Environmental regulation and corporate tax avoidance—Evidence from China

In this study, we used a difference-in-difference (DID) approach to analyze the effect of environmental regulation on corporate tax avoidance behavior based on China’s carbon emissions trading pilot policy of 2013. Our findings were as follows: (1) Environmental regulation has led companies to adopt further tax evasion behaviors. Furthermore, the core conclusion was confirmed after a series of robust and endogenous tests, such as parallel trends and PSM-DID (propensity score matching-difference-in-difference). (2) Environmental regulations increase tax avoidance activities by reducing corporate cash flows. (3) The influence of environmental regulation on firm tax evasion is highly pronounced among non-state-owned enterprises, big-scale enterprises, and enterprises with a high degree of industry competition.

Impact of Corporate Environmental Responsibility on Firm’s Financial Performance: Moderating Role of Organizational Slack and Industry Competition

Due to speedy trade and industry expansion in the emerging economies it is creating stern environmental corrosion. Effluence makers’ enterprises are mostly responsible for environmental deterioration. Therefore, it is the responsibility of those firms to take steps to control this corrosion in the environment. This research explains the effect of corporate environmental responsibility (CER) on corporate financial performance (CFP) with the moderating effect of organizational slack and industry competition. Data was collected from annual reports of 50 KSE 100 index companies from 2012-2019, containing total 450 observations. Dynamic penal model was used to test the study hypothesis by using Eviews, different pre and post estimations are applied to confirm the data validity. Empirical results indicate that corporate environmental responsibility has significant positive effect on corporate financial performance, while the moderating effect of organizational slack is negative. Industry competition has significant positive moderating effect on the relationship, i.e., if there is high competition in industry then firms will invest more in environment to attract more consumers and to create good will in market. The study reveal that those firms will lead where competition is high and who will focus on their responsibility towards environment.

Determinants of SME’s Social Media Marketing Adoption: Competitive Industry as a Moderator

In light of the growing role of social media marketing in the success of businesses and its low adoption rate among small and medium enterprises (SMEs), this study aims to identify determinants of SMEs’ social media marketing adoption by considering the competitive industry as a moderator. Data were collected from 214 SMEs in Malaysia. Unlike extant literature, this study proposed a dual-stage analysis involving partial least squares (PLS) technique and artificial intelligence named deep artificial neural network (ANN). The application of deep ANN architecture is used to predict 91% of accuracy for the proposed model. The results showed that perceived relative advantage, perceived cost, top management support, perceived competitor pressure, and perceived vendor pressure have a significant impact on social media marketing adoption. Furthermore, the competitive industry moderates the effects of competitive pressure and customer pressure on social media marketing adoption. The results of the study extend the literature on social media marketing by illustrating the influence of technological, organizational, and environmental (TOE) factors on social media marketing adoption among SMEs concerning the extent of industry competition. The results of the study enable policymakers and managers of SMEs to understand the factors that influence social media marketing adoption in both competitive and non-competitive industries and invest effectively in digital marketing.

Credit Shock Propagation Along Supply Chains: Evidence from the CDS Market

Using a panel of credit default swap (CDS) spreads and supply chain links, we observe that both favorable and unfavorable credit shocks propagate through supply chains in the CDS market. Particularly, the three-day cumulative abnormal CDS spread change (CASC) is 63 basis points for firms whose customers experienced a CDS up-jump event (an adverse credit shock). The value is 74 basis points if their suppliers experienced a CDS up-jump event. The corresponding three-day CASC values are –36 and –38 basis points, respectively, for firms whose customers and suppliers, respectively, experienced an extreme CDS down-jump event (a favorable credit shock). These effects are approximately twice as large for adverse credit shocks originating from natural disasters. Credit shock propagation is absent in inactive supply chains and is amplified if supply chain partners are followed by the same analysts. Industry competition and financial linkages between supply chain partners, such as trade credit and large sales exposure, amplify the shock propagation along supply chains. Strong shock propagation persists through second and third supply chain tiers for adverse shocks but attenuates for favorable shocks. This paper was accepted by Kay Giesecke, finance.

Too much of a good thing? The nonlinear influence of noncontrolling large shareholders on corporate innovation

PurposeNoncontrolling large shareholders can reduce the agency problem of executives and can reduce the expropriation or tunneling behavior of controlling shareholders, thereby promoting corporate innovation. However, too many noncontrolling large shareholders may also lead to excessive supervision, thereby inhibiting innovative activities that contribute to the long-term value of the firm. Research to date, however, has not examined the nonlinear impact of noncontrolling large shareholders on corporate innovation. Based on principal–agent theory and the too-much-of-a-good-thing (TMGT) effect, the authors discuss the inverted U-shaped influence of noncontrolling large shareholders on corporate innovation and the moderating effect of industry competition and corporate product diversification on the above relationship.Design/methodology/approachBased on the empirical data of Chinese listed companies from 2003 to 2017, the authors use the bidirectional fixed effects model to conduct empirical testing and robustness testing of the research hypotheses.FindingsThere is an inverted U-shaped relationship between noncontrolling large shareholders and corporate innovation; type I and type II agency costs play a mediating role between noncontrolling large shareholders and corporate innovation. In addition, firm product diversification weakens the inverted U-shaped relationship between noncontrolling large shareholders and corporate innovation, but industry competition has no significant moderating effect on the above relationship.Practical implicationsThis research has important implications for policy makers, to better activate corporate innovation vitality, and investors, to better choose investment targets. Specifically, investors and policy makers should be aware that an appropriate increase in larger noncontrolling shareholders can maximize the enthusiasm of firms for innovation and enhance corporate value, but they should also realize that having too many noncontrolling large shareholders may backfire.Originality/valueThis research helps the authors to understand the pros and cons of increasing the number of noncontrolling large shareholders more comprehensively and also helps to understand corporate innovation more comprehensively from a supervisory perspective. In addition, this research also enhances the explanatory and predictive power of the TMGT effect.

Modern features of benchmarking in the hotel business

The market of hotel services is an actively developing market in which innovative technologies of service of guests are widely used; various loyalty and reservation programs are being developed and improved; new approaches to business process management are applied. Benchmarking is a very relevant area designed to assess and select alternative options for the development of the hotel business, defining tasks and improving management efficiency through a deeper study and borrowing approaches successfully implemented by competitors. The aim of the research is to study the current features of benchmarking in the hospitality industry and its impact on the dynamics of enterprise performance. The research methods used are method of competitive analysis, statistical method, generalization method, forecasting. The results and conclusions: the analysis of the state of the hotel services market has shown a steady growth in the number of facilities and consumers of hotel services, which leads to increased intra-industry competition. Benchmarking helps to correlate the operating performance of the hotel business with the performance of the competitive environment, to move away from the subjective assessments of hoteliers and to identify errors in sales policy. In addition, the use of benchmarking allows you to predict the dynamics of demand in order to minimize managerial errors. The conclusions: benchmarking is part of marketing research and the basis for business process planning in the context of choosing strategic activities of the hotel service company. Conducting such a study is focused on providing the hotel with significant competitive advantages, the quintessence of which is the procedure of studying the experience of operating in the market of business leaders.

Analysis and Defect Improvement Using FTA, FMEA, and MLR Through DMAIC Phase: Case Study in Mixing Process Tire Manufacturing Industry

In line with the increasingly fierce industry competition, all companies strive to make continuous improvements to increase added value and reduce waste which will impact the company's ability to maintain its existence in the future. One of the problems found in the tire manufacturing industry is the quality problem of the occurrence of defects in the mixing process which is dominated by the viscosity out standard on the compound steel breaker. In this study, analysis and improvement of the defect problem were carried out using Fault Tree Analysis (FTA), Failure Mode and Effect Analysis (FMEA), and Multiple Linear Regression (MLR) to test the correlation between the root causes found to the main problem. Based on the results of the analysis found thirteen root causes where the factor of variation in material viscosity and the suitability of determining the design process has the largest Risk Priority Number (RPN) value and has a strong correlation to defects that occur based on hypothesis testing. Furthermore, improvements are made using the DMAIC method on all factors that affect the occurrence of defects. As the result, the improvement can be effective in reducing the defect to 34.5% and achieve the expected target.

The dilemma of winners: market power, industry competition and subsidy efficiency

Purpose The purpose of this paper is, from a resource accumulation and resource allocation perspective, to examine the variant effects of government subsidies among firms with varying levels of market power and to test how industry competition moderates the relationship between market power and allocative efficiency of government subsidies. Design/methodology/approach This study explores the relationship between government subsidies and firm performance from a resource-based view. The authors study the moderating role of market power and three-way interaction between subsidy, market power and industry competition on firm performance. The authors test their hypotheses using a sample of Chinese A-share manufacturing firms from 2006–2019. The authors apply firm-level panel data regressions and conduct a series of robustness tests. The marginal effect of market power and industry competition is explored via three-way moderator effect models. Findings This study finds that government subsidies are negatively related to firm performance. Market power, on average, strengthens the negative effect of government subsidies on performance, but such a reinforcement effect is neutralized when industry competition is intense. Government subsidies are least efficiently used when firms have market power and industry competition is low. In addition, the authors use different forms of firm performance and a various of robustness tests to verify their assumptions. Originality/value This paper contributes to the literature as follows. First, the authors look into subsidy–performance problem from the perspective of the resource-based view and contribute to explaining and mitigating the divergence of current findings on the subsidy–performance relationship. Second, the authors introduce market power and industry competition as moderators to study how resource allocative efficiency affects the subsidy–performance relationship. Third, the authors propose that managerial incentives have played an important role in the allocation of government subsidies, which enriches management practices.