A Panel Study of the Impact of R&D on Financial Performance: Evidence from an Emerging Market

The corporate governance mechanism was initiated to curb the excesses of managers that are saddled with the running of firm and also protect the shareholders and public interest. However, the collapse of big firms all over the world few years ago has awaken a renewed interest in firm adherence to corporate governance mechanism. Similarly, in Nigeria some firms also face similar situation. This study set out to examine the impact of corporate governance on manufacturing firms’ financial performance in Nigeria. The data used were collected from 39 listed manufacturing firms in the Nigerian Exchange Group from 2003 to 2022. The panel regression technique was used to determine the impact of corporate governance on financial performance. The study used three measures of manufacturing firms’ financial performance namely; Return on Asset (ROA), Return on Equity (ROE) and Tobin Q. Seven variables were used to measured corporate governance namely; Independence Board (IND), Board Meeting (BM), Audit Committee (AUD), Board Structure/Composition (BOC), Board Size (BOS), Executive Stock Ownership (EXS) and Nomination Committee (NOC), and the control variable was Firm Age. These variables were subjected to several test; Variance Inflation Factor (VIF). The Breusch-Godfrey Serial Correlation Langragian Multiplier Test, Breusch-Pegan-Godfrey Heteroskedasticity and the Hausman Test selected the Random Effect Panel regression. The study found that AUD had a positive effect on ROA and Tobin Q but negative with ROE, BOS had a negative effect on ROA, and ROE but positive with Tobin Q, BM had a negative effect on ROA, and Tobin q but positive with ROE. BOC had a negative effect on ROE and Tobin Q but positive ROA. EXS had negative effect on ROA and Tobin Q, but positive with ROE. IND had a positive effect on ROA and ROE but negative with Tobin Q. FAGE had a positive effect on ROA and ROE but negative with Tobin Q while NOC had positive effect on all the three measures of manufacturing firms’ financial performance. We concluded that corporate governance had significant effect on manufacturing firms’ financial performance in Nigeria. However, when different measurements were used to proxy firm financial performance the effect contrasts, this may be attributed to both the market value and operating value of financial performance adopted for this study. Hence, the study cannot draw conclusion on which of the manufacturing firm’s financial performance is better.

Financial Performance is the result or achievement that has been achieved by the company's management in carrying out its function in managing company assets effectively for a certain period. This financial performance is needed by the company to know and evaluate the extent of the company's success rate based on the financial activities that have been carried out. Stock returns can be used as a performance measure, because stock returns can interpret the company's management ability in carrying out its business to get results from good financial performance. Therefore, it is necessary to measure Profitability ratios (Return on Assets, Return on Equity, Net Profit Margin) and Solvency ratios (Debt to Asset Ratio, Debt to Equity Ratio).
 This study aims to determine the effect of Profitability Ratios (Return on Assets, Return on Equity, Net Profit Margin) and Solvency Ratios (Debt to Asset Ratio, Debt to Equity Ratio) on the financial performance of a company. The sample used is the financial statements of the Indonesia Stock Exchange with the Pharmaceutical sub-sector with 05 samples that meet the criteria for research. The research method uses multiple linear regression analysis with simultaneous T test and F test hypothesis testing.
 The results based on the Partial T Test (1) Return on Assets (ROA) has a negative effect on financial performance, (2) Return on Equity (ROE) has a positive effect on financial performance, (3) Net Profit Margin (NPM) has a negative effect on financial performance. (4) Debt to Asset Ratio has a negative effect on Financial Performance, (5) Debt to Equity Ratio has a positive effect on Financial Performance and for the simultaneous F test, the results show that simultaneously Return on Assets, Return on Equity, Net Profit Margin, Debt to Assets Ratio, Debt to Equity Ratio affect Financial Performance.
 
 Keywords: Profitability Ratio, Return on Assets, Return on Equity, Net Profit Margin, Solvency Ratio, Debt to Asset Ratio, Debt to Equity Ratio, Financial Performance, Stock Return.

This study investigates the nexus between return on assets (ROA), return on equity (ROE), dividend payout ratio (DPR), and firm value, represented by stock prices, within the consumer goods industry sector on the Indonesia Stock Exchange from 2019 to 2021. Utilizing a sample of 26 companies, employing Partial Least Square (PLS) analysis, the research reveals that neither ROA nor ROE significantly influences stock prices, and ROE exhibits no impact on DPR. Moreover, DPR fails to influence stock prices, and it cannot serve as an intervening variable between ROA or ROE and stock prices. These findings suggest a decoupling between financial performance metrics and market valuation within the consumer goods sector, urging a reconsideration of conventional wisdom regarding the determinants of stock prices in this industry Highlights : Limited Influence of ROA and ROE: The study reveals that return on assets (ROA) and return on equity (ROE) do not significantly impact stock prices in the consumer goods sector. Mediation Role of DPR: Dividend payout ratio (DPR) fails to mediate the relationship between ROA or ROE and stock prices, indicating its limited influence on market valuation within the sector. Implications for Market Valuation: The findings challenge traditional assumptions about the determinants of stock prices in the consumer goods industry, prompting a reevaluation of financial performance metrics' relevance in market valuation. Keywords: Consumer Goods Sector, Stock Prices, ROA, ROE, DPR

The objective of this study is to empirically assess the effect of bank-specific and macroeconomic determinants of Ethiopian private commercial banks financial performance using three measures namely, return on assets (ROA), return on equity (ROE) and economic value added (EVA) for the period 2006 to 2015 by using multiple regression on a sample of seven private commercial banks. The results indicated that performance persists to some extent, indicating the existence of relatively fair competitive market in private commercial banking environment. Regarding the explanatory variables from bank-specific determinants, Capital adequacy (CAP has a significant and positive relation with ROA and significant and negative relation with ROE and EVA. In addition, ASQ has a significant and negative relation with ROA and insignificant and negative relation with ROE and EVA. Whereas ME affect bank performance (ROA, ROE and EVA) significantly and negatively. On the other hand, LIQ and BS affect bank performance (ROA, ROE and EVA) significantly and positively. Furthermore, GDP has an outsized positive and significant effect on both ROE and EVA but an insignificant effect on ROA. Therefore, Ethiopian commercial banks policy makers and managers should give high emphasis on CAP, ASQ, ME, LIQ, BS and GDP as these were found to have significant effect on private commercial banks financial performance. Key words: Financial performance, return on assets (ROA), return on equity (ROE) and economic value added (EVA).

Purpose Intellectual capital (IC) plays a pivotal role in the high-tech and knowledge-based economic sectors. With the emergence of FinTech, which, with respect to the banking sector, is merging high-tech with the k-economy, there is an emerging need to highlight the importance and understand the dynamics of bank IC. With respect to Gulf Cooperation Council (GCC) economies, where FinTech has become de rigueur, banking is bifurcated into Islamic and banking sectors. Through comparative empirical analysis, the purpose of this paper is to examine IC efficiency in Islamic and conventional banks with a view to elucidating the impact of IC, in aggregate and decomposed into its components, on an operational, financial and market performance of Islamic banks juxtaposed with conventional banks. Design/methodology/approach Using data collected from 59 banks for five years (2012-2016) involving 295 observations, an independent variable derived from the modified value added IC (MVAIC) components are regressed against dependent bank performance indicator variables [Return on Assets (ROA), Return on Equity (ROE) and Tobin’s Q (TQ)]. Two types of control variables complete the regression analysis in this study: bank-specific and macroeconomic. Findings The findings elicited from the empirical results demonstrate that there is positive relationship between IC efficiency and financial performance (ROE) and market performance (TQ) in Islamic banks. In conventional banks, however, there is a positive relationship between IC and operational performance (ROE) and financial performance (ROE). Originality/value The model in this paper presents a valuable analytical framework for exploring IC efficiency as a driver of performance in dual-sector banking economies characterized by co-existence of Islamic and conventional financial institutions. In addition, this paper highlights bank management lacunae manifesting in terms of the weak nexus between: IC and asset efficiency (ROA) in Islamic banks and IC and market value (TQ) in conventional banks.

This study aims to determine "The Impact of Good Corpoorate Governance to Financial Performance on basic banking companies in Indonesia Stock Exchange". Data collection techniques used purposive sampling and the number of samples in this study were 50 data. From the results with partial test (t) use return on asset (ROA) the board of directors has a positive and insignificant effect on financial performance of return on asset (ROA), board of commissioners has a positive and not significant effect on financial performance of return on asset (ROA), audit committee does not significantly influence financial performance return on asset, good corporate governance has no significant effect on financial performance return on asset (ROA). From the results with partial test (t) use return on equity (ROE) the board of directors has a positive and insignificant effect on financial performance of return on equity (ROE), board of commissioners does not have a significant effect on financial performance on return on equity (ROE), audit committee does not have a significant effect on financial performance return on equity (ROE), good corporate governance has no significant effect on financial performance return on equity (ROE).

This study examines the impact of capital adequacy ratio, net interest margin, and debt-equity ratio on the financial performance of Nepalese commercial banks. Return on assets (ROA) and return on equity (ROE) are the selected dependent variables. The selected independent variables are non-performing loans, capital adequacy ratio, net interest margin, loan-to-deposit ratio, debt to equity ratio, and bank size. The study is based on secondary data of 15 commercial banks with 105 observations for the study period from 2015/16 to 2021/22. The data were collected from Bank Supervision Report published by Nepal Rastra Bank (NRB) and annual reports of the selected commercial banks. The correlation coefficients and regression models are estimated to test the significance and importance of capital adequacy ratio, net interest margin, and debt-equity ratio on the financial performance of Nepalese commercial banks. The study showed that non-performing loan has a negative impact on return on assets and return on equity. It indicates that increase in non-performing loan leads to decrease in return on assets and return on equity. Similarly, capital adequacy ratio has a negative impact on return on assets and return on equity. It indicates that increase in capital adequacy ratio leads to decrease in return on assets and return on equity. Likewise, net interest margin has a positive impact on return on assets and return on equity. It indicates that increase in net interest margin leads to increase in return on assets and return on equity. In contrast, loan-to deposit ratio has a negative impact on return on assets and return on equity. It indicates that higher the loan-to-deposit ratio, lower would be the return on assets and return on equity. In addition, debt-to-equity ratio has a negative impact on return on assets and return on equity. It indicates that increase in debt-to-equity ratio leads to decrease in return on assets and return on equity. Moreover, bank size has a positive impact on return on assets and return on equity. It indicates that larger the bank size, higher would be the return on assets and return on equity.

Purpose – The aim of this study is to analyze the relationship between the structures of the board of directors and financial performances of family businesses listed on the Borsa Istanbul. Design/methodology/approach – In this study, in parallel with the report of the European Commission, if the entrepreneur who established or acquired the firm (share capital) or their families or descendants possess 25 percent of the decision-making rights mandated by their share capital, the business has been accepted as a family business. As the determinants of the board structure of the businesses; the board size, the non-executive member rate in the board, the independent member rate in the board and the women member rate in the board were used. Benefiting from the previous research, financial performances of businesses are measured by return on assets (ROA), return on equity (ROE), return on sales (ROS) and leverage (LEV). A total of 160 family businesses (except financial institutions) in Borsa Istanbul which can be reached board structure of businesses are included in the scope of the research. Data on the board structures and financial performances of businesses belong to January 1-December 31, 2018. The relationship between the board structures and financial performances of family businesses has been tested by regression analysis. Findings – As a result of the analysis, it has been found that there is no significant relationship between the board structures of family businesses and ROA, ROE, ROS. On the other hand, the model between the board structures of family businesses and LEV (F = 3.304, sig. = 0.012) has been found significant. Accordingly, while a negative relationship has been found between the independent member rate in the board and LEV, there is no significant relationship between the board size, non-executive member rate, women member rate and leverage. Discussion – According to the findings, it can be stated that the board size, rate of non-executive members, rate of independent members and rate of female members in family businesses do not affect financial performance in terms of ROA, ROE, ROS. However, it can be said that the leverage decreases as the rate of independent members in the board of directors in family businesses increase.

The objective of this study is to examine the impact of Intellectual Capital (IC) on financial performance and sustainable growth within consumer goods sector companies in Indonesia over the period from 2018 to 2022. The research employs a multiple regression analysis method to assess the relationship between IC variables—measured using the Value Added Intellectual Coefficient (VAIC)—and its components: Capital Employed Efficiency (CEE), Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), Innovative Capital Efficiency (RDE), and Relational Capital Efficiency (RCE), in relation to financial performance indicators such as Return on Assets (ROA), Return on Equity (ROE), Sales Growth (SG), and Sustainable Growth Rate (SGR). The results of the analysis indicate a relationship between IC and financial performance, where VAIC demonstrates a significant influence on ROA, ROE, SG, and Sustainable Growth Rate (SGR) in the companies. However, findings regarding the individual IC components (CEE, HCE, SCE, RDE, and RCE) reveal varying effects on financial performance (ROA, ROE, and SG) and SGR. The implications of this study emphasize the critical importance of effective management and development of Intellectual Capital for companies, particularly in enhancing financial performance and achieving sustainable growth.

This study investigates the impacts of political unrest; firm-specific and macroeconomic factors on the financial performance of the insurance industry in Ethiopia during youth-led mass anti-government protests. The study used, Return on Assets (ROA) and Return on Equity (ROE) as dependent variables. Eight key independent (internal and external) variables are also used. The study selected 17 out of 18 due to the availability of data for the period ranging from 2014 to 2022. The descriptive and multiple regression analyses were done. The results of the study indicate that political violence and terrorism (PV&T) have a negative and significant effect on ROA and ROE, while GDP has a positive and significant effect on ROA and ROE. The findings also show that financial risk (FR) has a negative and significant effect on ROA and ROE but a positive and significant effect on ROA and ROE. Furthermore, the study reveals that the size of company (SZ) and premium growth (PG) have a significant and positive impact on ROA but insignificant effect on ROE as well as liquidity (LQ) and asset tangibility (ATG) have a significant negative effect on ROE but insignificant effect on ROA. The inflation rate (INF) has no effect for both models on Ethiopian insurance financial performance. This study is considered one of the first pioneering studies that determined the factors affecting the financial performance of insurance companies in Ethiopia. Therefore, the study gives good insights to policymakers, regulators, and interested parties about enhancing the profitability of insurance companies in Ethiopia. Keyword: - political unrest, firm specific factor, macroeconomic factor, financial performance, insurance industry, Ethiopia JEL Classification G22 G32 F50

Bu çalışmanın amacı Borsa İstanbul (BIST)’da faaliyet gösteren bankaların finansal performansı ile makroekonomik değişkenler ve içsel faktörler arasındaki ilişkiyi araştırmaktır. Bu amaçla BIST’de faaliyet gösteren bankaların 2005-2017 dönemine ilişkin verileri analiz edilmiş ve regresyon yöntemi kullanılmıştır. Bankaların finansal performans göstergeleri olarak aktif karlılık oranı (ROA), öz kaynak karlılık oranı (ROE), Tobin’s Q (TOBIN) oranı ve fiyat/kazanç (F/K) oranı araştırmada yer almış olup, çalışmanın bağımlı değişkenleridir. Makroekonomik değişkenler olarak enflasyon ve işsizlik kullanılmıştır. Toplam aktifler, finansal kaldıraç ve yaş değişkenleri araştırmanın içsel faktörleridir ve makroekonomik değişkenler ile birlikte araştırmanın bağımsız değişkenlerini oluşturmaktadır. Araştırma sonuçlarına göre finansal performans göstergeleri olan aktif karlılık oranı (ROA), öz kaynak karlılık oranı (ROE), Tobin’s Q (TOBIN) oranı ve fiyat/kazanç (F/K) oranı toplam aktifler, finansal kaldıraç ve yaş değişkenleri ile istatistiki olarak anlamlı bir ilişkiye sahiptir. Buna karşın söz konusu finansal performans göstergeleri ile makroekonomik değişkenler arasında anlamlı bir ilişki tespit edilememiştir. Tahmin edilen tüm modellerde finansal performans göstergeleri ile toplam aktifler arasında anlamlı ve pozitif yönlü bir ilişki tespit edilmiştir. Finansal performans göstergeleri ile finansal kaldıraç oranı ve yaş arasında negatif yönlü bir ilişki bulunmaktadır. Buna göre bankaların toplam aktiflerini istikrarlı bir şekilde büyütmeleri bankaların finansal performansını olumlu yönde etkilemekte ve karlılığı arttırıcı bir faktör olarak öne çıkmaktadır.

PurposeCorporate social responsibility (CSR) has evolved since the nineteenth century and is becoming mandatory for firms. However, the association between CSR and financial performance remains fluid. The purpose of this paper is to examine the mediating effect of third-party assurance (TPA) and the moderating effect of financial leverage in CSR – financial performance relationship.Design/methodology/approachPanel and hierarchical regression models are used to analyse data covering 29 companies in the Indian stock market for the period, from 2010 to 2017.FindingsThe study shows that CSR has a positive association with financial performance (ROA (return on assets) and ROE (return on equity)) of listed firms in India. The second finding shows that TPA has a negative association with financial performance (ROA and ROE) and negatively mediate the association between CSR and financial performance (ROA and ROE). Further, the findings also show that financial leverage has a negative association with ROA but no association with ROE, and is unable to moderate the association between CSR and financial performance. Lastly, financial leverage has no association with TPA and unable to moderate the association between CSR and TPA.Research limitations/implicationsThe scope of the study is limited to large firms submitting sustainability reports based on the Global Reporting Initiative (GRI) guidelines, and this criterion is likely to limit the generalisation of the findings.Practical implicationsCapital market investors look for new markets to invest, and CSR results show a positive return for equity investors, which may encourage capital market investments in a mandatory CSR environment. The mediating effect of TPA has the potential to force managers to undertake CSR activities, which leads to a user-friendly environment and improved social sustainability.Originality/valuePrevious studies show a mix association between CSR and financial performance. Nevertheless, some of the possible reasons for the mix association have not received scholarly attention. Hence, the role of the mediating effect of TPA and the moderating effect of financial leverage in CSR-financial performance relationship.

In the ever-changing world of financial markets, the intersection between financial distress and performance is important. Financial distress, an entity's inability to satisfy its financial obligations, can seriously affect a company or individual's market value and stability. Sri Lanka's financial sector has recently faced difficulties, with certain institutions failing due to insolvency or regulatory noncompliance. The research intends to give significant insights to stakeholders, regulators, and investors in the Sri Lankan finance industry by utilizing Altman's Z-score model. This study examines the relationship between financial distress and financial performance in 22 licensed finance institutions in Sri Lanka from 2013 to 2022. The study's independent variable is financial distress, measured by Altman’s Z’Score model, and the dependent variable is financial performance, measured by Return on Assets (ROA) & Return on Equity (ROE). Descriptive analysis, Correlation analysis and panel data regression were used to analyze the data in the study. The study supported that financial distress significantly impacts the ROA and ROE which are considered as financial performance measurements. The higher distress firms showed a lower performance during the period. The main indication given where companies should focus on the distress of the company can be analyzed through the Altmans Z score model. Licensed finance companies can have proactive measurements to enhance the liquidity reserves and optimize the capital structure of the firm. The findings are significantly important for the management of Licensed finance companies in Sri Lanka to manage their future strategies. The study's result indicates a significant impact of financial distress on the financial performance of listed licensed finance companies in Sri Lanka.

The paper examines the impact of corporate governance and financial disclosure on the financial performance of banks in Ghana. Corporate governance was measured by three variables: board size, CEO duality, and board composition. Financial disclosure was also measured by timeliness, bank size, and quality of auditors. Financial performance, as the dependent variable, was measured by return on assets (ROA), and return on equity (ROE). The study used panel data from 18 commercial banks operating within the Ghanaian banking industry, both listed and unlisted, over a ten-year period (2009 to 2018). A random-effects regression model was used, and the results revealed that board size, timeliness, and quality of auditors were statistically significant and positively related to return on assets. Board composition, however, had a significant negative relationship with return on assets. There was no significant association between bank size and return on assets. Moreover, the findings of the study showed that board size and bank size had a positive and significant relationship with return on equity. Board composition and timeliness were however negative and statistically related to the return on equity. There was no significant nexus between the quality of auditors and return on equity. The study findings place emphasis on the combined effect of corporate governance and financial disclosure on financial performance, particularly within the banking industry in Ghana. Keywords: Corporate Governance, Financial Disclosure, Financial Performance, Commercial Banks.

The performance of State-Owned Enterprises (BUMN) and Regional-Owned Enterprises (BUMD) is currently the main hope regarding state revenues and one source of regional income, because BUMN and BUMD are national assets and regional assets which are very important as a source of funds for economic recovery. nationally, especially the Covid-19 pandemic that has just passed. The aim of this research is to determine the performance of BUMN compared to the performance of BUMD. Logically, the very large resources of BUMN compared to BUMD should make BUMN's performance better than BUMD and the results are expected to be very different. The data used is BUMN and BUMD financial performance data for five years, namely the 2017-2021 period. In this research, financial performance assessment uses financial ratio indicators, Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Net Profit (NPM), Return On Assets (ROA) and Return On Equity (ROE) Test the hypothesis using the Kolomogorov-Sminov for normality-test and t-sample independent-test. The results of this research show that the financial performance of BUMN determined by the Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Return On Assets (ROA) and Return On Equity (ROE) is not significantly different from the financial performance of BUMD for the 2017-2021 period.The performance of State-Owned Enterprises (BUMN) and Regional-Owned Enterprises (BUMD) is currently the main hope regarding state revenues and one source of regional income, because BUMN and BUMD are national assets and regional assets which are very important as a source of funds for economic recovery. nationally, especially the Covid-19 pandemic that has just passed. The aim of this research is to determine the performance of BUMN compared to the performance of BUMD. Logically, the very large resources of BUMN compared to BUMD should make BUMN's performance better than BUMD and the results are expected to be very different. The data used is BUMN and BUMD financial performance data for five years, namely the 2017-2021 period. In this research, financial performance assessment uses financial ratio indicators, Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Net Profit (NPM), Return On Assets (ROA) and Return On Equity (ROE) Test the hypothesis using the Kolomogorov-Sminov for normality-test and t-sample independent-test. The results of this research show that the financial performance of BUMN determined by the Current Ratio (CR), Debt To Equity Ratio (DER), Debt To Total Asset Ratio (DTA), Return On Assets (ROA) and Return On Equity (ROE) is not significantly different from the financial performance of BUMD for the 2017-2021 period.