Firm-level Performance Research Articles

Impacts on Firm Productivity by Retaining Worker Knowledge and Capacity Through Disability Management Programs

Helping employees return to work following an injury or illness is a moral imperative, and usually a legal requirement, but is it economically beneficial to the firm? While there is intuitive awareness that disability management programs can be economically beneficial, particularly by retaining and resecuring the knowledge and capacity of employees, there is limited evidence to support that claim. The literature lacks insight into the logic and mechanisms through which disability management programs are economically beneficial. To provide such insight, this study undertakes an exploratory analysis of disability management programs concerning productivity as a firm-level performance factor. The data is sourced from a Canadian national database statistically representing more than 650,000 firms. The findings indicate there are differential impacts of disability management programs on firm productivity and this relationship is moderated by business strategy.

Does export promotion enhance firm-level intensive margin of exports? Evidence from a meta-regression analysis

PurposeThe impact of export promotion programs (EPPs) on the intensive margin of exports remains somewhat uncertain. This study tackles a crucial question: does export promotion enhance firm-level intensive margin of exports?Design/methodology/approachWe draw upon comprehensive empirical research conducted up to 2023. We collected 951 estimates, constructed 22 variables, captured diverse contexts and employed a meta-analytical approach to scrutinize the considerable variation in findings.FindingsThe overall meta-effect, after filtering out publication bias, is positive and statistically significant. Firms receiving EPP support exhibit an export intensity that is 1–9% higher than firms not participating in such programs. Assessing the mechanisms through which EPPs bolster this, we observe that support in the form of various services plays a more substantial role compared to assistance in the form of financial resources.Research limitations/implicationsEvaluating EPPs and their activities in terms of social welfare falls beyond the scope of this paper, which specifically focuses on the benefits of EPPs to export intensity. Subsequent research should undertake a comprehensive evaluation, considering both economic impacts and costs for accurate assessments of welfare. We also suggest that future meta-analyses explore other dimensions of firm-level performance linked to EPPs.Practical implicationsPublication bias distorts the impacts of EPPs, leading to an overstatement of their actual effects. Adjusting for publication bias, the practical significance of EPPs for a country’s trade intensity appears to be limited. Additionally, the provision of diverse activities and services primarily contributes to the amplification of export margins as compared to subsidies and grants. While larger firms initially benefit more from EPPs, these effects are found to be transitory.Originality/valueThis is the first meta-analysis scrutinizing the impact of EPPs, specifically concentrating on the firm-level intensive margin of exports.

Drivers of firms’ digital activities in response to the Covid-19 pandemic

The aim of the paper is to analyse the main internal drivers of the increase and adoption of online activities carried out by firms in reaction to the Covid-19 pandemic. While the impact of Covid-19 pandemic on several measures of firm-level performance has been debated in many papers, not enough effort has been devoted to investigating its digitalization impact, especially with respect to the drivers of firms operating in transition countries. To this end, we explore a very detailed firm-level dataset, drawn from the World Bank Enterprise Survey (WBES) combined with the Covid-19-ES Follow-up Survey, for 22 Eastern European and Central-Eastern Asian countries. Our findings reveal that (i) higher online activity is associated with higher digital and technological endowment of the firm and (ii) this relationship is shaped by external factors, such as country-level digital infrastructure.

How firms position and perform in global value chains with financial frictions: evidence from China

ABSTRACT This article clarifies the relationship between financial frictions, production line position and firm-level performance in China. We develop a stylized model in a partial equilibrium setting and incorporate financial frictions into the sequential production of firms. We use a sample of unbalanced panel data ranging from 19,929 firms in 2000 to 61,109 firms in 2013, by merging China’s Customs Dataset, Chinese manufacturing firm dataset and global input-output tables between 2000 and 2013. In the presence of lower financial constraints, we find that: first, the firm’s span of production stages becomes wider by its imports becoming more upstream and its exports becoming more downstream, and its average position becomes relatively downstream; Second, it tends to decrease debt financing relative to equity financing and obtains higher profits.

The proliferation of motor tricycle usage in precarious transportation contexts and the performance of micro and small manufacturers

Micro and small businesses (MSBs) in developing countries increasingly use motor tricycles to navigate transportation-induced supply chain disruptions. However, there is a lack of empirical understanding of whether and when these resources benefit such firms. This study draws on the contingent resource-based theory to examine how motor tricycle deployment relates to the performance of MSBs under varying conditions of supply chain dynamism in a developing country. The study tests its hypotheses on primary data from 267 micro and small manufacturers in Ghana using moderated regression analysis. The results indicate that motor tricycle deployment positively relates to MSB performance in Ghana (β = 0.024, SE = 0.007, p = 0.001). The results further show that supply chain dynamism positively moderates the relationship between motor tricycle deployment and MSB performance (β = 0.008, SE = 0.004, p = 0.035). In contributing to the limited literature on the firm-level performance implications of the increasing use of motor tricycles among micro and small businesses in developing countries, this study's results underscore the importance of adopting a contingency-based approach to understand the complexities inherent in the relationship between motor tricycle deployment and firm performance in these settings.

Alliance management capability and SMEs’ international expansion: The role of innovation pathways

Although alliance management capability (AMC) has been widely investigated as a firm-level performance driver, it is still unclear whether and how this distinctive type of relational capability can enhance small and medium-sized enterprises (SMEs) internationalization activity. By integrating the alliance capability literature and resource-based view (RBV), as well as using data collected from a sample comprising 248 SMEs in UK manufacturing industries, we address this gap by examining the mechanisms through which SMEs can expand their internationalization via collaboration. We found support for our contention that AMC enhances radical and incremental co-innovation in SMEs, culminating in the international expansion of these firms. Additionally, we reveal the moderating effects of alliance partner diversity on the AMC and co-innovation relationship. The results offer both theoretical and managerial insights, contributing to a better understanding of how SMEs can leverage AMC to drive their global expansion strategies.

Sustainability Practices and Firm Performance: Evidence from Listed Companies in India

Purpose: The impact of corporate sustainability practices on the firm performance of Indian-listed businesses was investigated in this study. Theoretical Framework: The present research investigated the stakeholder theory’s application to corporate sustainability initiatives. Many recent studies have claimed that the theory encompasses a wide range of other elements that can affect the firm's valuation in addition to its purely economic value (Martin, 2022; Bodhanwala, 2022 ). To ensure firm performance in the current dynamic business environment, it is crucial to evaluate the scope of value creation from a stakeholder perspective in this context. Design/Methodology/Approach: The corporate sustainability practices of 65 listed Indian firms were evaluated using the ESG score from the refinitive database of Thomson Reuters, and the firm performance was evaluated using the ROA (return on assets) score from the Prowess IQ database. The presented hypotheses were tested using single and multiple regression models for the study period of 2017–2021. Findings: Findings suggest that the sustainability practices of listed companies in India had a significant positive impact on the firm performance. On detailed analysis, it was further found that among the three sustainability variables, social and governance activities of firms had a significant positive impact on firm performance while environmental activities had a negative insignificant association with firm performance. Research, Practical & Social Implications: The findings of this study highlight the importance of supporting sustainable enterprises and properly reporting them in order to enhance firm-level performance. The study’s findings may also assist the business in piquing the interest of various stakeholders in reference to its sustainability initiatives and aid it in luring more investors. Originality/Value: The study’s empirical data can be used by different governmental and regulatory agencies to help them take the necessary steps to support different sustainable business practices.

Innovation capabilities and market performance in the Zimbabwean telecommunications industry: The mediating role of individual activity

Drawing upon the dynamic capabilities approach, this research examined the impact of innovation capabilities on market performance. Innovation capabilities are widely acknowledged as critical ingredients of entrepreneurial performance. Consequently, there has been a plethora of research work on this concept. However, owing to the multifaceted nature of innovation capability as a construct, there has been increased calls for more research on this concept. Hence, this study adopted the survey method and collected data from 170 managers from the Zimbabwean Telecoms sector. Results, analysed using Structural Equation Modelling, revealed the significant direct impact of participatory leadership culture and individual activity on market performance. Individual activity partially mediated the relationship between participatory leadership culture and market performance. However, no mediation was found between work climate and well-being and market performance. This study contributes to the innovation literature by examining the mediating mechanisms through which innovation capabilities enhance firm-level performance. Finally, the research extends the innovation literature by validating the link between innovation capabilities and market performance.

Efficiency measurement in the tendering of road surface renewal contracts

The problem of slow productivity growth in the road construction (and wider construction) industry is well known. The present paper suggests a means for efficiency analysis in one part of this industry, namely road surface renewal in Sweden, built upon the application of Stochastic Frontier Analysis (SFA) techniques. The paper is novel in that it focuses on project level rather than firm or contractor level performance and takes the perspective of the inefficiency that may result from the way the contracts are specified by the highway agency’s pavement engineers (client side). We compare 233 renewal contracts tendered over a four-year period via the estimation of a cost frontier, with controls for heterogeneity between projects. Our results produce first estimates that expose substantive differences in the relative efficiency performance of different engineers within the Swedish highways procurement organisation (Trafikverket); with indicative savings of around €40 m out of a total road renewals budget in Sweden of €200 m. We also find substantial economies of scale that could, in principle, point to further cost savings if road renewal projects can be packaged up as larger projects. These client-side savings represent potentially important sources of savings in addition to those that can be achieved through the pressure of competitive tendering on the supplier side. The paper therefore illustrates how disaggregate analysis of project level information can readily be used for revealing important information about how best to frame the procurement process and thus deliver productivity and unit cost improvements over time.

Determinants of Firm-Level Growth: Lessons from the Czech Republic, Hungary, and Poland

Abstract This paper examines the determinants of firm-level growth based on three eastern European countries – the Czech Republic, Hungary, and Poland. We investigate whether there exist common firm-level characteristics that play a significant role in determining firm-level performance across the three countries, and whether development in financial markets can facilitate the growth of individual firms, particularly for firms that require external financing (borrowing). Our empirical analysis shows that in the case of Poland, firm-level characteristics, such as firm age and firm size, turn out to be significant, and that the role of these factors on the sales growth of firms is quite consistent with the findings in the existing literature. The same firm-level characteristics do not appear to be significant in the cases of Czechia and Hungary, which suggests that these factors play a different role in the firm-level growth of these countries. However, a firm’s access to external financing matters for the determining the firm’s growth and its development of financial markets, which enables the firm to have easier access to external sources of financing, thereby especially facilitating the growth of the individual firm that might need external funds. Our findings provide additional empirical evidence on the existing literature that emphasizes the positive impact of financial development on the individual firms’ growth based on a cross-country analysis.

An empirical test of sponsorship theory on a population of business incubators between 2005 and 2017 – is it working or not?

ABSTRACT This article investigates how business incubator support affects subsequent firm performance. We build on and extend a recent focus on organisational sponsorship mechanisms, applying the lens to business incubators. We first ask: Is there an overall effect of business incubator sponsorship on subsequent firm performance? Second, we ask: To what extent do the decisions of business incubator managers, in terms of allocating resources to start-up firms, impact the subsequent firm performance? We use a unique dataset consisting of the entire population of business incubators in Sweden and their start-ups from 2005 to 2015. Results indicate that business incubator sponsorship has a positive effect on firm performance, while the effects of various forms of sponsorship vary from large positive to neutral effects. Thus, we confirm earlier research on the positive effects of sponsorship and give input on how business managers can use sponsorship theory to provide more optimal resource allocation over time. It appears that coaching and legitimacy have more positive impact on firm level performance compared to other sponsoring activities. Sponsorship is a complex issue, meriting increased theoretical and managerial understanding of its forms and mechanisms. In this respect, our study of how the sponsorship activities of business incubators affect start-up performance complements and extends previous studies of how the effects of business incubator sponsorship depend on external contingencies.

The differential impact of strategic aggressiveness on firm performance: The role of firm size

Strategic aggressiveness, including product and process innovation, is a central construct in both the strategic management and entrepreneurship literatures, including strategic positioning, innovation, and competitive dynamics. While scholars have considered antecedents to strategic aggressiveness, this area of research lacks empirical studies assessing the impact of a firm’s innovative efforts on organizational-level outcomes. Moreover, most empirical studies examining strategic aggressiveness focus on large organizations. This study draws on the resource-based view (RBV), institutional theory, and the corporate entrepreneurship literature to examine the extent to which strategic aggressiveness differentially impacts firm performance in large and small firms. Using a two-sample design comprising 773 firms from 74 industries, this study finds that the relationship between strategic aggressiveness and firm-level performance is stronger in small firms compared to large firms.

Value creation through marketing data analytics: The distinct contribution of data analytics assets and capabilities to unit and firm performance

This study answers research calls regarding data analytics in a specific unit and its impact at the unit and organizational level. In doing so, it takes an information value chain approach to theorize about how quality data and IT-enabled data analytics sensing capability in the marketing unit relate differently to the unit performance as well as to firm-level performance. Results from a survey of 346 firms confirm the hypotheses by showing partially and fully mediated effects for quality data, and direct and partially mediated effects for sensing capability.

In consilium apparatus: Artificial intelligence, stakeholder reciprocity, and firm performance

Firms are increasingly using forms of AI to serve stakeholders across various business functions, resulting in both positive and negative outcomes. Stakeholder theory explains how firms create and destroy value via their stakeholder encounters, making it an ideal foundation for understanding AI deployment on firm-level performance. As AI continues to evolve, both when it comes to the activities and roles it takes and the stakeholders it affects, the AI-stakeholder framework developed herein identifies and situates key managerial decisions related to the adoption and deployment of AI that drive the firm’s likelihood of creating or destroying value through stakeholder encounters. The AI–stakeholder framework focuses on stakeholder justice and is supported by testable propositions about the conditions most likely to affect the outcomes of incorporating AI into business processes. The framework also supports future research and practical managerial guidance by articulating the challenges and potential of AI for managing stakeholder encounters.

Explicating the factors influencing firm performance: study of social enterprises in India

PurposeThe purpose of this study was to ascertain organizational factors that impacted the performance of social enterprises.Design/methodology/approachFor this research study, a structured close-ended survey questionnaire was prepared based upon literature inputs. The data was collected from 370 executives in social enterprises in India. The data was analysed through structural equation modelling. The data was analysed towards hypothesis development as well as model development explicating the success of social enterprises.FindingsThis research study’s findings developed a model towards explicating firm level performance in social enterprises. The antecedent factors were organizational commitment (OC), organizational orientation (OO), employee empowerment (EE) and top management support (TMS). The factor business innovation capability (BIC) was the mediating variable, whereas the firm performance (FP) of social enterprises was the dependent variable. Business innovation creativity had full mediation effect.Research limitations/implicationsIn this research study, the variable influencing the performance of social enterprises were ascertained. TMS and EE were independent organizational variables in any social enterprise along with the two organizational factors of OC as well as OO that did matter for enhancement of BIC of social enterprises. BIC had full mediating effect based upon the mentioned factors of OC, organization orientation, EE and TMS, which subsequently manifested in superior social enterprises FP.Practical implicationsSocial enterprises had to balance the twin objectives of social good (doing good for society) as well as earning economic benefits for the enterprise. Given this challenge, social enterprises had to develop an organizational context in which employees were empowered towards undertaking social issues proactively. Furthermore, top management team must provide support for such causes. When this aspect coupled with the presence of OC and OO then in the social enterprise, BIC got developed. With the presence of BICs, it became easier for social enterprises to undertake innovation that were also socially oriented and led to superior FP.Social implicationsIt has often been observed in developing countries like India that social innovation and entrepreneurial ventures associated with these have become a necessity. However, such ventures often do not to scale up. Hence, its case for business continuance and sustenance have been challenging. This study provided insights regarding the existential aspect of social enterprises in terms of its performance.Originality/valueThis study was one of the first research studies that integrated the factors of OC, OO, EE and TMS in building organizational capability towards innovation in social enterprises. This in turn contributed towards the improvement of FP of social enterprises.

Drinking poison to quench thirst: Does bribery foster firm performance in China?

Whereas the damage of bribery on economic development is well recognized, controversy exists regarding whether it can benefit firm-level performance. By integrating the “grease” and “sand” views of bribery, this study offers the novel proposition that even though bribery may provide a means to deal with institutional voids, such that it fosters firms’ short-term performance (i.e., sales growth), it hinders long-term performance reflected in market capitalization. Moreover, the positive effect of bribery on sales growth decreases and its negative impact on market capitalization increases when the level of institutional development is higher. A longitudinal data set of Chinese listed firms lends strong support to our predictions, which in turn offer novel insights into bribery and its performance implications.

Does value chain participation facilitate the adoption of Industry 4.0 technologies in developing countries?

The adoption of new technology is a key driver of firm performance and economic development. Yet the process of transferring and adopting new technologies is not seamless, particularly when the pace of technological change accelerates, and more advanced capabilities are required for the effective operation of new technology. In this paper we develop a framework for the analysis of the drivers of adoption of advanced digital production technologies associated with Industry 4.0 in developing economies. In particular, we ask whether firms’ participation to global value chains (GVCs) can facilitate the adoption of Industry 4.0 technologies in manufacturing sectors. Using a novel UNIDO database on firms’ adoption of different generations of production technology in Ghana, Viet Nam, and Thailand, we find that firms’ participation to GVCs is positively associated with the adoption of Industry 4.0 technologies, and that adoption is positively associated with firm-level performance.

Linking employer branding and firm-level performance: The case of Azerbaijani firms registered on Glassdoor

In today’s competitive labor market, firms use employer branding strategies to engage their workforce for better performance. However, the current understanding of the role of employer branding in firm-level performance in the context of developing countries is very limited. This study aims to investigate the importance of employee retention and recruitment efficiency to strengthen the relationship between employer branding and firm-level performance. Data are collected from 316 Azerbaijani firms that are tagged by the Glassdoor and reviewed by former employees. Structural equation modeling is used to test the hypotheses. The results of the study show that employer branding can enhance firm-level performance through employee retention and recruitment efficiency. However, online employee reviews on the Glassdoor do not moderate the connection between employer branding and employee retention. Current employees feel motivated to continue working with those companies which show excellent employer strategies. Furthermore, a firm’s strategy to attract the best employee pool improves firm-level performance. It is also concluded that employees working in developing countries do not concern about online reviews on their employer, and prefer to continue working despite contrary thoughts. Acknowledgment Author acknowledges the financial support provided by Internal Grant Agency (IGA/FaME/2019/008) of FaME through Tomas Bata University in Zlin, Czech Republic.

Is Social Security Investment Beneficial to Enterprises to Improve Labor Productivity?: Empirical Research Based on China Employer-Employee Survey

Social security rights are strongly anchored by international human rights law and are a key element of international labor standards. It also plays an important role in the competitiveness of companies. This paper investigates the relationship between social security expenditure indexes and labor productivity to fill the gaps in this field. In other words, we make an attempt to answer the question: To what extent is social protection associated with better firm level performance? The empirical results demonstrated that high social insurance contributions encourage enterprises to improve the efficiency of human resources allocation and labor efficiency. Thus, their technological efficiency undergoes betterments. However, the rise in the share of social insurance contributions overshadows private investment in technological advancement and hinders its technological progress. So, the ratio of social insurance contributions influences the productivity of these companies negatively.

Rethinking the strategic management of human resources: lessons learned from Covid-19 and the way forward in building resilience

PurposeNumerous empirical studies and meta-analyses have offered ample evidence for the relationship between the strategic management of human resources and a variety of important organizational outcomes, such as individual- and firm-level performance. The outbreak of the COVID-19 pandemic, however, steered the discussion away from the traditional performance-related outcomes of the strategic human resource management and brought to the fore the importance of resilience. The purpose of this paper is to identify areas in which strategic human resource management can help organizations to become more resilient.Design/methodology/approachOn the basis of a brief overview of the different phases of the COVID-19 pandemic and its impact on the management of human resources, this conceptual paper uses the Ability-Motivation-Opportunity framework as the backbone for the development of suggestions for the strategic management of employees to create and maintain organizational resilience.FindingsA series of actionable suggestions regarding the way forward in building organizational resilience through the effective and ethical management of employees are presented and discussed. Specifically, the importance of using flexibility-oriented human resource management systems is highlighted. This “flexibility-orientation” involves all functions of human resource management, such as selection, training and compensation.Originality/valueThe proposed suggestions can benefit organizations by offering actionable recommendations regarding the management of human resources by taking stock of lessons learned during the COVID-19 pandemic.