Corporate Choice Research Articles

Regional Logistics Capability and Foreign Direct Investment Location Choice of Multinational Corporations

Regional Logistics Capability and Foreign Direct Investment Location Choice of Multinational Corporations

Nature Inspired Discovery and Development of Antibacterials: An Update

The growing prevalence of pathogens resistant to several drugs poses an urgent health concern, which can only be addressed by increasing support for the research and development of newer antibiotics. Drug discovery through the exploration of nature's treasures is a successful and ongoing endeavor. However, the conventional method of discovering new drugs from natural sources has become an adjunct choice of the pharmaceutical corporations since it is time-consuming, complicated, expensive, and fraught with uncertainty. The application of several computational techniques, including combinatorial chemistry, metagenomics, and high throughput screening, has accelerated the drug development process simultaneously reducing costs and time. It is a well-established fact that synthetic drugs generated through computer-aided research are frequently linked to a restricted spectrum of pharmacological activity and adverse side effects as compared to treatments that are either directly or indirectly derived from natural sources. Hence, an innovative drug discovery program may be centered on the virtual design of molecules using a scaffold with a natural origin in order to develop effective and affordable therapies with a wide variety of functionality

Corporate social responsibility, new challenges with new development, and new structural work of management framework business development cycles

The study focuses on the impact Of Corporate Social Responsibility on Sustainable Enterprise Development. In addition, it also focuses on Corporate Social Responsibility and institutional theory for new Perspectives on private governance. Lastly, it examines reimagining Corporate Social Responsibility in the Era of COVID-19 by Promoting Corporate Social Competence.As this paper is based on reviews so that secondary data collection method will be used in which various past articles, books, journals, and reviews will be used to collect all the reliable data based on the topic. This study is qualitative in nature.The integration of CSR into the core business strategy is more efficacious than its treatment as a distinct initiative. This strategy aims to synchronize corporate social responsibility endeavors with the objectives of the organization, thereby guaranteeing enduring viability. Nevertheless, it presents difficulties as enterprises must devise strategies to integrate CSR deliberations into all facets of their activities.Corporate Social Responsibility (CSR) initiatives are frequently characterized by their voluntary nature and self-regulatory approach, which may not be subject to enforceable standards. This phenomenon may lead to incongruity and fluctuating degrees of dedication among corporations. In the absence of well-defined guidelines, certain organizations may resort to "greenwashing" tactics, whereby they purport to exhibit social responsibility without effecting significant alterations.Through a comprehensive comprehension and proficiency in tackling emerging challenges in Corporate Social Responsibility (CSR), enterprises can augment their standing and foster confidence among their stakeholders. A robust corporate social responsibility (CSR) strategy that is in line with societal expectations has the potential to enhance brand reputation, entice customers, and cultivate enduring relationships with stakeholders. The academic perspective suggests that the study of Corporate Social Responsibility (CSR) enables businesses to comprehend the wider societal and ecological consequences of their operations. The aforementioned statement highlights the significance of comprehending the effects of corporate choices on stakeholders, thereby facilitating judicious and conscientious decision-making. Consequently, this facilitates the alignment of corporate strategies with sustainable development objectives and enables decision-making that is mutually advantageous for the enterprise and the community.

Can innovation affect the relationship between Environmental, Social, and Governance issues and financial performance? Empirical evidence from the STOXX200 index

AbstractInnovation represents one of the most important drivers in the business context. Drawing upon the research on corporate social responsibility (CSR), shared value, and innovation, this paper aims to analyze the relationship between Environmental, Social, and Governance (ESG, a form of CSR) sustainability policies and corporate financial performance (CFP) by investigating the mediating role of Innovation (i.e., investment in research and development, R&D). Our sample comprises 148 European companies belonging to the Euro Stoxx index in the period 2009–2014. For high‐innovation companies (HICs), we find positive relationships between some Social (S) issues and CFP and weaker linkages between Environmental (E) indicators and CFP. In contrast, Governance (G) issues (i.e., issues related to board structure and board function) negatively influence CFP. In contrast, for medium‐innovation companies (MICs), these relationships are absent and low‐innovation companies (LICs) show negative relationships. Adopting reporting frameworks or guidelines affects CFP only in HIC. We introduce an original interpretative model, which identifies innovation (R&D) as the main driver in corporate sustainability, particularly in light of Social issues related to the production of a good or service. In terms of managerial implications, we identify three key factors for effectively embedding ESG in organizations' policies: investment in product innovation, compliance with environmental regulations, and corporate choices on brands and channels of external communication.

Dividend taxes and corporate choice: Evidence from 2015 tax cut in South Korea

In this paper, we test the old view and the new view of dividend taxation using a new set of evidence from a unique event in South Korea. Using a multiple regression discontinuity (MRD) setting from the South Korean 2015 tax reform, we find that investors react positively to the news of an anticipated dividend tax cut. The positive market reaction is more pronounced for firms with higher investment intensity, more investment opportunities, and less financial constraint. We also find that firms with more investment opportunities but less capital expenditures in the past are more likely to opt for the dividend tax cut. Using a difference-in-differences analysis, we document that corporate investment increases for firms that received the tax cut, along with a decrease in the implied cost of equity. Our findings are consistent with the notion that firms make a rational choice of dividend taxes based on their needs for financing and investment.

Family Ownership and Impression Management: An Integrated Approach

ABSTRACT According to agency theory, impression management is lower in family-owned firms because of reduced agency I conflicts. However, when family owners are present, agency I conflicts are superseded by agency II conflicts between controlling and minority shareholders, leading to a positive association between impression management and family ownership. Moreover, family owners have distinct goals related to the preservation of socioemotional wealth (SEW) that may influence agency conflicts. We formalize these countervailing forces by developing an integrated theoretical framework that considers both agency I and agency II conflicts and how they interact with SEW-related motives. We hypothesize that the coexistence of agency I and agency II conflicts in family-owned firms leads to a U-shaped association between family ownership and impression management. We also expect that this U-shaped association is flatter when family influence on the board is stronger and SEW motives shape more corporate choices. We test our predictions by analyzing the letters to shareholders of 77 Italian-listed firms from 2008 to 2015. The results confirm our expectations and hold when we use instrumental variable estimation, alternative proxies to capture SEW motives, and impression management measures.

Local government turnover and capital structure: evidence from China

PurposeThe political influence on the determinants of capital structure has been under-researched for a long time. Taking the turnover of secretary of municipal committee as a political factor in China, this paper studies the effect of local government officials' turnover on firm's capital structure.Design/methodology/approachStarting with all A-shares listed firms in the Shanghai and Shenzhen Stock Exchanges from 2001 to 2018, this paper implements the OLS estimation, staggered difference-in-difference approach to investigate the effects of political turnover on the choice of capital structure.FindingsThe results show that, driven by government officials' turnover, firms will significantly reduce their leverage. When comparing between formal finance (bank loans) and informal finance (payables), the reduction of capital structure is mainly driven by banks, not by suppliers. Furthermore, two possible channels have been investigated. First, the reduction effects are mainly driven by the SOEs when classifying the types of corporate ownership into SOEs and non-SOEs. Second, the reduction effects exist in areas with the more intense government intervention when considering the heterogeneity of the development of institutional environment in provinces.Originality/valueThis paper first contributes to the literature on the determinants of corporate choice on capital structure. Second, this paper enriches the studies on the economic consequences of local government officials' turnover.

Appeal of word of mouth: Influences of public opinions and sentiment on ports in corporate choice of import and export trade in the post-COVID-19 era

With the advent of the post-COVID-19 era, corporate managers of import and export trade are now more sensitive in their daily work, and their decisions are more likely to be influenced by the emotional bias of public opinions, especially regarding cooperation with trade ports of frequent circulation. Therefore, how to manage public opinion and sentiment in the post-COVID-19 era will be a new opportunity and challenge for the marketing management of ports. For the above considerations, through the same frequency verification between public opinions and sentiment on ports and corporate choice of import and export trade, and through analysis of the influence mechanism, the present study demonstrates the positive effects of public opinions and sentiment on ports in corporate choice of import and export trade in the post-COVID-19 era, verifies the significance of shaping word of mouth in port management, puts forward the great role of public opinions and sentiment in the cognitive and emotional empathy in the choice of import and export trade, and provides theoretical guidance for port managers' strategic choices in the post-COVID-19 era.

Dividend Taxes and Corporate Choice: Evidence from 2015 Tax Cut in South Korea

Dividend Taxes and Corporate Choice: Evidence from 2015 Tax Cut in South Korea

Holistic Dialogical Corporate Communications in the Food Retailing Industry: The Importance of Conscious Communication in Social Networks

ABSTRACT Conscious Communication, or Corporate Social Responsibility Communication, which is the communication about corporate engagement and activities, has received growing attention. This study analyzes the communication of two companies in the German food retailing industry: ALDI Süd and Alnatura. Quantitative data allow for an analysis of the general social media presence of the companies, user interactivity, and corporate choices with regard to social media communication. The results show that Alnatura pursues a clear and consistent communication strategy on social media. The organic food retailer boasts a strong, active, and involved fan-community and performs better than ALDI Süd in manifold categories, especially when it comes to interactivity and content. The findings concerning Instagram in particular underscore high levels of corporate engagement as well as the strong participation of users in the dialogue on sustainable topics.

Do brand rumors matter? The role of brand equity and response strategy to brand rumor

PurposeThis paper aims to investigate consumer responses to brand rumors and corporate rumor response strategies in the restaurant industry.Design/methodology/approachA scenario-based experimental design was used to examine changes in consumers’ brand evaluation depending on level of brand equity and corporate choice of response strategy.FindingsIt was found that the impact of brand rumors on consumer responses is more negative when the restaurant’s brand equity is low compared to when it is high. It was also found that a company's use of active response strategies is more effective in combating brand rumor than a strategy of simple denial.Practical implicationsThe findings have significant implications for both academics and practitioners in terms of developing effective response strategies for counteracting brand rumors.Originality/valueGiven the frequency of brand rumors in the restaurant industry and their serious negative impacts, this study extends the existing brand crisis communication literature by demonstrating how consumers respond to a rumor and the effectiveness of different corporate rumor response strategies.

Impact of COVID-19 on the parent-nurse relationship in NICU: a phenomenological study of nurses lived experience.

During the Covid-19 pandemic, the family presence in hospital was reduced, or excluded, to limit the contagiousness, but that could impact negatively on the quality of communication, family education, and the best development outcome for the newborn. This study aims to explore and describe if and how the pandemic influenced the relationship and care provided to the family in NICU (Neonatal Intensive Care Unit). This is a descriptive qualitative study. The data were collected through a questionnaire and semi-structured interviews with 7 NICU nurses from different Italian Regions in the period June-August 2021, by snowball sampling. Thematic analysis by Braun and Clarke method was conducted. The data show an overview of the hospitals' choices about parents' access to NICUs, from total to partial closure. The thematic analysis revealed how some nurses have boycotted corporate choices in favor of child's and family's well-being, while others have consolidated the idea that NICUs must remain closed. Moreover, nurses report that they standardized their practice rather than individualize care. The Covid-19 limitations created many inconveniences and negatively impacted the quality of the care provided, as the safety of the discharge of these fragile patients. It is important to evaluate how this situation impacts long-term patient outcomes, but also how some organizational decisions influence the well-being of professionals, who facing difficult choices, during a health emergency. This study aims to give leadership data to understand the value that the family has in the care process in NICU and that parents cannot be considered "visitors".

Efficiency or resiliency? Corporate choice between financial and operational hedging

We propose that firms face two potential defaults: Financial default on their debt obli- gations and operational default such as a failure to deliver on obligations to customers. Hence, financially constrained firms substitute between saving cash for financial hedg- ing to mitigate financial default risk, and spending on operational hedging, which mitigates operational default risk. Whereas corporate financial hedging increases in leverage, operational hedging declines in leverage. This results in a positive relation- ship between operational spread (markup) and financial leverage or credit risk, which is stronger for financially constrained firms.We present empirical evidence supporting this relationship.

Does Diversity Matter for Religious Firms Too? Board Gender Diversity and Corporate Choices of Shar¯ı‘ah Compliant Firms

Governance mechanisms of religion-adhering firms offer a great debate topic in contemporary business and finance research. Though at nascent stages, yet there exists a growing body of knowledge regarding Islamic corporate finance. With an emphasis on this body of knowledge, the current study aims at examining the relationship between gender diversity in corporate sector boards on corporate choices of Shar¯ı‘ah compliant firms. Specifically, this study examines whether gender diverse boards of Shar¯ı‘ah compliant firms have any influence towards business diversification, dividend pay-out, and firm’s financial performance or not? Study used data from Karachi-Meezan Index (KMI-30) of Shar¯ı‘ahcompliant firms and employed panel data analysis technique. Results of the study show that gender diversity does matter for Shar¯ı‘ah compliant firms too. Representation of women on boards of Shar¯ı‘ah compliant firms results in more business diversification, dividend pay-out and better financial performance. The results are robust and carry crucial implications for policy makers of the Shar¯ı‘ah compliant firms, regulators and the government. Results of the study suggest that efforts should be deliberated to enhance women’s inclusion in boards of Shar¯ı‘ah compliant firms. Our results must be interpreted with caution as they only relate to a specific type of stocks i.e. Islamic stocks and specific country i.e. an Islamic Republic of Pakistan.

Understanding the Conceptual Evolutionary Path and Theoretical Underpinnings of Corporate Social Responsibility and Corporate Sustainability

To unlock the potential for corporations to play a more proactive role in sustainable development, it is critical to have a fundamental understanding of the pathways leading to a responsible and sustainable business. This study explores contributions of theories of the firm in explicating why and how integrating corporate social responsibility (CSR) and corporate sustainability (CS) into business strategic decisions and operation processes helps to improve the viability of corporations. The research objective is addressed through a narrative review of relevant literature by following the developmental and evolutionary sequences in business responsibility and sustainability while contemplating the connections between CSR and CS through the lens of the dominant theoretical perspectives underpinning the concepts. The study posits an integrative theoretical framework that offers supports for embedding CSR and CS into a corporate business strategy. It discusses that corporate choice of CSR and CS actions and policies is supported by dual internal and external mechanisms based on resource-based theory and institutional theory. This is to meet the interests and expectations of internal and external stakeholders, the basis upon which stakeholder theory is constructed. Findings from this review corroborate the proposition that the three theories of resource-based, institutional, and stakeholder could be used as the primary approach to explain corporate recognition of the need for CSR and CS, and further build a coherent platform to support corporate choice and adoption of CSR and CS in business strategy.

Corporate choice of providers of voluntary carbon assurance

This study investigates corporate incentives for the choice of assurance providers of accounting firms versus nonaccounting firms. Based on an international sample of 3,635 firm‐year observations for the period of 2010–2014, we find that firms subject to greater legitimacy and stakeholder pressure (e.g., those with higher carbon emissions in countries with stringent climate protection and stakeholder‐orientation) are more likely to choose accounting firms as their assurance provider. We also find supporting evidence that firms with a desire to improve carbon management mechanisms (e.g., firms that adopt carbon reduction incentives with higher carbon transparency) show a tendency to choose consulting firms specializing in climate change management. The overall findings suggest that the choice of assurance provider is a strategic decision, which aligns with a firm's overall corporate social responsibility goal. Our results should help practitioners, managers, and regulators understand the emerging audit practice and market.

Does doing “good” always translate into doing “well”? An eco‐efficiency perspective

AbstractDoes doing “good” always translate into doing “well”? Debate over the “value” of corporate social responsibility is high on the agenda of corporate finance research. Deeper understanding is required on managers' incentives to pursue and implement corporate social responsibility related strategies, as is more thorough comprehension of the effect of these strategies to firms' performance levels as well as shareholder and wider stakeholder valuations of the firm. This paper provides a new lens by approaching the subject from a different methodological paradigm, grounded in the performance benchmarking methods more commonly applied in operational research. In so doing, we provide novel evidence of the effect of corporate choices on environmental, social, and governance (ESG) strategic investment compliance (i.e., doing good) to firms' eco‐efficiency levels (doing well). In brief, our empirical findings suggest that ESG and firm's eco‐performance are nonlinearly related. Specifically, advanced ESG policies and disclosure levels are associated with a positive affect to firms' eco‐efficiency levels, but only up to a point, after which the effect becomes “neutral,” that is, ESG demonstrates a visible pattern of diminishing marginal returns. Thus, we may humbly conclude that a firm may “do well” by doing good, but it is not clear they should ever expect to “do great” just by “doing good.” The threshold at which this “neutrality” appears varies systematically with the characteristics of the sector in which the firm is operating, as well as dimensions of board diversity. Finally, it is evident that ESG implementation choices can be a source of managerial agency problems.

Corporate Choice and National Choice for Highly Skilled Foreign Workers

Corporate Choice and National Choice for Highly Skilled Foreign Workers

A Study on Corporate Governance and Business Ethics-Indian Scenario

Frequent corporate frauds and governance failures dotting the global corporate map have witnessed comparably vigorous efforts of improving corporate governance practices. India has liberalized the regulatory fabric of the country to align her corporate governance norms with those of developed countries. And yet, achieving good governance and ensuring results of such governance practices continue to remain one of the top priorities of stakeholders even today. High profile scandals resulting in financial collapses have served as the impetus for most sweeping corporate governance practices for bringing economic viability to the nations. Abuse of authority by a particular group of stakeholders continues to influence the corporate choices to the extent stakeholders. Governance is no longer treated as a set of rules concerning the management of firm; rather, it would establish diverse rights and obligations to reduce the negative externalities of an economic entity. By this paper, the author intends to explain the gap between corporate governance reforms and ethics and to seek why these two movements seem yet to be generated little in the form of widely accepted prescriptions for improvement of business behavior to the satisfaction of the constituents of business. The implication of the study showcases conduct, measures to be taken to induce compliance with provisions of the code. It also suggests as to how regulatory bodies should deal with corporate overcoming the weaknesses concerning the way they conceive modern business operations in the event of non-compliance by corporate. Keywords: Corporate governance, Business ethics, Business operation, Corporate, Stakeholders

Director interlocks and cross-cultural impact on strategies affecting shareholder–creditor conflicts

PurposeDirector interlocks, with their extended resources and shared experiences, have the potential power to go beyond the basic role of providing advice and monitoring the activities of an organization. Interlocked directors can have a cross-cultural role in manipulating corporate choices and strategies in several areas, including capital structure, based on learned behavior in their internal company. Shareholders and creditors are the two main capital providers for a company. However, their risk return horizons are very different, and policies that benefit one group may not be optimal to the other. Interlocks can act as carriers of sub-par practices that affect the behavior of several organizations. Such transactional and relational activities may increase short-term value for equity shareholders, but increase the risk for the creditors. The purpose of this paper is to examine cross-cultural effects of interlocks on corporate strategies that affect this essential agency relationship.Design/methodology/approachThis paper surveys the extant literature on board interlocks, board practices, equity valuation and credit risk to develop a link between such interlocks and creditor protection. Based on a brief survey of the central concepts of governance and the role of directors, this paper then provides various propositions on the role of interlocking directorships and their effect on the shareholder–creditor agency problem.FindingsDirector interlocks, through their linked common practices, have the potential to increase or worsen shareholder–creditor conflicts by magnifying strategic practices like short-termism, earnings management or through its effects on chief executive officer compensation. Such cross-cultural effects persist across ownership structures and cultural differences in governance.Research limitations/implicationsThe paper is not an empirical study of the conflict. This paper uses a literature review to arrive at propositions that may impact shareholder–creditor conflicts.Practical implicationsSeveral studies have shown cronyism and the dense corporate network has been a large factor in the financial crisis that affected both shareholders and creditors. As the influence of creditors grows with the current availability, and therefore increase in debt levels, this conflict can be magnified through homophily inherent in interlocks. For an organization to be successful in its role of protecting all stakeholders, especially the two major providers of equity capital, factors that cause conflicts must be taken into account while developing the tenets of governance policies and, on a regular basis, during the strategic planning process within the organization. Regulations affecting interlocks, including governance policies, must therefore take into account such influences.Social implicationsBoard interlocks act as channels of information between companies, creating a social network where processes and polices are shared and implemented as defined by the concept of homophily. Such management actions reduce both the quality of information available to creditors and their monitoring capabilities. This juxtaposition of shareholder and creditor interest can, therefore, be worsened by director interlocks.Originality/valuePrior literature has not specifically linked director interlocks and their mutual impact on the culture and strategy of linked corporations to the shareholder–creditor conflict.