Corporate Management Research Articles

Financial Strategies Driving Market Performance During Recession in Nigerian Manufacturing Firms

This study examines the interplay between leverage, dividend policy, and market performance in Nigeria’s manufacturing sector during the economic downturn of 2016–2020. Drawing on signaling and trade-off theories, we investigate how firms balanced leverage and dividend payouts to sustain performance amidst macroeconomic shocks, including currency depreciation, inflation, and weakened consumer demand. Using panel data from 26 Nigerian Stock Exchange-listed firms, the study applies pooled ordinary least squares (POLS) and fixed-effect models (FEM) to analyze the direct and interactive effects of leverage and dividend policy on market performance, controlling for profitability, firm size, and taxation. The findings reveal that leverage generally exerts a negative effect on firm value, particularly long-term debt, which increases financial distress risks. However, the interaction between leverage and dividend payouts positively moderates this relationship, suggesting that firms use dividends strategically to signal stability and mitigate leverage-related risks. Profitability emerges as a key determinant of firm value, while short-term debt provides operational flexibility, and taxation imposes significant financial strain. Larger firms demonstrate greater resilience, benefiting from scale economies and diversified funding sources. This research highlights the importance of an integrative financial strategy during periods of economic uncertainty, emphasizing the complementary roles of leverage and dividend policy in enhancing firm value. The findings offer critical insights for policymakers and corporate managers in emerging markets, advocating for tax reforms and prudent financial management to improve business resilience. By addressing gaps in the literature, this study contributes to the understanding of financial decision-making in developing economies.

Determinants of Leverage in Emerging Markets and the Moderating Effect of Foreign Ownership: Evidence from Nigeria

Managers of corporations are usually faced with several strategic decisions to make, including those related to capital structure and financial leverage. This study examines the determinants of leverage practices of listed non-financial firms, both local and foreign, and the moderating effect of foreign ownership. The study uses data from 61 listed non-financial firms over the period 2011–2021 and employs the generalized method of moments estimation technique to explore direct and moderating relationships. The key findings show that profitability, firm growth, liquidity, asset tangibility, capital expenditure, dividend and foreign ownership decrease leverage significantly, while holding more cash increases leverage practices significantly. In particular, firm growth, asset tangibility and dividend increase leverage insignificantly (significantly for cash), whereas return on asset and liquidity significantly decrease leverage in local firms (insignificantly for capital expenditure). On the other hand, all firm characteristics, except cash and dividends, significantly decrease leverage in foreign firms. Moreover, foreign firms have more debt financing compared to the local firms in Nigeria. It is also evident that foreign ownership moderates the relationship between return on asset, firm growth and leverage practices. Such findings should assist managers, investors and regulators in Nigeria to understand the determining factors of leverage and to consider the accruing benefits of debt financing over equity financing.

Managing Organisational Sustainability and Corporate Social Responsibility: Perspectives for Sustainable Development

Abstract Managing corporate sustainability involves consideration of the economic, environmental and social impacts of business activities on communities and society. Successful corporate sustainability strategy and sustainable operations must include an engaged and committed workforce. It has been seen that employees are increasingly seeking more purpose at work, with an awareness of environmental and social issues. Research has shown that employees engaged in corporate sustainability practices perceive their work as meaningful contributions to business performance. This empirical study explored sustainability performance in the tea industry, measured with a holistic sustainability framework and investigated the linkages between corporate social responsibility (CSR), employee engagement, and corporate contributions towards sustainability. The operations of participating organisations measured via a ‘7E’ model to benchmark sustainability performance, were compared with how employee engagement is influenced by CSR and wellbeing aspects. Data was collected from company sustainability surveys and surveys of 1146 employees in the tea industry. The results were analysed using a cluster model to assess employee attitudes to CSR and corporate sustainability practices towards sustainable development. The findings show that companies with strong company sustainability performance and developed social sustainability with CSR activities, have employees with higher participation at work and outreach engagement. Dimension reduction and the two-step cluster method was used to classify employee responses, showing the most engaged employees exhibited ‘shared values’ characteristics aligned with corporate engagement and social outreach. These results contribute to research on sustainability management from corporate and employee perspectives, with insights for sustainable development through CSR and sustainable business operations.

The Impact of Short-Term Debt on the Performance of Manufacturing Companies Listed on the Ghana Stock Exchange

Abstract: This study examines the impact of short-term debt on the financial performance of manufacturing companies listed on the Ghana Stock Exchange over an eight-year period (2015–2023). Using a combination of descriptive and causal research designs, the study utilizes secondary data from audited financial statements to investigate the relationship between short-term debt and firm performance, measured through Return on Assets (ROA). The findings reveal a significant but negative correlation between short-term debt and ROA, indicating that higher reliance on short-term financing may adversely affect profitability. Conversely, firm size demonstrates a positive but weak association with performance. Regression analysis confirms that short-term debt and firm size account for 9.9% of the variations in financial performance, highlighting the limited but impactful role of short-term debt in the capital structure. The study shows the need for manufacturing firms to optimize their financing strategies by prioritizing internal funds before resorting to external short-term debt. Recommendations include exploring alternative investment options, diversifying funding sources, and conducting similar studies across other sectors to validate these findings. This research contributes to the ongoing discourse on capital structure management in developing economies, providing insights for policymakers, investors, and corporate managers.

The Big Three Passive Investors and the Cost of Equity Capital

This study investigates the role of the Big Three passive investors (BlackRock, Vanguard, and State Street) in influencing firms’ cost of equity. By examining the unique ownership structure these investors bring, the research sheds light on a pivotal yet underexplored aspect of institutional ownership and its implications for corporate financing. Using a comprehensive dataset spanning from 1997 to 2016, this study demonstrates that increased ownership by the Big Three is associated with improved disclosure practices and reduced information asymmetry, leading to a lower cost of equity. However, the study also uncovers a nuanced trade-off, as concentrated ownership may introduce liquidity risks in certain contexts. These findings bridge a critical gap in the literature by reconciling divergent perspectives on the role of passive investors and provide actionable insights for institutional investors, regulators, and corporate managers seeking to understand the broader implications of passive ownership on firm valuation and financing strategies.

Oil price uncertainty and capital structure dynamics

Purpose The literature is remarkably silent on questions concerning the nexus between firms’ capital structure adjustment speed and the uncertainty of oil prices. This study aims to examine how oil price fluctuations affect a firm’s capital structure and adjustment speed. Design/methodology/approach This research focuses on a set of corporations from the Gulf Cooperation Council spanning from 2011 to 2022. The methods applied are panel fixed effects and dynamic two-step system Generalized Method of Moments models. Findings The findings indicate that changes in oil prices significantly impact corporate capital structure. Specifically, high oil price volatility leads to a reduction in both market leverage and book leverage. In addition, increased volatility in oil prices results in higher costs for leverage adjustment speed, which subsequently influences how quickly companies move toward their optimal leverage ratio. It is observed that when there is an increase in oil price volatility, firms adjust their leverage more slowly. At the same time, they do so more rapidly during phases of lower oil price volatility. Practical implications The findings of this study hold significant implications for corporate managers, investors and lenders. The observed negative relationship between oil price uncertainty and leverage suggests that corporate managers may benefit from prioritizing equity financing over debt during periods of heightened oil price volatility. In addition, managers should integrate oil price uncertainty into their liquidity management strategies by maintaining sufficient cash reserves. This proactive approach can help mitigate the challenges posed by reduced access to external debt financing during volatile periods. Furthermore, understanding the influence of oil price fluctuations on firms’ cost of debt is crucial, as it directly impacts firms’ adjustment costs in achieving their optimal capital structures. Creditors, too, should consider the adverse effects of oil price volatility on corporate financing when designing credit policies, ensuring they remain responsive to the financial constraints faced by firms under such conditions. Originality/value At best, this study presents new evidence that sheds light on the nexus between oil price volatility and the speed at which firms adjust their leverage toward the trade-off theory’s optimal target.

Environmental penalties and corporate carbon disclosure in China: divergent effects of resource availability and the role of social media pressure

IntroductionEnvironmental concerns and the escalating impacts of climate change have prompted governments to set ambitious carbon emission reduction targets. Corporations, as major contributors to carbon emissions, play a critical role in achieving these goals through transparent carbon disclosure. This study investigates the impact of environmental penalties on corporate carbon disclosure practices among Chinese-listed firms from 2009 to 2019, drawing on organizational legitimacy theory.MethodUsing data from publicly available corporate reports, we employed multivariate regression analysis to examine how environmental penalties influence carbon disclosure. Additionally, we explored the moderating roles of firms’ financial resource conditions and social media scrutiny.ResultThe results revealed that environmental penalties significantly enhance carbon disclosure, particularly in resource-redundant firms, while their effect diminishes in resource-constrained enterprises. Social media scrutiny amplifies the positive impact of penalties by increasing public pressure, highlighting the role of external stakeholders in fostering transparency.DiscussionThese findings underscore the importance of integrating tailored regulatory frameworks with active public and social media engagement to enhance corporate accountability and transparency. This study contributes to the literature on corporate social responsibility, offering actionable insights for policymakers, regulators, and corporate managers aiming to advance sustainability goals.

The Impact of New Managerialism on Academic Identity and Governance: A Comparative Study of University Cultures in the UK and Pakistan

This study explores the impact of New Managerialism on academic identity and governance in higher education institutions, focusing on the UK and Pakistan. New Managerialism, which includes corporate management, performance, measurement, and accountability elements, has been widely practiced in the UK but its effects in developing countries like Pakistan are yet to be fully understood. The study aims to inform the current and future developments of Higher Education Institutions (HEIs) within the context of global managership trends. The research uses both qualitative and quantitative research techniques, with samples collected from 30 participants from six universities, three from the UK and three from Pakistan. The study aims to examine the extent to which New Managerialism has impacted the identity and governance of academics in UK and Pakistani universities, compare the responses and adaptations of academics and administrators in both settings, and assess the general implications of change processes on institutional autonomy, academic freedom, and governance. The study finds that New Managerialism has led to new changes in academic identity, with performance indicators and managerial accountability superseding traditional academic values and principles. In the UK, faculty members report a feeling of powerlessness and detachment from their academic identity. In Pakistan, management practices are not well developed, but there is increasing pressure on academics to embrace performance management approaches. The practical implications of this research call for moderation in implementing managerial reforms in higher education. Policymakers and university leaders must note the challenges related to the protection of academic ideals and ensuring that pragmatic directions of managerial processes do not erode the liberties of academics and institutional independence. It is crucial that cultural models implemented by these managerial models exist in tune with regional requirements, encouraging and developing academicians without eradicating academic standards.

The relationship between financial statement comparability and accounting conditional and unconditional conservatism

PurposeThe primary objective of this study is to examine the correlation between financial statement comparability and conditional and unconditional conservatism within companies listed on the Tehran Stock Exchange (TSE).Design/methodology/approachTo achieve this, a sample of 193 companies, resulting in 1,546 firm-year observations, were listed on the TSE between 2014 and 2021. The study’s research hypotheses are assessed by applying multiple regression models.FindingsThe findings reveal a notable positive association between financial statement comparability and conditional conservatism. Additionally, the research results indicate a significant and negative connection between financial statement comparability and unconditional conservatism.Practical implicationsAccording to the findings, corporate managers may prioritize financial statement comparability to enhance conditional accounting conservatism, which might be translated as a suitable benchmark for competitors. Equity owners may decrease the agency problems associated with CEOs by emphasizing comparable financial reports, as it improves the quality of financial figures and facilitates stakeholders’ evaluation and comparison of various companies’ performances.Originality/valueA review of the relevant literature underscores the absence of research focusing on the relationship between financial statement comparability and conditional and unconditional conservatism within emerging markets. Consequently, this study aims to address this gap by investigating this relationship in the context of emerging markets and contributing to the existing body of literature in this field.

Prospects and Risks of Using ai Technology in Corporate Management

The article analyzes the use of AI technologies in different spheres of human activities with special focus on their use in the field of corporate management. Consequent analysis of literature sources and content-analysis allowed the authors to draw a conclusion about the growing interest in using such technologies, at the same time fears and risks dealing with this innovation arise. The authors give examples of assessing efficiency and expediency of AI using both by representatives of business-communities, state structures and by academic quarters. The research brings us to the conclusion that for successful completion of various tasks with the use of AI technologies it is necessary to take into account possible risks and restrictions that can be leveled or smoothed by precise regulation of processes of their introduction and application.

Hidden champions and knowledge spillovers: innovation-enhancing agglomeration effects and niche technology specificity

Abstract To achieve market and technology leadership, innovation is essential for niche market leaders. While research suggests that regions benefit economically from a high concentration of niche market leaders, it is still unclear which role locating close to one another plays for their innovation performance. Therefore, we contribute to existing literature that studies external factors of firm-level innovation. We analyze 1372 German niche market leaders and study whether (1) being located in a cluster improves their innovation performance and (2) if the impact of locating in a cluster varies depending on the diversity of industries within the cluster. We measured the spatial agglomeration using the location quotient. Our findings show that being located in a cluster increases the patenting rate by 1.49 times. This effect is more pronounced in clusters with more diverse industries, indicating a lower level of technology specificity. This suggests that technology specificity has an impact on a company’s ability to take advantage of positive knowledge from other companies in the same cluster. Finally, we conducted several tests to ensure the robustness of our analysis. The Modifiable Areal Unit Problem (MAUP) refers to the discretionary choice of the spatial unit, and we tested different spatial unit levels to account for this. Additionally, we used entropy balancing to confirm the positive effect of cluster location on innovation, comparing with a control set of mass-market firms. Our study concludes with implications for both corporate management and public policy.

Female Management Representation and Corporate Financial Fraud: Do Local Gender Norms Play a Role?

Female Management Representation and Corporate Financial Fraud: Do Local Gender Norms Play a Role?

Research on corporate management accounting from the perspective of HeXie Management Theory

Research on corporate management accounting from the perspective of HeXie Management Theory

Business Strategy and Auditor Report Lag: Do Board Characteristics Matter? Evidence from an Emerging Market

This study investigates the association between business strategy and audit report lag (ARL). In addition, it reveals the moderating influence of board characteristics on this relationship. We used data collected from Egyptian firms listed on EGX100 during the period from 2014 to 2019, which were analyzed using ordinary least squares and binary logistic regression models. Our study revealed a decrease in ARL for firms adopting cost leadership or differentiation strategies. In addition, we found that ARL decreased for cost leadership firms with a higher percentage of non-executive director and board meetings. Moreover, ARL decreased for firms adopting a differentiation strategy with a higher percentage of non-executive directors. This study contributes to the literature on the potential factors affecting the link between business strategy and the quality of financial reporting by focusing on ARL, which is rarely examined in the literature, especially in emerging markets such as Egypt. The findings of this study are valuable to investors, auditors, corporate management, and other stakeholders, who should consider particular board attributes to better predict ARL and ensure the effective adoption and implementation of business strategies.

Sustainable Growth Rate and Sustainable Development Goals (SDGs): Likuidity, Leverage and Profitability, Financial Performance as an Intervening Variable

Objective: This research examines the impact of liquidity, leverage, and profitability on financial performance, with financial performance acting as an intervening variable in the sustainable growth rate (SGR) of companies listed on the Indonesia Stock Exchange from 2019-2023. Sustainable Growth Rate (SGR) and Sustainable Development Goals (SDGs) have a close relationship, because both focus on sustainable development that maintains a balance between economic, social and environmental aspects. Theoretical Framework: This research uses stakeholder theory, which explains the company's relationship with various parties who have an interest in its activities and success. Method: The study employs a quantitative approach using data from 470 companies across various sectors in Indonesia, selected through purposive sampling. Data analysis was conducted using empirical testing to assess the relationships between liquidity, leverage, profitability, financial performance, and sustainable growth. Results and Discussion: The results revealed that liquidity and profitability have a positive influence on financial performance, while leverage does not significantly affect financial performance. Financial performance, in turn, has a direct and significant effect on the sustainable growth rate. Research Implications: The findings provide practical implications for corporate management, highlighting the importance of optimizing liquidity and profitability to enhance financial performance and achieve sustainable growth. Theoretical contributions include insights into the interconnected roles of financial factors in supporting long-term growth without excessive reliance on external financing or increased leverage. Originality/Value: This study contributes to the literature by offering empirical evidence from the Indonesian context, emphasizing sustainable growth within a dynamic and competitive environment. Its originality lies in the integration of liquidity, leverage, profitability, and financial performance as key determinants of SGR, providing valuable insights for both academic and corporate stakeholders.

Integration of Law and Business: The Collaborative Construction of Legal Regulation of Commercial Contracts and the Contract Management System in Enterprise Business

Against the backdrop of globalization and the rapid development of the market economy, the intersection of commercial contract legal issues and the construction of corporate business management systems has become increasingly important. The organic integration of law and business management can effectively promote the improvement of corporate compliance and management efficiency. This article explores the integration and synergy of law and business management by analyzing the legal risks in commercial contracts and the legal protection needs in the construction of corporate management systems, and proposes a comprehensive interdisciplinary management model. Research shows that the optimization of a company's legal compliance system, risk control mechanism, and contract management system is the key to promoting the long-term and stable development of the company.

Disclosure of corporate risk from socio-economic inequality

ABSTRACT Growing socio-economic inequality poses one of the greatest challenges to society, thereby raising new questions about the responsibility of corporations to address its effects. Inequality also poses material risks to business performance. Like climate risk, inequality can impact business across a broad set of sectors and economies on a global scale. To mitigate risks and leverage opportunities to generate positive outcomes from corporate sustainability investments, managers and investors need better data on the business risks posed by inequality and the impact of corporate conduct on it. However, the current transparency infrastructure is inadequate to meet this need. This article reviews the current state of corporate disclosure on inequality and assesses its utility to companies as well as investors and other stakeholders. Drawing on innovations in climate disclosure, we suggest a path forward for companies and investors to drive improved disclosure from companies on the risks presented by socio-economic inequality.

Exploring The Financial Impact of Environmental Sustainability: A Study of Taiwan's Semiconductor Sector

In the era of global low-carbon transformation, corporate management of carbon emissions, environmental performance disclosures, and water resource utilization have become critical focal points for capital markets. This study investigates the relationship between the stock returns of Taiwanese semiconductor companies and variables such as total carbon emissions, TESG scores, corporate water consumption, and corporate social responsibility (CSR) during 2016–2022. Specifically, the study evaluates the influence of these factors in the context of international sustainability trends and Taiwan’s mandatory carbon inventory policies. The findings reveal significant negative effects of total carbon emissions and corporate water consumption on stock returns, whereas TESG scores exhibit a positive correlation with stock returns. By integrating these elements, the study provides a comprehensive understanding of how environmental sustainability influences financial performance within the semiconductor sector. These insights underscore the importance of corporate environmental efforts in enhancing both sustainability and competitiveness.

Evaluating the impact of ESG on financial risk: the moderating effects of operational ability and profitability in Indonesian infrastructure firms

Purpose This study aims to examine the impact of environmental, social, and governance (ESG) practices on financial risk, with operational ability and profitability as moderating variables, within the infrastructure sector in Indonesia. Design/methodology/approach The sample consists of 14 infrastructure companies listed on the Indonesia Stock Exchange over the period of 2020–2022, resulting in a total of 42 firm-year observations. The study employs a random-effects model for panel data regression analysis to test the hypotheses. ESG serves as the independent variable, financial risk as the dependent variable, and operational ability (measured by total asset turnover) and profitability (measured by return on assets) as moderating variables. Findings The results reveal that ESG practices have a significant positive impact on financial risk. Furthermore, operational ability negatively moderates the relationship between ESG and financial risk, while profitability positively moderates this relationship. These findings suggest that although higher ESG scores may elevate financial risk due to associated costs and uncertainties, firms with greater operational efficiency and profitability are better equipped to mitigate and manage these risks more effectively. Research limitations/implications This study focuses on infrastructure companies in Indonesia, which may limit the generalizability of the findings to other sectors or geographic regions. Future research could broaden the scope by incorporating diverse industries and cross-country contexts to enhance the robustness and applicability of the results. Practical implications The findings offer valuable insights for policymakers and corporate managers. Policymakers can develop frameworks to encourage sustainable practices without imposing excessive financial burdens on companies. Managers can leverage operational efficiency and profitability to integrate ESG practices effectively, thereby balancing sustainability goals with financial performance. Originality/value This study contributes to the scarce literature on the moderating effects of operational ability and profitability on the relationship between ESG practices and financial risk, particularly in the context of the infrastructure sector in Indonesia.

Exploring the Impact of ESG Practices on Financial Performance: The Moderating Effect of Green Innovation in the Indonesian Energy Sector

This study explores the impact of Environmental, Social, and Governance (ESG) practices on the financial performance of energy companies in Indonesia, with green innovation serving as a moderating variable. The research utilizes secondary data from Indonesian energy firms. It employs a cross-sectional analysis to evaluate the relationships between ESG practices, green innovation, and financial performance, measured by Return on Assets (ROA). The findings reveal that ESG practices alone do not significantly affect financial performance. However, when moderated by green innovation, ESG practices positively and significantly impact financial performance. This suggests that green innovation enhances the benefits of ESG initiatives by improving operational efficiency, reducing costs, and bolstering market competitiveness. The study's results have important implications for corporate managers and policymakers, emphasizing the need for integrating green innovation with ESG strategies to achieve sustainable financial growth.