scholarly journals Firm Performance and Its Drivers: How Important Are the Industry and Firm-Level Factors?

2016 ◽  
Vol 8 (11) ◽  
pp. 60 ◽  
Author(s):  
Olubanjo Michael Adetunji ◽  
Akintola Amos Owolabi
Keyword(s):  
Firm Performance ◽  
Firm Growth ◽  
Stock Exchange ◽  
Firm Level ◽  
Specific Data ◽  
Return On Equity ◽  
Industry Level ◽  
Specific Factors ◽  
Using Data ◽  
The Individual

This paper provides empirical evidence for the relative importance of industry and firm-level factors as determinants of firm performance. It also shows the relevance of the individual factors at both industry and firm levels. The paper therefore attempts to provide evidence for effects of industry and business-specific factors on firm performance using data from a developing economy. The study uses the financial and other organization-specific data of firms listed on the Nigerian Stock Exchange. The findings show that organization-specific factors are relatively more important than the industry factors, accounting for 66.58 percent of the variation in return on asset with little or no evidence for the effects of industry-level factors on return on asset. Financial leverage, firm size and firm growth rate are shown to be the most relevant firm-level factors. Firm-level factors also accounts for slightly more variance in Tobin’s Q than the industry factors.The results also show that the industry sector of the firm is the most relevant industry-level determinant of firm market performance. There is however little or no evidence for the effects of both industry- and firm-level factors on return on equity.

scholarly journals DETERMINANTS AFFECTING THE CAPITAL STRUCTURE DECISION OF A FIRM (A CASE STUDY OF TEXTILE SECTOR IN PAKISTAN)

2021 ◽  
Vol 3 (3) ◽  
pp. 118-133
Author(s):  
SADDAM HUSSAIN ◽  
Chunjiao Yu ◽  
Xiao Ling
Keyword(s):  
Capital Structure ◽  
Firm Growth ◽  
Stock Exchange ◽  
Secondary Data ◽  
Balance Sheets ◽  
Return On Equity ◽  
Leverage Ratio ◽  
Equity Ratio ◽  
Specific Factors ◽  
Textile Sector

In this paper, we have examined the influence of specific factors based on a capital structure sample of five Pakistani textile sector (Leveraged) companies. The secondary data came from an analysis of the balance sheets of five companies listed on the Karachi Stock Exchange between 2004 and 2014.Regression and correlation analysis on the panel data shows that profitability is negatively correlated with leverage ratio, while tangibility is positively correlated with leverage ratio, but not significantly. Firm size and firm growth are also positively and significantly correlated with leverage. Return on equity is also negatively correlated with leverage. Our findings also show that large textile firms, compared with small ones, finance long-term through debt. Keywords: Capital Structure, Return on equity, Profitability, Tangibility, Leverage, Debt to equity ratio, Pakistan.

The Firm-Specific Factors Influencing the Tax Haven Operations of Indian Multinationals

2021 ◽  
pp. 001946622110360
Author(s):  
P. Vineeth ◽  
K. B. Nidheesh
Keyword(s):  
Service Sector ◽  
Positive Impact ◽  
Binary Logistic Regression ◽  
Binary Logistic Regression Model ◽  
Firm Level ◽  
Return On Equity ◽  
Factors Influencing ◽  
Tax Haven ◽  
Specific Factors ◽  
Knowledge Intensive

The present study measures the role of firm-specific factors influencing the likelihood of establishing a subsidiary in tax haven countries. The panel data of Indian companies, which have business operations in foreign countries, are used for the study. The firm-level data for the period from 2007 to 2018 are analysed by using binary logistic regression model. The result shows that the intangible assets, long-term debt, number of subsidiaries and service sector dummy have significant and positive impact on tax haven operations of multinational companies, but the experience of the firm and return on equity are insignificant, and a firm’s size deters the likelihood of setting a tax haven subsidiary. The results also show that firms from high-technology manufacturing and knowledge-intensive sector have more influence on the likelihood of owning a tax haven subsidiary by Indian multinationals. JEL Codes: F21, F23, H25, H26

scholarly journals Do Reconciliations Of Segment Earnings Affect Stock Prices?

2012 ◽  
Vol 28 (5) ◽  
pp. 1085 ◽  
Author(s):  
Dana Hollie ◽  
Shaokun Carol Yu
Keyword(s):  
Financial Reporting ◽  
Stock Prices ◽  
Firm Growth ◽  
Abnormal Returns ◽  
Cash Flows ◽  
Management Approach ◽  
Firm Level ◽  
Return On Equity ◽  
The Difference ◽  
Segment Disclosures

While SFAS No. 131 is intended to increase the transparency of financial reporting using a management approach, it may reduce shareholders ability to interpret segment disclosures relative to the industry approach employed under SFAS No.14. This study investigates whether segment reconciliation differences affect stock prices and whether abnormal returns can be earned using information about two components of earnings: aggregated segment earnings and segment earnings reconciliations. We compute reconciliations as the difference between firm-level consolidated earnings and aggregated segment-level earnings. Firms that report negative SERs have greater sales and profitability, greater return on equity, as well as more operating cash flows and firm growth. This suggests that firms that report aggregated segment earnings greater than firm-level consolidated earnings may be better off financially. Our findings show that mispricing does occur when firms report positive SERs by the market, underestimating the segment earnings reconciliation component of earnings persistence. Investors can also earn positive abnormal returns when investors take a long (short) position with the portfolio with the highest (lowest) absolute SERs. On the contrary, we find investors earn negative abnormal returns when firms report negative SERs. Collectively, this study provides evidence that mispricing occurs and that investors over/underestimate the importance and/or persistence of segment earnings reconciliations.

Convergence of corporate governance in Malaysia and Thailand

2014 ◽  
Vol 4 (1) ◽  
pp. 2-21 ◽  
Author(s):  
Syed Abdulla Al Mamun ◽  
Yousre Badir
Keyword(s):  
Corporate Governance ◽  
Emerging Economies ◽  
Annual Reports ◽  
Unconditional Convergence ◽  
Individual Country ◽  
Firm Level ◽  
Content Type ◽  
Prior Literature ◽  
Specific Factors ◽  
Using Data

Purpose – The purpose of this paper is to examine whether there is a firm-level corporate governance (CG) convergence in two emerging economies, namely Malaysia and Thailand in post-Asian financial crisis periods, and how the level of convergence is moderated by different firm-specific factors. Design/methodology/approach – Using data collected from annual reports of top Malaysian and Thai companies in two point of times 2005 and 2008, this research examines the attributes of board of directors to find the firm-level CG convergence. This study, based on prior literature, identified firm-specific factors to assess their moderating impact on the level of convergence. This paper exploits beta and sigma convergence technique to measure the CG convergence. Findings – Results show that top Malaysian and Thai companies have developed internal CG practices in similar way with increasing board independent, separate board leadership, important board committees, board education, and participation in the post-crisis reform regime. Accordingly, there is a firm-level CG convergence within companies of an individual country, i.e. intra-convergence, and companies across the countries, i.e. inter-convergence. Notwithstanding, the study does not find the unconditional convergence in all CG variables. Additionally, it observes that the firm-level CG convergence is moderated by firm-specific factors. Practical implications – Outcomes of the study have the implication to understand the complicated changing aspects of internal CG practices in emerging economies which, in turn, can help to formulate and implement effective CG structure so that firms can tackle adverse effects of any further economic crisis. Because this paper highlights that the firms in these emerging economies have enough room yet to improve their CG practices to become internationally competitive. Originality/value – This paper demonstrates how internal CG practices may evolve and converge in emerging Southeast Asian economies. Results related to moderating factors of firm-level CG convergence contribute in literature by exploring a new dimension of CG convergence.

scholarly journals Political Connections and Firm Performance: The Case of Hong Kong

2010 ◽  
Vol 10 (2) ◽  
pp. 275-314 ◽  
Author(s):  
Stan Hok-Wui Wong
Keyword(s):  
Hong Kong ◽  
Firm Performance ◽  
Political Institutions ◽  
Dominant Role ◽  
Chief Executive ◽  
Political Connections ◽  
Firm Level ◽  
Systematic Analysis ◽  
Return On Equity ◽  
Systematic Assessment

Business interests are overrepresented in Hong Kong's nominally democratic political institutions. Many in Hong Kong perceive this as evidence of the existence of “collusion between government and business,” a phenomenon that has stirred public concerns in the city since its sovereignty transfer. Although anecdotal accounts abound, no systematic analysis has been conducted to evaluate the validity of this perception. In this article I use a rich firm-level dataset to offer the first systematic assessment of the effects of political connections on firm performance in Hong Kong. I define politically connected firms as firms that have stakeholders concurrently holding a seat on the Election Committee, a constitutional body that elects the city's chief executive. I found evidence, though not overwhelming, consistent with the “collusion” hypothesis: political connections do improve firm performance measured by return on equity and market-to-book ratio. The improvement is unlikely due to unobserved confounding factors such as firms' inherent ability. As for the origin of the political connections, the data show that a firm's economic power has little predictive value of its connections to the Election Committee. Rather, number of employees matters; firms that hire fewer workers were more likely to gain a seat on the 1997 Election Committee. This result may suggest that Beijing plays a more dominant role in the formation of political connections—that serve Beijing's co-optation needs rather than the interests of powerful firms that may have a desire to “capture” the state.

scholarly journals FAKTOR–FAKTOR YANG MEMPENGARUHI KINERJA PERUSAHAAN NON KEUANGAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

2018 ◽  
Vol 2 (1) ◽  
pp. 27
Author(s):  
Trisnawati Trisnawati ◽  
Henny Setyo Lestari
Keyword(s):  
Firm Performance ◽  
Firm Size ◽  
Significant Influence ◽  
Stock Exchange ◽  
Return On Equity ◽  
Growth Opportunity

This research is conducted to find the factor’s affecting firm performance of non financial listed in Indonesia Stock Exchange. The sample was taken from 101 companies in the last five years from 2010-2014. The dependent variable in this research is the firm performance measured by return on equity, while the independent in this research is leverage measured debt to equity, growth opportunity, firm size, and liquidity. The results show that there are negative and significant influence between research leverage to firm performance. There is also posifive and significant effect between firm size to firm performance. And there is no influence between growth opportunity and liquidity to firm performance.

scholarly journals CORPORATE GOVERNANCE UNDER MULTI- THEORETICAL PERSPECTIVE

2016 ◽  
Vol 12 (2) ◽  
Author(s):  
Muhammad Hassan ◽  
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Stock Exchange ◽  
Structural Characteristics ◽  
Theoretical Perspective ◽  
Empirical Literature ◽  
Data Set ◽  
Structural Variables ◽  
Using Data ◽  
The Impact

This study examines the impact of corporate governance reforms (SECP code in Pakistan) on board structural characteristics, board roles and firm performance. It uses an exclusive balanced panel data set of 200 companies listed on Karachi Stock Exchange. The study contributes to a sparse empirical literature on boards using data from Pakistan via multi-theoretic perspective to prove that if the boards’ monitoring and resource provision roles are strengthened through board restructuring, the financial performance of the organization will be strengthened. The main findings of the study indicate that the mediated relationship between board structural variables and firm performance is stronger. The study concludes that overall companies adopted a box-ticking approach for reporting corporate governance.

scholarly journals Conceptual Study on Socio-Economic Impact of the Decline in Firm Performances of Hotels in Sri Lanka

2020 ◽  
Vol 9 (1) ◽  
pp. 39
Author(s):  
Nagalingam Nagendrakumar ◽  
Anuja Akalanka Lokeshwara ◽  
Karanasuriya Ragalage Ganguli Thamodya Jayasuriya ◽  
Hewissa Gamage Anuradha Malith Ravisara ◽  
Matheesha Jeewantha Weerawickrama ◽  
...  
Keyword(s):  
Firm Performance ◽  
Sri Lanka ◽  
Economic Impact ◽  
Stock Exchange ◽  
Annual Reports ◽  
Return On Equity ◽  
Consumer Services ◽  
Socio Economic Impact ◽  
Conceptual Study ◽  
Hotel Managers

The study aims to determine the socio-economic impact of the decline in firm performances of hotels in Sri Lanka. Evidence from previous research found that 91% of the hotels listed in the Colombo Stock Exchange (CSE) were in the distress zone and this study aims to fill the prevailing knowledge gap by determining the socio-economic impact of this decline. The study will be conducted using a sample of 33 hotels listed under the consumer services sector of the CSE, by considering the firm performance as the independent variable while the dependent variable is the socio-economic impact. The firm size was considered as the moderating variable. Indicators such as Return on Equity (ROE), Return on Assets (ROA) and occupancy rate derived from annual reports and other publications was used to measure firm performance while several indicators derived from statistical reports published by the Sri Lanka Tourism Development Authority (SLTDA) and Central Bank will be used to measure socio-economic impact. The research will be conducted during a period of 10 years from 2009 to 2019. Findings from the research will contribute to the existing literature on the assessment of socio-economic impacts and are beneficial to a variety of stakeholders such as hotel managers, government, tourist development authorities and upcoming researchers.

PENGARUH KECAKAPAN MANAJERIAL DAN KINERJA KEUANGAN TERHADAP MANAJEMEN LABA

2018 ◽  
Vol 9 (2) ◽  
pp. 204-221
Author(s):  
Istiqomah Istiqomah ◽  
Vita Elisa Fitriana
Keyword(s):  
Earnings Management ◽  
Financial Performance ◽  
Stock Exchange ◽  
Data Envelopment ◽  
Return On Equity ◽  
Managerial Skills ◽  
Using Data ◽  
Relationship Of ◽  
The Relationship ◽  
Positive Effect

The purpose of the study was to examine the effect of the relationship of managerial skills and financial performance on earnings management. Sample from this study is a manufacturing company listed on the Indonesia Stock Exchange (IDX) in 2014 to 2016, and as many as 137 sample companies. Managerial skills are measured using Data Envelopment Analysis (DEA). Financial performance is measured using ROE (Return on Equity) financial ratios. While earnings management is measured by calculating discretionary accruals of modified Jones models. By using multiple regression analysis, it was found that managerial skills did not affect earnings management. Because capable managers tend not to do earnings management. Furthermore, financial performance has a positive effect on earnings management. Because when a company's performance is bad, management tends to maintain the company's reputation for not doing earnings management.

Effect of Innovation on Firm Performance — The Case of a Technology Intensive Manufacturing Cluster in India

2019 ◽  
Vol 16 (07) ◽  
pp. 1950052 ◽  
Author(s):  
Deepak Chandrashekar ◽  
M. H. Bala Subrahmanya ◽  
Kshitija Joshi ◽  
Tathagat Priyadarshi
Keyword(s):  
Firm Performance ◽  
Qualitative Comparative Analysis ◽  
Sampling Technique ◽  
Industrial Clusters ◽  
Economic Benefits ◽  
Important Lesson ◽  
Firm Level ◽  
Promotion Policy ◽  
Specific Factors ◽  
And Performance

Industrial clusters can be sources of innovation. Further, externalities rendered by clusters entitled firms in clusters to various economic benefits. The motivation of the study is to understand what determines the net benefits that these cluster firms receive. While innovation is a key driver of firm performance, it has not been probed adequately in the context of a cluster. The present study which draws data from 101 technology intensive manufacturing firms in Bengaluru cluster adopts stratified random sampling technique. The study employs Fuzzy-set Qualitative Comparative Analysis (fsQCA) to examine the influence of firm-level innovation on performance, considering the role of various firm-specific factors in moderating the relationship between innovation and performance. The results of the study reveal that there does not exist any direct relationship between innovation and firm performance. However, a strong and nonlinear relationship between them is moderated by firm-specific factors such as firm size, nature of Industry, origin of a firm and firms’ age. The findings of the study have brought out an important lesson for policy makers that mere promotion of industrial clusters does not ensure the generation of innovations by firms located therein, for their benefit. A cluster focused innovation promotion policy has to consider industry/firm-specific characteristics for its effective implementation.

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