Consideration For Firms Research Articles

The Effect of Earnings Management on Dividend Policy: Concentrated Ownership and Audit Committee Expertise as Moderating Variables

Dividend policy is one of the important decisions of a firm where this dividend policy is an important consideration for shareholders as an indicator of the firms success in managing the capital invested by investors. This study aims to provide empirical evidence of how earnings management affects dividend policy, then whether concentrated ownership and audit committee expertise can affect the relationship between earnings management and dividend policy. The research sample is a manufacturing company with a period of 2018-2022. The sample selection used a purposive sampling approach so that the total observations amounted to 128 observations. The results showed that earnings management has a remarkable effect on dividend coverage, concentrated ownership and audit committee expertise can affect the relationship between earnings management and dividend policy in an effective way. The effect proves that managers have the discretion to choose accounting methods to file better earnings as a way to signal the success of the firms management and on the other hand earnings control benefits focused ownership so that earnings management and concentrated ownership are complementary. This observation contributes to signal theory and firm theory in explaining the earnings control movement and focused ownership as moderating variables in explaining the relationship between earnings management and dividend coverage. The real implication of this research is that it can be used as a consideration for firms in making decisions regarding the proportion of dividends distributed, and can be a review tool for investors in investing.

Determinants of Cash Holding of Shariah and Non-Shariah-Compliant Firms at Indonesia Stock Exchange

The purpose of this study is to analyze what factors determine the cash holding of Shariah and non-Shariah-compliant firms of the manufacturing sector on the Indonesia Stock Exchange with the variables of leverage, profitability, capital expenditure, net working capital, size, dividend payment, growth opportunity, operation cash flow, cash flow volatility as the determinant of cash holding, as well firm's age as the control variable. This study uses secondary data from the financial statements of manufacturers on the Indonesia Stock Exchange in 2016-2020. To collect data, this study uses a purposive sampling method and obtained 41 firms (31 Shariah-compliant firms and 11 non-Shariah-compliant firms). Data analysis use multiple regression with the Eviews10 program. The result shows that leverage, profitability, capital expenditure, net working capital, size, dividend payment, growth opportunity, operation cash flow, cash flow volatility, and firm's age have a significant relationship on the cash holding of Shariah-compliant firms. For non-Shariah-compliant firms, relevant determinants of cash holding are leverage, profitability, capital expenditure, net working capital, size, operation cash flow, and firm's age. These findings could be a consideration for firms and investors to optimize cash holding to gain profits and avoid financial distress.

Trade‐offs to using standardized tools: Innovation enablers or creativity constraints?

AbstractResearch SummaryIn platform ecosystems, the creation of new products is often based on standardized development tools. Complementors often have a choice between either using these tools or creating the functionality themselves. In this paper, we study how the use of standardized development tools is related to the type of products created. By using data on the use of middleware (e.g., game engines) in the console video game market, we show that the use of development tools is associated with products that are less novel but with higher sales on average. We exploit a policy change that affected the ability of U.S.‐based developers to hire foreign workers as an instrument for the use of development tools and find further support for these patterns.Managerial AbstractWhen developing new products, firms often have to decide whether they base their technology on preexisting components and standardized tools or develop that technology themselves. In general, it has not been clear how using standardized third‐party tools that may be available to all firms in an industry affects the nature of the products that are created. Using data on middleware components, such as game engines, in the console video game industry, this paper shows the use of such standardized tools is associated with the creation of products that are less novel but generate higher sales on average. This is an important strategic consideration for firms, but also for platforms that make decisions regarding whether such tools should be allowed on their platform.

Reshoring for Sustainability: A Multi-Theory Decision-Making Framework

Sustainability has been increasingly recognised as an important consideration for firms in reshoring decisions. Although there are frameworks in the literature that explain the reshoring decision, limited attention has been given to integrating sustainability issues into the analysis, with much of the attention being given to economic factors. This paper integrates environmental, social and economic factors into a reshoring framework through employing the theoretical perspectives of the Natural resource-based view, the Social resource-based view, the Eclectic paradigm and Transaction cost economics. The paper highlights the interdependencies between these perspectives, and adds theoretical depth to our understanding of how social, environmental and economic factors interact to influence the reshoring decision.

Design Criteria for the Floating Walkways and Pontoons Considering the Extreme Climatic Conditions

The study has addressed design criteria about how the industry of the floating reinforcement concrete precast (pontoons) is installed in the factory with the combinations of utility, electricity services, and internet service. The pontoon bridges are successfully installed on the road for transport. The installation process for pontoons is successfully attempted in a balanced situation above the surface of the sea to the resistance of floating precast (pontoons) to any ambient effects such as weather conditions, the movement of the waves, or any other effects. This study has found new inspirations to identify the pontoon bridges of the future in spite of the fact that several new ideas are already presented by the most imaginative designers. A detailed explanation regarding the procedures of mold preparation, reinforcement, and use of expanded polystyrene, casting, and the pontoon installation is presented. The findings of the study may help engineers in providing firm considerations to the technical details of the construction process while considering the significance of extreme climatic conditions in various regions.

Firm decline and the mobility of US inventors, 1976–2015

Because innovation is a key driver of economic growth, the mobility of inventors is one important consideration for firms and policy makers. While considerable research examines the factors that influence inventor mobility in general, this research traces US inventors in response to firm decline. Using regression to model inventors’ probability of patenting in a new firm or moving to a new city, I find that the most skilled and well-connected inventors have the easiest transition after leaving a struggling company, but they are also most likely to move away to seek re-employment. After the decline of a major firm, inventors are less likely to move away from cities with more diverse regional economies.

Islands of Deliberative Capacity in an Ocean of Authoritarian Control? The Deliberative Potential of Self-Organised Teams in Firms

Business firms play an increasingly influential role in contemporary societies, which has led many scholars to return to the question of the democratisation of corporate governance. However, the possibility of democratic deliberation within firms has received only marginal attention in the current debate. This article fills this gap in the literature by making a normative case for democratic deliberation at the workplace and empirically assessing the deliberative capacity of self-organised teams within business firms. It is based on sixteen in-depth interviews in six German firms which practice various forms of self-organised teamwork. The article argues that self-organised teamwork can create a space for authentic, inclusive, and consequential deliberation by suspending authoritarian control structures within business firms. Finally, the article proposes the consideration of firms not only as necessary parts of a larger deliberative system but also as deliberative systems in themselves.

The copycat effect: do social influences allow peer team members' dysfunctional audit behaviors to spread throughout the audit team?

PurposeThis study seeks to identify the role that peer team members' behaviors and superiors' preferences play in influencing the likelihood that staff auditors engage in dysfunctional audit behavior (DAB).Design/methodology/approachThis study uses an experiment that manipulates peer team member behavior (DAB present or DAB absent) and superior preference (efficiency or effectiveness). Students enrolled in a graduate accounting course, proxying for inexperienced staff auditors, receive an internal control sample selection task. Participants assess the likelihood that a typical staff auditor would engage in DAB or non-DAB.FindingsFirst, staff auditors with a peer team member who engages in DAB are more likely to engage in DAB. Second, staff auditors who have a superior with a preference toward efficiency are more likely to engage in DAB. Finally, when considered simultaneously, the effect of the superior's preference on the likelihood of staff auditors engaging in DAB is not different for staff auditors, subject to a peer engaging in DAB versus those subject to a peer who engaged in a non-DAB.Research limitations/implicationsThis study uses a hypothetical audit team, a written script of team member communication, and students proxying for inexperienced staff auditors. As such, future studies might consider improving the realism of the team setting, the manner in which a message is portrayed, and implications at higher levels within the audit team hierarchy.Practical implicationsTeam interactions contribute to the prevalence of DAB within the profession. Specifically, inexperienced auditors are influenced by the behavior of peer and superior team members and this may be one cause of the prevalence of DAB within the profession. As such, future firm considerations could include well-structured mentorship programs and rewards structures.Originality/valueThis study adds to the audit team literature by investigating the influence of audit team dynamics on staff auditors' behaviors. This paper extends the current audit team literature, that is mostly focused on supervisor–subordinate relationships, by investigating social influences from peers and superiors. This study's findings inform public accounting firms of areas in which personnel may negatively affect audit quality through intra-team interactions.

Customer heterogeneity and innovation‐based competitive strategy: A review, synthesis, and research agenda

AbstractManaging customer heterogeneity (CH), that is, differences among customers (e.g., consumers, business firms) is an important, yet challenging consideration for firms seeking innovation‐based competitive advantage. To facilitate better understanding of the opportunities and challenges that CH presents, we conducted a systematic review of the literature linking CH with innovation‐based competitive advantage. Initially, we synthesize extant CH literature to propose a multidimensional conceptualization and definition of the CH construct comprising three dimensions: customer need heterogeneity, customer knowledge heterogeneity, and customer relationship heterogeneity. Customer need heterogeneity refers to the extent to which customers’ needs/preferences for a product offering differ from each other, customer knowledge heterogeneity indicates the degree to which customers have different knowledge levels regarding how their needs can be satisfied, and customer relationship heterogeneity indicates the extent to which customers have different preferences toward engaging in relationships with the firm. Next, we present an integrative summary of the empirically tested as well as theoretically proposed links between each CH dimension and its antecedents/outcomes. Finally, we draw upon the paradox literature to identify specific tensions associated with each CH dimension and rely on the dynamic capabilities literature to suggest how these tensions can be effectively managed. Collectively, we contribute to the emerging resource‐based perspective of CH by offering a propositional model of how CH can be managed for innovation‐based competitive advantage.

Financing a Quality-uncertain Supplier under Procurement Decentralization

Problem definition: This article investigates the optimal combination of financing schemes (bank finance versus buyer finance) and outsourcing structures (consignment versus turnkey) in a three-tier supply chain composed of a capital-constrained quality-uncertain component supplier (SP), a contract manufacturer (CM), and an original equipment manufacturer (OEM). Academic/Practical relevance: In outsourcing practice, the OEM must decide on whether to procure components directly from the SP (i.e., consignment) or decentralize the component procurement to the CM (i.e., turnkey). However, no paper has yet studied firms’ preferences of all these four combinations of financing schemes and outsourcing structures. Methodology: To address the above concern, we apply a Stackelberg game setting to characterize the equilibrium product quality, contract prices, interest rates, and firms’ profits. Results: Our analysis reveals that buyer finance can conditionally outperform bank finance under both consignment and turnkey; however, the benefit of buyer finance is more significantly undercut by the procurement decentralization. Furthermore, the capital-constrained SP may encounter a collateral dilemma under turnkey, in which the SP suffers from possessing a higher asset value. Notwithstanding, firms can benefit from procurement decentralization in both bank finance and buyer finance when the CM’s capital cost is low enough. Such benefit is more significant in bank finance; thus, it is more likely for the OEM to select turnkey over consignment in bank finance than in buyer finance, but at the expense of other firms. Managerial implications: This study provides some guidelines for OEMs when making their outsourcing and financing decisions. Managers should be aware of that financing schemes and outsourcing structures are not independent of each other, and procurement decentralization should be implemented with consideration of firms’ financial and operational interaction.

How post-merger integration duration affects merger outcomes

PurposeThis study aims to confirm earlier findings that differences between merger and acquisition (M&A) participant firms are a hurdle for successful mergers and shows that merger outcomes can also be affected by the post-merger integration duration (PMID).Design/methodology/approachExperimental research on distinct cultures developed within experimental pre-merger subject groups is used to compare pre- and post-integration performances.FindingsThis study finds that firm distance (i.e. inherent differences between pre-merger firms) negatively influences merger success; no significant relationship between firm distance and PMID exists and PMID is positively related to merger success. Specifically, a slower integration minimizes conflicts between merger partners, enhances trust-building and reduces the disruption of existing resources and processes in both firms, which may benefit M&As. By contrast, a fast integration that shortens the overall integration process may discourage the combined entity from recognizing the intended synergy quickly.Research limitations/implicationsThe new finding that PMID can affect merger outcomes invites empirical validation. This study presents experimental evidence that prolonged, well-structured post-merger integration may compensate for the negative time-variant issues associated with PMID.Practical implicationsOrganizational support for collaborative learning between professional members should be a strategic consideration for firms so that acquiring business capabilities can be more natural and cost-efficient than building internal capabilities despite possibly slowing down the integration process. Encouraging a transfer of technical and client knowledge between the combined members can create value and understand differences in both the form and content of each firm’s knowledge base and the pre-existing mechanisms for sharing knowledge. It may lower the level of resistance in knowledge transfer.Originality/valueWhile M&As may better facilitate the cost-effective expansion of business offerings than building capabilities internally, they can require considerable time, preventing many firms from realizing their intended outcomes. Nevertheless, less attention has been focused on PMID and its influence on M&As. This study is the first to use experimental research to examine the effects of PMID on merger success.

Entrepreneurial actions: implications for firm performance

PurposeThe purpose of this paper is to investigate different types of investment actions undertaken by entrepreneurial firms to determine how these actions influence performance. Specifically, the effects of entrepreneurial action with regards to investments in human capital, the capabilities of the firm and the competitive dynamics of the business relative to other firms are examined. These actions are examined in conjunction with the offering of products, services or both, to determine the benefits of specific actions for firms.Design/methodology/approachThe sample is taken from the confidential version of the Kauffman Firm Survey (KFS). The data are analyzed using a fixed effects model.FindingsResults show that investment in human capital development actions and capability development actions improve firm performance. Further, investment in human capital development actions is shown to have the largest positive impact on the performance of firms that offer products only. Competitive positions actions have the greatest positive impact on firms that offer products and services.Research limitations/implicationsResults contribute to multiple theoretical lenses within the context of entrepreneurship and demonstrate applicability of theory related to entrepreneurial action to other established theories. Findings also demonstrate that different entrepreneurial actions benefit firms that offer products or services in different ways. Limitations of the study are those associated with survey research generally, such as self-reported measures, non-response bias and the KFS specifically such as survivorship bias and variance in survey items across years.Originality/valueThe consideration of firms whose primary focus is the selling of products compared to services and how they moderate specific actions is novel and valuable. Theoretical development tying human capital, competitive dynamics and dynamic capabilities to entrepreneurial action creates new avenues for inquiry.

Dimension effects in the relationship between eco-innovation and firm performance: A European comparison

This study investigates the effect of eco-efficiency actions on firm performance, considering both turnover and employment growth, in the European enterprises with different firm size classes. The sample includes 63303 firms from 13 different European Union countries. The main contributions of this work are the use of the most recent Community Innovation Survey (CIS) and the consideration of firms’ size when analysing the relationship between the introduction of environmental benefits and firm performance. Using the ordinary least squares and simultaneous equation models the results showed that eco-innovations may affect negatively turnover growth as well as employment growth, a result which is not sensitive to firms’ size. However, environmental benefits introduced in products, demanded by the end user, are sensitive to the different size class to which the enterprise belongs. Both human capital and the number of adopted eco-innovation strategies influence positively firm performance, revealing to be more sensitive to the firm size. Overall, policy makers should be aware of the size as an important driver, or conditioning factor, for firm performance when forcing firms to introduce policies regarding environmental benefits.

Visualization of tax avoidance and tax rate convergence

PurposeThis study aims to explore the evidence of the probability of firms’ tax avoidance and the downward convergence trend of national statutory tax rates and firms’ effective tax rates.Design/methodology/approachThis research employs exploratory data analysis using interactive data manipulation and visualization tools, namely, R with SparkR, dplyr, ggplot2 and googleVis (GeoChart and Motion Chart) packages. This analysis is based on the world-scale accounting data of all listed firms from 148 countries spanning 30 years.FindingsThe results reveal the following: three types of evidences on probability of firms’ tax avoidance, showing a non-random distribution of firms’ effective tax rates and return on assets, cross-sectional variation of firms’ effective tax rates in each country, and the trend of difference between effective tax rates and statutory tax rates, and the downward convergence trend of statutory tax rates and firms’ effective tax rates.Practical implicationsThe results highlight the prominent issues of world-scale tax avoidance and tax rate competition and facilitate a collaborative discussion between laymen and professionals using objective evidence.Originality/valueA novel methodology is adopted through the visualization of world-scale accounting data, which can facilitate a new perspective, revealing unexpected patterns and trends in otherwise hidden information. This study also highlights the importance of global consideration of firms’ tax avoidance and tax rate competition, using objective evidence.

Modelling generalized firms’ restructuring using inverse DEA

The key consideration for firms’ restructuring is improving their operational efficiencies. Market conditions often offer opportunities or generate threats that can be handled by restructuring scenarios through consolidation, to create synergy, or through split, to create reverse synergy. A generalized restructuring refers to a move in a business market where a homogeneous set of firms, a set of pre-restructuring decision making units (DMUs), proceed with a restructuring to produce a new set of post-restructuring entities in the same market to realize efficiency targets. This paper aims to develop a novel inverse Data Envelopment Analysis based methodology, called GInvDEA (Generalized Inverse DEA), for modeling the generalized restructuring. Moreover, the paper suggests a linear programming model that allows determining the lowest performance levels, measured by efficiency that can be achieved through a given generalized restructuring. An application in banking operations illustrates the theory developed in the paper.

Bi‐level Programing Merger Evaluation and Application to Banking Operations

The potential for operational efficiency improvement is a key consideration for firms contemplating the consolidation of both internal and external business units. This paper develops a leader–follower game model to assess such potential gains from the merger of different organizations with constrained resources. A profit‐sharing strategy and algorithm are proposed to solve the model while maintaining incentive compatibility within each unit's decision‐making process. This paper further demonstrates that in a framework, within the data envelopment analysis paradigm, a supply chain with an upstream leader and downstream followers is efficient if and only if both the leader and the followers are individually efficient. A case study of a banking operations merger shows how incentive compatible merger of operations can produce overall efficiency improvement.

Modelling and Investigating the relationship of after sales service quality with customer satisfaction, retention and loyalty – A case study of home appliances business

After sales services (ASS) are activities that take place after the purchase of the product by customers and are devoted to supporting customers in the use and disposal of goods. ASS can create sustainable relationships with customers and contribute significantly to customer satisfaction. The purpose of this study is to evaluate the ASS quality by measuring the level of customer satisfaction (CS), customer retention (CR) and customer loyalty (CL) through the SERVQUAL dimensions comprising of ASS attributes and also to check which such ASS-based dimensions of SERVQUAL needs to be focused more on improving the quality of ASS with the consideration of firms involved in manufacturing the home appliances. For this purpose research models were proposed to examine the influence of ASS attributes on CS, CR and CL for three different products such as Gas Stove, Water Purifier and Mixer Grinder from the home appliances sector and tested by multiple regression analyses on data collected through the structured survey questionnaire, with a five-point Likert scale. The study has demonstrated the application of multiple regression analysis in studying the influence of ASS attributes on CS, CR and CL, and the results of the study have helped in analysing the performance of the case companies so as to devise suitable strategies in improving CS, CR and CL.

Hidden Fees and Firm Reputation: Evidence from the U.S. Hotel Industry

Does engaging in price obfuscation damage firm reputation? Using a difference- in-differences framework applied to data from the U.S. hotel industry, I establish that a firm’s adoption of hidden “resort fees” negatively affects subsequent traveler ratings. These findings are relevant to the growing literature on price obfuscation. Recent theoretical contributions have argued that firms often have an incentive to obfuscate, and empirical evidence confirms that price obfuscation is highly effective at raising revenue and markups, at least in one-shot transactions. The literature to date, however, has not addressed the potential reputational cost of obfuscation - an important consideration for firms, especially in online settings where seller reputation (in the form of ratings) has been shown to have a substantial impact on demand.

Why Firms Avoid Cutting Wages

Firms very rarely cut nominal wages, even in the face of considerable negative economic shocks. The authors of this article use a unique survey of 14 European countries to ask firms directly about the incidence of wage cuts and to assess the relevance of a range of potential reasons for why the firms avoid cutting wages. They examine how firm characteristics and collective bargaining institutions affect the relevance of each of the common explanations for the infrequency of wage cuts. Concerns about the retention of productive staff and a lowering of morale and effort were reported as key reasons for downward wage rigidity across all countries and firm types. Restrictions created by collective bargaining were found to be an important consideration for firms in Western European (EU-15) countries but were one of the lowest-ranked obstacles in the new EU member-states in Central and Eastern Europe.

An Accounting Viewpoint for the Relationship Between Intellectual Capital and Web Trends of BIST 30 Firms in Turkey

Abstract This research investigates the relationship between intel-lectual capital and web trends of the index bist-30 3 from an accounting viewpoint. As well known, bist-30 is comprised of top 30 firms listed in Istanbul Stock Exchange. The trends of web pages and firm are analyzed using specific web means such as the Google Trends. In addition, Market Value / Book Value and Value Added Intellectual Coefficient (VAIC) meth-ods are utilized to measure intellectual capital. Also, enterprise web sites, firm annual reports, company financial statements and Public Disclosure Platform 4 are taken advantage for ac-counting and measurement of intellectual capital. Keywords: Accounting, Financial Reporting, Measurment, Intellectual Capital, Stock Exchange, Data Mining, Time Series Analysis, Operating Reports I.Introduction Intellectual capital is currently a popular and extensively discussed topic. In the past, enterprises were solely considered and evaluated by their phyiscal and tangible assets. On the other hand, the knowledge era requires a much accurate consideration of firms’ real value. That is the leading reason why intellectual capital plays a critical value for companies and nations.