The relationship between bank credit and firm performance: the moderating role of board attributes

The aim of this paper is to examine the effect of corporate governance on the organizational performance of domestic small and medium-sized enterprises (SMEs) in the industrial, construction, distribution, and mining sectors listed on the Nilex stock market in Egypt. Using an empirical analysis this study examines the effect of board size, board composition, chief executive officer (CEO) duality, and the existence of the audit committee on the performance of the listed companies. This study exploits corporate performance by accounting-based measures (return on assets, ROA). The study’s findings about listed SMEs provide some interesting information. It demonstrates a negligible association between board size and company performance in Egypt as well as a negative association between the proportion of executive directors on the board and company performance. A positive correlation between CEO duality and business performance is also present. A reverse relationship between the existence of the audit committee and the performance of the companies. The paper provides empirical evidence that applying corporate governance practices is still not mature in the Egyptian SMEs listed on the Nilex stock market. Considering the enforcement of corporate governance practices in 2017, this paper considers one of the fewest that contributes to the literature on corporate governance and SMEs performance in Egypt by introducing empirical findings for the period from 2018 to 2021

PurposeThis study aims to analyze chief executive officer (CEO) duality in corporate governance by using Scopus data. It explores CEO duality research trends across diverse corporate governance contexts and disciplines, shaping the future research agenda, and proposing recommendations for further investigations in this area.Design/methodology/approachThis analysis is conducted through VOSviewer software and Biblioshiny by extracting the bibliometric network from the output files of the Scopus bibliographic database.FindingsResearch on CEO duality centers on keywords such as corporate governance, agency theory, board of directors, board size and firm performance. Word tree maps uncover various research areas and gaps. Top authors are Elsyed K. & Rashid K, with the University of Utara Malaysia as the leading organization. Main disciplines are “Business Management and Accounting” followed by “Economics.” “Corporate Governance: An International Review” tops the journals with 1,120 citations. Quantitative methods using secondary data dominate (94%), mostly from nonfinancial industries (96%). Theoretical lenses include agency theory, stewardship theory, stakeholder theory, resource dependence theory and institutional theory. Firm performance is the most researched aspect (38% of studies) concerning CEO duality.Practical implicationsBibliometric and systematic analysis offer researchers a general overview and in-depth insights into current CEO duality research trends, influential articles and keywords in corporate governance. This study’s findings benefit research institutions, professional bibliometric users and funding agencies alike.Originality/valueBy visualizing bibliometric networks and conducting systematic analysis of top-cited articles, this study not only advances the academic understanding of CEO duality in corporate governance but also provides actionable recommendations for researchers, practitioners and policymakers to enhance governance practices and contribute to the field’s evolving body of knowledge.

A study of small and medium sized enterprises (SMEs) in Wales was undertaken to evaluate the effectiveness and competence of users of information technology (IT) and information systems (IS). A questionnaire survey, followed by selected follow-up interviews, was conducted: to determine levels of information technology (IT) and information systems (IS) use by small and medium enterprises (SMEs) in Wales; to identify key factors influencing SMEs’ ability to exploit opportunities that technology offers; to investigate whether IT/IS is managed in an active and strategic fashion; to assess the use and management of data within these enterprises; and to consider whether SMEs have opportunities to create strategic advantage from IT/IS. The results indicated that the utilization of IT is increasing but the majority of SMEs are under-exploiting the potential benefits due to a lack of management direction. Nevertheless, although few SMEs are being seen to achieve competitive advantage, those enterprises that are doing so tend to be focusing on acquiring knowledge, using their flexibility and ability to react speedily and generating innovative solutions. Th study identified areas where further research was needed to support the findings, particularly in terms of the regularly review of the level and exploitation of IT/ IS within the SME sector within Wales and the rest of the UK via quantitative surveys providing a base for a longitudinal comparison of data; the investigation of the factors that deter IT/IS development within SMEs; and the review of IS/IT within individual SME industries and sectors, utilizing case study methodology and allowing for the qualitative analysis of key factors underpinning usage. (Part 1 of this article was published in the previous issue of Business Information Review).

Small and medium enterprises (SMEs), defined in this review as businesses with up to 250 employees, are believed to be both an important tool in the fight against poverty and an important contributor to economic growth in developing countries. SMEs are responsible for the majority of employment generation in developed as well as in developing countries (Ayyagari et al., 2007). Given that SMEs play an important role in the formal labour force, the health of the sector has implications for employment generation policies and growth. Ayyagari et al. (2007) show that formal SMEs are responsible for most of the private sector employment in developed countries - for example, SMEs are responsible for around 60-70 per cent of employment generation in Germany, Finland, Belgium and Canada. However, in African countries SMEs are responsible for a smaller share of formal employment generation, providing only about 20 per cent of employment in Nigeria, Cote d'Ivoire and Cameroon. Ayyagari et al. also note that the SME sector's contribution to employment shows a strong positive correlation with GDP per capita. Thus, the evidence suggests that increasing this sector's contribution to employment might generate growth (Ayyagari et al., 2007; Beck et al., 2005), and therefore that effective business support services may positively affect GDP per capita. African economies have a lower percentage of formal workers in SMEs due to the fact that these economies have a larger (not computed) and less productive informal sector. Thus, in the path towards a more formalised labour market, employment generation by the SME sector plays a very important role. SMEs can further be linked to economic growth through their ability to link knowledge, product commercialisation and total factor productivity (Acs et al., 2009; Solow, 2007). A seminal study using a cross-section of countries to analyse SMEs and growth was provided by Beck et al. (2005), who found a positive but not causal relationship between SMEs and growth. An exploration of other available empirical evidence however, shows that while studies that focus on developed nations suggest a positive impact of SMEs and entrepreneurship on economic growth, studies examining developing countries suggest a negative impact (for example, Audretsch and Keilbach, 2004; Mueller, 2007; Cravo 2010; Cravo et al., 2012; Cravo et al., 2014).1 Acs et al. (2008) have attributed these differences in empirical results to different entrepreneurship responses to institutional arrangements. Moreover, heterogeneity in institutional arrangements is likely to provide different incentives to rent-seeking activities (Baumol, 1990). Thus, the role of SMEs in a given economy can be expected to vary depending on the institutional settings and level of development. Development agencies provide a considerable amount of targeted assistance to SMEs in low-and middle-income country economies (Beck et al., 2006). For instance, the World Bank devoted US$9.8 billion to SME projects during the period 2006–12 (IEG, 2013). For the same period, the support of the International Finance Corporation (IFC) of the World Bank Group directed to SMEs amounted to US $25 billion. However, there is limited evidence on the impact of SME support in the literature, due either to an insufficient number of studies employing convincing identification strategies to isolate the causal impact of the intervention under consideration, or to limited information regarding the mechanism underlying such interventions. This systematic review will draw on economic theory and qualitative studies to uncover the channels through which a particular intervention can affect the outcomes of interest. This research will therefore separate the outcomes into two categories, intermediate and final, wherever possible in order to uncover the theory of change of each intervention. In developing countries, programmes that support SMEs are based on the view that there are institutional constraints that impede SMEs from reaching their full potential to generate jobs and profits. Thus, the large amount of financial resources allocated to the development of the SME sector by governments and development organisations is designed to address institutional failures, and allow SMEs to operate more efficiently, thus leading to productivity growth (Beck et al., 2005).2 Various approaches are used to provide support services to SMEs. These mainly aim to improve the institutional setting and to remove those institutional constraints that prevent these firms from reaching their full potential and thus contributing effectively to economic growth and poverty alleviation. Based on a preliminary review of the literature, we have identified the main approaches to SME support as programs related to formalisation and the business environment, access to external markets, value chains and clusters, training and technical assistance, SME financing and innovation policy. This literature can be divided into two distinct themes. The first considers indirect support that addresses the constraints that prevent SMEs from getting access to credit, whereas the second addresses the impact of direct business support to SMEs. In the first strand, many studies look at the impact of an indirect type of public support aimed at SMEs, such as tax simplification, which intend to provide incentives for informal SMEs to formalise. The underlying assumption is that formal firms are less credit-constrained than their informal counterparts and therefore formalisation would be an effective way of helping entrepreneurs. Formalised firms are expected to have higher economies of scale and consequently be more productive, demand a more skilled labour force, and have higher profits. If informal firms are prevented from growing due to credit constraints, reducing the cost of formalisation should, indirectly, give firms the opportunity to escape from the low-scale-low-productivity trap. This intervention is an indirect form of public support because it is targeted to all firms with annual revenues below some threshold. All informal firms are incentivised to formalise through tax simplification. Those that decide to formalise are not directly offered any other type of public support. The second group of studies addresses the impact of direct business support to SMEs. They generally estimate the impact of a support programme to SMEs within a specific sector in a specific country, with the intervention based on the assumption that SMEs face constraints such as a limited pool of skilled labour, limited innovation capability and coordination failures. In this view, SMEs need public support to break the vicious circle of low investment and low productivity. A successful intervention might even generate (spillover) effects on firms that do not belong to the target group of the programme – firms from other sectors and/or informal firms in the same sector. This kind of support comes in the form of training programs, support for innovation or value chain and association strategies (for example, clusters) to address coordination failures. Notice that, unlike the indirect public support programmes, the unit of intervention is the firm itself. Firms are directly targeted with programmes that aim to help them shift from a low equilibrium (small size and scale) to a high equilibrium (bigger scale and dynamism). Workers are offered training, and transportation costs, spillover effects and coordination failures are directly affected by the creation of productive agglomerates. Since this review will investigate the impact of a diverse array of interventions, it is challenging to come up with a general theory of change. Although we provide a general theory of change based on our preliminary search of the literature in this section, it is with the caveat that each type of intervention identified in the initial search of the literature is based on an institution's belief in a particular causal chain. Therefore our approach to building out this theory of change will involve taking a case-by-case perspective on the assumptions regarding the causal chain of each of the programs analysed. As mentioned in Section 1.2, in general, support to SMEs is related to productivity growth and employment generation. Overall, the theory of change behind SME support services is linked to the improvement or creation of institutions that allow SMEs to reach their full potential. Figure 1 below provides a more general illustration of the theory of change for the intervention models we aim to survey in this review, as detailed in Table 1. Theory of change Within this general theory of change are contained those which are specific to the particular interventions shown: Tax simplification initiatives can be seen as a type of indirect business support to SMEs. These interventions aim at improving firm performance through the channel of formalisation. Economic theory suggests that formal firms will be able to grow with access to credit markets and by taking advantage of economies of scale. A tax simplification program could affect outcomes such as employment and profit through two intermediate outcomes: 1) formalisation rate, and 2) access to credit. The causal chain could be simplified as following: The necessary conditions for a tax simplification program shifts the informal entrepreneurs trapped in one equilibrium, characterised by low productivity and profits, to another where they face less constraints to growth after formalisation. There are plenty of studies that concentrate only on final outcomes, however, and shed no light on the mechanisms. Consequently, policy makers interested in knowing how such an intervention worked are given no guidance. We note that sub-components within the business support interventions that this review analyses may overlap. We will develop a conceptual model of intervention types to ensure appropriate categorisation of interventions for the analysis. A review such as this has the potential for significant policy relevance, given the amount of attention governments, development agencies and organisations around the world have dedicated to sponsoring a range of assistance programs targeted to SMEs and aimed at spurring firms' performance regarding innovation, productivity, exports and employment generation. Broader impacts on the economy such as higher wages and poverty reduction are also seen as by-products of such interventions (Beck et al., 2006). However, in spite of their prevalence worldwide, too little is known about the impact of SME support interventions. In a recent survey on SME policies in African countries, McKenzie (2011) shows that African firms are in general small, with up to 10 employees, but very heterogeneous in terms of employment, sales and access to external market. He also shows that although SMEs have been supported in several ways in African countries, rigorous evaluation of such policies is scant. This is surprising given that the SME sector is one of the main targets of international and national aid agencies (Cravo et al., 2014). This research intends to fill part of this gap by summarising systematically the rigorous evaluations done in the field so far, and feeding back the results to policymakers working on this problem worldwide. The policy relevance of this review is increased by the fact that it aims to distill the evidence on what works in Africa, and should therefore be particularly useful to policymakers and donor organisations interested in supporting SMEs in Africa. Among the Africa-specific issues we aim to address with this review, are the question of SMEs' potentially limited contribution to employment in African countries relative to other regions, and, in contrast, the potentially greater contribution to poverty reduction these enterprises may make in the African region in comparison to larger ones. The initial literature search for impact evaluations of indirect business support services suggests the existence of a considerable number of studies for Asian and Latin American low- and middle-income economies. Fajnzylber et al. (2011) and Monteiro and Assunção (2012) use quasi-experimental techniques to analyse the effect of a tax simplification program in Brazil on formalisation and firms' performance. McKenzie and Sakho (2010) use instrumental variable (IV) estimations and provide evidence on how tax registration affects profitability in Bolivia. Mel et al. (2012) study the effect of formalisation on profit, sales, new workers and other outcomes in Sri Lanka using IV estimations and Rand and Torm (2012) use matching and difference-in-difference techniques to assess how formalisation affects profit, access to credit and investment in Vietnam. For the African context, the available evidence is likely to be more limited. However, a detailed, comprehensive search and synthesis of the literature is necessary, with a particular focus on its applicability to the African context. As with the indirect interventions, the initial search of the literature for impact evaluations of direct support services indicates that there is limited evidence for Africa. In one of the few studies available, Mano et al. (2012) conduct a randomised experiment in Ghana to analyse the effect of SME training programs on sales, added value and profit. In the context of low-and-middle income countries as a whole, a considerable amount of evidence is available for Latin America. Benavente and Crespi (2003) analyse the effect of an association strategy on productivity in Chile, using difference-in-difference and matching methods. In another study of the Chilean case, Arraiz et al. (2012) analyse the effect of value chain support on sales, employment and exports using propensity score matching and difference-in-difference estimators. The literature also presents evidence on support for innovation in low- and middle-income countries. Castillo et al. (2011) provide evidence of the impact of process and innovation support on exporting, employment, wages and survival in Argentina, by combining propensity score matching and a difference-in-difference approach. Other studies analyse different types of support. Tan (2009) provides evidence for Chile for different SME programs of technical assistance, cluster programs, technology programs and credit programs on sales, output, employment, wage, productivity and exports. In addition, Ibarraran et al. (2009) study how training programs, access to credit, product innovation and ISO certification affect productivity using instrumental variables and matching methods in Latin American countries. Though most of the papers cited above indicate a positive effect of SME support programs on selected outcomes, there is a need to systematically review and synthesise the evidence to provide an unbiased account of the impact of these programs on firm performance. As the evidence appears to be predominantly from Latin America, its applicability to African countries, or any other context, is not straightforward due to lack of external validity that mark these studies. A comprehensive understanding of the mechanisms underlying the causal chain of an SME intervention is therefore crucial if one is interested in designing SME interventions in different contexts. Therefore, one of the aims of this review is to shed light on the impact of various programs, as well as on the mechanisms that could help us understand why similar programs succeed in some countries or contexts but fail in others. This review has some similarities with another Campbell-registered review, by Grimm and Paffhausen (2013). This other review, however, focuses on employment creation and business creation and will not systematically review evidence on firm performance such as productivity, revenues, profits, innovation, formalisation and access to credit – all of which are the main outcomes of interest of this review. To answer these questions, the research will cover both intermediate outcomes, such as access to credit, training, and formalisation, and final outcomes, such as higher profits, employment generation, productivity and access to external market, and will look for context-specific variables that can help us understand the causal chain of the intervention. We recognise that this is a very challenging exercise to be fully addressed by this systematic review. In fact, the main objective is to shed some light on the potential moderator variables linked to the institutional setting and level of development of each country. Assessing applicability of the results to specific local African context is not an easy task and goes beyond the scope of the systematic review, however, in order to allow the reader to relate the review findings to a specific context, the document will present relevant contextual and implementation information. This review will focus only on studies that evaluate policies aimed at supporting SMEs in low-and middle-income countries (as defined by the World Bank's classification), with an emphasis on African countries wherever possible. The focus on LMICs is justified firstly because private firms in these countries tend to be more labour intensive and less innovative, and consequently are the main employer of a large proportion of the labour force. Secondly, restricting the scope to LMICs helps to identify the binding constraints that SMEs might face in similar institutional contexts, such as in some African countries. The term SME covers a wide range of definitions and measures, varying from country to country and between the sources reporting SME statistics. Some of the commonly used criteria are the number of employees, total net assets, sales and investment level (Ayyagari et al., 2007). The most common criterion used to classify SMEs is based on employment information, due to data availability, and the cut-off used to define SMEs is usually 250 employees4. This review will use this cut-off of 250 employees. Consequently, other types of interventions aimed only at supporting entrepreneurship and the creation of microenterprises, such as microfinance5, will not be part of this research. This is because self-employed and micro-entrepreneurs have a different nature in comparison to SMEs6. The former, especially in LMICs, are comprised of less productive or informal enterprises of few employees in the fringe of the markets. Furthermore, these enterprises are not eligible to most of the public interventions to be covered in this review. Thus, the definition of SME based on number of employees fits well our purpose of covering a broad set of interventions and of considering relevance for African countries7. Since our prior assumption is that there will be only a few studies examining public interventions in African countries, a proper contextualisation of the interventions, a comprehensive understanding of the designs, the target groups, and the moderator variables ranging from those related to firms themselves (size, sector, number of years in operation) to those related to the country where the intervention take place will be crucial to this review. This will allow us to be able to shed some light on whether the intervention has some external validity and consequently whether it could potentially work in an African context.8 In order to address the likely problem of limited evidence, particularly of relevance to Africa, the scope of the review will include all studies identifying final and intermediate outcomes. This will also better inform the causal chain analysis which will help inform our tentative findings about generalisability to African countries. In the studies selected, we will then search for any information on how and why interventions worked or did not work. The literature recommends that synthesis is informed by the theory of change embedded in the design of an intervention (see Waddington et al., 2012b). However, our focus is not only on the impacts directly anticipated by the intervention but also included unanticipated impacts. We will include the following interventions: Formalisation/ Business Environment (Institutional Improvement): such as tax simplification, intended to provide incentives for informal SMEs to formalise. Underlying assumption: that formal firms are less credit-constrained than their informal counterparts and therefore formalisation would be an effective way to help entrepreneurs. Indirect support to SMEs may include policies regarding business registration, property registration and regulatory frameworks (Fajnzylber et al., 2011; Monteiro and Assunção, 2012; McKenzie, 2013). Exports/Access to External Markets: defined as interventions that correct market failures such as information externalities and help SMEs overcome obstacles to exporting (Volpe and Carballo, 2010; Volpe et al., 2010; World Bank, 2010). Support for innovation policies is based on the idea that social returns to innovation exceed private returns (Lundvall and Borras, 2005; Acs and designed to support innovation This review will different types of innovation support such as matching and tax as identified in the preliminary For instance, et al. evaluate the of matching provided after an for et al. (2012) analyse the impact of matching and credit for innovation, and et al. (2011) evaluate the effect of tax on Other of innovation support may also be identified during the search and interventions: defined as interventions that help firms from externalities and overcome the coordination failures that prevent SMEs from these externalities and et al., and technical defined as interventions that provide support for training and technical assistance, based on the idea that improve and wages of workers and to firm productivity et al., 2011; et al., 2007). This type of intervention also services and such as those by the World Bank et al. and et al. (2013). SME and in credit markets generate financial constraints, which in SME activities (Beck and and 2007; et al., The review will in this of interventions that provide or services to SMEs, such as those in World Bank (2010) for credit and in et al. (2009) for credit We note that sub-components within the business support interventions this review analyses may overlap. In this case, it will be important to them as as possible. If there is a analysis will be using detailed information on intervention however, this may not be possible if only a number of are To the of our knowledge, most of the papers the impact of a public policy targeted to SMEs a group with a group comparison group in the of quasi-experimental However, we will be studies that and from studies that have more than two we will also separate the evidence to the intervention In the of for instance, an intervention can use a an cluster or (see et al., have two they identify different and so and they in terms of data different rate, different of and so The selected studies on at one impact to do with outcomes, either or For the of this review, we will define firm performance impacts to to objective such as revenues, profits, innovation, formalisation, number of workers and access to credit. of firm performance impacts will be on and will be outcomes of SME support around better firm performance and growth and therefore can be revenues, profits, employment, productivity, innovation, and survival The following are of studies that we would to include in the review at these outcomes: Mano et (2012) experiment in Ghana to analyse the effect of SMEs training programme on sales, value added and Benavente and (2003) study of the effects of an association strategy on productivity in Arraiz et (2012) of the effect of value chain support on sales, employment and exports in (2009) evaluation of different Chilean SMEs programs for technical assistance, cluster programs, technology programs and credit programs on sales, output, employment, wage, productivity and and Castillo et (2011) study of the effects of process and innovation support on exporting, employment, wages and survival in outcomes vary to the type of but can be defined access to credit, training, tax simplification aimed at firms' formalisation, formalisation rate, policies aimed at improving the value and growth. These are all of direct intervention through outcomes. that provide access to credit aim to allow firms to an economic and/or As the firms in the market and the intended outcomes are survival and in productivity. with SME support related to innovation, training and the value chain the underlying assumption is that more skilled workers and a better value chain will in higher productivity, employment generation, access to markets and others. For instance, Ibarraran et al. (2009) focus on how interventions such as training programs, access to credit, product innovation and certification affect productivity of SMEs in Latin American countries. The review will draw on a broad search to identify studies that relate to the interventions aimed at SMEs in To address to the review will focus on analysis and include only studies that use and quasi-experimental such as design instrumental matching on propensity score matching and any other methods that to for (for example, selected have for the of program or into the and quasi-experimental methods are seen as the the main objective is to estimate the causal impact of an intervention or policy (see for et al., an intervention is designed or the identification strategy of an study convincing the findings on the impact of the program or intervention are to have that one can that the in the outcomes between and was by the This review will thus only studies that assess the impact of an intervention the and the at one or more in In where more than two are the can also involve comparison of the two The studies will therefore be from and data studies that on data show or use a matching to for in using matching for instance, should the intervention of the program to be able to make the that the problem of is due to the studies included will document the impact of any business support on SMEs to as In addition, the review will the impact of different types of business support on firm performance. As in Waddington et al. on studies that use and quasi-experimental methods may the studies that can be included in the review. Although this might be a particularly if one is interested in different interventions, we this because findings of studies that do not for their are of little relevance, and for The search strategy aims to cover as comprehensive a set of and sources as within the period because in the of the interventions of it is most likely that these have been in the formal literature on SMEs or in the literature on the part of national and international

The performance of small and medium-sized enterprises (SMEs) in Malaysia’s manufacturing sector was the main emphasis of the current study. The Malaysian economy has suffered because of the manufacturing sector's SMEs’ poor performance and low GDP. Thus, this conceptual research aims to explore the correlation between enterprise risk management capabilities and firm performance. The research also examines the mediating role of innovation capabilities between enterprise risk management capabilities and firm performance. Present research revealed comprehensive discussion on how enterprise risk management capabilities impact firm Malaysian manufacturing SMEs’ firm performance. This research highlighted the key value of enterprise risk management capabilities on firm performance for the consideration of the owner/managers of Malaysian SMEs in the manufacturing sector. In addition, Resource-Based View (RBV) theory was employed in this research to examine the impact of enterprise risk management capabilities on firm performance and the mediation impact of innovation capabilities between enterprise risk management capabilities on firm performance. The research used systematic literature to build its conceptual model. Based on the conceptual model build; present research theorised that the is a positive relationship between ERM (IC and FP); There is also a positive relationship between IC and FP. In addition, the research posits that IC mediate the relationship between ERM and FP. There are several implications of this conceptual framework for theory and practice are discussed. Future research should conduct an empirical testing to analyse the results.

This study examines the impact of board characteristics and chief executive officer (CEO) attributes on firm financial performance in an emerging economy. Drawing on agency theory (Jensen & Meckling, 1979), the study investigates whether board composition, diversity, and leadership traits function as effective internal governance mechanisms in mitigating agency problems and enhancing firm performance. Using panel data from 24 non-financial companies listed on the Indonesia Stock Exchange (IDX) over the period 2017–2024, financial performance is measured by return on assets (ROA). The empirical analysis employs panel regression techniques, with the common effect model (CEM) selected as the primary specification based on overall model fit, and robustness is further assessed using the two-step generalized method of moments (GMM). The results reveal that board size and board gender diversity have a positive and significant effect on firm financial performance, supporting the view that broader representation and diversity enhance monitoring and decision-making quality. In contrast, CEO tenure and CEO age exhibit a significant negative relationship with ROA, indicating potential managerial entrenchment and increased risk aversion associated with prolonged and senior leadership, consistent with prior governance research (Chowdhury & Fink, 2017). Other board attributes, such as average board age and meeting frequency, show no significant effect. Overall, this study contributes to the corporate governance literature by integrating CEO-specific characteristics into the agency framework and providing empirical evidence from Indonesia’s concentrated ownership environment.

Purpose The purpose of this study is to explore the moderating role of chief executive officer (CEO) duality in the relationship between board subcommittees and audit committees with financial expertise on firm performance in European countries. To extend this research, the sample is divided into two subsamples based on common and civil law, with the latter being divided into the three subgroups of civil French law, civil German law and civil Scandinavian law. Design/methodology/approach Panel data for 3,448 observations from nine European countries are analyzed for the period 2016–2019. The model is estimated and contrasted with the generalized method of moments. Findings The main findings of this study show that CEO duality moderates positively the relationship between corporate governance committees and firm performance in Europe. Furthermore, the results indicate that CEO duality moderates positively on the association between corporate governance committees and firm performance in countries located by civil law. The findings also evidence that CEO duality moderates positively on the association between corporate governance and compensation committees and firm performance in countries located by Civil-French. Finally, the findings reveal that CEO duality moderates positively the relationship between audit committees with financial experts and firm performance performance in countries located by Civil-German. Research limitations/implications This study has some limitations. First, this study may not have considered some characteristics that could influence firm performance from other empirical and theoretical approaches. Second, this study divided the sample according to La Porta et al. (1997) and Graff’s (2008) approaches, but other classifications from different studies may have led to different outcomes. Finally, this study did not examine the country-level aspects that influenced firm performance, such as culture and institutional characteristics beyond corporate governance, economic and political factors. This is a potential avenue for future research. Practical implications Managers can use the findings to make strategic company decisions, and they can help other directors understand the important effects CEO duality has on corporate boards because board subcommittees mitigate the negative effect of CEO duality on firm performance. Originality/value This study expands upon the research about the moderating role of CEO duality through the different board subcommittees, thereby presenting it as an instrument that greatly enhances firm performance. In this sense, this moderating role preserved firm performance when the agency theory was previously corroborated, and the independent management of CEO duality was found to negatively impact.

PurposeThe purpose of the paper is to evaluate the essential role of corporate social responsibility (CSR) on SMEs' performance by exploring the mediating role of corporate image (CI), corporate reputation (CR) and customer loyalty (CL) between CSR and firm performance (FP) in the context of an emerging country.Design/methodology/approachBased on an extended literature review on CSR, CI, CR and CL studies, the authors evaluate the impact of these four constructs on SMEs' performance in an emerging market. The paper follows a quantitative approach. The study sample was composed of 482 responses covering top executives, managers and experts. The Smart PLS SEM version 3.3.2 was used to analyse the data of the small- and medium-sized enterprises (SMEs) of Vietnam in the year 2020–2021.FindingsThe authors' findings reveal significant and positive relationships amongst CSR, FP, CSR and CI, CSR and CR, CSR and CL, and most importantly, the findings add value to the current knowledge by exploring the mediating effect of CI, CR and CL between CSR and FP.Research limitations/implicationsThe study was conducted in Vietnam. As a result, the findings of the study might not be applicable for other countries, if the economic and environmental settings are different from that of Vietnam. Therefore, future research should consider for other countries, other regions. Second, due to the purpose and priority of the study, CI, CR, and CL was employed as mediators amongst the relationship between CSR and FP. Thus, future research should consider other mediators or moderators in such a relationship to see how CSR generates outcomes in the new associations.Practical implicationsThe study regarding the role of CSR in enhancing the performance of SMEs can motivate firm's chief executive officers (CEOs) to be proactive in getting involved and practising CSR in a consistent manner. Second, the above discussion draws a very important implication for the executive level, the management level of the enterprise, which enterprises should balance the interests of business, customers, other stakeholders, the environment and society in order to optimise CSR outcomes for improving competitiveness and developing sustainably. This implication is particularly important to the survival and development of SMEs in a challenging emerging economy.Social implicationsThe study widens the literature regarding relationship between CSR and SMEs' performance. Besides, the study supports stakeholder theory that explains why CSR positively affects firm's performance. The significant mediating roles of CI, CR and CL were positively confirmed in the study. Although previous studies determined that such roles are strategic source of competitive advantages of enterprises, however, how CSR involved in enhancing the roles has not been deeply explored and integrated. Third, the findings of the study support the resource-based view (RBV) and resource-based perspective that explains why firm should engage in CSR activities, and CI, CR and CL can enhance firm's performance by providing strategic source of competitive advantages that facilitate business to improve its performance in sustainable direction.Originality/valueTo the best of the authors' knowledge, the current literature on CSR and FP shows that, to date, there has been little empirical research on the mediating mechanism of CI, CR and CL in the link between CSR and FP for SMEs. The findings of the study may have great implications for entrepreneurs and top management with respect to the strategic perspectives to drive the businesses and to improve firm's performance in a sustainable direction in the context of emerging markets. In addition, the finding might be of great interest to – and motivate – SMEs' managers to engage with CSR actions where such businesses were or are situated during and after the coronavirus disease-2019 (COVID-19) pandemic. By that understanding, the Government might allow for innovative and groundbreaking policies or the reformation of old policies to leverage businesses to promote their strengths towards sustainable development in the new economic settings. The findings of the study may be a significant contribution to SMEs in Vietnam and in other emerging economies.

Purpose The energy sector is one of the most important sectors with an impact on the environment, and therefore, sustainable performance in this sector is considered a sensitive issue for sustainability. It is, therefore, necessary to know how to address stakeholders’ interest in sustainability through governance mechanisms. The purpose of this study is to look into the role of corporate governance (CG) on sustainable performance disclosure (SPD) in the energy sector. Design/methodology/approach This study uses panel data covering the period 2019–2023 among 12 companies in the energy sector in Jordan. Fixed-effect regression models were estimated for board size, board independence, chief executive officer (CEO) duality, board diligence, board gender diversity, sustainability committee existence and sustainability disclosure. The data analysis tool of choice was a multiple regression approach because it was deemed appropriate. The disclosure index was created using global reporting initiative standards and provides the number and quality of disclosures on key sustainability indicators. Findings The study found a significant and positive relationship between board size, percentage of independent directors, board audit, board gender diversity, existence of sustainability committee and level of SPD. On the other hand, the study establishes that CEO duality has an inverse relationship with SPD. Practical implications The findings of this study have significant implications for managers and corporate decision-makers in the energy sector. The findings affirm that the improved design of CG motivations and realizations conducive to robust measures of SPD necessitates effective CG. Originality/value The value of this applied study stems from the importance of SPD for various categories of stakeholders, and conducting such an applied study is crucial to improving the existing realization of the factors that can have a significant impact on the level of SPD in Jordanian energy sector companies. The results of this paper may be of procedural value to regulatory authorities and decision-makers.

Corporate Governance and Performance of UK Listed Small and Medium Enterprises

The leverage of bank credit may result in different consequences on current assets. As the accounting procedures report financial credit in two significant terms, short-term bank credit and long-term bank credit, the study tries to reveal the effect of those liabilities on the level of accounts receivable in the forestry products sub-sector in Turkey. The study examines a set of long-term data including current ratio, cash and cash equivalents ratio, and short-term inventories ratio as control variables to test two different models in which either short or long-term bank credit consequence is predicted. The results confirm that time constraints of bank credits have both significant roles on the level of account receivables. However, the significance is barely higher for the effect of long-term bank credit. Therefore, we conclude that the businesses of the forestry products sector in Turkey should also be sensitive primarily on the level of their long-term bank credit along with the level of short-term bank credit amongst the liabilities in balancing the accumulation of accounts receivable. Thus, businesses of the sector would better consider the level of bank credits in the conditions of risky, non-performing or accumulating accounts receivable.

Corporate governance affects the ownership and control of a firm. Conflicts between agents, managers and shareholders caused the crises of WorldCom, Enron, Tyco and Lehman Brothers. Therefore, the impact of chief executive officer (CEO) duality or board size on sustainable innovation and performance of small and medium-sized enterprises (SMEs) is relevant for research and evaluation. This may reflect the CEO style that supports long-term business growth with limited resources to enhance accountability, fast decision-making, and minimise hindrances to governance, particularly in emerging markets like India. The finding will help SMEs in maintaining their long-term viability. The current study examines the impact of CEO duality, board size, and informal social networks on sustainable innovation, governance, and performance of Indian SMEs to enable management to assess the significance of factors that contribute to firms’ sustainable performance

Firms interested in being perceived by all stakeholders and society as drivers of corporate social responsibility (CSR) activities, especially regarding CSR reporting, should have boards of directors that defend not only shareholder interests but also all stakeholders' needs. Thus, we expect that efficient boards, particularly if well‐structured, will impact on CSR disclosure. As a result, in this paper, we examine the effect of board composition, particularly board size, board independence, board gender diversity, chief executive officer (CEO) duality, and CSR board committee, on CSR reporting. Using a sample of international firms, concretely 13,178 observations belonging to 39 countries, we hypothesize that all these attributes positively affect CSR disclosure, except board independence and CEO duality, which are expected to impact negatively. These hypotheses are theoretically supported by the agency and stakeholder perspectives. Our findings support all the hypotheses, except that of CEO duality, and therefore, we conclude that board characteristics such as board size, board gender diversity, and CSR board committees encourage the disclosure of CSR matters, whereas board independence discourages this reporting. Contrary to our predictions, CEO duality has a positive effect on CSR reporting.

Abstract: The purpose of this paper is to investigate the level of SME banking development in Bosnia and Herzegovina (BH). By using a structured questionnaire, the authors discuss perceptions of the banking sector representatives in BH regarding SME banking and their future plans for the management of credit risk associated with financing the SME sector. One of the main findings of this research is that the SME sector is becoming a strategic sector for BH banks and banks are willing to increase their involvement with SME clients. Authors also present results on current level of banks’ exposure to SMEs, types of financial services offered to SME’s clients by BH banks, drivers of banks’ involvement with SMEs, obstacles to further development of banks’ involvement with SMEs. Based on the banks’ responses and results of research conducted, suggestions to policy makers are given, such as tax reforms, interest rate subventions to SMEs, improvement of judiciary, simplifying administrative procedures. Also, some recommendations are given to banks, such as the need for better understanding the requirements of SME clients providing them more personal approach and creating a partnership, as well as lobbying the government bodies to change regulations governing SME sector. Keywords: Financial system; Small and medium-sized enterprises (SMEs); SME banking; Comparative experiences; Bosnia and Herzegovina (BH)

Trade credit and bank credit constitute two of the most important external sources of finance for small firms. The purpose of this paper, first and foremost, is to explore the complementary or substitutive relationship between trade credit and bank credit by considering the joint determination of both resources on small and medium-sized enterprises (SMEs), and second, it analyses how the country institutional factors affect these two resources. Specifically, we introduce the efficiency of the legal system and the development of the financial sector. For the empirical analysis, we use a simultaneous equations model across a sample of 60,377 SMEs operating in 12 European Union countries over the period 2008–2014. The results suggest that two resources, trade credit and short-term bank credit, are simultaneously determined and negatively related in SMEs. The results also suggest that trade credit and bank credit depend on country institutional factors.