EXPLORING THE RELATIONSHIP BETWEEN SHORT-TERM BORROWINGS AND PROFITABILITY IN CHINA: THE MODERATING ROLE OF CASH CONVERSION CYCLE

This study focuses on the moderating role of the cash conversion cycle (CCC) and its components while investigating the relationship between short-term borrowings and profitability in Chinese firms. The generalized method of moments (GMM) approach is employed on the panel data over the period 2000 to 2017. The findings reveal a significant moderating role of CCC and its components in the short-term borrowings and profitability relationship. Specifically, the firms following a conservative strategy in CCC and its components, adopt the same strategy in the external financing which lies in the long-term borrowings. Consequently, such firms require less short-term borrowings compared to the full sample. However, the firms following an aggressive strategy in the CCC and its components, do not follow the aggressive strategy in external financing that lies in the short-term borrowings. Instead, these firms adopt the conservative strategy for profit maximization and require less amount of short-term borrowings compared to the full sample. Finally, several policy options are proposed to achieve the optimum relation between short-term borrowings and profitability.

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Footprint of Personality Characteristics on Financing Objectives: The Arbitrating capacity of Risk Attitude and the Moderating capacity of Investment Savvy

European Journal of Business Management and Research ◽

10.24018/ejbmr.2021.6.4.971 ◽

2021 ◽

Vol 6 (4) ◽

pp. 163-169

Author(s):

Javed Hussain ◽

Tariq Mehmood Dar ◽

Neelofer Tariq

Keyword(s):

Risk Attitude ◽

Personality Characteristics ◽

Short Term ◽

Long Run ◽

Dependent Variables ◽

Relationship Of ◽

The Relationship ◽

Moderating Role

The following study clarifies the role of risk attitude in revolving the relationship between Financing Objectives and personality characteristics and the moderating role of investment savvy between risk attitude and financing objectives by the particular sample size of 200 students. The participants of the study belonged from finance background. To simplify the collected data, the regression analyses was utilized in a flow to implicate the effect upon the dependent variables of the independent variables. To get more enhanced results, the mediator and the moderator were uplifted. Hence by, the results revealed that individuals who are activity, determined, and sympathy towards others are more willing to opt for STFO (short term financing objectives). Whilst, in long run extraversion, openness to experience and agreeableness, and conscientiousness traits are more inclined towards LTFO (long term financing objectives). Moreover, the study further mentions that STFO and LTFO are not much affected by investment savvy of an individuals. Nonetheless, the investment savvy is not really bothered by the relationship of financing objectives and risk attitude.

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Financial leverage, debt maturity, future financing constraints and future investment

International Journal of Islamic and Middle Eastern Finance and Management ◽

10.1108/imefm-10-2019-0430 ◽

2020 ◽

Vol 13 (4) ◽

pp. 613-634

Author(s):

Ehsan Poursoleiman ◽

Gholamreza Mansourfar ◽

Sazali Abidin

Keyword(s):

Debt Maturity ◽

Financing Constraints ◽

Financial Leverage ◽

Short Term ◽

Content Type ◽

Mediating Role ◽

The Impact ◽

The Relationship ◽

Moderating Role

Purpose This paper aims to investigate the impact of debt maturity on the relationship between financial leverage and future financing constraints. Moreover, it attempts to analyze the moderating role of short-term debt and the mediating role of future financing constraints in the relationship between financial leverage and future investment. Design/methodology/approach To test the moderating role of debt maturity, all the observations are divided into two groups based on short-term debt to total debt ratio. Moreover, Sobel, Aroian and Goodman tests are used to analyze the mediating role of future financing constraints. The sample used in this research includes firms listed on the Tehran Stock Exchange from 2006 to 2018. Findings It is shown that financial leverage is inversely (positively) related to future financing constraints for firms with higher (lower) use of short-term debt and, short-term debt moderates the relation between financial leverage and future investment. The findings also indicate that future financing constraints carry the influence of financial leverage to future investment. Originality/value In an imperfect market where financing is not independent of investment, it is highly required to carry out some studies on the role of different financing scenarios in firms and their impacts on future financing and investment; therefore, this paper is conducted to address one of the most important issues in the capital market, which is almost the pioneer study in this field.

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Delay of Gratification in Predicting Job Performance in New Employees: A Time-Varying Process and the Moderating Role of Perceived Informational Justice

Journal of Pacific Rim Psychology ◽

10.1017/prp.2017.4 ◽

2017 ◽

Vol 11 ◽

Cited By ~ 1

Author(s):

Xiaoyan Liu ◽

Kun Yu

Keyword(s):

Job Performance ◽

Delay Of Gratification ◽

Short Term ◽

Job Interviews ◽

New Employees ◽

Informational Justice ◽

Organisational Justice ◽

The Relationship ◽

Moderating Role

Our study profiles a varying process of the relationship between delay of gratification (DG) and job performance over time and examines the moderating role of perceived organisational justice in the DG-job performance relationship. Employees’ ability to delay gratification was measured during their job interviews (Time 1). When they had worked for 3 months (Time 2), their job performance was rated by their supervisors. When they had worked for 5 months (Time 3), their perception of perceived informational justice was measured. Their job performance was rated again by their supervisors at 6 months (Time 4). The results showed that DG could directly predict new employees’ short-term (3-month) job performance but not their longer-term (6-month) job performance. Moreover, perceived informational justice moderated the relationship between DG and 6-month job performance.

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Divestiture strategy, CEO power and firm performance

Management Research Review ◽

10.1108/mrr-04-2020-0196 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Rayenda Khresna Brahmana ◽

Hui-Wei You ◽

Xhin-Rong Yong

Keyword(s):

Firm Performance ◽

Generalized Method Of Moments ◽

Strategic Decision ◽

Ceo Power ◽

Content Type ◽

And Performance ◽

The Impact ◽

The Relationship ◽

Moderating Role

Purpose This study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the relationship under the agency and power circulation theories. Design/methodology/approach This study focuses on a sample of 319 non-financial public-listed companies in Malaysia from the year 2012–2016 and estimates the model under two-step generalized method of moments panel regression to eliminate the endogeneity issue. Findings The results show that divestiture strategy decreased the firm performance. Meanwhile, greater CEO power changed that divestiture effect but still failed to increase the performance. This study also indicates the CEO power strengthens the relationship between firm performance and divestiture. Research limitations/implications The overall findings show that the positive moderating role of CEO power on the relationship between divestiture and performance. This research confirmed the agency and power circulation theories by showing that CEO power can make divestiture strategy works. However, the moderating plot tells different. CEO power may strengthen the relationship between divestiture and performance; it fails to boost up the performance in overall. Therefore, this study is about CEO power on the strategic decision and gives a good implication for corporate governance concerning the impact of CEO power on the organization’s alignment process. Originality/value This study examines the effect of CEO power on the performance of divestiture strategy implementation by contesting the agency and power circulation theories within an emerging country context.

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Intellectual capital disclosure and corporate market value: does board diversity matter?

Journal of Accounting in Emerging Economies ◽

10.1108/jaee-06-2015-0048 ◽

2017 ◽

Vol 7 (3) ◽

pp. 369-398 ◽

Cited By ~ 11

Author(s):

Mutalib Anifowose ◽

Hafiz Majdi Abdul Rashid ◽

Hairul Azlan Annuar

Keyword(s):

Value Relevance ◽

Stock Exchange ◽

Generalized Method Of Moments ◽

Ethnic Composition ◽

Board Diversity ◽

Content Type ◽

Listed Firms ◽

The Relationship ◽

Moderating Role

Purpose The purpose of this paper is to examine the relationship between IC disclosure and the corporate market value (CMV) of listed firms on the main board of Nigeria Stock Exchange and to test the moderating effect of religious and ethnic composition of board members on the relationship. Design/methodology/approach This study applies the signaling and upper echelons theories in formulating four hypotheses that guide the results analysis. By employing a two-step dynamic system generalized method of moments and controlling for the possible endogeneity effect on the parameters estimated for a sample of 91 listed firms on main board of Nigeria Stock Exchange, this study investigates the association of IC disclosure with CMV, namely, cost of capital and market capitalization, and the moderating role of religious and ethnic composition on such association using data over the 2010 to 2014 financial years. Findings The results show a significant positive relationship between overall IC disclosure and market capitalization and a negative impact on cost of capital, which are in line with the hypothesized propositions. The moderating effect of board diversity is also confirmed. This study contributes to recent evidence concerning the value relevance of IC information to investors and other interested stakeholders and the established moderating role of board diversity in IC disclosure-related studies. Practical implications The regulators may consider development of standards on board composition about religious and ethnic composition in order to curb the domination from same group in the board room. Those charged with governance should be concerned with the disclosure of IC information in the financial statements as it has value relevance to the investors, in line with signaling theory. Social implications The ethnic and religious composition of board members is a significant factor within the board room and needs to be given adequate consideration. Originality/value This study is the first to consider IC disclosure across whole sectors in the Nigerian economy and looks upon ethnicity and religious affiliation of boards as moderating variables. The study controls for heteroscedasticity and endogeneity issues by adopting two-step dynamic system generalized method of moments.

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Does Gender Heterogeneity Matters: The Moderating Role of Women Directors' Independence in the Indian Corporate Sector

10.17015/ejbe.2021.028.05 ◽

2021 ◽

Vol 14 (28) ◽

pp. 87-105

Author(s):

Pradeep KAUR ◽

◽

Poonam MAHAJAN

Keyword(s):

Firm Value ◽

Fixed Effects ◽

Negative Impact ◽

Generalized Method Of Moments ◽

Independent Directors ◽

Women Directors ◽

Role Of Women ◽

The Relationship ◽

Moderating Role

This study aims to examine the moderating role of the independent status of women directors on the relationship between gender heterogeneity and firm value. The empirical analysis is performed on the panel data of BSE 100 companies for the period of 10 years from the year 2009 to 2018. Generalized Method of Moments is employed along with Fixed Effects Model while controlling for firm and board-specific variables to examine the relationship between gender heterogeneity and firm value. Moderation impact on this relationship is also analyzed empirically as well as graphically. Results show a negative impact of board gender heterogeneity on the value of a firm. Also, there is a negative moderation effect of women independent directors on the relationship between gender heterogeneity and firm value. Empirical findings of the present study contribute to the current discourse of gender heterogeneity and depict the Indian scenario of corporate boards in this context. This is the first study examining the moderating role of women independent directors on the relationship between board gender heterogeneity and the value of a firm in the Indian climate.

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CEO Turnover, Network Effects, and Firm Performance

International Journal of Organizational and Collective Intelligence ◽

10.4018/ijoci.2020040104 ◽

2020 ◽

Vol 10 (2) ◽

pp. 54-72

Author(s):

Yanan Sun ◽

Peiqin Zhang ◽

David Wierschem ◽

Francis A Mendez Mediavilla

Keyword(s):

Firm Performance ◽

Network Effects ◽

Generalized Method Of Moments ◽

Market Performance ◽

Ceo Turnover ◽

Superior Performance ◽

Short Term ◽

Moderating Role

This article applies network and organizational theory to examine the effect of CEO turnover on firm accounting and market performance in both short-term and long-term. In addition, this research investigates the moderating role of network effects using cluster analysis. Using a system generalized method of moments (GMM) estimation of panel data obtained from Compustat and S&P's Execucomp database, this study finds that it is less likely to have superior performance in the long-term for firms with frequent CEO turnover. While it is more likely to have better accounting performance over the short-term, but less likely to have superior market performance. This study further validates the moderating role of network effects. This article contributes to the research by providing new insights of CEO turnover effects on firm performance and investigating the moderation effect of network structure. The findings also provide practical suggestions for firms that experience frequent changes of their CEOs.

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DOES STRONGER R&D CAPABILITY ALWAYS PROMOTE BETTER INNOVATION? THE MODERATING ROLE OF KNOWLEDGE BOUNDARY SPANNING OF R&D NETWORK

International Journal of Innovation Management ◽

10.1142/s1363919618500597 ◽

2018 ◽

Vol 22 (07) ◽

pp. 1850059 ◽

Cited By ~ 1

Author(s):

YANHUI JIANG ◽

CHONGYANG WEI ◽

ZHI YANG ◽

ULAGANATHAN SUBRAMANIAN

Keyword(s):

Boundary Spanning ◽

Innovation Performance ◽

Short Term ◽

Trade Offs ◽

Innovation Strategies ◽

The Impact ◽

The Relationship ◽

Moderating Role

Setting the research background in China, this study draws on absorptive capacity, knowledge inertia and prospect theory to show the relationship between R&D capability and innovation performance which comprises exploitation and exploration. We propose that stronger R&D capability promotes exploitation performance but inhibits exploration performance. As exploitation represents immediate interest and exploration represents long-term interest, we introduce the notion of knowledge boundary spanning of R&D network to balance short-term and long-term benefits. The empirical results show that R&D capability and knowledge boundary spanning of R&D network complement each other for explorative innovation while they present trade-offs for exploitative innovation. This study contributes to existing literature on R&D capability–innovation performance, and it further extends our understanding by investigating the impact of knowledge boundary spanning of R&D network on the R&D capacity–innovation performance relationships. In addition, this study provides references on resources configuration to achieve different innovation strategies.

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