Narrow Results

This research develops a difference-in-differences (DID) model to explore the relationship between environmental policy (The Measures for the Administration of Permits for the Discharge of Key Water Pollutants in the Huaihe and Taihu River Basins, MAPD) and the performance of firms involved in the paper and paper products industry (MPP) in China. Cost and innovation are introduced as mediators to explore the mediating effects. A firm-level dataset from 1998 to 2007 is adopted for empirical study. The findings support the positive role of the MAPD, and the average treatment effect is 0.016.The heterogeneity analysis shows that the MAPD exerts a positive impact on non-state-owned and small-scale enterprises, with coefficients of 0.018 and 0.021, respectively. Moreover, MAPD increases enterprise costs harming firm performance. On the other hand, it can promote firm performance by improving innovation ability.

Using the Chinese A-share listed enterprises from 2015 to 2022, this paper investigates the impact of labor outsourcing on the cost of debt. I find that labor outsourcing reduces the cost of debt. The research conclusion is still valid after a series of robustness tests. In terms of economic significance, labor outsourcing reduces the cost of debt by 9.43%. The mechanism tests suggest that labor outsourcing can reduce the cost of debt by improving corporate performance and information transparency. Further analyses find that the relationship between labor outsourcing and the cost of debt is more prominent for non-state-owned enterprises and firms located in regions with lower banking competition. This paper is the first empirical study on the impact of labor outsourcing on the cost of debt, which has important theoretical and practical significance.

This study examines the impact of blockchain technology (BCT) and corporate governance practices on firm performance. Using GMM on a sample of 2,844 firms, the results show that BCT improves firm performance. The results show an average difference in corporate governance and financial variables between BCT firms and firms from other sectors. In the presence of BCT, independent and female directors, and Top10-Shareholdings no longer positively affect firm performance, while the impact of board size and Largest-Shareholdings become positive. Chief executive officer (CEO)-Duality negatively, while Institutional-Shareholdings positively affect the firm’s performance, either individually or in the presence of BCT. Managerial-Shareholdings showed mixed results. A sub-sample analysis reveals that the role of board size and CEO-Duality becomes ineffective in BCT firms. This study reveals that the monitoring function of corporate governance practices in optimizing agency costs and maximizing firm performance is different in the firms using BCT. Our results hold up to economic parameters such as difference-in-differences and propensity score matching.

Scholars have begun to pay more attention to green entrepreneurial concerns (GEC) and sustainable management of supply chain (SMSC) practices, but the impact of these factors on a firm’s competitive performance (FCP) remains unclear, especially post COVID-19. Although previous studies have examined GEC and SMSC practices, they have mainly focused on assessing their effects on general firm performance, not specifically on FCP and the post-COVID-19 perspective. Therefore, this study investigates the direct links between GEC and SMSC, and between SMSC and FCP from a COVID-19 standpoint. This paper also examines the mediating effect of SMSC on the GEC–FCP relationship, and the moderating effect of digital technologies on the GEC–SMSC correlation. This study is a survey-based empirical research. The survey forms or questionnaires were distributed to 330 companies in Yemen with a response rate of 83.9%. The conceptual framework was assessed with structural equation modeling. The analysis outcomes indicate that GEC significantly affects SMSC and then FCP. The outcomes also unveil that SMSC mediates the GEC–FCP relation. Furthermore, digital technologies (e.g. artificial intelligence and big data analytics) significantly moderate the relationship between GEC and SMSC. This paper contributes to the existing literature by (i) expanding the limited findings of previous SMSC works by delivering a novel factor of GEC to boost the FCP via SMSC post the pandemic; and (ii) increasing knowledge about the effect of digital technologies on advancing SMSC and later FCP post the pandemic. Different from other academic works that have observed SMSC as a direct predicting factor for firm performance, the research offers novel insights about the capability of SMSC to mediate the relationship between GEC and FCP, and digital technologies can support the incorporation of GEC and SMSC for companies’ internal operations, particularly in the era of uncertainty such as in the post-pandemic times.

This paper reexamines the relation between firm performance and board size using the data of Japanese companies. We find a significantly positive relation between firm performance and board size when the board size is small, but a significantly negative relation when the board size is large. Our finding is different from major empirical research such as the work by Yermack, Eisenberg et al. and Coles et al. [Yermack, D (1996). Higher market valuation of companies with a small board of directors. Journal of Financial Economics, 40, 185–211; Eisenberg, T, S Sundgren and MT Wells (1998). Larger board size and decreasing firm value in small firms. Journal of Financial Economics, 48, 35–54; Coles, JL, ND Daniel and L Naveen (2008). Boards: Does one size fit all? Journal of Financial Economics, 87, 329–356].The empirical results regarding the relation between firm performance and board size might depend strongly on the characteristics of firms used in a given analysis.

This study investigates whether government participation in firm ownership leads to better firm performance of publicly listed companies in Malaysia. The sample covers 257 companies listed on the Bursa Malaysia from 1997 to 2009. Multiple regression models with balanced panel data are used to examine the impact of government ownership (GOVN) on firm performance. We find a negative relationship between GOVN and firm performance, a finding that supports the negative public perception of government-linked companies (GLCs) in Malaysia. We conclude that government ownership is not an effective tool for improvement of firm performance in Malaysia.

Most studies on the relationship between agglomeration economies and economic performance have focussed on regions in general or manufacturing. Very few papers have considered the impacts of agglomeration economies on the economic performance of knowledge-intensive business services (KIBS) firms. We propose a theoretical framework based on the characteristics of KIBS to study the precise channels through which KIBS firms benefit from specialization externalities and diversity externalities. The empirical evidence based on the software and IT services industry in China, a very dynamic branch of KIBS, shows that firms benefit from service diversity externalities but not specialization externalities, consistent with the idea of “nursery cities”.

The relationship between macroeconomic factors and firm performance is important, especially for growth and development in developing countries. In this paper, a firm-level dataset is used for estimating the role of macroeconomic factors on firm performance in the period 2006–2017 for the Turkish manufacturing sector by using GMM model. Four macroeconomic factors are considered for estimating their roles on firm performance; openness, financial depth, real exchange rate, and economic growth rate. The obtained findings show that the macroeconomic conditions have a significant effect on firm performance in the manufacturing sector in Turkey.

Utilizing a case study methodology, this study investigates ways in which fast growth small-to-medium enterprises (FGSMEs) measure firm performance. This investigation, involving 21 interviews with 18 companies, revealed that FGSMEs seem to adopt a multi-level approach involving different sources and contexts to performance measurement. Apart from the application of standard financial performance measures such as profits and growth, FGSMEs also utilize measures of customer satisfaction, attainment of industry awards, receipt of client reports, website popularity, number and quality of successful innovations adopted, objective employee performance indices, and staff retention. Founders highlight the importance of providing employees with flexible environments and career opportunities as a way to reduce churn. These organizational characteristics signal non-financial benefits and incentives of working in these firms to potential employees and customers. These findings are in accord with extant literature and the balanced scorecard perspective, advocating associations between performance measurement systems and management strategies.

Public sector support is important for SMEs due to the finance and stability it offers, the measures are often designed specifically to answer the problems SMEs face and they can help fill gaps in the existing capacities of the firms through the network of expertise the measures allow them to access. There has been an ongoing debate over what effect support services have on the development of assisted firms, and the initial high expectations about the effectiveness of these services now seem overoptimistic, giving rise to more critical examinations of the effectiveness of these services and the institutions involved. With 93 technology-based SMEs in North Wales during a period of relative decentralization of provision of public business services and support in Wales, this study investigates: (1) how technology-based SMEs in North Wales perceive the quality of the services provided by local or national public support organizations; (2) if gaps exist in support then how differently these gaps are perceived by high and low performing firms; and (3) what services they perceive helpful to their business performance, and how differently these services are perceived by high and low performing firms.

This study aims to uncover the impact of individual- and firm-level factors, measured by personality traits of the owner-managers and firm serendipity-seeking in explaining SMEs performance and the moderating impact of firm size. The results of the study show that firm-level factors are more important in explaining SMEs performance. Firm size is also found to moderate the effect of need for achievement and endogenous serendipity-seeking of the SMEs but the results do not conclude whether individual- or firm-level factors are more relevant to predict the performance of SMEs with different size. The findings could provide an alternative direction of study to the inconsistent results in studying effect of personality traits and SMEs' performance.

This study examines the effect of digital capability on firm performance and firm growth. We apply the resource-based view and especially its expansion of the dynamic capabilities perspective to illustrate how digital capability is positively related to firm performance and firm growth, and how firm size is a relevant factor in explaining digital capability in incumbent SMEs. The context of this study is Finnish SMEs. The data were gathered from 242 SME owner-managers and analysed with structural equation modelling. The results show that smaller firms have less digital capability than larger SMEs and that smaller firms struggle with performance indicators. Digital capability is positively related to firm performance and firm growth. Our results indicate that although several factors explain and alter the course of firm growth, digital capability can boost the opportunity creation process, and aid survival in the face of competition. Digital capability is an important resource in SMEs and allows firms to safeguard the sustainability of their business model. We argue that digital capability is strongly related to SME’s management practices and SME owner/manager’s commitment to responding to digital transformation. This research sheds light on the importance of strategic leaders’ perceptions of digital capability on incumbent SMEs’ competitive advantage, and contributes both entrepreneurship theory and practice.

Firms with higher board independence, smaller boards, and lower expected managerial entrenchment, have lower cash holdings. We find that the positive association between cash holdings and managerial entrenchment is mitigated by stronger board structures. Specifically, in firms with higher expected managerial entrenchment, those with higher proportion of outside director on the board and smaller board size have lower cash holdings. We also find that firm value is negatively associated with cash levels. The negative association between firm value and cash holdings is more pronounced in firms with (i) lower proportion of outside directors, (ii) larger boards and (iii) higher expected managerial entrenchment. For firms with both high cash holdings and high expected managerial entrenchment, investors additionally discount the valuation of firms with lower proportion of outside directors and those with larger boards.

This research separates out the incentive and entrenchment effects of executive pay and uses it to test if the agency cost is that of underinvestment or overinvestment. I find that investments increase with dollar value of stock and options owned by the CEO but decrease with percentage of shares owned by the CEO. These results are robust to alternate measures of investments such as R&D, acquisitions, and change in assets. It appears that the positive relationship between investment and percentage of stocks owned by the CEO, as observed in the literature, is because of the omitted variable of dollar value of stock and options. I also find that the increases in dollar value of stock and options owned by the CEO reduces agency costs; while increases in percentage of stocks owned by the CEO increases entrenchment. These results are robust to endogeniety and a battery of relevant tests. This research concludes that, for the average firm, the agency cost is that of underinvestment, while the concerns about overinvestment are overstated.

This study examines whether the relationship between managerial ability and firm performance is driven by familiness and foreignness of the CEOs. We divide the sample of CEOs according to their familiness and foreignness and estimate CEOs abilities via DEA and Tobit regression. We then employed dynamic GMM panel estimator to address the endogeneity issues. Based on a sample of 361 firms in Malaysia over 2011–2015, we documented empirical evidence that managerial ability of local CEOs with foreign working or education experience are most positively related to Tobin’s Q, followed by local CEOs without foreign experience. We further found that local CEOs contribute to firm performance only if they are not family connected with the firm. Last, our findings also suggest that the presence of foreign CEOs improve the firm performance when they are nonfamily CEOs originated from high management practice countries.

This paper examines the empirical relationship between working capital management (WCM) and firm performance (FP) for Australasian publicly listed firms. Australia and New Zealand are attractive investment destinations due to their business friendly environments. The past two decades have seen increased academic attention in studies linking WCM and FP across various parts of globe. The empirical relationship between WCM-FP has not been sufficiently examined in regards to Australian and New Zealand firms. This study measures the role of WCM during the 2008 global financial crisis in both Australia and New Zealand firms. This study uses System General Method of Moments to address the endogeneity problem in order to reduce the possibility of biased results. The results show that WCM has a significant relationship with FP. More specifically, the Cash Conversion Cycle (CCC) and the Inventory Conversion Period (ICP) exhibit negative relationships with FP indicating that a reduction in the CCC and the ICP help to improve FP in Australasian firms. However, in the case of the Average Collection Period (ACP) and the Average Payment Period (APP), the results vary between both countries. In Australia, the ACP has no significant relationship, whereas APP has a positive relationship. This is contrary in the case of New Zealand firms. Another important finding is that firms in both markets were relatively efficient collecting their receivables during the 2008 global financial crisis period. These findings provide new empirical evidence that WCM matters for improving FP in Australasian firms.

The relationship between executive compensation and firm performance is well documented in the existing literature. However, in the case of Asia Pacific firms, the least attention is paid while investigating this relationship. This study examines the relationship between executive compensation and firm performance in the Asia Pacific firms throughout 2007–2019. We use the total salary paid to chief executive officers and equivalent, the total compensation paid to the CEO, and the equivalent and total salaries and bonuses paid to the CEO and equivalent as a measure of executive compensation. For the firm performance, both accounting measure (ROA) and market measure Tobin’s $Q$ (TQ), and various control variables were used. We found that a firm performance has a positive relationship with total compensation paid to CEO and total salaries and bonuses paid to the CEO. Our results support the agency theory by confirming that higher CEO compensation will lead towards higher firm performance by motivating executives to maximize shareholder benefits. However, the total salary does not have any significant relationship. The overall result of the study indicates that the results of the Asia Pacific regions complement the results obtained in another part of the developed world. The results are supported by the social comparison theory. The study has a practical implication for policymakers, business owners, shareholders, and executives by suggesting aligning their business strategies based on compensation parameters for achieving the best firm performance.

This study examines the association between firms’ tax avoidance and long-term investments. We find that tax avoidance firms make greater investment than nontax avoidance firms, and that the positive association between tax avoidance and investments holds both for firms that are financially constrained, and therefore ex-ante likely to underinvest, and for financially unconstrained firms that are ex-ante more likely to overinvest. Our results further show that CEO equity incentives and governance strength exert an incremental effect on investment decisions of tax avoidance firms. In additional analyses, we demonstrate that tax avoidance firms’ investments are associated with improved future firm performance especially when those firms are ex-ante more likely to underinvest. For tax avoidance firms that are ex-ante more likely to overinvest, current investments are associated with declined future firm performance. Tax avoidance firms have higher (lower) investment efficiency in terms of improved (declined) operating profitability in the post-investment period when they have lower (higher) CEO equity incentives and stronger (weaker) governance. Overall, our results shed light on efficiency in utilizing the available cash through tax avoidance in long-term investments that might create shareholder value for a group of financially constrained firms but diminish shareholder value for another group of financially unconstrained firms.

This study aims to identify the strategic roles of competitive intelligence and to examine the mediating effect of competitive intelligence practices on the relationship between perceived strategic uncertainty and firm performance. Data are collected from 123 public listed companies in Malaysia using mail questionnaire survey. The study highlights the essential role of competitive intelligence in supporting strategic decision making and strategic planning as well as in identifying opportunities and threats. Results reveal that perceived strategic uncertainty relates positively to competitive intelligence practices, which in turn, relates positively to firm performance. This paper includes implications, limitations, and recommendations for future studies.

In this study, we investigated strategies that small and medium-sized enterprises (SMEs) in Canada employ to create, transfer, and apply knowledge, and we evaluated the importance of supporting dynamic knowledge capabilities and information systems. To examine the empirical support for a model based on the resource-based view of the firm, we conducted a survey of SMEs operating in knowledge-intensive industries. We tested relationships among knowledge strategy, information systems strategy, dynamic knowledge capabilities, and firm performance. SME performance was measured by their physical and financial capital, as well as four intangible types of capital: structural, human, innovation, and relational. We observed that dynamic knowledge capabilities only partially mediate the link between knowledge strategy and performance in SMEs. However, dynamic knowledge capabilities fully mediate the link between information systems (IS) strategy and performance in the small and medium-sized firms studied. We observed that information systems only indirectly influence firm performance, but they directly support the knowledge and innovation capital of SMEs. Further, our results indicated that, in SMEs, knowledge strategies directly influence IS strategies, and that alignment between knowledge strategies and IS strategies positively impacts dynamic knowledge capabilities, and hence firm performance.