Does sustainability matter for Fintech firms? Evidence from United States firms

Purpose This study aims to look at how financial technology (FinTech) companies adhere to sustainable standards in contrast to their counterparts. Following the validation of its new sustainability index, this study looks into the impact of sustainability on the stock performance of FinTech companies. Design/methodology/approach To efficiently test the hypotheses, sample has been collected from the Bloomberg of all FinTech and non-FinTech companies from the USA. The final sample comprises 1,712 company-year observations over the investigation period 2010–2019. The methodology entails ordinary least squares regressions and generalized panel methods of moments (GMM). Findings The results suggest that the developed sustainability index is a valid proxy for sustainability measures and directly relates to stock performance. Besides, the evidence indicates that non-FinTech companies display superior sustainability and stock performance compared to FinTech companies. The present results corroborate with stakeholder theory, which implies that quality sustainability performance will alleviate the agency issue and safeguard the shareholders’ interest. Research limitations/implications Despite the fact that it presents the limitation of not considering other dimensions of financial performance, this research is important as it highlights the sustainability practices by the FinTech and non-FinTech companies, offering insights to researchers, policymakers, regulators, financial reports users, investors, environmental union, employees, clients and society. Originality/value This paper is novel because it is unique in evaluating the sustainability practices in FinTech and non-FinTech firms.

Moderating role of Shariah committee quality on relationship between board of directors effectiveness and the performance of Malaysian Takaful

Purpose The purpose of this study is to examine the effect of Board of Directors Effectiveness (BODE) on the performance of Malaysian Takaful companies licensed by the Central Bank of Malaysia. In addition, the study investigates the moderating effect of Shariah Committee Quality (SCQ) on the relationship between BODE and companies’ performance. Design/methodology/approach This study uses a sample of 11 Malaysian Takaful companies during the period of 2010-2017. While BDE and SCQ are measured using indices, performance is proxied using ROA and ROE. A panel fixed effect regression analysis is used to test the impact of the BDE on the financial performance of Malaysian Takaful companies and the moderator role of SCQ. Findings The main finding of this study shows a positive association between BDE and performance. More specifically, boards with a high presence of independent, Muslim and female directors positively contribute to the performance of Malaysian Takaful companies. Another interesting finding is related to the positive moderating effect of SCQ on the relationship between BDE and performance. This result indicates that a high level of SCQ combined with a high level of board effectiveness improve performance. Practical implications The finding is of great importance to stakeholders and policymakers to improve their board effectiveness and the quality of the Shariah committee to reduce agency costs and to improve the performance of Malaysian Takaful companies. Originality/value This study adds to the prior literature by investigating for the first time the relationship between BDE and performance and the interaction effect of SCQ on the performance of Malaysian Takaful companies.

Impact of flexible work arrangements on employees’ perceived productivity, organisational commitment and perceived work quality: a United Arab Emirates case-study

Purpose This study aims to examine the impact of flexible work arrangements (FWAs) on employees’ perceived productivity, quality of work and organisational commitment (OC) with a special focus on the United Arab Emirates. It also analyses the mediating effect of employee happiness on the relationship between FWA and employees’ perceived productivity, OC and perceived work quality. Design/methodology/approach A quantitative, non-experimental correlational study was used for this research project. The study yielded numerical data, which were analysed using a deductive approach. The analysis aimed at exploring the relationships between the constructs, which were viewed as variables; these relationships were considered correlations, mediation and moderation. The sample comprises employees currently working at different public and private sector organisations, representing all major service industries in the UAE. Nine questions were used to assess the flexibility at work and six out of the nine questions were used to measure the level of FWAs using the Likert scale. Findings FWA has a significant and positive association with the employees’ perceived productivity, quality of work and OC. It was confirmed that happiness plays a mediating role in the relationship between FWA and employee outcomes. The facility allows employees to manage their personal and professional lives with ease using their preferred work method. This ability promotes employee satisfaction. In conclusion, managers and employees around the world should view FWAs as a positive tool to enhance employee productivity and OC, particularly in an emergency like the Covid-19 pandemic. Research limitations/implications The participants’ honesty was a limitation, which could raise questions on the validity of this study. This limitation arises when the self-report method is used for data collection. Use of multiple instruments could be another limitation. Practical implications Organisational leaders can use FWAs to improve employee outcomes. When an organisation grants flexible work options to employees, it implies that the organisation trusts its employees to complete the task. This factor motivates all employees to work with dedication, which is particularly true if the employees are creative people and wish to work on their preferred time and place. Originality/value This study is significant because the findings will allow managers to assess the benefits of using FWAs to improve employee productivity, particularly in the service sector. It combines the aspects of perceived productivity, OC and perceived work quality, as well as employee happiness to assess the role of FWAs in organisations. The study also investigates the influence of FWAs in improving these employee outcomes. Based on the literature review, this study on FWAs is the first of its kind in the UAE, the country using a truly multinational workforce coming from more than 100 countries and cultures.

Hypercompetition: a review and agenda for future research

Purpose The purpose of this study is to review and understand the dimensionality of hypercompetition, factors causing a hypercompetitive environment and the consequences of hypercompetition on markets. Thereby, the purpose of the study is to cover the main contributors in the research field of hypercompetition and explore their findings and different views on hypercompetition. Design/methodology/approach Systematically review 131 conceptual and empirical studies published or presented at a conference in the past 25 years, with the focus on the definitions, causes and consequences (or presumed effects) of hypercompetition. In the paper, I follow the well-known systematic literature review method by Tranfield et al. (2003). Findings The contribution of the study is to advance the knowledge of researchers and managers, in such a way that it becomes easier for them to select relevant variables to measure hypercompetition and identify strategies for gaining temporary competitive advantages in hypercompetitive environments. The construct of hypercompetition required a consolidation of commonalities in the definitions and characteristics used by scholars, to ensure that proper assumptions and variables are being used to measure hypercompetition in future research. Several ways to measure the effects of hypercompetition on firms, industries and individuals have been proposed, but the field still lacks of a clear definition on how to directly measure the construct. Practical implications In this paper, I highlight three managerial implications of hypercompetition as follows: action-based strategy, the determinants of hypercompetition and the importance for managers of accurately establishing their firm’s competitive situation. Originality/value Previous reviews in the area have either focussed on specific components or effects of hypercompetition. The present study collectively takes into consideration the definitions, causes and consequences of hypercompetition on firms, industries and individuals. The contribution of the paper is to indicate future opportunities and challenges within research on hypercompetition.

The strategic innovation under information technological turbulence: the role of organisational resilience in competitive advantage

Purpose This study aims to propose a structural model drawing from the theoretical literature, extending the relative research fields to the competitive strategy. The empirical results involve data collection of 582 data that represents various enterprises in the Indonesian context. The authors develop four scenarios of strategic innovation based on the empirical findings, which extend the discussion on the concept of competitive strategy. Design/methodology/approach This paper aims to examine the impact of organisational resilience and marketing communication on competitive advantage through new product development under information technological turbulence. Findings The results indicate that product development is less effective to firm competitive advantage during the high information technological turbulence than during low information technological turbulence. This study shows that organisational resilience and marketing communication help firms achieve a competitive advantage. The authors also identify four scenarios for strategic innovation, drawing from empirical results. Originality/value This paper extends the literature of resource-based views by proposing a model that concerns product development as the primary determinant of competitive advantage. In addition, this study discusses the intersection between the concept of dynamic capability and contingency theory by examining how firms deal with information technological turbulence.

Sustainable business models to create sustainable competitive advantages: strategic approach to overcoming COVID-19 crisis and improve financial performance

Purpose The purpose of this study is to evaluate whether the implementation of sustainable business models contributes to improving a firm’s performance during a global crisis, such as the one caused by COVID-19. Based on the triple bottom line theory, the paper explores the relation between the creation of value through solid corporate social responsibility (CSR) strategies, United Nations (UN) Global Compact’s (GC) business model proposals and Global Reporting Initiative’s (GRI) reporting scheme. Design/methodology/approach The present paper studies companies within the European Union, focusing specifically on the long-term impact of using the world’s most widely used standards for sustainability reporting – the GRI’s standards and/or the UNGC management models, as well as on the firm’s performance based on the financial results during COVID-19 crisis. To achieve this goal, the study analyses the share price of firms publicly listed in the FTSEMIB (benchmark index of Italy’s largest trading platform) out of those companies that are implementing the UN and GRI’s tools. Findings Findings show how a commitment to sustainable business models and long-term CSR strategies can contribute to firm’s ability to overcome periods of economic crisis. Furthermore, implementing GRI standards and UNGC guidelines within the business model seems to have a positive impact in overcoming a hard context such as COVID-19. In addition, it contributes to a better understanding of stakeholders’ needs, consumer profiling and value creation. Originality/value This study evaluates firms’ business models, considering the effects of decisions made in the context of COVID-19. The role of UNGC and GRI is evaluated in terms of their contribution to firms’ financial performance and corporate reputation during a context of hardship. Consequently, this study contributes to academia and practice, adding value in areas related to strategic planning and business model design.

Determinants of the exit value in European venture capital-backed technology startups

Purpose This study aims to analyze the impact of different exit alternatives, investor presence and founders’ human capital on the exit value of European venture capital (VC)-backed high technology startups. Design/methodology/approach The empirical analysis is based on a sample of 107 European firms that obtained an exit through Merger&Acquisition (M&A) or an initial public offering (IPO) between 2010 and 2017, backed by VC investors. Findings This study provides empirical evidence on how different exit alternatives, investor heterogeneity and founders’ human capital may affect the exit value of European VC-backed startups. Exiting through an IPO and retaining a larger equity stake are positively correlated with the exit value. The presence of business angels and non-governmental VC firms is associated with larger valuations. Founders’ previous education was positively correlated with the exit value. Originality/value Exit strategies in technology startups are essential to capitalize investors’ efforts and reinvest cash into new ventures, supporting the development of entrepreneurial ecosystems and countries’ competitiveness. The results of this study provide interesting hints for policymakers and contribute to an in-depth understanding of the drivers of exit valuation for startups.

The determinants of ESG in the banking sector of MENA region: a trend or necessity?

Purpose As reporting environmental, social and governance (ESG) information is not yet mandatory in all countries, it is intriguing to understand ESG’s underlying driving mechanisms. This study aims to investigate ESG determinants in the banking sector of the Middle East and North Africa countries. Design/methodology/approach The authors gather data for 38 listed banks for the period 2011–2019. The data used is threefold as follows: data related to ESG; firm-level; and country-level data. While ESG and firm’s level data are taken from Refinitiv, country-level data are extracted from the World Bank. Using panel regression, the authors test the effect of firm- and country-specific variables on the overall ESG score and its pillars. Findings Results indicate that banks’ ESG scores are negatively affected by performance and positively affected by size. The level of economic development exerts a negative impact on the environmental pillar while the social development exerts a positive impact on ESG and governance pillar. Corruption is the only country-level that gathers a homogenous effect on ESG scores. Finally, the three pillars follow heterogeneous patterns. Originality/value This study extends the scope of previous studies by introducing new country-level independent variables to contribute to the understanding of ESG antecedents.

Coopetition among competitors in global industries: drivers that lead to coopetitive agreements

Purpose The purpose of this study is to focus on a growing strategic approach in global industries: the coopetition. Cooperation among competitors, namely, coopetition, is a strategic guideline in many global industries affected by technological innovation. This study discussed the effect of firm-, inter-firm- and industry-level drivers leading to coopetitive agreements in global industries affected by technological innovation. Design/methodology/approach By using an event history analysis, the authors develop a framework on firm-, inter-firm- and industry-level drivers on the likelihood of each competitor in the industry entering into coopetitive agreements in global competitive contexts. Empirical data are analyzed in five global industries: car industry, telecommunication industry, air transportation industry, bank industry and computer programming services industry. Findings The results of this study suggest that firms’ experience in cooperation (H1) predicts whether a firm will enter a coopetitive agreement. Moreover, the cultural similarity among competitors (H2) predicts whether a firm will enter a coopetitive agreement with a culturally similar competitor, while the total number of competitors already involved in coopetitive agreements (H3) has a low positive effect on the likelihood of a firm to coopete. Finally, the speed of agreements among competitors (H4) and the total number of coopetitive agreements in the industry (H5) (only in the car industry and software industry) are positively related to the chance of a firm entering into a coopetitive agreement. Research limitations/implications First, the authors identified and tested specific drivers of coopetition as a result of the literature review and data accessibility. The results may have omitted some variables able to further explain the event of coopetition. Second, the results of cultural distance versus cultural similarity revealed differences on firms’ behavior according to their different nationality. Chinese firms were the most oriented to deal coopetitive agreements with other Chinese firms, while firms from other countries were progressively less oriented by cultural similarity. These results may lead to studies of the “country of origin effect” on which partners to include in coopeititve agreements or which network of partners to join. Finally, the findings of this study are based on five industries over a specific ten years period of time. Consequently, the results certainly reflect the evolution of these industries over the time period considered. Practical implications The empirical investigation clarifies the relationship between decisions on strategy and competitive dynamics with the decision-making option to coopete. While managers take into account strategic moves against competitors, according to the authors’ investigation, it is valuable to consider coopetitive actions, especially when other competitors are involved in coopetitive agreements and the industry is affected by technological innovation. Moreover, the knowledge of drivers at the firm, inter-firm and industry level affecting coopetition is helpful to identify the weak or strong signals that show the rise and proliferation of coopetition in an industry. Social implications This study highlights the relevance of coopetition as an emerging approach in the competition among firms for developing or exploiting technological innovations. This approach can improve results in technological innovations that can have an impact in sustainability as well as new innovative solutions for social progress. Originality/value In literature, attention has been focused on drivers explaining the growing number of coopetitive agreements in several industries. Some contributions already discussed this topic from the perspective of costs and benefits for players. This study tries to continue to fill this research gap by studying, at firm, inter-firm and industry level, drivers of the likelihood of each competitor in the industry entering into coopetitive agreements in global competitive contexts.