Firm financial performance in the wake of political turmoil; whether political connection is propitious?

This study analyzes the effects that certain political-uncertainty factors have on financial firm performance in the Stock Exchange of Thailand (SET). The results of a panel regression performed on a database of 7976 firm-years over 18-year unbalanced panel data from 2001 to 2018 show a mixed relationship between political uncertainty and firm performance. The constitutional reform harms the return on assets (ROA), and the government election and political protest significantly decreased the market value of equity (MVE). In contrast, constitutional reform increased MVE, and the government election positively impacted ROA. Therefore, this study emphasizes how political unpredictability is assumed to influence firm performance in Thailand’s economy, an Asian developing country.

Political connections, government subsidies and firm financial performance: Evidence from renewable energy manufacturing in China

Prior theoretical and empirical studies have suggested that political influence affects the application of corporate governance and firm performance enormously. However, several fundamental questions remain to be answered. To fill this knowledge gap,the study's main objectives are examining the direct impact of political connection on firm financial performance in Pakistani non-financial listed companies and the moderating effect of director's financial expertise on political connections and firm financial performance. The study utilised panel data of 220 firms from 2008 to 2017 and used panel corrected standard error regression analysis. The results show that political connection negatively impacted firm financial performance, and director financial expertise as a moderator strengthened the relationship between political connections and firm financial performance. This study's results supported political economy theory in that weak judicial systems and unstable political systems have immense effects on investor’s rights. The study contributes to extending the existing literature on political connection by providing evidence of the impact of politically connected firms on firm performance in an emerging market. The study also deliberates on how the director’s financial expertise contributes towards the relationship. The findings could be generalised to other countries with similar degrees of development and culture.

The main motivation of this study stemmed from the dearth of empirical evidence of the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria and also to provide empirical proof on “governance disclosure” as one of the explanatory variables of sustainability accounting disclosure. Consequently, this study ascertained the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria. An ex–post facto research design approach was adopted for the study. The population of this study comprised five (5) Brewery firms quoted on the floor of the Nigeria exchange group (NGX), and Nigerian Breweries Plc was purposively used as the sample size of this study. Secondary data were carefully sourced from the financial statement/annual reports and sustainability reports from 2013 to 2022 of the Brewery firms quoted on the Nigeria exchange group (NGX). Least regression analysis by aid of E-views 10.0 software was used to test for statistical significance of the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria. The results showed that Economic Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria. The findings further revealed that Environmental Sustainability disclosure indexes significantly affect Net Profit Margin of Brewery firms in Nigeria. More so, results showed that Social Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria. Finally, the result established also that Governance Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria, this study recommends among others; that managers of Brewers in Nigeria should improve and sustain full disclosure practices on economic, environmental, social and governance disclosures following the guidelines of the Global Reporting Index(GRI) as they are capable of exerting significant effect on financial performance of firms in Nigeria.

PurposeAlthough the halal orientation strategy (HOS) plays a key role in protecting the halal status of any product, research on the impacts of HOS on the financial performance of halal firms is lacking in the literature. As the main objective of all companies is to maximize their profit, this study aims to examine the influence of HOS on the financial performance of halal food firms with respect to halal culture as a moderator.Design/methodology/approachData were obtained from a survey of 154 halal food firms in Malaysia and were analyzed using the partial least squares technique.FindingsThe results indicate that halal materials and halal storage and transportation positively affect financial performance, whereas the halal production process negatively affects financial performance. It is also interesting to observe that halal culture moderates the relationship between the production process and the financial performance of the firm.Practical implicationsThe findings can help managers of halal food firms to enhance the financial performance of their respective firms by investing in HOS and giving attention to halal culture. It also helps decision makers to understand the importance of revising requirements for halal certification.Originality/valueThis study also contributes to the advancement of knowledge on the relationship between HOS and the financial performance of halal food firms.

State Ownership and Political Connections

PurposeFirm performance has become a thriving research field. However, a review of previous studies shows that the answers to several fundamental questions remain vague and require further investigation. Thus, the purpose of this study is twofold. The first is to determine the extent of the involvement of political connections (PCs) in Pakistani-listed companies, and the second is to examine the association between PCs and firm financial performance with director efficacy’s moderating role.Design/methodology/approachA data set of 221 non-financial companies listed on the Pakistan Stock Exchange for 10 years (2008–2017) was analysed using panel-corrected standard error regression. Additionally, the authors address endogeneity issue by using Hackman two-stage estimation and lagged variables regression.FindingsThe study found that PCs negatively affected the firm’s financial performance, and director efficacy as a moderator strengthened this relationship. The result is consistent with the political economy theory that argues that an unstable political system and a weak judicial system will strongly affect investors and their rights.Practical implicationsThe impact of political influence on the corporate sector remains a concern for policymakers, regulators, investors, financial experts, auditors and academic researchers. This study’s findings are that an effective board of directors can strengthen the company’s best practices by controlling political connectedness to protect all the interested parties, particularly investors, and restore their confidence. Therefore, the results of this study can assist all stakeholders when a PCs exists to make the right decisions.Originality/valueThe study extends the literature in terms of theoretical contribution that uses an integrative approach to combine political economy theory, agency theory and resource dependence theory to address the moderating role of director efficacy with an association between PCs and firm financial performance. To the best of the authors’ knowledge, no extant research has investigated the association between PCs and firm financial performance using five aspects of PCs, along with moderator director efficacy.

Purpose: This study examines the impact of working capital management on the financial performance of the non-financial firms listed on the Nepal Stock Exchange (NEPSE). Design/Methodology/Approach: The study is based on panel data analysis of 23 non - financial firms listed in NEPSE from 2001 to 2018 with 194 firm-year observations. When the return on assets (ROA) is used as a dependent variable, the Hausman Test and Wald Test suggest that a Fixed Effect Model (FEM) is acceptable, whereas Random Effect Model (REM) is appropriate when the return on equity is used as a dependent variable. Findings: The results reveal that longer receivable conversion period and inventory conversion period negatively affect the financial performance of non-financial firms. In addition, a longer payable deferral period negatively affects the return on equity of non-financial firms in Nepal, indicating that firms can reap profit by reducing the deferral period. Finally, the study shows a statistically significant relationship between the cash conversion cycle and return on assets. Research Limitations/Implications: The research is based solely on secondary data. As a result, the study contains all of the drawbacks that come with financial statements in annual reports. Practical Implications: The findings of the study will help owners and financial managers in better understanding the relationships between working capital management and financial performance of the firms, as well as formulating firm-specific working capital policies. Moreover, research scholars will benefit from this study as it aims to add to the existing literature by enhancing knowledge of the impact of working capital management on financial performance. Originality/Value: This is an original research study and examines the relationship between working capital management and financial performance of non-financial firms listed in NEPSE.

Extant research exploring the relationship between servitization, digitalization, and firm financial and market performance provides valuable insights, but yields inconsistent and inconclusive results. This study argues that these inconsistencies arise from the ambiguous nature of servitization. Prior research have operationalized servitization as a business model (service type) or a set of service capabilities, treating these distinct constructs interchangeably. This study, therefore, advanced the proposition that both service capabilities and service type need to be incorporated into an integrated framework. To test this, the research develops and empirically validates a moderated-mediation model for the relationship between digitalization, service type (moderator), service capabilities (mediator) and firm financial and market performance using data from 204 manufacturing firms. The results indicate that service capabilities positively mediate the relationship between digitalization and firm financial and market performance. The moderating effect of the service type on service capabilities and firm financial and market performance are more pronounced for services supporting customers than services supporting products. The findings underline the imperative for manufacturers to develop their digital capabilities to enhance their service capabilities, irrespective of the type of services they offered. The findings contribute by enriching our understanding of the relationship between servitization, digitalization and firm performance.

Improving the firm performance, especially its financial aspect, has always been at the core of the attention of both researchers and stakeholders during history. The formal strategic planning process is an element that has shown its impact, whether positive, negative, or neutral on firm financial performance in the literature. Besides, some variables, such as innovation and flexibility in planning, can affect this relationship as moderating factors. Therefore, this study strives to evaluate the association between formal strategic planning and firm financial performance while supposing innovation and flexibility in planning as moderating variables. The statistical population of this paper involves 300 top and middle managers of Refah bank, one of the biggest banks in Iran, and the variables are measured by a questionnaire that is based on the five-point Likert scale. The findings of this research have two main achievements. Firstly, results demonstrate that all three studied variables, meaning that formal strategic planning, innovation, and flexibility in planning have positive impacts on firm financial performance. Secondly, and according to the first conclusion, integrating innovation and flexibility into the formal strategic planning process isa necessity leading to a better firm financial performance.

Enterprise risk management (ERM) research has mostly been limited to factors determining its implementation and its effects on firm performance. Despite a clear need for its establishment in sound risk culture and its integration with strategic planning, organisational leaders continue to implement these management concepts in isolation. Academic research into these conjoint relationships has also received less attention in the literature. This study investigates whether ERM's effect on firm financial performance, measured by return on assets, is mediated by risk culture and strategic planning. The study provides empirical evidence that adopting ERM solely does not enhance a firm's financial performance. The ERM, risk culture, and strategic planning constructs are empirically determined to be correlated. Strategic planning has a direct and positive relationship with firm performance. The study further provides empirical evidence that the positive effects of ERM implementation on firm financial performance are mediated by risk culture and strategic planning. The size of a firm and its financial leverage are remarkable determinants of firm performance, while firm age and growth rate are not. The pieces of evidence have been presented from an under-investigated context in Africa with other contributions to the literature, such as, providing comprehensive measures of ERM and risk culture and responding to calls to synthesise risk and strategic management. This study also advances multiple mediation analysis and the use of PLS-SEM in the ERM literature.

Corporate governance is an important factor in generating firm financial performance especially in the Covid-19 Pandemic. During the pandemic, the government announced to do social distance that effect on firm operation which could not run maximal comparing to normal conditions. Good corporate governance practice may help to prevent deterioration financial ratio due to decreasing firm financial performance. Moreover, external funding becomes important to back up back up firm operations because firm tend to suffering loss during the pandemic. The aims of this study are to analyse the impact of corporate governance practice and capital structure on firm performance, as well as firm value. This study applies Shariah-compliant firms (SCF) that listed on Indonesia stock exchange from 2015 – 2020. This study analyses using structural equation modelling - partial lease square (SEM-PLS). The results show that corporate governance have a significant positively on firm financial performance, but capital structure shows the adverse effect on firm financial performance. In terms of firm value, both corporate governance and firm financial performance have a positively associated to firm value. Moreover, firm financial performance has negatively impact on firm value. Finally, the findings may help stakeholders to create effective corporate governance practice in driving both firm performance and firm performance, as well as maintain the balance between debt and equity to optimize capital structure that may impact on the firm financial performance and firm value.

The objective of this paper is to study whether the presence of women on boards affects the financial performance of firms. This study builds upon other studies that have earlier tried to determine the impact of number of women directors in Indian corporates on their financial performances, in terms of market performance index, i.e. Tobin's Q. The new Companies Act, 2013 has mandated the appointment of at least one woman director in certain classes of listed companies in India as described in Section 149(1)(b), which could possibly bring about a change in the governance and thus the financial performance of firms. The focus of this study is on finding and analysing the impact of compliance with this provision on the financial performance of IPO firms. In order to test our hypotheses, we selected 41 Indian Companies that have made an Initial Public Offer (IPO) in the recent past and have been listed on Bombay Stock Exchange during the period 2012-2016. The performance of each of these firms has been measured in terms of Tobin’s Q for 3 successive years after their listing (IPO) as well as by using two gender diversity index values- Blau Index and Shannon index. The study concluded that the proportion of women on board is insignificant and that it could not impact the financial performance of the firms. Neither has it caused any adverse impact on the performance of these firms.

Financial performance is one of the basic indicators that investors and creditors check in accessing the performance of firms. The purpose of this paper is to empirically examine the impact of economic indicators on financial performance of quoted non-financial firms on the Ghana Stock Exchange (GSE). The study focuses on the impact of RealGDP, Exchange rate, Inflation, Unemployment and Interest rate as determinant of economic indicators whereas Sales growth, Company size, Leverage and Efficiency from firms specific are used as controlled variables in checking the effect of these indicators on financial performance of these firms. ROA and ROE were used as proxies for financial performance of the listed firms. The study employed a panel data of 21 listed non-financial firms from the period of 2008 to 2017. The result revealed that Real GDP and inflation have significant positive impact on ROE. On the contrarily, economic indicators used for this study showed no level of significance with ROA. Company size recorded positive and negative significant impact on ROA and ROE respectively, sales growth and efficiency were statistically significant with ROA. The study recommends government and regulatory authorities to come out with good policies that will help boost the economic activities in the country and drop inflation rate since they have the tendency of affecting non-financial firms’ performance. Moreover, management must ensure full utilization of its internal resources by focusing on diversification and expansion since company size, efficiency and sales growth affect the return on assets and equity of firms. In addition, management should warily consider inflation rate when making financial decision due to its impact on financial performance.

Most research in strategic management ope rationalizes firm financial performance by using either accounting‐or market‐based measures. Recently, some have suggested that subjective measures may be useful in assessing a firm's financial performance. We argue that there is a theoretical basis for viewing firm financial performance as having a higher order structure consisting of three separate yet distinct dimensions. Using second‐order confirmatory factor analysis, we found that while differences exist among accounting, market, and subjective measures of firm financial performance, there is evidence to support the concept of a single underlying construct. While our findings are statistically significant and thus support our hypotheses, the substantive nature of our results suggests that much more research is needed before we fully understand the dimensionality of firm financial performance.RésuméDans la majorité des recherches en gestion stratégique, on opérationnalise la performance financière d'une entreprise au moyen de mesures fondées sur la comptabilité ou le marché. Récemment, certains ont suggéré que des mesures subjectives pourraient ětre utiles dans l'évaluation de la performance financière d'une entreprise. Nous avançons l'hypothèse qu'il existe une base théorique pour considérer que la performance financière d'une entreprise consiste en une structure supérieure de trois dimensions séparées et distinctes. Par l'analyse des facteurs de confirmation secondaires, on a trouvé qu'il existe des différences dans les mesures de performance financière d'une entreprise, que ce soit la mesure de comptabilité, de marché ou subjective, et on peut prouver le concept d'une base unique commune. Bien qu'ils soient statistiquement significatifs et prouvent nos hypothèses, nos résultats suggèrent qu'il faut effectuer des recherches plus poussées avant de comprendre tout à fait la dimension de la performance financière d'une entreprise.