Corporate Policies Research Articles

The Impact of Dividend Policy on Company Financial Performance During the Covid 19 Pandemic : An Empirical Analysis

Dividend policy decision is one of the most important factors of corporate policy. Stockholders and potential investors generally believe that the dividend payout decision of the companies give important clues about the firm’s financial performance and its ability to generate sufficient profit. Investors are usually ready to pay a premium for a firm that follows a stable dividend policy.The purpose of this research is to investigate whether there is positive relationship between the dividend policies and the financial performances of the selected companies included in the Borsa Istanbul (BIST) Dividend Index (XTMTU). The selected companies are those 30 companies which distributed dividends regularly between 2018 and 2022. In this study, the dividend payout ratio, which is a dependent variable, is measured by the ratio of dividends paid by a company to its earnings. Two types of ratios were selected to conduct the research: profitability ratios and liquidity ratios. The result of the analysis indiates the positive relationship between profitability ratios of Return on Equity (ROE), Return on Asset (ROA), Earnings per Share (EPS) and dividend policy. On the other hand, a statistically significant relationship between the liquidity ratios of current ratio, cash ratio and net working capital ratio and dividend policy could not be determined. Keywords : Borsa Istanbul Dividend Index, dividend policy, profitability, financial perfomance, liquidity DOI: 10.7176/EJBM/15-6-09 Publication date: March 31 st 2023

Корпоративная социальная политика как механизм управления воспроизводством трудового капитала организации

Данное исследование направлено на изучение корпоративной социальной политики как механизма управления воспроизводством трудового потенциала, основанного на качественной оценке. Использованы вопросы о мерах социальной поддержки, которые помогли оценить влияние компенсации затрат на съем жилья на экономию затрат по подбору кадров. Проведенное эмпирическое исследование показало, что отдельные аспекты корпоративной социальной политики по-разному влияют на развитие организации. Данное исследование имеет значение для менеджеров организации и полезно для разработки бизнес-стратегии, поскольку оно дает четкое представление о том, какие аспекты корпоративной социальной политики влияют на область ее конкурентных преимуществ. This study is aimed at studying corporate social policy as a mechanism for managing the reproduction of labor potential, based on a qualitative assessment. Questions about social support measures were used, which helped to assess the impact of compensation for rental costs on savings in recruitment costs. An empirical study has shown that certain aspects of corporate social policy affect the development of an organization in different ways. This study has implications for the managers of an organization and is useful for business strategy development as it provides a clear picture of what aspects of corporate social policy affect its area of competitive advantage.

Supervisor off-work boundary infringements: Perspective-taking as a resource for after-hours intrusions

ABSTRACT Constant connectivity is prevalent in modern workplaces, aided by smartphones and email. Supervisors may further pressure their subordinates to remain connected to work through their after-hours communications. We develop the concept of supervisor off-work boundary infringements (SBI) or supervisor intrusions during subordinates’ nonwork hours, which are becoming widespread due to expectations of immediate accessibility. Through the conservation of resources theory lens, we explore whether these unnecessary intrusions by supervisors increase subordinate strain outcomes (i.e. job tension and depressed mood at work). We also examine the role of perspective-taking, a cognitive resource deployed as a coping strategy that allows individuals to understand the viewpoint of others, which in turn facilitates changes in one’s attitudes and behaviours. Specifically, we propose that employee perspective-taking can lessen the adverse effects of SBI. Across a four-study constructive replication, we find evidence that SBI positively relates to job tension and a depressed mood at work. Heightened levels of perspective-taking attenuated this relationship. Our study presents evidence that individuals who engage in perspective-taking can protect themselves by buffering the adverse effects of SBI. Importantly, we advocate for corporate policies and laws that protect workers from SBI and encourage supervisors to cease such infringements on their employees.

“You didn’t have a choice, but to be on your train. The train was moving”: West Virginia pharmacists’ perspectives on opioid dispensing during the evolution of the opioid crisis

BackgroundWest Virginia (WV) has been at the forefront of the opioid crisis in the United States, with the highest rate of opioid overdose mortality involving prescription opioids in the country. To curb the crisis, the state government implemented a restrictive opioid prescribing law in March 2018, Senate Bill 273 (SB273), to decrease opioid prescribing. However, sweeping changes in opioid policy can have downstream effects on stakeholders such as pharmacists. This study is part of a sequential mixed methods investigation of the impact of SB273 in WV in which we interviewed various stakeholders–including pharmacists–about the impact of the law. ObjectivesThis paper aims to explore how pharmacy practice during the opioid crisis impacted the need for restrictive legislation and how SB273 impacted subsequent pharmacy practice in WV. MethodsSemi-structured interviews were conducted with 10 pharmacists who were practicing in counties that had been designated as high-prescribing counties based upon county-level prescribing/dispensing data from state records. Analysis of the interviews was informed by the methodological orientation of content analysis to identify emerging themes. ResultsParticipants described confronting questionable opioid prescriptions, treatment costs, and insurance coverage driving opioids as a first-line choice for pain management, as well as the influence of corporate policies and the immense responsibility of being the “last line of defense” in the opioid crisis. A central impediment to the care of patients was the inability of the pharmacists to effectively communicate their concerns to prescribers, making improved prescriber-dispenser communication an essential next step in minimizing opioid care gaps. ConclusionThis is one of few qualitative studies that have explored pharmacists' experiences, perceptions, and role in the opioid crisis leading up to and during the enactment of a restrictive opioid prescribing law. In light of the difficulties they faced, a restrictive opioid prescribing law was viewed positively by pharmacists.

Do younger CEOs really increase firm risk? Evidence from sudden CEO deaths

This study uses sudden deaths of CEOs to provide causal evidence on the relation between CEO age and firm risk. I find that CEO age negatively influences firm risk, measured by stock return volatility, but has no effect on policy choices related to risk taking. These findings contrast prior studies, and suggest that the higher volatility is caused by uncertainty about the younger replacement CEOs' contribution to firm value, rather than changes to risk-related corporate policies.

CEO marital status and capital allocation efficiency

PurposeThe extant literature provides evidence that single CEOs are less risk-averse. Building on the theory of risk aversion, the authors argue that the risk aversion trait arising from CEO’s marital status partially explains capital allocation efficiency. The paper aims to examine the association between CEO marital status and capital allocation efficiency.Design/methodology/approachThe primary sample includes 9,671 observations from 1,264 US firms. The authors apply multivariate regression and a series of endogeneity tests to examine the association between CEO marital status and capital allocation efficiency.FindingsSingle-CEO firms have higher capital allocation inefficiency than those with married CEOs. The findings continue to hold after a series of endogeneity tests such as propensity score matching, change analysis and instrumental variable regression analysis and are robust to alternative proxies for capital allocation inefficiency. The capital allocation inefficiency in single-CEO firms arises from overinvestment but not underinvestment, and corporate risk-taking channels the effect.Research limitations/implicationsThe study is limited to the effect of CEO marital status, not CEO marital quality.Practical implicationsThe findings imply that besides information asymmetry and agency conflicts, CEO marital status should receive special attention for capital allocation efficiency. Also, marital status influences the CEOs’ commitment to the general good of society, affecting the potential conflict of interest with different stakeholders from inefficient capital allocation.Originality/valueThis study extends corporate finance literature on CEO marital status by providing novel evidence on the effect of single CEOs on capital allocation efficiency. The authors conclude that CEOs’ personality traits, such as marital status, matter in corporate policy choices.

The Role of Integrated Reporting in Income Smoothing, Tax Avoidance, Idiosyncratic Risk – Case of Manufacturing Sector

Purpose : Idiosyncratic risk directly affects investment. The failure to foresee the risk may cause investors to suffer an enormous capital loss. Thus, this study investigates the effect of corporate policies, i.e., income smoothing and tax avoidance, on idiosyncratic risk. The use of integrated reporting as moderating variable is essential in these associations.
 Method : The analysis includes 90 manufacturing companies listed on the Indonesia Stock Exchange from 2016 to 2020, obtaining a total sample of 450 firm-year. Multiple linear regression models for panel data are employed to test the hypotheses.
 Findings : Our findings suggest that tax avoidance positively correlates with idiosyncratic risk, while integrated reporting strengthens these relationships. In contrast, income smoothing is not associated with idiosyncratic risk. However, the interaction between income smoothing and integrated reporting is negatively associated with idiosyncratic risk. Our finding proves that idiosyncratic risk can be costly due to porous corporate policies. It bridges investors understanding of idiosyncratic risk and improves their foresight, allowing them to anticipate managers’ transgression. A better understanding of idiosyncratic risk may also help local tax authorities to improve compliance risk management for taxation purposes. This study demonstrates that market regulators may benefit from enhanced integrated reporting implementation by listed companies.
 Novelty : This study includes integrated reporting, which encourages companies to be more transparent in providing information to the public, as a moderating variable in testing the effect of income smoothing and tax avoidance on idiosyncratic risk, which are rarely used in previous references.
 Keywords : Idiosyncratic Risk; Income Smoothing; Tax Avoidance; Integrated Reporting; Manufacturing Company

Shareholder Politics: The Influence of Investors’ Political Affiliations on Corporate Social Responsibility

Many institutional investors are active political donors, but the impact that their political partisanship has on corporate practices and policies has mostly eluded academic examination. As political donations can reflect investors’ views and values, we theorize that the nature of investors’ political donations can shape managerial decision-making in important ways. We test this idea by examining changes in corporate social responsibility (CSR) activities, an area where managers have a high degree of discretion over how they account for investors’ views and values. Our theory introduces two focal constructs: political position, which captures the average political affiliation of actors within a group, and political dispersion, which captures the variance in political positions across group members. After hypothesizing a positive relationship between liberal-positioned investors and a firm's CSR activities, we argue that political dispersion among investors mitigates this positive effect. To account for between-group dispersion, we also suggest that liberal-positioned investors have a stronger positive effect on CSR in firms with more conservative managers. Our analysis of 19 years of shareholder political donations data for 2,062 U.S.-based firms supports our theory. This paper lays new groundwork for research on shareholder politics in management, and contributes to research on investor influence, political ideology, and CSR.

Clawback Provisions and Firm Risk

AbstractMany of the events that trigger clawback provisions are associated with risky corporate policies and variable performance outcomes. We propose and test the hypothesis that clawback provisions motivate managers to reduce firm risk. Panel ordinary least squares, general method of moments with instrumental variables, and propensity square matching models all indicate that clawback provisions decrease the volatility of stock returns. The channels that connect clawback presence to firm risk include more conservative investment and financial policies. The clawback-induced reduction in risk-taking appears to benefit shareholders on average. The gains from reduced risk-taking are larger for firms with fewer growth options, lower R&D, and prior wrongdoing. (JEL G32, G34, J33, M41, M52, M55)

Corporate Policy Strategy Based on Comparison of Financial Performance Due to the Impact of the Covid-19 Pandemic

The analysis carried out to see how far a company has carried out by using the rules of financial implementation correctly and adequately is called financial performance. There are 5 (five) ratios used in assessing a company's financial performance, including liquidity ratios, leverage ratios, activity ratios, profitability ratios, and market value ratios. This study aims to determine policy strategies based on the results of comparative tests of the financial performance of companies in the technology and infrastructure sector before and during the 2018-2021 Covid-19 pandemic. This study uses secondary data. The sampling technique used was the purposive sampling method. This study used the normality test and paired difference test. The results of this study indicate that the financial performance of technology companies during the Covid-19 pandemic obtained significant results for all variables. In contrast, for the variables in the infrastructure sector companies, only one variable was significant. Based on the comparative test results, a policy strategy is needed to overcome problems related to financial performance experienced by infrastructure and technology companies listed on the Indonesia Stock Exchange. Through the eight determined policy strategies, it is expected to be able to make the company survive and choose the proper steps in developing its business.

CEO marital status and corporate cash holdings

AbstractWe examine the effect of CEO marital status on corporate cash holdings. Consistent with the classical agency framework, we find that firms with single CEOs hold more cash compared to otherwise similar firms with married CEOs and that the excess cash held by single CEOs is significantly discounted by shareholders. Our findings survive a battery of tests to ease endogeneity and selection bias, confirming that results are not simply reflecting innate heterogeneity in preferences. Overall, our findings indicate that a variable outside the common firm‐ and macro‐level determinants, CEO marital status, can significantly influence corporate policies.

Corporate decisions on LGBT friendliness: a multi-level approach

PurposeThis research investigates how and why firms adopt inclusive diversity activities, identifying the mechanisms behind firms involved in lesbian, gay, bisexual and transgender (LGBT)–friendly pursuits. By integrating resource dependence theory, institutional theory and stakeholder theory, the authors argue that a firm's LGBT friendliness is affected by marketing orientation and the external political environment.Design/methodology/approachThis study uses the Corporate Equality Index, as reported by the Human Rights Campaign, of 460 (1,540 firm-year observations) firms in the United States between 2006 and 2019.FindingsThis study finds a significant, positive relationship between a firm's marketing orientation and LGBT-friendly activities. This research also determines that this relationship is weakened by state-level diversity policies and country-level political uncertainty.Originality/valueThe study results provide unique theoretical and practical implications for the debate on inclusive corporate policy in similar global markets.

Peer effects on corporate R&D investment policies: A spatial panel model approach

Identifying peer effects has important policy implications because endogenous peer effects can amplify policy effects. Using a spatial panel model with network-structure peer groups and data on listed manufacturing firms in China, we investigate whether a firm’s R&D expenditure affects its peers’ R&D policies. Our results show: (1) peer firms’ R&D expenditures play an essential role in determining corporate R&D investment policies; (2) competition and information incentives are the two main underlying channels; and (3) R&D subsidies can indirectly increase a firm’s R&D via the endogenous effect. Using a novel identification strategy, this study provides additional empirical evidence of peer effects on corporate policies. The findings contribute to our understanding of the impacts of R&D subsidies and indicate that the overall policy effect can be leveraged by considering firms’ networks.

Metallurgical marketplaces: on the transformation of the sales policy of corporations

At present, the organization of sales of industrial products is characterized by the accelerated implementation of various e-commerce tools in practice. As part of the study of the transformation of sales policy in industry, an analysis of trends in the current metal products sales market under the influence of digitalization of processes is presented, an assessment of changes in the structure of the main entities operating in this market is given. It is noted that in the new conditions, when the maintenance of commercial interaction with customers and distribution logistics have become significantly simpler and cheaper. The metallurgical companies are gradually ceasing to delegate the authority to service customer relations to traditional intermediaries-metal traders. Instead of they are actively developing their own online stores of metal manufacturers, using the services of independent platforms – price aggregators, and the creation of complex electronic services for the sale of metal products – marketplaces is also beginning. Everything that is happening reflects the current trend of transition to a platform economy, which allows metallurgical companies to maintain a direct connection with the clientele, as well as to keep part of the potential profit in the corporate perimeter.

Sustainability Innovation in the Textile Industry: A Systematic Review

The aim of this review study is to understand the current state and practice of sustainability innovation in the textile industry. The textile industry is regarded as one of the industries that faces the biggest challenges in incorporating sustainability in its business practices. In this study, we conducted a systematic review to synthesize empirical knowledge relevant to sustainable innovation in the textile industry. From the systematic search process, 41 papers that were identified met the criteria of inclusion and were then analyzed qualitatively using thematic analysis. The findings showed that the attention of researchers toward sustainability innovation has increased in the recent years. Sustainability innovation practices in the textile industry were identified. Sustainability product innovation includes ecodesign, ecolabel, life cycle assessment, materials, and packaging. Sustainability process innovation includes cleaner production, ecoefficiency, waste handling, supply chain management, and enzymatic textile processing in process innovation. Sustainability organizational innovation includes the environmental management system (EMS) and corporate policy, collaboration, business model innovation, culture and knowledge management, and enzymatic textile processing. This study found that the dominant sustainability innovation practice discussed in the textile industry is more related to the ecological innovation aspect compared to social innovation. As consumer demand for ecofriendly products is growing, as are more stringent regulations, it is important for business players and policymakers to develop sustainability innovation in the textile industry together.

Corporate Tax Policy: Impact Tunnelling Incentive, Debt Covenant, And Transfer Pricing

Transfer pricing is considered one of the corporate policies for minimizing the tax burden. This study aims to analyze the role of transfer pricing in the influence of tunnelling incentives and debt covenants on corporate tax policy. Manufacturing companies listed on the Indonesia Stock Exchange are unit analyses in this study. Their 398-panel data after purposive sampling. Using STATA, this study found that tunnelling incentives are used in transfer pricing activities, while debt covenant and transfer pricing are used in management in tax policies. Meanwhile, debt covenant is not widely used in the transfer pricing scheme, and tunnelling incentive also does not affect management on corporate tax policy. The mediating role of transfer pricing is not found in the indirect effect of tunnelling incentives and debt covenants on corporate tax policy. This result explains that transfer pricing and debt covenants are commonly used by companies in their tax policy.

Green human resource management

Green human resource management means taking action and shaping and promoting pro-ecological attitudes in the working environment. The purpose of this study is to investigate the role of green Human Resource Management (HRM) and green corporate policies in environmental sustainability. Research in this area was carried out among 346 employees employed in enterprises from various industries in Poland in 2021. An online questionnaire was used in the study. The obtained results were subjected to statistical analysis; a logistic regression model was applied using the Statistica computer package. The conducted research showed that the employees' awareness of green competencies and the employer's activities in environmental training and education are statistically significant. Still, employers should emphasise the environmental education of employed staff in conjunction with their job position.

Life after Whitehall: The career moves of British special advisers

The article examines the post-government career moves of 521 former British special advisers who served from 1997 to 2017. Analysis of an original dataset mapping the first job each special adviser ‘landed-in’ after leaving government shows the vast majority land in corporate lobbying and policy advocacy roles. A minority become politicians, although many continue to work in political organisations. The least popular choice is public service. The findings challenge the ‘lure of power’ hypothesis and lend weight to increasing concerns about former political staff revolving to shadow lobbying. The findings point to potential lobbying regulation loopholes first raised by the UK Committee of Standards in Public Life. A multi-nominal logistic regression shows how party affiliation and occupational path dependency constrain career moves. Labour special advisers are less likely to become corporate lobbyists than Conservative and Liberal Democrat ones. Special advisers also tend to revolve back to similar professional roles held before an appointment.

National culture and firm-level carbon emissions: a global perspective

PurposeThis study aims to examine the association between national culture and corporate carbon emissions. Specifically, the research explores how firm-level carbon emissions are associated with Hofstede’s four cultural dimensions: power distance, individualism/collectivism, masculinity/femininity and uncertainty avoidance.Design/methodology/approachThe study examines 36,945 firm-year observations across 39 countries and uses panel regressions to assess the association between firm-level carbon emissions and national culture. This research also uses instrumental variable regression to address the potential endogeneity issues. Alternative proxies for culture are used to test the sensitivity of the findings.FindingsThe findings of this study reveal that power distance and uncertainty avoidance are negatively while individualism and masculinity are positively associated with corporate carbon emissions. The results are robust to the instrumental regressions and alternative measures of culture.Practical implicationsFor policymakers, this research highlights the importance of national culture in assessing the efficacy of potential emissions reduction policies, identifying the possible challenges posed by the cultural differences of the targeted groups and designing policy adjustments accordingly. The local culture in which the branches of multinational corporations operate should be considered when the management implements emissions reduction policies for the business units in diverse cultural settings.Social implicationsAligning emissions reduction policies with regional cultural dimensions has the potential to enhance the effectiveness of corporate and national emissions reduction policies, which can contribute to mitigating global climate change adversities.Originality/valueThis study provides insights into firm-level carbon emissions and Hofstede’s four cultural dimensions in a global setting.

ChatGPT and Corporate Policies

ChatGPT and Corporate Policies