Firm Adoption Research Articles

Developing industrial AI capabilities: An organisational learning perspective

Incumbent industrial firms are putting in a lot of effort in developing capabilities for machine learning (ML) systems that help them better predict and perform a variety of industrial and business processes and decisions. Given the data-, process-, and organizational structure-related requirements for effective implementation of such systems, these organizations encounter a major challenge in developing capabilities in this context. However, the existing literature has yet to unravel the organizational processes and practices associated with artificial intelligence (AI) capability development and deployment in industrial incumbent firms. The present study frames AI adoption in established industrial firms as a process of history-embedded, situated organizational learning involving explorative and exploitative learning. Based on a qualitative study of seven firms utilizing ML algorithms in their industrial and business processes, we develop a grounded model that explains AI capability building as both enabled and constrained by perceptual and functional triggers and barriers, leveraged via communicative and structural practices, and resulting in ongoing and interdependent processes of exploration and exploitation. The study contributes to the literature by showing how the convergence of organizational learning and AI technology's unique features promotes a distinct dynamic of AI capability building and deployment.

The Impact of Organizational Factors and Environmental Factors on the Adoption of Computer Assisted Audit Tools and Techniques (CAATTs) by SME in Sri Lanka

The study investigates the low adoption of Computer-Assisted Audit Tools and Techniques (CAATTs) in developing countries, focusing on environmental and organizational factors that influence technology adoption in firms, particularly small audit firms in Sri Lanka. Key variables identified include Clients’ AIS complexity firm size as organizational factors and, perceived support from professional accounting bodies firm size, and top management commitment as environmental factors to CAATT adoption. The objective is to assess the impact of organizational and environmental factors on CAAT adoption by SME in Sri Lanka. The population comprises 71,126 small audit firms listed as Small and Medium-Sized Enterprises (SMEs) as of December 31, 2021, according to the Accounting Auditing Standards Monitoring Board in Sri Lanka. A sample size of 40 small audit firms was selected from this population. Data collection involved distributing questionnaires among auditors, with analysis conducted using the SPSS version 23. Correlation analysis reveals a positive correlation between all variables and CAATT adoption, while regression analysis demonstrates the impact of AIS complexity, perceived support from professional accounting bodies has a high impact on CAAT adoption by SME. The findings suggest that organizational factors such as AIS complexity and Perceived Support from professionals play a significant role in CAATT adoption among small audit firms. In conclusion, the study highlights the importance of considering organizational factors, such as in promoting CAATT adoption. These findings provide valuable insights for enhancing audit productivity and reducing costs in developing countries like Sri Lanka.

Does the size of the firm matter in determining the adoption of green economy practices in India?

PurposeThis article aims at analysing the factors influencing the adoption of green economy practices across different sizes of firms in India.Design/methodology/approachThis study is based on the World Bank Enterprise Survey 2022, covering 9,376 firms in India. The Poisson Count Regression Model has been used to analyse the factors affecting the adoption of green economy practices.FindingsAbout 83 % of firms reported adopting at least one green practice in their business related to energy conservation, water management, pollution control and waste management and recycling. Research results reveal a significant association between the size of the firm and adoption of green economy practices. The impact of enterprise characteristics varies by firm size. For instance, female ownership positively affects adoption in large firms but negatively in small and medium-sized enterprises (SMEs). However, lean operations, research and development (R&D) spending and international quality certification positively influence green practices adoption for both SMEs and large firms. Perceived business obstacles show similar implications on green practices adoption by size of firms except access to finance, business licencing, tax rate and law and order affect SMEs while labour regulations, tax administration and political instability affect large firms.Practical implicationsThis paper suggests implications for strengthening the adoption of green economy practices across firm sizes and provides opportunities for future research.Originality/valueThis study is based on a unique dataset derived from the World Bank Enterprise Survey 2022, which has included green economy indicators for the first time.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-11-2023-0918.

Clawback enforcement heterogeneity and the horizon of executive pay: empirical evidence

Purpose Clawback provisions entitle shareholders to recover previously awarded incentive compensation after the discovery of accounting manipulation or misconduct. The author evaluates the impact of clawback enforcement heterogeneity on the horizon of executive compensation. Design/methodology/approach The author provides empirical tests to evaluate the impact of clawback adoption decisions. The author deals with the endogeneity of clawback adoption decisions through an instrumental variables strategy that exploits the transmission of governance choices within firms’ networks. Findings While the author finds that clawback adoption reduces the frequency of accounting manipulation, this reduction is accompanied by heterogeneous effects on the horizon of executive pay across firms. Clawback adopters with high director independence, high leverage, high managerial termination payments and low executive ownership tilt their compensation toward the short-term. Practical implications The results, robust to alternative specifications, suggest that clawbacks allow strong-enforcement firms to tilt compensation toward the short-term, offsetting some of the direct manipulation disincentives generated by the clawback. The stock market reacts positively to the adoption in firms with weak enforcement, suggesting that clawbacks significantly reduce the managers’ rent-extraction capacity. Originality/value Using a novel empirical and identification approach, the results suggest that clawbacks allow strong-enforcement firms to tilt compensation toward the short-term, offsetting some of the direct manipulation disincentives generated by the clawback.

A Multilevel Perspective of Antecedents and Outcomes of Talent Management Adoption in Family Firms

A Multilevel Perspective of Antecedents and Outcomes of Talent Management Adoption in Family Firms

Blockchain adoption of pharmaceutical firms in a competitive market: Pricing, drug traceability and consumer awareness

To cope with counterfeit drugs reaching consumers all over the world, pharmaceutical firms increasingly regard blockchain technology (BCT) as a promising solution to achieve drug traceability. This study proposes a game-theoretic model to investigate the impact of BCT adoption on pharmaceutical firms’ pricing and performance in a competitive market, where one firm offers a branded drug and the other offers a generic version. We consider three contrastive cases with no BCT adoption, unilateral BCT adoption of the branded drug firm and bilateral BCT adoption and characterize consumer traceability awareness, which represents the fraction of consumers sensitive to drug traceability. We find that when BCT is unilaterally adopted, a high consumer traceability awareness level may lead to either higher or lower drug prices. The bilateral adoption of BCT always benefits the generic drug firm due to the enhanced drug traceability, but may damage the branded drug firm attributed to the mitigated differentiation between the two drugs. Compared with the unilateral adoption of BCT, bilaterally adopting BCT can lead to a win-win or lose-lose outcome, depending on the trade-off of drug traceability, drug differentiation and pricing competition. In addition, the adoption of BCT improves consumer welfare when consumers hold a high level of traceability awareness.

A Strategic Perspective on Which Firms Adopt Remote Hiring

A Strategic Perspective on Which Firms Adopt Remote Hiring

Robot adoption of family firms: the role of family non-executive directors

PurposeIndustrial robots are of great significance to the long-term development of family firms. Drawing on the lens of the principal–principal conflict, this paper aims to investigate the influence of family non-executive directors on robot adoption in Chinese family firms.Design/methodology/approachThis paper selects the family firms in China from 2011 to 2019 as the sample. Furthermore, the authors manually collected the family non-executive directors and constructed the robot adoption variable utilizing data sourced from the International Federation of Robotics. In brief, this paper constructs a comprehensive framework of the mechanisms and additional tests pertaining to the influence of family non-executive directors on robot adoption.FindingsThis paper finds that family non-executive directors can promote robot adoption in family firms. The underlying mechanism analysis shows that family non-executive directors promote robot adoption by exerting financial and human effects. This paper further finds that the characteristics of family non-executive directors, such as kinship, differential shareholding and excessive directors, affect the role of family non-executive directors. Finally, robot adoption can improve future performance, and the promotional effect is more evident when family members are non-executive directors.Originality/valueThis paper contributes to the related literature from the following two aspects. Firstly, this paper decomposes the types of family directors to understand the role of family non-executive directors, which challenges the assumption that family board members are homogeneous in family firms. Second, this paper expands the research on the factors that influence robot adoption in emerging economies from the micro-enterprise level. In addition, the findings in this paper have managerial implications for family firms to optimize their strategic decisions with the help of the mode of board right allocation.

Determinants of digital technologies' adoption in South African manufacturing: Evidence from a firm‐level survey

AbstractDigital technologies and digitalisation are emerging as new drivers of structural transformation in developing countries. At the firm level, adopting advanced digital technologies offers prospects for improved productivity and competitiveness and, hence, digital industrialisation. However, the determinants of adopting digital technologies in manufacturing firms in developing countries remain anecdotal. This paper uses unique survey data on 516 manufacturing firms in South Africa and a multivariate probit model to examine the determinants of digital technology adoption in South African manufacturing firms. Our results show heterogeneity in the factors explaining digital technology adoption across business functions. Overall, the empirical results reveal that innovation, foreign ownership, exposure to export markets, and higher skilled human capital propel the adoption of digital technologies. In contrast, the lack of capital inhibits the adoption of digital technologies in sampled manufacturing firms in South Africa. We discuss the possible policy implications of these findings and how they fit into the South African Digital Skills policy discourse.

Web 2 adoption and performance of telecommunication firms in Ghana: a study of MTN Ghana

Web 2 adoption and performance of telecommunication firms in Ghana: a study of MTN Ghana

A moderated model of artificial intelligence adoption in firms and its effects on their performance

A moderated model of artificial intelligence adoption in firms and its effects on their performance

Navigating fintech innovation: Performance, trust, and risk factors in UAE's banking sector

This study was conducted to identify the determinants of fintech adoption in UAE financial service firms, specifically in the banking sector. Towards this direction, the study identified a set of factors such as performance expectancy, effort expectancy, facilitating conditions, perceived trust, and perceived risk as the factors affecting fintech innovation adoption. The data for this study was primary in nature; the sample used consisted of 330 managers from UAE financial services firms. Factor analysis and regression analysis were performed to arrive at the study results, which confirmed that fintech adoption has a significant positive impact on performance expectancy, effort expectancy, and perceived trust, but it has a significant negative impact on perceived risk. The results of the study recommend training employees and engaging customers for better adoption of fintech technology.

Proactive Environmental Management's Drive for Green Technology Adoption in MENA Firms: Regulatory Mediation and Financial Moderation

This empirical study explores the determinants of Green Technologies and Practices (GTP) adoption within Middle East and North Africa (MENA) firms, focusing on Proactive Environmental Management (PEM), Environmental Regulation (ER), and Financial Exposure to Environmental Impediments (FEEI). Using World Bank Enterprise Survey data from 5381 firms across six MENA countries, we apply an ordered logit model and General Structured Equation Model (GSEM) to examine the direct and mediated effects of PEM on GTP adoption through ER, and moderation by FEEI. Our analysis reveals a significant impact of PEM on GTP adoption, enhanced by ER mediation. Additionally, FEEI moderation unveils a nuanced relationship between environmental financial exposures and green adoption propensity. The study also investigates control variables, revealing varying GTP adoption propensities across firm characteristics, and offers policy and firm-level recommendations to bolster GTP adoption in the MENA region.

Factors determining the path of digital technologies adoption of Brazilian industrial firms

Este trabalho tem como objetivo identificar os principais fatores que afetam a adoção de tecnologias digitais por 299 empresas industriais brasileiras pesquisadas em 2017 e 2019/20. Usando um modelo probabilístico, foi estimada a probabilidade de características organizacionais, tecnológicas e do ambiente da firma afetarem à decisão de adotar estas tecnologias entre os períodos. O estudo revela que a adoção avançou, mas ainda é incipiente no Brasil. Os resultados econométricos apontam que a adoção atual, o tamanho, pertencer a indústrias de alta intensidade digital, ser exportador e a formação têm um efeito significativo e positivo na adoção. No entanto, a qualificação de habilidades tem um efeito negativo. Esse resultado sugere que a qualificação em tecnologias antigas pode ser mais uma restrição (lock-in) do que um pré-requisito para a digitalização. Essas descobertas devem ser colocadas dentro de condições estruturais econômicas adversas ao crescimento e hostis ao investimento, nas quais as empresas possam reagir em qualquer direção: avançar para sobreviver; permanecer firme para enfrentar a incerteza ou retroceder defensivamente.

Digital business transformation adoption in SMEs and large firms during COVID-19

ABSTRACT The COVID-19 pandemic has presented significant challenges for businesses worldwide. Those who recognised the importance of an online presence and transformed their traditional business model into a digital one were better equipped to mitigate the pandemic's negative impacts. However, there is a lack of research on the differences in digital transformation between small and medium-sized enterprises (SMEs) and large firms, as well as the main factors driving this transformation. This paper aims to address this gap by examining the successful digital transformation among these groups (SMEs and Large firms) in the province of New Brunswick, Canada, as a case study. The study uses secondary data from the TechImpact survey to explore the primary factors of this shift for both SMEs and large firms. The study confirms the critical factors identified in the literature, while also revealing new factors specific to each group. For SMEs, these include adopting a digital business model, investing in low-budget social media and e-marketing, recruiting young digital experts, and accessing government grants and subsidies. For large firms, the factors include implementing mass customisation through online channels, providing remote work incentives, using a comprehensive content management system, and prioritising electronic customer relationship management and e-loyalty.

What motivates firms to adopt a green supply chain and how much does it matter?

This study integrates the elaboration likelihood model, institutional theory, and the image management perspective to identify the internal and external forces that can effectively drive firms to adopt a green supply chain. Using survey data from a sample of 246 firms in the Chinese manufacturing sector, we empirically examine how the internal green process and green product innovation of firms and different types of external institutional pressures contribute to their adoption of a green supply chain, which in turn can explain the variation in their environmental and new-product development performance. Results of our structural equation modeling analysis reveal that the internal green process and green product innovation of firms and three types of external institutional pressures (i.e., coercive, normative, and mimetic pressures) play an important role in driving green supply chain adoption. Moreover, firms can improve their environmental and new-product development performance by adopting a green supply chain. In addition, though the image management motivation of firms tends to play a negative moderating role in the relationship between their green process innovation and green supply chain adoption, such motivation positively moderates the contribution of coercive pressure to their green supply chain adoption. Our findings can help explain why emerging-market firms tend to adopt a green supply chain and do not follow the pattern predicted by classical strategic management theories. The results of our study clearly demonstrate the determinants and consequences of the adoption of a green supply chain of firms and confirm that their green supply chain adoption can exert a positive effect on their environmental and new-product development performance. Overall, our research highlights the importance of recognizing internal innovation and external institutional forces in driving the green supply chain adoption of firms, which in turn will contribute to their environmental and new-product development performance. In this regard, our study extends the stream of research on green supply chains and sheds new light on the importance of abandoning the conventional supply chain and adopting a green one. Our study also provides important implications for research, practice, and policymaking.

Penerimaan BIM di Kalangan Kontraktor PKS dalam Industri Pembinaan Malaysia

Building Information Modelling (BIM) is a modelling technology that provides construction professionals with digital tools for use in project planning, design, monitoring, and control. The potential advantages of putting BIM into practice are known to the Malaysian government. The Malaysian government has taken a number of steps to promote BIM in the hopes that Malaysian construction industry experts will utilize it extensively. However, significant difficulties are delaying the introduction of BIM in Malaysia. Implementing BIM typically presents difficulties for smaller businesses. Even though there are numerous benefits to utilizing BIM, small and medium-sized construction companies are still cautious to do so in the course of their work. This study examines BIM adoption in Malaysian small and medium-sized construction firms. The present degree of BIM adoption in Malaysia’s construction industry as well as the best tactics to encourage SME contractors in Malaysia’s construction industry to embrace BIM more effectively were the subjects of a questionnaire survey that was conducted. According to the survey’s results, SME contractors are still trailing behind in adopting BIM due to a number of obstacles that stand in the way of its adoption. In order to increase BIM adoption among SME contractors, it is crucial that government agencies successfully promote and encourage BIM use across the whole Malaysian construction sector. The importance of this study is in gathering data on the extent of BIM adoption among SME contractors, which might be utilized as a benchmark and reference for the development of BIM in the Malaysian construction industry.

Understanding the Transformative Potential of Computer-Assisted Audit Tools and Techniques (CAATTs) in the Accounting Profession

The transformative CAATTs enhance auditing with technology-driven approaches and data analytics. While widely used in large audit firms, their benefits and future impact on accounting remain uncertain for smaller firms. This study aims to provide a theoretical overview of CAATTs, examining their concept, benefits, and significance compared to traditional audit methods. It also explores the challenges associated with CAATTs' adoption. Through up-to-date insights from previous studies, the research sheds light on the potential impact of CAATTs on the auditing sector. Additionally, this study reviews the existing literature that addresses the obstacles hindering CAATTs' adoption in small and medium-sized firms and offers strategies to overcome these adoption challenges. The aim is to provide a better understanding of these innovative tools and their role in shaping the accounting profession. By leveraging CAATTs' capabilities, auditors can enhance their efficiency, accuracy, and effectiveness in conducting audits, paving the way for a more promising future of accounting endeavours.

Eco-innovation Types Adoption in Mexican Small and Medium Firms

The debate on eco-innovation is a relatively recent and emerging topic in the literature, and although it is gaining interest among cientific, academic, and enterprise community, and the analysis and discussion in the context of small and medium-sized enterprises is in an embryonic stage, especially in emerging economy countries, such as Mexico. In this sense, the objective of this research is to analyze the most important eco-innovation types that affect eco-innovation adoption in manufacturing SMEs. The results obtained follow that product eco-innovation, process eco-innovation and management eco-innovation are good eco-innovation types adoption of small and medium-sized companies in the automotive industry.

Accounting for Equity Financial Instruments Under IFRS 9: Determinants and Usefulness

This oral presentation aims to discuss the results of my study regarding the determinants and usefulness of accounting for equity financial instruments after the effect of the new accounting standard: International Financial Reporting Standard (IFRS) 9 Financial Instruments. The prohibition of recycling fair value gains or losses (FVGL) on equity instruments from other comprehensive income (OCI) to profit or loss when derecognition and the default fair value through profit or loss (FVTPL) presentation with alternative fair value through OCI (FVTOCI) option are some major changes for equity financial instruments accounting in IFRS 9. Motivated by the International Accounting Standards Board (IASB)’s continuing monitoring implementation evidence on equity instruments classification and measurement, I examine firms’ accounting choices in presenting FVGL on EFA either at FVTOCI or at FVTPL under the framework of Positive Accounting Theory (PAT) and whether the presentation location matters to investors in ASX 500 firms. I find that firms’ EFA holdings are not changed after IFRS 9 in terms of whether to hold an EFA or EFA holding amount. FVGL on EFA presentation location choice is not used opportunistically in firms to smooth earnings or increase profitability. However, information asymmetry for FVTOCI presentation choice increased after IFRS 9 adoption in non-financial firms. EFA amount in financial firms provides incremental value relevance to the market regardless of IFRS 9 adoption, and the EFA presentation location matters to investors. The results of this study provide evidence to standard setters to understand the determinants and usefulness of EFA under IFRS 9, which has implications for further revisions. I contribute to the debate around whether to recycle FVGL from OCI or not. Moreover, I extend accounting choice and value relevance literature in financial instruments accounting that is of value to a broad constituency, such as managers, investors, and various financial statement users.