Corporate Profits Research Articles

Corruption’s Crossroads: Exploring Firm Performance and Auditors’ Role in Emerging Markets

This study examines the relationship between country-level corruption (proxied by the Corruption Perception Index, CPI) and firm performance (measured by Return on Assets, ROA) across 18,286 firms in the East Asia, South Asia, and Southeast Asia regions. Additionally, the moderating effects of audit quality (proxied by auditors’ reputation) on the relationship are examined. The findings of the study indicate a positive association between corruption and ROA in high-income nations, thus providing evidence in favor of the “greasing the wheel” theory. On the other hand, a negative association is documented in the upper middle- and low-income nations, which is consistent with the “sanding the wheel” notion. Notably, audit quality has a positive moderating influence on the relationship between corruption and ROA, especially in nations with low corruption levels, reaffirming the pivotal role of reputable auditors in enhancing firm performance within these economic contexts. The results of this study have important ramifications for forming policy suggestions and enhancing governance. The findings highlight the opportunity to improve governance practices and regulations to reduce corruption and increase transparency. Policymakers can develop ways to strengthen institutional frameworks by recognizing the complex link between corruption, corporate profitability, and the function of respected auditors.

Does Privatization improve Corporate Governance and Profitability? Evidence from Cement Company of Northern Nigeria

The paper study how Privatization improves Corporate Governance and Profitability of Cement Company of Northern Nigeria. Data was collected from secondary sources, and the statistical tools employed in the Methodology were descriptive statistics and OLS regressions. The study aimed at bridging literature gap on studies that relate corporate governance and privatization policy in Nigeria. The results suggest that, The result suggest that, the company has lower market capitalization, private sector and foreign investors have concentrated ownership, bigger board size, lower percentage of executive directors and higher percentage of non-executive directors, Board chairmen were not the chief executives and chairmen audit committees were non-executive directors, lower workforce, higher percentage of management staff small percentage of non-management staff, lower profitability, products demand depended on government capital projects, The Company purchased 5MW power plant in 1991, macro-economic challenges such as devaluation of naira, energy sector crisis, foreign exchange rate, inflation, trade liberalization, inconsistent stabilization policies, political instability and banks’ strikes and weak private sector. Inferential result reveals that, has state ownership, percentage of management staff, percentage of non-management staff and privatization have positive and significant relationship with profitability. However, minority ownership has a negative and significant relationship with profitability. Based on these findings, the researcher arrived at the conclusion that, Corporate governance has significant impacts on profitability of Cement Company of Northern Nigerian. Even though, unfavourable macroeconomic environment militated against its efficiency. The study recommends that, government needs to introduce macroeconomic stabilization measures that will improve effective demand of cement products particularly with the problem of withdrawal of fuel subsidy in the economy. The company should, as a matter of necessity, design strategies that will; create international market opportunities, enhance security measures, cheap inputs, efficient financial and inventories management that will improve profitability post privatization.

Is there a connection between ESG scores and a company’s profitability? Empirical evidence on selected Stoxx Europe 600 firms

This study scrutinizes the potential correlation between Environmental, Social, and Governance (ESG) scores and the profitability of firms listed in the selected STOXX Europe 600 index. Utilizing panel regression analysis, the study examines data from 385 non-financial companies over the period 2017 to 2021, correlating CSRHub's ESG scores and selected financial variables with corporate profitability measured by ROA. The investigation reveals that, overall, ESG scores do not have a significant impact on profitability, except for the ESG-community sub-score, which shows a slight negative influence. Thus, this paper partially supports studies that show a negative correlation between ESG and profitability, even though such results are in the minority in the literature. The overall results suggest that while ESG scores may reflect a company's ethical stance, they are not a predominant factor influencing its profitability. However, this is not the case for leverage, as the importance of capital structure for profitability is confirmed. AcknowledgmentThis research has been supported by the Scientific Grant Agency of the Slovak Republic under project VEGA No. 1/0579/21.

Harmonizing Social Impact and Corporate Success: The Nexus of GOTO's Contribution to Society and Profitability

This research examines the relationship between social impact and corporate profitability in the context of GoTo, Indonesia's largest technology conglomerate. This study analyzes GoTo's transformation from a simple ojek service to a comprehensive digital ecosystem, as well as its role during the COVID-19 pandemic. Using quantitative and qualitative mixed methods, this study investigates changes in consumer behavior, GoTo's economic contributions, and post-IPO challenges. Key findings show a significant increase in GoTo's service usage during the pandemic, with annual contributions reaching 1.6% of Indonesia's GDP. However, GoTo's pursuit of profitability post-IPO faces market volatility and regulatory scrutiny, particularly regarding driver-partner welfare. This research highlights the complexity of balancing social missions with the demands of profitability in the gig economy, emphasizing the importance of a holistic approach to sustainable growth that considers the interests of all stakeholders.

The Impact of the Use of Environmentally Friendly Raw Materials and Green Marketing Communication on Corporate Reputation and Profitability in the Manufacturing Industry in Central Java

This study examines the impact of environmentally friendly raw materials and green marketing communication on corporate reputation and profitability within the manufacturing industry in Central Java. Utilizing a quantitative research approach, data were collected from 140 manufacturing firms, analyzed using a Likert scale ranging from 1 to 5. The data were processed with Structural Equation Modeling-Partial Least Squares (SEM-PLS 3) to evaluate the proposed hypotheses. The findings reveal that both the use of environmentally friendly raw materials and green marketing communication have positive and significant effects on corporate reputation and profitability. These results highlight the strategic importance of sustainability practices in enhancing corporate outcomes. The study underscores the value of integrating environmentally conscious operations and effective communication strategies to achieve competitive advantages in the manufacturing sector. By adopting sustainable practices and promoting these efforts through targeted marketing communications, companies can strengthen their market position and financial performance.

PENGARUH PENGUNGKAPAN CSR, KEBIJAKAN DIVIDEN, KEPEMILIKAN INSTITUSIONAL, LEVERAGE, PROFITABILITAS, DAN TAX AVOIDANCE TERHADAP NILAI PERUSAHAAN

The objective of this study is to investigate the effects of corporate social responsibility (CSR) disclosure, dividend policy, institutional ownership, leverage, profitability, and tax avoidance on firm value. The intention is to comprehend how these elements affect firm value amidst the dynamic market challenges, thereby providing insights to stakeholders. The research population consisted of consumer non-cyclicals sector companies listed on the Indonesia Stock Exchange during 2021-2022, with sample collected through purposive sampling, resulting in 21 companies and yielding 42 sample units. The analytical methodology employed multiple linear regression supported by SPSS 29. The research findings highlight that dividend policy and profitability have an effect on firm value, consistent with signalling theory. However, CSR disclosure, institutional ownership, leverage, and tax avoidance do not affect firm value

The Influence of Good Corporate Governance and Profitability on Firm Value of Banking Sub Sector Companies

The Influence of Good Corporate Governance and Profitability on Firm Value of Banking Sub Sector Companies

Reforming Corporate Compliance Systems in China Under the New Company Law: Lessons from The United States and Japan

This article investigates the construction of an ideal compliance system under China’s new Company Law through a comparative legal analysis. It begins by identifying the existing challenges in China’s compliance framework, particularly the historical dominance of shareholder primacy and the uneven distribution of responsibilities under the previous Company Law. These issues have hindered the development of an effective compliance system, necessitating a reevaluation of corporate governance principles in China. The comparative analysis examines the compliance systems in the United States and Japan, focusing on the frameworks and key elements such as fiduciary duties and the application of the business judgment rule. The study highlights significant differences in how these jurisdictions handle compliance, providing insights into potential improvements for China’s system. This section underscores the importance of adapting international best practices to local contexts to enhance the effectiveness of corporate compliance in China. Finally, the article proposes a dual-level compliance concept tailored to China’s unique legal and corporate environment, integrating both private and public interests. It outlines specific compliance duties for directors, supervisors, and other compliance personnel, emphasizing the need for robust information transmission, whistleblower protections, and temporary management systems. The conclusion calls for a comprehensive and flexible compliance framework that not only ensures corporate profitability but also promotes broader societal welfare, aligning with the evolving goals of corporate governance in China. Keywords: Compliance System, Corporate Governance, Fiduciary Duties, Business Judgment Rule, New Company Law

Pharma 4.0: A deep dive top management commitment to successful Lean 4.0 implementation in Ghanaian pharma manufacturing sector

The primary aim of this study is to assess the significance of top management commitment in the context of Lean 4.0 implementation within the pharmaceutical manufacturing industry in Ghana. The study seeks to understand and evaluate the overall effectiveness and achievements associated with adopting Lean 4.0. Employing a positivist mindset, the research utilizes an explanatory quantitative research design and a survey technique. Data collected from 181 employees of pharmaceutical companies in Ghana undergo analysis using SmartPLS (version 4) and IBM SPSS version 26. The study employs a combination of descriptive statistics to summarise data characteristics and inferential statistics to test various hypotheses related to Lean 4.0 adoption. The analysis reveals that the successful integration of lean methods and Industry 4.0 technologies requires meticulous management. Simultaneously, individual implementations of lean principles and Industry 4.0 technologies positively impact business performance. Surprisingly, the study does not observe a substantial positive influence of Lean 4.0 on corporate performance, suggesting that immediate improvements in efficiency or profitability may not result from the adoption of this framework. This research contributes to the field by highlighting the need for careful management in integrating lean methods and Industry 4.0 technologies. It also emphasizes the positive impacts of lean principles and Industry 4.0 technology on business performance. The unexpected finding regarding the lack of immediate improvements in corporate efficiency or profitability with Lean 4.0 adoption prompts considerations of initial implementation challenges or the organization's need for time to adapt to this integrated approach.

Exploring the asymmetric relationship between macroeconomic factors and corporate profitability in the MSCI Colombia index

PurposeThis study aims to explore the asymmetric effects of macroeconomic factors on the profitability of large-cap companies in an emerging country like Colombia, using the Morgan Stanley Capital International (MSCI) Colombia index as the basis.Design/methodology/approachWe employ a combination of singular spectrum analysis (SSA) and principal component analysis (PCA) to identify and estimate four key macroeconomic factors that account for approximately 47.8% of Colombia's macroeconomy. These factors encompass indicators related to inflation and cost of living, foreign trade and exchange rate, employment and labor force and trade and production in Colombia. We utilize the distributed lag nonlinear model (DLNM) to analyze the asymmetric relationships between these factors and corporate profitability, considering different scenarios and lags.FindingsOur analysis reveals that there are indeed asymmetric relationships between the identified macroeconomic factors and corporate profitability. These relationships exhibit variability over time and lags, indicating the nuanced nature of their impact on corporate performance.Originality/valueThis study contributes to the existing literature by applying a novel methodology that combines SSA and PCA to identify macroeconomic factors within the Colombian context. Additionally, our focus on asymmetric relationships and their dynamic nature in relation to corporate profitability, using DLNM, adds original insights to the research on this subject.

The Impact of the Global Minimum Tax Reform on China and Its Countermeasures

Abstract Significant corporate tax reform was agreed upon by more than 140 nations in 2021, with implementation set for 2023 and beyond. Many people throughout the globe are discussing the possible effects of the Organization for Economic Cooperation and Development (OECD) planned adjustment to the global minimum tax (GMT) on their respective economies. The OECD has formulated a “two-pillar” scheme for international tax rules for 137 countries and regions within the overall framework. Pillar 2 is to set the tax rate at 15%, the world’s lowest corporate tax. The GMT is a reclassification of the taxing authority mechanism for the profits of multinational corporations, which has made significant adjustments to the global tax coordination and governance mechanism. People living in China and earning money from China must pay university fees, which are all of a nationality. Progressive rates ranging from 3 to 45% apply to the complete income. Therefore, taking the initiative in policy is crucial to address this challenge actively. This article makes an in-depth assessment and prediction of the impact of the GMT reform on China’s tax system and enterprises and proposes countermeasures. However, approximately 20% of the earnings can be exposed to the 15% tax rate that governments can apply. If the entire process is mixed in tandem, the tax rate equals 0.2%. Hence, an important amount of tax revenue can proceed down the drain. From the numerical outcomes, the minimum tax with jurisdictional blending was set at 12.5% under Pillar 2; the disparity between the sample’s top and lowest EATRs would decrease by 2.8% points.

The Empirical Examination of the Effect of Environmental, Social, and Governance (ESG) Performance on Enterprise Value: Focusing on Real Estate Agencies

In the 21st century, modern production techniques and technological advancements have yielded remarkable development achievements, yet they are accompanied by challenges posed by energy and resource scarcity, ecological and environmental strain, and pressing social issues. Recently, the spotlight has shifted to environmental, social, and governance (ESG) factors, as negative social events have heightened public awareness. The impact of corporate ESG performance on society is significant, and the public's perception can, in turn, affect corporate profitability and overall value. As such, investors are increasingly realizing the importance of considering ESG metrics in their decisions. While ESG investment is still in its nascent stage domestically, it has garnered widespread attention and is rapidly gaining momentum. Indices and related derivative products themed around ESG, such as the ESG Beauty 50 index, have been launched on domestic exchanges like the Shanghai Stock Exchange and China Securities Index. Taking the real estate industry as a case study, this paper aims to accomplish the following through a combination of literature research and empirical analysis: Firstly, to assess whether ESG performance varies across companies with diverse characteristics (such as state-ownership status, enterprise size, and so forth) and explore its differential impact on enterprise value. Secondly, to raise awareness among company managers regarding the critical role of ESG performance in shaping the future sustainability and long-term value of their organizations.

The Effect of Corporate Social Responsibility (CSR), Firm Size, Profitability, Leverage and Earning Persistence on Company Value

The study aims to test the effect of CSR, firm size, profitability, leverage and earning persistence on company value. The study was conducted primary consumer companies in food and beverage subsector listed in Indonesian Stock Exchange in the period 2019-2022. Sample selection in this study used the method of purposive sampling and obtained 25 samples. Data used in research is quantitative obtained from secondary data using unbalance data. Test results using the SPSS 26 analytical tool. This study shows that CSR variables, firm size, and earnings persistence have no effect on company value, while profitability and leverage variables have a positive effect on company value. This research contributes to corporate management on the importance of company value in the business.

Pengaruh Corporate Social Responsibility (CSR) dan Profitabilitas terhadap Harga Saham pada Perusahaan yang Bergerak di Subsektor Produksi Batu Bara yang Terdaftar di BEI Tahun 2019-2022

This study aims to determine the effect of Corporate Social Responsibility (CSR) and Profitability measured by Return On Asset on stock prices in companies operating in the Coal Production Sub-Sector listed on the Indonesia Stock Exchange (IDX). This research is quantitative in nature. The population in this study consists of manufacturing industries listed on the Indonesia Stock Exchange. The sample in this study was obtained using purposive sampling technique, which involves selecting samples based on predetermined criteria. Based on this purposive sampling technique, 11 samples were selected from 34 companies operating in the coal production sub-sector listed on the Indonesia Stock Exchange during the period of 2019-2022. The method used is multiple linear regression analysis using the SPSS program. The results of this study indicate that partially, Corporate Social Responsibility (CSR) has a significant positive effect on stock prices. Meanwhile, Profitability measured by Return On Asset has a significant negative effect on stock prices. However, simultaneously, Corporate Social Responsibility (CSR) and Profitability measured by Return On Asset have a positive effect on stock prices.

Impact of Corporate Social Responsibility and Profitability in Financial Performance Moderated by Amanah Concept

Purpose – This study aims to fill a gap in the literature by examining the impact of CSR, measured through Zakat, and the effect of profitability on the financial performance of companies in Saudi Arabia, as well as the role of the concept of Amanah as a moderating variable. Methodology/approach – This study employs a quantitative method using secondary data from financial reports of banks listed on Tadawul from 2019 to 2023. The sample was selected based on the consistency of reports and the absence of losses in the last three years. Data analysis was conducted through multiple linear regression with panel data using Eviews version 11. Findings – The research findings indicate that CSR and the concept of Amanah have a significant impact on the financial performance of Islamic banks, whereas profitability does not have a significant effect. The concept of Amanah also acts as a moderating variable that strengthens the influence of CSR and profitability on financial performance. Novelty/value – This study makes a significant contribution by demonstrating that the concept of Amanah plays a key role in enhancing the financial performance of Islamic banks, alongside CSR. The findings support the Sharia Enterprise theory and introduce a new approach to measuring the performance of Islamic banks by placing greater emphasis on the concept of Amanah.

Differential Pricing Strategies for Airport Shuttles: A Study of Shanghai Based on Customized Bus Ticketing Data

Airport shuttle buses, as a specialized form of bus service, serve as an economical, efficient, and sustainable transportation option for air travelers. In contrast to conventional bus services, airport shuttle bus operations exhibit more pronounced market-oriented characteristics, striving to balance extensive public transport coverage with the optimization of corporate profitability. Although these services outperform regular bus transit in terms of efficiency, they incur higher operational costs. However, existing studies on enhancing profitability and optimizing resource allocation for airport shuttle buses are inadequate. This study proposes a differential pricing strategy based on historical ticketing data. Initially, we analyze the characteristics of orders, users, and reservations within the context of customized bus operations. Leveraging the differences among various groups, we employ clustering techniques to classify seat grades and segment users. Based on the clustering outcomes, we determine distinct price elasticity values for each segment. As the strategies are developed based on seat grades, booking time, and user travel patterns, the numerical experiments indicate that the proposed differentiated pricing strategy can increase the revenue of customized public transport services by at least 41%. This strategy not only enhances the efficiency of resource allocation and service accessibility but also makes the service more financially sustainable.

Innovation's influence on working capital management and profitability: A Chinese high‐tech manufacturing perspective

AbstractThis study investigates the role of corporate innovation in moderating the impact of working capital management on profitability for a Chinese high‐tech manufacturing industry. Using a two‐way fixed effect model and subgroup analysis, we found that net working capital (NWC) negatively impacted corporate profitability, while corporate innovation magnified the inverse association between the NWC and profitability. This moderating effect was stronger in non‐state‐owned enterprises (SOEs) than in SOEs, and different company sizes exhibited varying effects. This study enhances our understanding of the role of corporate innovation financial management and provides valuable insights for innovation research in emerging economies.

Unveiling the influence of ESG disclosures on corporate profitability: Insights from Thailand’s publicly listed companies

This study investigates the influence of Environmental, Social, and Governance Disclosures (ESGD) on the profitability of firms, using a sample of 385 publicly listed companies on the Thai Stock Exchange. Data from 2018 to 2022 is sourced from the Bloomberg database, focusing on ESGD scores as indicators of companies’ ESG commitments. The study utilizes a structural equation model to examine the relationships between independent variables; ESGD, Earnings Per Share (EPS), Debt to Assets ratio (DA), Return on Investment Capital (ROIC), Total Assets (TA), and dependent variables Tobin’s Q (TBQ) and Return on Assets (ROA). The analysis reveals a positive relationship between ESGD and TBQ, but not with ROA. Further exploration is conducted to determine if different ESGD levels (high, medium, low) yield consistent effects on TBQ. The findings indicate discrepancies: high and medium ESGD levels are associated with a negative impact on TBQ when EPS increased, whereas low ESGD levels correlate with an increase in TBQ with rising EPS. This nuanced approach challenges the conventional uniform treatment of ESGD in previous research and provides a deeper understanding of how varying commitments to ESG practices affect a firm’s market valuation and profitability. These insights are crucial for firm management, highlighting the importance of ESGD in relation to other financial variables and their effects on market value. This study offers a new perspective on ESGD’s impact, emphasizing the need for differentiated strategies based on ESG commitment levels.

Sustainability and firm value: A multivariate regression analysis in the clothing industry

Firms, recognizing their Corporate Social Responsibility (CSR), are becoming catalysts for societal change by integrating Environmental, Social and Governance (ESG) criteria into their activities. The fashion industry exemplifies this effort, with an increasing number of companies embracing sustainability and ethical practices. In this context, our purpose is to provide a clear and comprehensive picture of the link between sustainability and business performance in the fashion industry. This work presents a Multivariate Regression Analysis, scrutinizing both external perspectives through stock prices and internal perspectives via profitability indices. Our aim is to discern the intricate relationship between sustainability practices and financial performance within the fashion industry, aligning ESG criteria with long-term economic success. Our regression analysis reveals a significant positive correlation between ESG scores and stock prices, indicating investor recognition of ESG performance as a crucial investment criterion. However, when focusing internally on profitability, the ESG score does not exhibit statistical significance, suggesting a yet-to-be-established connection between ESG policies and corporate profitability. This study underscores the evolving role of companies as sustainability promoters, emphasizing the crucial role of ESG performance in shaping investor perceptions. Nevertheless, it also highlights the need for further exploration into the intricate relationship between sustainable policies and corporate profitability. As businesses increasingly embrace sustainability, in fact, it could become paramount for informed decision-making and fostering ethical societal and environmental progress.

PENGARUH GREEN ACCOUNTING DAN CORPORATE SOSCIAL RERSPONSIBILITY (CSR) TERHADAP NILAI PERUSAHAAN DENGAN PROFITABILITAS SEBAGAI VARIABEL MODERASI

Three guiding principle economic, social, and environmental development are the center of sustainable development. A corporation must consider the three profit, people, and planet if it hopes to remain sustainable. The inference is that businesses become sustainable through the application of CSR (Corporate Social Responsibility) initiatives as a means of fulfilling a duty to improve society and the environment through the company's production activities, specifically through the application of green accounting in the financial reporting domain. The purpose of this study was to examine and evaluate how corporate social responsibility and green accounting affect company value, which is influenced by profitability. This study looks at 15 manufacturing companies that are listed on the Indonesia Stock Exchange. Purposive sampling was used to gather the research sample, and moderate regression analysis was used to analyze the data. The study's findings indicate that while corporate social responsibility has a major impact on a company's value, green accounting has no such effect. The value of a corporation is influenced by profitability. While corporate social responsibility can reduce the impact of green accounting on a company's value, profitability cannot moderate the impact of green accounting on that value. This study's shortcoming is that it only looks at manufacturing enterprises. In order to determine whether the company has complied with environmental laws, stakeholders, the government, and readers of financial reports interested in purchasing shares from the company are the target audience for this research's contribution. Keywords: Green Accounting, Corporate Social Responsibility, Company Value and Profitability