Firm Ownership Research Articles

Allocating labor across small firms: Experimental evidence on information constraints

We document interest in labor reallocation among small firm owners in Ghana; 60% and 41%, respectively, self-report willingness to hire or work for the average local firm owner. Firm owners also exhibit high willingness-to-pay for information on a random subset of hiring firms and jobseeking firm owners during a Becker–Degroot–Marschak exercise. Conditionally random variation in access to this information generates immediate labor adjustments within and between firms, though rarely of firm owners themselves, and impacts firm closure 5-months post-intervention. Our findings suggest that labor market information of this kind is both valuable and actionable in our context.

Factors Moderating the Impact of the COVID-19 Pandemic on Large-Scale Firms in Nepal

The coronavirus disease (COVID-19) pandemic ruthlessly affected almost all aspects of human life—the industrial sector as well. Despite the severe effects of the pandemic on large-scale firms, the intensity of the impacts on them has not been uniform; different firms have been affected to different degrees. Using data enumerated from 102 large-scale firms in Nepal, this study has assessed the impact of the COVID-19 pandemic on large-scale firms and identified the factors moderating its impact on large-scale firms. The study revealed that the COVID-19 pandemic had negative impacts on the production, sales, and profit of large-scale firms in Nepal. The study disclosed that the age, sex, educational qualification, work experience, managerial skills and managerial foresight of the managers or higher authorities, age of the firm, total capital, type of ownership and sector of firms were the key factors moderating the impact of the COVID-19 pandemic on the large-scale firms. Policymakers are suggested to consider the factors such as age, sex, educational qualification, managerial skills, managerial foresight, age of the firm, total capital, type of ownership and sector of the firm while making policies related to improving the performance of large-scale firms during the pandemic like COVID-19 in the future. Int. J. Soc. Sc. Manage. Vol. 11, Issue-3: 66-75.

Exploring the nexus of industry dynamism, climate risk exposure and mental health and well-being of owners of small and micro-sized suppliers: implications for sustainable supply chain management

PurposeAlthough climate change-related risks affect all stakeholders along the supply chain, the potential impact on small and micro-sized suppliers is incredibly excessive. The corresponding toll of these climate risk threats on the mental health and well-being of owners of small and micro-sized suppliers can adversely affect their participation in sustainability efforts, ultimately impacting the firm's performance. This often-overlooked dynamic forms the core of our research. We probe into two pivotal aspects: how industry dynamism and climate risk affect the mental health and well-being of owners of small and micro-sized suppliers and how, in turn, dictate involvement and, consequently, supply chain sustainability performance. This is further nuanced by the moderating role of the abusive behavior of buyers.Design/methodology/approachOur study is built on resource dependency theory and the supporting empirical evidence is fortified by a mixed-methods sequential explanatory design. This study comprises three phases. In the first phase, our experiment examines the effect of industry dynamism and climate risk exposure on sustainable supply chain management performance. Hypotheses H1a and H1b are tested in the first phase. The second phase involves using a survey and structural equation modeling to test the comprehensiveness of the model. Here, the relationship between industry dynamism, climate risk exposure, mental health and well-being of owners of small and micro-sized supplier firms, supplier involvement and sustainable supply chain management (H2–H7) is tested in the second phase. In the third phase, we adopt a qualitative approach to verify and provide descriptive explanations of phase two findings.FindingsOur findings underscore the significance of small and micro-sized suppliers in sustainability, offering invaluable insights for both theoretical understanding and practical implementation. Our study highlights that buyers must allocate sufficient resources to support small and micro-sized supplier firms and collaborate closely to address climate change and its impacts.Practical implicationsThe key takeaway from this study is that buyer firms should consider SDG 3, which focuses on the good health and well-being of their employees and the mental health and well-being of owners of small and micro-sized suppliers in their upstream supply chain. This approach enhances sustainability performance in supply chains.Originality/valueThis is one of the first studies that shows that industry dynamism and climate risk exposure can negatively impact small and micro-sized suppliers in the presence of a contextual element, i.e. abusive behavior of buyers, and ultimately, it negatively impacts sustainable supply chain performance dimensions.

Monetary policy shocks and firm investment decisions: Evidence from China

This paper investigates how unexpected monetary policy changes affect corporate investment decisions in China. Using monetary policy shocks estimated with a sophisticated technique, we show that Chinese public firms significantly change their investment to accommodate unexpected monetary policy shifts. Moreover, such a reaction is significant mainly when a restrictive monetary policy shock occurs and can last for six quarters. Further cross-sectional analyses confirm that the heterogeneous responses of investment depend on many firm-level characteristics, such as firm ownership, growth opportunities, local market development, and firm age.

Independence or interdependence: The role of artificial intelligence in corporate entry mode for overseas energy investments

Artificial intelligence (AI) technology has significantly transformed corporate behavior in the energy sector by enhancing the capacity and efficiency of information transmission and big data analysis. However, there is still a limited understanding of how AI influences new market entry mode strategies in overseas energy investments. Drawing on information processing theory, we propose that firms with advanced AI technology exhibit superior data processing capabilities, which can help energy companies mitigate the uncertainties associated with entering a foreign market and encourage them to choose a wholly-owned entry mode. We further hypothesize that the state ownership of firms, the political affinity between home and host countries, and the risk preferences of firm executives serve as moderating factors. Using a sample of Chinese-listed multinational firms in the energy sector from 2010 to 2021, our empirical results strongly support these predictions. These findings contribute to the emerging and crucial literature on the impact of AI technology on firms’ overseas investment behavior, particularly in the energy sector.

Black monster or green giant? Revaluating the role of Chinese multinational enterprises in Belt and Road countries on carbon emissions

The Belt and Road (B&R) initiative, which brings emissions from China to the B&R countries, has gained considerable attention. By building a multiregional input-output model that distinguishes firm ownership, we measured the carbon emissions produced by Chinese multinational enterprises (MNEs) in B&R countries in reality and set two extreme counterfactual scenarios to evaluate the emission impacts of Chinese MNEs' overseas production activities on B&R countries: In Scenario 1, Chinese MNEs' production activities in B&R countries were replaced by local domestic producers; and in Scenario 2, the same amounts of outputs produced by Chinese MNEs in B&R countries were imported from China. We find that compared to the reality, in Scenario 1, a total carbon emission increase of 29.06 million tons (Mt) was observed in B&R countries, while in Scenario 2, a cumulative emission increase of 165.00 Mt worldwide, from the year 2005–2016, was observed indicating that the foreign direct investment related production activities of Chinese MNEs create a ‘green’ benefit for B&R countries and the world. Case studies show the detailed emissions mitigation effects of Chinese MNEs. This study sheds light on a possible way to facilitate the development of economies' emission control with the involvement of MNEs with higher energy efficiency and to simultaneously realise global emission mitigation goals.

A support system for the detection of abusive clauses in B2C contracts

AbstractMany countries employ systemic methods of protecting consumers from unfair business practices. One such practice is the use of abusive clauses in business-to-consumer (B2C) contracts, which unfairly impose additional obligations on the consumer or deprive them of their due rights. This article presents an information system that utilizes artificial intelligence methods to automate contract analysis and to detect abusive clauses. The goal of the system is to support the entire administrative process, from contract acquisition, through text extraction and the recommendation of potentially abusive clauses, to the generation of official administrative documents that can be sent to court or to the owners of firms. This article focuses on on the components that use machine learning methods. The first is an intelligent crawler that is responsible for automatically detecting contract templates on websites and retrieving them into the system. The second is a document analysis module that implements a clause recommendation algorithm. The algorithm employs transformer-based language models and information retrieval methods to identify abusive passages in text. Our solution achieved first place in a competition on the automatic analysis of B2C contracts organized by the Polish Office of Competition and Consumer Protection (UOKiK), and has since been implemented as an official tool to support the contract analysis process in Poland.

Sustainable futures: Toward institutionalizing green industrial policy

AbstractAlthough there have been substantial accomplishments in understanding environmental sustainability policy, there remains a paucity of research categorizing the mechanisms through which firm ownership architectures can be harnessed to advance green industrial policy (GIP). The purpose of this study is to examine how different types of ownership structures can be utilized as mechanisms for capitalizing on and championing GIP. By integrating the fragmented streams of research, this study advances a four‐cell typology of GIP‐firm ownership dimensions (privately‐owned enterprises (POEs)/state‐owned enterprises (SOEs) × intra‐country/inter‐country GIP), which sheds much‐needed light on the long‐term energy transition (ETs) pathway through institutional and industrial challenges. The analysis further enhances researchers' understanding of leveraging SOEs and POEs to neutralize uncertainties inherent in scaling up renewables and addressing the “pollution haven hypothesis.” Directions for future research pertaining to ETs are outlined.

The “Supply-Side Reform Policy” and the Share of Labor Income in Enterprises

This article takes the supply-side structural reform launched in 2016 as a quasi-natural experiment and uses the “DID” method to analyze the relationship between the policy effects of supply-side reform and the labor income share. Firstly, the basic conclusion is that the “supply-side reform policy” can reduce the labor income share of enterprises in the “six major industries”. The correctness of the benchmark regression results was verified through a series of robustness tests. The results of the main regression were validated based on three different heterogeneity analysis perspectives: firm ownership, firm region, and government intervention. Secondly, two mediation mechanisms were examined, and the results showed that increasing operating income can positively enhance the “supply-side structural reform” in reducing the labor share of income in all enterprises, while increasing R&D investment can negatively enhance the effect of the “supply-side structural reform” on the reduction of the labor share of income in all enterprises. The heterogeneity of the two intermediary effects indicates that state-owned enterprises and private enterprises have different performances. The research results of this article indicate that the “supply-side reform policy” can effectively reduce the labor income share of target enterprises, reduce the proportion of excess employees, and enhance the vitality of target enterprises. The policy suggestion is to continue promoting supply-side structural reform, a policy which is in line with the requirements of the high-quality and sustainable development of Chinese enterprises.

Firm ownership structure and voluntary carbon disclosure: a systematic review and meta-analysis

Purpose This study aims to systematically consolidate and quantitatively integrate the mixed empirical results on the association between ownership mechanisms and voluntary carbon disclosure using meta-analysis and further propose potential country-level moderators of this relationship. Design/methodology/approach The authors apply meta-analytic procedures on 55 empirical studies conducted during 2008–2022, covering 13 countries, 85 effect sizes and 226,473 firm-year observations. To gauge the significance of the estimated mean effect size, a random-effects Hedges and Olkin meta-analysis procedure is adopted, followed by a restricted maximum likelihood based meta-regression, to test the effect of possible moderators. Findings Aligned with agency and stakeholder theories, the results highlight institutional and state ownership (SO) as having a significant positive impact on voluntary carbon disclosure. On the other hand, ownership concentration, managerial and foreign ownership have an insignificant effect on voluntary carbon disclosure. Based on institutional theory perspectives, the authors confirm the impact of institutional ownership on voluntary carbon disclosure to be more prominent in civil law countries and those countries that have implemented an emission trading scheme (ETS). Practical implications The finding that institutional and SO in firms can translate into higher voluntary disclosures deems investors and the government as crucial stakeholders in achieving carbon neutrality. Furthermore, the finding that the effect of institutional investors on carbon disclosure is heightened in ETS-implemented countries provides evidence to the regulatory authorities in favour of this scheme. Social implications The positive impact of institutional and government ownership on voluntary carbon disclosure highlights that these ownership structures not only have the potential to transform corporate decisions but also have implications for the wider society. As firms owned by institutional investors disclose their carbon information, it provides access to critical information about their environmental practices to the public. This fosters an environment of transparency and trust between the firm and its stakeholders (the community), leading to an overall well-informed society. Originality/value While prior meta-reviews studied the impact of corporate governance on voluntary disclosures, the meta-literature, as of 2024, has yet to address its influence specifically on carbon disclosures, which are pertinent amidst the ongoing global climate change crisis. The findings inform policymakers about the pivotal institutional factors that can amplify the impact of effective ownership structures on voluntary carbon disclosure. Future scope exists for investigating the effects of ownership mechanisms on firm-level sustainable investments. Furthermore, future empirical analysis could consider the moderating influence of “culture” and “ease of doing business” on the ownership-carbon disclosure relationship.

Nexus of Corporate Governance, Financial Reporting Quality and Investment Efficiency

This paper examines the relationship between corporate governance, financial reporting quality, and investment efficiency using data from 207 non-financial firms listed on the Pakistan Stock Exchange (PSX) for a period of 9 years from 2008 to 2016. Since the Pakistan Corporate Governance Code was revised in 2012, therefore consistent with previous studies, the effect of the promulgation of the new corporate governance code on financial reporting quality is also analyzed. Thus, using the GMM model, the results of the study show that the Corporate Governance Code 2012 improves the quality of financial reporting. Owners of family firms confiscate the wealth of minority shareholders by deteriorating the quality of financial reports. Independent directors of the board and independent directors of the audit committee effectively monitor the financial reporting process. Family ownership, board independence and audit committee independence interact with the code in affecting financial reporting quality and substitute or complement each other. Inefficient investments decrease financial reporting quality. Furthermore, the new governance code has an incremental effect on the relationship between investment inefficiency and financial reporting quality.

SPRINGATE S-SCORE MODEL ANALYSIS BEFORE CORPORATE MERGER AND ACQUISITION: A STRATEGY EXECUTION FOR PT. WASKITA KARYA, TBK

Financial distress is a situation that leaders and owners of firms want to evade, as it is a precursor to insolvency. This study employed financial ratio data and S-Score values to analyze the financial state of PT.Waskita Karya Tbk from 2019 to 2023. The data demonstrate a notable deterioration in the company's performance throughout that timeframe, with financial challenges commencing in 2019 and intensifying until 2023. The escalating likelihood of bankruptcy is linked to a decline in financial parameters such as efficiency, leverage, liquidity, and profitability, as well as a reduced S-Score. Suggested actions including reassessing the financial strategy, adopting improved debt control measures, formulating a plan for financial recuperation, partnering with financial specialists, and strengthening financial supervision and performance tracking, then merger and acquition with other Stated Owned Enterprises with excellent financial performance such as PT. Hutama Karya could an alternative salvation strategy . By applying these suggestions, organizations are anticipated to enhance their financial situation and mitigate the likelihood of bankruptcy in the future.

VC ownership post‐IPO: When, why, and how do VCs exit?

AbstractWe examine the evolution of lead venture capital firm (VC) ownership after their portfolio companies (PCs) are publicly listed. We find that, on average, lead VCs retain their shares for three years post‐IPO. Higher liquidity pressure and better stock market performance lead to faster VC exits, while higher VC reputation, better VC monitoring, and higher quality PCs lead to slower exits. VCs mostly use sales in the open market, share distributions, and mergers and acquisitions to divest their shares. Higher liquidity pressure incentivizes VCs to use majority share distributions, while better stock market performance increases their preference for continuous sales.

The effect of software registration on manufacturing export

ABSTRACT Considering the pivotal role of the software industry in the digital economy, this article investigates the effect of software registration on China’s manufacturing exports from 2000 to 2013 against the backdrop of rapid growth in the digital economy and international trade. Our results indicate a positive association between software registration, a unique proxy for digital economy development, and manufacturing firm exports. This finding remains robust across various tests, including Bartik IV estimation, different estimators, and subsample analyses. Mechanism analysis suggests that software registration may bolster exports by reducing firms’ production and operational costs while mitigating information frictions in international markets, thereby incentivizing firms to expand their export activities to diverse markets. Furthermore, extended analyses reveal heterogeneous impacts across firm ownership, regions, industries, and destinations. Overall, our findings underscore the significant linkage between software registration and firm exports, providing a novel perspective on the digital economy’s influence on international trade.

Double managerial delegation contracts with relative profit performance and environmental performance incentives under emission taxes

AbstractThis paper examines the strategic relations between emission taxes and firms' managerial delegation contracts, which include incentives based on relative profit performance (RPP) and environmental performance (EP). We demonstrate that under quantity (price) competition, the government imposes higher (lower) emission taxes, while the firm owner sets lower (higher) EP incentives and negative (positive) RPP incentives, which leads to lower (higher) welfare. We also explore an endogenous competition mode game and find that quantity (price) competition emerges when both consumers' green willingness‐to‐pay (WTP) and product differentiation are low (high). Our findings suggest that public education on greenness is crucial for enhancing EP incentives in the design of managerial delegation contracts, while intense product market competition may be detrimental to consumers and society, especially when consumers' green WTP is low.

Correction: Family firm ownership and its impact on performance: evidence from an emerging market

Correction: Family firm ownership and its impact on performance: evidence from an emerging market

Does gender of firm ownership matter? Female entrepreneurs and the gender pay gap

We examine how the gender of business owners is related to the wages paid to female relative to male employees working in their firms. Using Finnish register data and employing firm fixed effects, we find that the gender pay gap is—starting from a gender pay gap of 11 to 12%—two to three percentage points lower for hourly wages in female-owned firms than in male-owned firms. Results are robust to how the wage is measured, as well as to various further robustness checks. More importantly, we find substantial differences between industries. While, for instance, in the manufacturing sector, the gender of the owner plays no role in the gender pay gap, in several service sector industries, like ICT or business services, no or a negligible gender pay gap can be found, but only when firms are led by female business owners. Businesses with male ownership maintain a gender pay gap of around 10% also in the latter industries. With increasing firm size, the influence of the gender of the owner, however, fades. In large firms, it seems that others—firm managers—determine wages and no differences in the pay gap are observed between male- and female-owned firms.

Female Ownership of Firms and Regulation Experience

The presence of gender disparity in de jure rules across the world is relatively well-known. Many studies show that this disparity is detrimental to female labor participation. Our focus is different in that we examine whether firms with females amongst ownership experience elevated time costs and burdens associated with government regulations relative to their male-owned counterparts. In this sense, we are interested in both de facto and de jure differences in governmental regulation. Using firm-level data and two alternative matching methods, our results suggest that firms with at least one female owner report that senior management spends a larger percentage of their time dealing with regulations. We also find that construction permits take approximately 4–7 days longer to obtain for these same firms. Lastly, we find that female-owned firms perceive labor regulations to be a larger obstacle to business operations. In all cases, these effects tend to be largest in countries with the most disparity in de jure rules. However, the gap remains even in the most de jure equal countries.

Family business sustainability: the impact of governance and women’s empowerment in Saudi Arabia

Due to their strong emotional interest and ownership control, family firm owners significantly influence their firm’s strategies and governance, which has consequences for their business sustainability practices. The failure to establish or maintain formal organizational structures, and adopt good governance principles, may hinder family firms in their pursuit of long-term sustainability. This study empirically investigated the impact of corporate governance on family firms’ sustainability, with women’s empowerment and culture as moderating and mediating factors, respectively. Data for the study were obtained from a sample of 126 family firms from Saudi Arabia. The study adopted the partial least squares structural equation modelling (PLS-SEM) method. The study results empirically confirmed that corporate governance is positively associated with women’s empowerment, which also assists in achieving business sustainability in family-controlled firms. The adoption of good corporate governance policies, and empowerment of women through their appointment on corporate boards operating in a supportive culture, can reinforce an organization’s mission, purpose and strategies, which can create an enabling environment for family business sustainability.

Architects’ Perception of Quality of Life—Impact, Practice, and Barriers

This study intended to identify the perception of quality of life (QoL) among architects, how architecture can impact QoL, and which barriers architects perceive to impact QoL. Numerous studies have emphasized the significance of the built environment in determining QoL, especially in institutional buildings. However, there has been less focus on how architects perceive QoL and how the concept is applied in their planning and design for residential buildings. The contribution of this study is to provide an increasingly important awareness of how to improve the architects’ considerations to build for QoL. The study is based on qualitative data from in-depth interviews with ten architects and one workshop with seven architects. The participants were selected by quota sampling and were all partners or owners of Danish architectural firms that provide housing services and are representative of the Danish architectural industry. The results reveal that the perceptions of QoL among architects are linked to three primary dimensions: health, a sense of harmony, and the experience of enchantment. The participants perceived that architectural design could impact QoL in three primary dimensions: the environment, the experience of enchantment, and health. The most frequent perceived barriers are linked to the economy and resources, building codes and regulations, and knowledge and communication.