Affect Corporate Performance Research Articles

Dual Social Responsibility: The Pathway Effects and Mechanisms of Benevolent and Malevolent Actions on Firm Performance

ABSTRACTWhile doing good things, enterprises may also be subject to subjective or unintentional behaviors of doing bad things, and corporate performance is comprehensively affected by its dual social responsibility. Using data from A‐share listed companies from 2010 to 2020, this paper, grounded in signaling theory, legitimacy theory, and stakeholder theory, analyzes the dual‐path effects, comprehensive effects, and boundary effects of corporate social responsibility (CSR) and corporate social irresponsibility (CSIR) on corporate performance. It innovatively introduces innovation efficiency as a mediating variable to examine its transmission mechanism and pathways in the influence of dual social responsibility on corporate performance. The study finds that CSR and CSIR have independent and heterogeneous effects on corporate performance, with the former exhibiting an inverted U‐shaped relationship with corporate performance and the latter consistently exerting a negative impact. The coexistence and interaction of CSR and CSIR have a comprehensive effect on corporate performance, where CSR performance can mitigate the negative impact of CSIR, and there exists a threshold effect. CSR has a nonlinear impact on innovation efficiency, and innovation efficiency plays a significant mediating role in the process of CSR and CSIR affecting corporate performance. The industrial environment competition plays a moderating role in the relationship between a company's dual social behavior and its performance. The higher the industrial environment competition, the more it will accelerate and intensify the negative impact of CSIR on corporate performance. Additionally, it will steepen the inverted U‐shaped curve of CSR influencing corporate performance and shift the inflection point to the left. This study not only extends the boundaries of research on the impact of CSIR on corporate performance but also provides insights for corporate social responsibility governance and ethical decision‐making in business.

A Study of LYFEN's ESG Disclosure and Its Impact on Corporate Performance

Environmental, social and governance (ESG) is an important criterion for evaluating non-financial indicators of corporate performance, which provides substantial support for promoting corporate’s green transformation. This paper investigates the impact of ESG disclosure on corporate performance by using the social responsibility report issued by Shanghai Laiyifen Co., Ltd and the company’s financial data from 2019 to 2022, as well as data up to the end of September 2023 as the basis for analysis. The results show that there is a high correlation between ESG rating scores and corporate performance. Companies that score higher on ESG indicators tend to perform better financially, indicating that a focus on sustainability and responsible business practices can drive value creation. In addition, detailed and in-depth disclosure of ESG information helps to enhance corporate value. These findings deepen the understanding of how ESG disclosure affects corporate performance and provide theoretical support for companies and investors who seek valuable guidance.

How Does Financial Technology Innovation Impact Business Performance?

ABSTRACT Financial technology (FinTech) is transforming traditional financial services and has a significant impact on business performance. This study investigates how FinTech affects the performance of businesses in China. It constructs a FinTech Index based on data from the Baidu Search Index and aligns this index with the financial data of publicly listed Chinese companies over the period from 2011 to 2021. We find that the development of FinTech positively affects corporate performance improvement through external and internal environment mechanisms. The findings reveal that FinTech significantly contributes to business performance by enhancing information transparency, alleviating financing constraints, and improving the efficiency of corporate investment environments. Additionally, we find that the impact of FinTech development on corporate performance exhibits heterogeneity. The beneficial effects of FinTech on corporate performance are particularly noticeable in in eastern regions, groups with lower levels of centralization, and areas with weaker regulatory oversight. The empirical results can be used to help emerging market firms improve their performance and assist investors in identifying worthwhile investment prospects.

Unethical Behaviour and Corporate Performance in University System: A study of Nigerian Private Universities

The study investigated whether there exists a relationship between unethical behaviour and corporate performance in the university system, and hence determined the impact of unethical behavior on corporate performance in the Nigerian university system with private universities as reference. A survey design was employed with a questionnaire instrument administered to 250 university staff drawn from four private universities in South-west, Nigeria, using a combination of purposive and random sampling techniques. The response data were analyzed using both descriptive and inferential analysis. The descriptive analysis showed that unethical behaviour exists in Nigerian private universities. A multivariate Partial Least Squares Structural Equation Model (PLS-SEM) was used for the inferential analysis and to specify the relationships among the construct variables in the study. The bootstrapping technique of the PLS-SEM was used to estimate the parameters in the model, with the aid of the Smart-3 software. The result of the factor loadings, reliability test, convergent and discriminant validity revealed that the construct variables are fit for the PLS-SEM. The path analysis revealed that financial malpractices are a major unethical behavior affecting corporate performance adversely. Furthermore, unethical behaviours from university staff and university administration have significant negative influence on corporate performance. The study concludes that unethical behaviour is a key driver of poor corporate performance in the Nigerian university system. Therefore, it is recommended that policy makers in the university should adopt a holistic approach to ethical management that is oriented toward zero tolerance for unethical behavior in the university system

The role of organizational culture in the performance of SMEs in Vietnam during the economic crisis

This study examines whether the financial crisis caused by the COVID-19 pandemic and the economic downturn will affect the role of organizational culture in the performance of SMEs in Vietnam. Specifically, the study aims to evaluate changes in the OC of SMEs during and after the crisis. Survey data used for analysis includes 202 SMEs in Vietnam. It was collected from January 2023 to March 2023. The research used the Denison culture model. SmartPLS 4.9.0.2 software was used to test the research model and compare cultural changes before and during the crisis. The findings suggest that organizational culture has a positive relationship with both accounting information systems (AIS) and organizational performance, but only adaptability affects corporate performance. Furthermore, AIS is positively related to the corporate performance of SMEs. The study shows that organizational culture, including involvement, consistency, and mission, is eroded during a crisis, supporting the theory that economic crises hurt corporate culture. Additionally, repeated research confirms that organizational culture positively affects AIS and that AIS positively affects organizational performance regardless of economic crisis. The results provide indicators for managers on how to promote sustainable business development. It is important for SMEs to establish a cultural identity that aligns with their goals and strategies to minimize conflicts of interest and improve competitiveness.

Analysis of the Impact of Equity Incentives on Corporate Performance

Equity incentive is a long-term incentive mechanism implemented by enterprises to motivate and retain core talents, and is one of the most commonly used methods to motivate employees. Equity incentives have been developed from the beginning of the twentieth century to the present day to form a relatively complete and mature system, and their dynamic evolution and key role in corporate governance (employee loyalty), executive compensation, and investor decision-making make them of far-reaching research significance. Also, the equity incentives of enterprises play a crucial role in their development. The purpose of this paper is to comprehensively summarize and analyze the development and classification of these incentives. In addition, this paper focuses on the equity incentive policies of Tesla and Xiaomi and explores how and why incentivizing two target groups, namely executives and employees, affects corporate performance, as well as making a side-by-side comparison, and gives some suggestions for future equity incentives.

기업이 인지한 기업지원이 위기 관리정도와 기업 성과에 미치는 영향

This study aimed to verify whether the need for business support to survive in a rapidly changing external environment affects corporate performance and whether the degree of crisis management mediates this relationship. Accordingly, a study was conducted on companies in Jeju, specifically in the intelligent tourism service and green energy solution industries, which are promoting the digital transformation of traditional sectors in response to the COVID-19 pandemic. Therefore, policy support for companies was categorized into four groups: Infrastructure, R&D, Technology support, and Business support. The impact of each support program on corporate performance was then examined through the degree of crisis management within the company. The following is a summary of the research results.
 First, the relationship between business support and crisis management was verified, showing that the impact varied depending on the characteristics of the business support program. In the short term, it was analyzed that companies require direct support programs to overcome crises. Second, the relationship between business support and corporate performance was found to be statistically insignificant. Third, in the relationship between crisis management and corporate performance, it was confirmed that managing financial and material resources in the short term can improve corporate performance. Finally, in the relationship between perceived corporate support and corporate performance, as well as the relationship between infrastructure, R&D, technology support, and corporate performance, it was found that resource management has a complete mediating effect.
 The implications of this study confirm that business support in response to uncertain business environments affects crisis management simultaneously but does not immediately impact corporate performance. As business support may have a negative effect on short-term corporate performance from the perspective of support agencies, it is necessary to establish a direction for support by dividing short-term and long-term outcomes derived through business support.

Social Diversity on Corporate Boards in a Country Torn by Civil War

AbstractWe examine how social diversity and inclusiveness on corporate boards affect corporate performance and monitoring in Sri Lanka, a country subject to decades of polarization, civil war, and even genocide. Barely more than a decade after the civil war, we find that board social diversity on the basis of ethnicity, religion, language, gender, and nationality of the board members is positively related to corporate performance, both in terms of stock market performance and accounting returns, and to corporate financial stability. The main positive effects of social diversity derive from ethno-linguistic inclusiveness. The results are confirmed by an instrumental variable approach that addresses endogeneity issues. We find no evidence that inter-personal and moral conflicts or communication problems among board members negatively affect firm performance.

Why State Power Pivotal to Economic Growth? A Review of Firms’ Performance in Dynamic Economies

Market regulations, governmental capital, and politically connected managerial teams are incrementally functioned, together with private-owned capital flows perennially. This paper reviews how macro-environment determinants, state-owned capital, as well as managers with connections affecting corporate performance in dynamic economies, such as China, Malaysia, and Nigeria. The findings clearly indicate that firms with politically connected manager and state-owned capital outperform in China, with higher IPO approvals, governing roles as informal structure, and tax benefits. The research has also shown that stability lays a foundation for businesses to strive.

The relationship between share pledge and corporate performance: Does corporate governance matter?

This study investigates the impact of share pledge on corporate performance and the moderating effect of the corporate social responsibility-oriented governance mechanism (CSRG) on this relationship. Using a sample of China's listed firms from 2007 to 2016, we show that a standard deviation increase of one in share pledge is associated with a 0.6% decrease in a firm's corporate performance. In particular, the results suggest that CSRG mechanism is an effective tool to alleviate dwindling corporate performance triggered by the share pledge. We further identify the various channels by which share pledge through CSRG affect corporate performance. We find that the CSRG moderating effect is channeled through financial constraints and agency conflicts. These findings support arguments in the literature that, CSRG tools supplement the inefficiencies of management, hence, improving corporate performance for the good of all stakeholders.

The effects of working from home on technical efficiency within the service industry: A meta‐frontier approach

AbstractThe COVID‐19 pandemic has accelerated the introduction of working from home (WFH), but it has not been verified how it affects corporate performance, and many companies are still hesitant to introduce WFH. In this study, service companies were divided into a group that introduced WFH and a group that did not introduce WFH during the COVID‐19 pandemic, and the technical efficiencies of the two groups were compared through meta‐frontier analysis. As a result, the WFH group had a lower technical efficiency (TE) but a higher meta‐technology ratio (MTR) than the group that did not introduce WFH, suggesting that the introduction of WFH can be positive for improving corporate performance in the long run.

Innovative business strategies, corporate performance, and firm value in the travel and leisure industry

This study examines the influence of innovative business strategies on corporate profitability and valuation in the travel and leisure industry. Following the theoretical framework developed by Miles and Snow (1978) to measure business strategy and using a sample of 791 firm-year observations for 138 publicly listed international companies from 2014 to 2021, we find that more innovative business strategies are associated with lower profitability but higher market valuations. Moreover, the negative association of innovation with profitability reversed during COVID-19. Our paper provides insights into the short-term consequences of innovation and how investors perceive innovative companies. Managers and investors may use our results to better understand the key factors affecting corporate performance and value in the travel and leisure industry.

Firm Performance of Saudi Manufacturers: Does the Management of Cash Conversion Cycle Components Matter?

The purpose of this study is to examine the liquidity management of a corporation. It aims to examine how managing cash conversion cycle components affects corporate performance. A dataset of 88 firms listed on the Saudi Stock Exchange between 2018 and 2022 was analyzed using both pooled OLS and fixed effects regression models. A sample of 84 firms listed on the Saudi Stock Exchange for the period from 2018 to 2022 was used. Both the pooled OLS and the fixed effects regression models were used. This study’s key findings are: (1) there is a strong negative correlation between the time it takes to convert inventory into sales (inventory conversion period) and firm performance. If inventory does not sell quickly, profit tends to be lower. (2) Firm performance demonstrates a strong inverse relationship with the duration it takes for companies to collect cash from customers, commonly known as the accounts receivable collection period. A short accounts receivable collection period may become collectible and increase a business’s profitability and performance. (3) There is a highly significant negative link between the time taken to pay creditors (days payable outstanding) and firm performance. A short average payment period, indicated by a low payment period, suggests that the firm is promptly settling its bills and obligations without any delays.

Exploration of Dynamics of Corporate Performance and Corporate Governance

This research explores the dynamics of corporate performance and governance in the context of globalization and fierce business competition. With a focus on the Spanish tourism sector and evaluating corporate governance in Latin America, the study uses a mixed approach, combining qualitative and quantitative analysis. The study aimed to understand the relationship between corporate performance and corporate governance by exploring the differences between family and non-family businesses. The research provides insight into how ownership, management, and governance practices can affect corporate performance through literature studies, return on capital analysis, and corporate governance evaluations. The results show that family businesses have unique dynamics involving emotional involvement and creativity, while good corporate governance is concerned with consistency of return on capital. Implications include a better understanding for organizational leaders in making investment decisions and sustainable business strategies. This research makes theoretical and practical contributions to understanding performance dynamics and corporate governance in global and local business contexts.

Nonstate ownership, agency costs and corporate performance: evidence from Chinese state-owned enterprises

PurposeThe primary objective of introducing nonstate ownership into state-owned enterprises (SOEs) is to enhance corporate performance. This study explores how nonstate ownership affects corporate performance, emphasizing agency costs as the primary mechanism.Design/methodology/approachUsing data from 2010 to 2019 for listed SOEs, the authors measure nonstate ownership based on shareholding ratios, control rights and shareholding–control matching. The authors also use fixed-effects and mediation-effects models, with agency costs as the primary mechanism.FindingsIncreased nonstate shareholding ratios, stronger control rights and improved shareholding–control matching promote SOE performance. Nonstate shareholding ratios boost performance through resource effects, while control rights and shareholding–control matching promote performance by mitigating agency costs. A heterogeneity analysis indicates stronger effects in local SOEs and highly marketized regions. Moreover, control rights and shareholding–control matching reinforce the positive impact of shareholding ratios on performance.Originality/valueThe mixed-ownership reform of Chinese SOEs aims to optimize shareholding and control structures between state and nonstate shareholders. Therefore, research on the impact of nonstate shareholding ratios, control rights and shareholding–control matching on corporate performance is highly pertinent. However, existing studies have focused on the effects of single factors on performance, without exploration of the economic implications of shareholding–control matching. This study not only prioritizes the optimization of shareholding and control structures but also underscores the importance of granting nonstate shareholders control rights proportionate to their shareholding, providing critical evidence of the value of improving SOEs' ownership structure.

Digital Platform and Company Performance: A Review of How Digital Platforms Can Improve Company Performance

Digital platforms play an increasingly important role in the digital age, and their impact on enterprises participating in the economic market is noteworthy. Whether business leaders can fully utilize digital platforms to gain development advantages often affects the future direction of the company. Given that, this study explores the impact of digital platforms on company performance, focusing on the ways in which digital platforms affect corporate performance. Moreover, Google is used as an example to analyze how digital platform companies make profits. By reviewing the research of previous scholars, this study summarizes three specific ways in which digital platforms work: digital innovation, generating users' aggregation effect, and taking a mediating role in digital transformation capabilities. Besides, the improvement of enterprise performance is specifically reflected in the increase in company revenue, the attraction of more users, and the upgrading of business models and strategies. Google primarily earns profits by receiving advertising fees paid by advertisers.

Corporate earnings management strategy under environmental regulation: Evidence from China

In response to external adverse factors affecting corporate performance, managers may be motivated to engage in earnings manipulation. Environmental regulation as an institutional factor threatens normal earnings for heavy-polluting firms. This paper discusses corporate earnings management strategy under an environmental regulation policy. A multistage difference-in-differences (DID) estimation is performed, based on the central environmental protection inspection (CEPI) that is widely acknowledged as China's most stringent environmental policy. The results show that heavy-polluting firms significantly adjust their earnings management strategy after CEPI. Managers tend to adopt real activities manipulation with the effects of CEPI, while reducing their reliance on accrual-based earnings management. CEPI stimulates heavy-polluting firms to increase environmental investment, which makes their managers more likely to manage earnings through real activity manipulation, simultaneously resulting in the reduction of discretionary accruals. This earnings management strategy only appears in firms inspected in 2016 or non-state-owned enterprises or firms located in the regions with low environmental pressure. Our findings show that managers could use the chances provided by exogenous shocks to manipulate earnings.

Study on the Correlation Between Accounting Fraud and Accounting Software

This paper aims to explore the impact of accounting software on accounting fraud cases. This study explores the impact of artificial intelligence on accounting fraud cases. The results of this paper are helpful for business owners and managers to understand the importance of using accounting software to achieve performance. Efficiency, reliability, ease of use, data quality and accuracy affect the use of accounting software, thus affecting the number of accounting fraud cases. Literature and research results show that the efficiency, reliability, ease of use, data quality and accuracy of accounting software have a significant impact on accounting fraud cases. Previous studies have shown that in the increasingly competitive enterprise environment, in addition to improving the management ability and efficiency of enterprises, the use of accounting software is an important means to ensure the survival and sustainable development of enterprises. This study is one of the few studies that can clarify how the use of accounting software affects corporate performance. In this study, the author believes that the dimension of using artificial intelligence is important for improving organizational performance.

The Impact of the Cash Compensation Gap between Executives and Employees on Corporate Performance

This study was conducted to analyze the impact of the compensation gap between executives and employees on corporate performance for companies listed on the Korea Exchange from 2010 to 2021. First, it was found that the compensation gap between executives and employees had a significant impact on sales performance and stock performance, suggesting that employees might feel deprived relative to the enormous compensations provided to management and their motivation to work might decline. These psychological factors also appeared to have an effect on subsequent corporate performance. Employees might become less loyal to the organization due to psychological factors and try to compensate for the situation by leaving their jobs. Second, the executive-employee compensation gap and compensation gap squared were found to have a significant impact on sales performance and stock performance, suggesting that the larger the compensation gap, the more it negatively affected corporate performance. In consideration of this, management must develop various compensation systems for employees and actively introduce and maintain employee welfare programs. Third, the compensation gap between executives and employees of chaebol (conglomerate) and non-chaebol firms was found to have a significant impact on operating performance and stock performance, and the compensation gap between the executives and employees of firms listed on the securities market and KOSDAQ was also found to have a significant impact on operating performance and stock performance. The results showed that the larger the compensation gap between executives and employees, the more it negatively affects corporate performance, regardless of whether the company is a chaebol or non-chaebol firm or listed on the securities market or KOSDAQ. Management must develop a wide range of compensation systems for employees and actively introduce and maintain employee welfare programs.

Research on ESG Report from the Perspective of Sustainable Development

China's economy has entered a stage of high-quality development, and sustainable, green and low-carbon are becoming important keywords for economic development. The "dual carbon" goal proposed by China in 2020 has further promoted the society's attention to green and low-carbon development. At the same time, more people and enterprises are gradually realizing the importance of assuming social responsibility for the sustainable development of enterprises. ESG includes environmental, social and governance aspects, and advocates that enterprises should not only pay attention to the growth of their own financial performance in the process of business development, but also pay attention to the coordinated development of non-financial performance, and promote sustainable development of enterprises through active ESG practices to help enterprises transform green. Moreover, as an important driving force for economic and social development, ESG practice can promote the high-quality development of China's economy. In recent years, ESG has gradually become a hot social issue, and how to achieve sustainable development has attracted extensive discussion and research, so the research of ESG report has become more and more important.This paper takes Fuyao Group's ESG report as the research object to explore its ESG reporting practice and its impact on the sustainable development of enterprises. Through the study of this paper, it is found that the practice of ESG reporting carried out by Fuyao Group first achieves energy conservation and emission reduction in environmental aspects, responds to the national strategy, and reduces energy costs; Secondly, in terms of society, improve employee efficiency by protecting the rights and interests of employees, participate in philanthropy to enhance corporate visibility, cooperate with all parties in the supply chain, and obtain government recognition; Thirdly, in terms of governance, we continue to promote the improvement of governance mechanisms and improve the efficiency of enterprise management; Finally, ESG practices affect corporate performance from two aspects: promoting R&D innovation and helping enterprises alleviate information asymmetry. ESG practices have a positive impact on corporate sustainable development, non-financial performance is most directly reflected in product added value, overseas revenue proportion increase, accumulated reputation and promote corporate green and sustainable development, financial performance has also been better long-term promotion, at the same time, the release of ESG practice report has achieved good market response, promoting the growth of corporate value. In conclusion, this paper argues that ESG practices can help improve corporate performance and promote sustainable development, and enterprises should attach importance to the coordinated development of environmental protection, social responsibility and corporate governance in the process of operation, and participate in ESG practices to promote the sustainable development of society.