Performance Of Indian Firms Research Articles

Unveiling the moderating role of governance mechanism on the nexus between CSR and firm performance in India: A GMM‐based dynamic panel approach

Unveiling the moderating role of governance mechanism on the nexus between CSR and firm performance in India: A GMM‐based dynamic panel approach

Does Sustainability Assurance enhance the connection between Corporate Governance and Firm Performance in India?

Scholarly attention to the association between corporate governance and firm performance, considering sustainability assurance as a moderator is scarce. This study aims to examine the moderating role of sustainability assurance in the nexus between corporate governance and firm performance in India. The data relating to 35 environmentally sensitive companies among the top 100 National Stock Exchange (NSE) listed entities were gathered from the ProwessIQ Database and annual reports of companies during 2016–2022. The fixed effect regression model was employed. The results show an insignificant effect of board effectiveness on firm performance as measured by return on assets (ROA), return on equity (ROE), and Tobin’s Q. Similar findings were documented on the audit committee effectiveness and firm performance nexus, except for Tobin’s Q (β = 0.316). In addition, the study did not support the moderating role of sustainability assurance on the board effectiveness and firm performance nexus, indicating the presence of ineffective corporate governance mechanisms. However, the results show that sustainability assurance significantly and negatively moderates the relationship between audit committee effectiveness and ROA (β = –0.021), ROE (β = –0.074), and Tobin’s Q (β = –0.996). This implies that the practice of external assurance of sustainability reports by firms with audit committee effectiveness is an additional burden due to the extra cost involved. Further, the result indicates the learning curve effect among Indian companies. Thus, the findings suggest the need for regulatory focus on encouraging sustainable business practices in terms of effective corporate governance and sustainability assurance. AcknowledgmentThe authors are grateful to Manipal Academy of Higher Education (MAHE), Manipal, for providing financial assistance in the form of a “JRF Contingency Grant” for this research article.

Special economic zone dynamics and firm performance: Evidence from an emerging economy

AbstractThe empirical literature on Special economic zones (SEZs) has shown that SEZs have become critical policy tools for advancing economic and firm performance, especially in developing economies where financial capital, human capital, technology and technical know‐how to drive these performances are in limited supply. While the importance and effects of SEZs cannot be overemphasised and are well documented, particularly in Asia, SEZs' operationalisation, structure and policy practice appear to vary, especially in Ghana and hence a need to examine SEZ effects on firm performance in Ghana. Thus, following the difference in the structure and practice of SEZs and its limited empirical evidence in African emerging economies, this present study employs analysis of variance, treatment estimation and regression models covering 328 firms between 2018 and 2021 to shed insights on how SEZ dynamics/features affect firm performance (measured with total factor productivity, labour productivity, profitability, revenue generation and value added) in Ghana. Our results suggest firms operating under SEZ dynamics have varying significant effects on firm performance. Thus, while firms registered as SEZ firms and operating in SEZ enclaves and firms registered as SEZ firms and operating outside SEZ enclaves have significant positive effects on the performance indicators of firms, firms that are not registered as SEZ firms and operating outside SEZ enclaves detracted firm performance. Clearly, firms that possess SEZ dynamics/features tend to promote performance of firms as denoted in the empirical literature and theoretical approaches to SEZ. Arguably, the tax holidays, cheaper tariffs and infrastructural benefits derived by SEZ registered firms boost their productivity, revenue and profit performance higher than non‐SEZ registered firms. These results suggest policymakers/government should reduce administrative bottlenecks of registering as SEZ firms and operating in SEZ enclaves to increase the number of SEZ firm operations to induce performance and create room for fiscal revenue.

The Significance of Innovation Orientation in Firm Performance: Technological Capabilities as A Moderating Role

Entrepreneurial marketing is considered to be suitable for small businesses. However, innovation orientation as an Entrepreneurial marketing dimension is a critical instrument that small and medium-sized businesses can use to obtain a competitive advantage. Thus, the general objective of this study is to explore and describe the significant relationship between innovation orientation and firm performance in SMEs in Khartoum-Sudan utilizing technological capabilities as a moderating variable. The resource-based view provides the theoretical foundation for this study regarding the effect of innovation orientation on firm performance through technological capabilities. In this manner, our study is quantitative. Reliable with the purpose of this study. Furthermore, our study relied on the “Positivism philosophy”, a deductive approach to theory development. Accordingly, overall, 255 responses were received in responding to our online questionnaire. To analyze the data firstly Principal Component Analysis, Correlation, and Rotation matrix were utilized to test the appropriateness of the study pre-model and check the validity of the questionnaire measurements. secondly, we used Path analysis to examine the significant relationships between study variables. Consequently, the findings confirm both significant and insignificant relationships between innovation orientation and firm performance. Our analysis revealed significant relationships between innovation orientation, technological capabilities, and firm performance indicators such as profitability, sustainability, and customer satisfaction. Moreover, we found that technological capabilities play a crucial moderating role in enhancing the effects of innovation orientation strategy on firm performance. Anyhow, these results confirmed the partial support of the study’s hypotheses.

Strategy, Ownership, and Performance of Firms in India: A Study of Manufacturing and Service Industries in India

Purpose: There is considerable interest among academicians as well as practitioners in strategic differences between foreign-owned firms and domestic businesses. Linked with this is the question of whether there is a relationship between strategy and performance. This paper primarily concentrates on the differences in strategy pursued by foreign-owned firms and domestic firms. Methodology: A questionnaire was constructed. It was administered to senior level managers of reputable firms. The comprehensive list of managers was obtained from various databases including that of the Confederation of Indian Industry (CII). Responses to the questionnaire were received in two phases. The questionnaire was sent again after a fortnight of sending it the first time. None of the respondents asked for any clarification during their responses to the questionnaire. Findings: Results of analysis of the responses obtained clearly showed the differences in strategy between the two sets of firms. In the overall perspective, foreign-owned firms are much more holistic in their approach, whereas the domestic firms are quite narrow in their outlook—the domestic firms primarily concentrate on resources and how to add customers in order to survive and grow. The concept of investing in R & D, which is a prime parameter of strategy for foreign-owned firms, is completely absent in the case of domestic firms. As a result, factors affecting performance are far more widespread for foreign-owned firms than it is for domestic firms. Originality: While the comparison has been made between FOB and DOB, the differences in strategy have never been investigated before.

The effect of ESG on enterprise value under the dual carbon goals: From the perspectives of financing constraints and green innovation

Environmental, Social, and Governance (ESG) is an important criterion for evaluating non-financial indicators of firm performance, offering substantial support for advancing green transformation. This paper examines the impact of ESG performance on enterprise value using data from 3139 Chinese A-listed companies spanning from 2010 to 2021. The results demonstrate that enhancing ESG performance significantly boosts enterprise value. Additionally, ESG initiatives can alleviate corporate financing constraints and stimulate green innovation, consequently driving enterprise value. Furthermore, the positive effect of ESG on enterprise value is more pronounced for non-state-owned enterprises, low-polluting enterprises, and small-scale enterprises. These findings deepen our understanding of how ESG influences enterprise value within the context of the dual-carbon goal, offering theoretical backing for companies and investors to bolster ESG management practices and aiding government efforts to enhance ESG macro guidance.

The Significance of Innovation Orientation in Firm Performance: Technological Capabilities as a Moderating Role

Entrepreneurial marketing “EM” is considered to be suitable for small businesses. However, innovation orientation “IO” as an EM dimension is a critical instrument that small and medium-sized businesses can use to obtain a competitive advantage. Thus, the general objective of this study is to explore and describe the significant relationship between IO and firm performance “FP” in SMEs in Khartoum-Sudan utilizing technological capabilities “TCPs” as a moderating variable. The resource-based view “RBV” provides the theoretical foundation for this study regarding the effect of innovation orientation on firm performance through technological capabilities. To achieve this objective, we assumed the following hypothesis: H1: Innovation orientation has a significant relationship with firm performance {profitability, sustainability, and customer satisfaction}. H2: We assume that TCPs can positively moderate the relationship between IO and FP. In this manner, our study is quantitative. Reliable with the purpose of this study. Furthermore, our study relied on the “Positivism philosophy”, a deductive approach to theory development. Accordingly, overall, 255 responses were received in responding to our online questionnaire. To analyze the data firstly PCA, Correlation, and Rotation matrix were utilized to test the appropriateness of the study pre-model and check the validity of the questionnaire measurements. secondly, we used Path analysis to examine the significant relationships between study variables. Consequently, the findings confirm both significant and insignificant relationships between IO and FP. Our analysis revealed significant relationships between innovation orientation, technological capabilities, and firm performance indicators such as profitability, sustainability, and customer satisfaction. Moreover, we found that technological capabilities play a crucial moderating role in enhancing the effects of innovation orientation strategy on firm performance. Anyhow, these results confirmed the partial support of the study’s hypotheses.

Board Gender Diversity and Firm Performance: Recent Evidence from Japan

Gender diversity is increasingly recognized as a critical element in corporate management. However, existing research on its impact on firm performance demonstrates inconsistency in a global context. This study employs 1990 publicly listed Japanese companies from 2006 to 2023 and examines the effect of board gender diversity on firm performance in Japan. Findings from the fixed-effects regression model revealed a significant negative impact of board gender diversity on firm performance. This adverse correlation is more pronounced in smaller firms, those with greater leverage and reduced institutional ownership, and regulated and consumer-focused industries, particularly pre-COVID-19. The detrimental impact of board gender diversity on firm performance is transmitted via corporate social responsibility and firm innovation instead of board independence or CEO duality. Notably, the two-stage least squares estimation addresses potential endogeneity, employing an equal opportunity policy as an instrumental variable. Moreover, the robustness of our results is affirmed via the substitution of return on equity for return on assets as an indicator of firm performance. Lastly, our analysis does not reveal a U-shaped nonlinear relationship between board gender diversity and corporate performance. As Japan progressively promotes women’s participation in corporate governance, this research bears significant implications for corporate leaders, investors, and policymakers in Japan.

Assessing the Effects of CEO Characteristics on the Financial Performance of Firms in Nigeria

This study investigated the relationship between CEO characteristics and the financial performance of listed firms in Nigeria (2005 –2022). The regression analyses employed in this study are pooled panel regression, random panel regression and fixed panel regression. Under the firm performance indicator – ROA, the Hausman-statistics p-value of 0.23 indicated that we accept the null hypothesis which says that random effect prevails. But the fixed effect result was adopted because it best explains the model as it considers the constant variables and solves the omitted variable bias problem. The result showed that CEO origin has a positive and significant impact on return on assets (2%). Whereas, CEO gender showed a negative and insignificant effect on return on assets (30%). CEO tenure impacts a negative and insignificant relationship with return on assets (62%). Furthermore, this result showed a positive and insignificant relationship between leverage and return on assets. While capital expenditure shows a negative and insignificant relationship with return on assets. The study recommends that, Firms should adopt internal recruitment in appointing CEO, as they tend to possess insider-knowledge and experience peculiar to the firm’s nature of work and relationship with the staff that an outsourced CEO may not have opportunity to immediately after his appoint and could be a major set-back in fulfilling the goal of the firm.

기업의 가족친화적 제도가 기업성과에 미치는 영향

Purpose - This research investigated the influence of family-friendly policies on the financial performance of Korean firms, with a specific emphasis on middle- and lower-level female employees. This study contributes to the body of knowledge regarding the effectiveness of family-friendly policies.
 Design/Methodology/Approach - This study used multiple regression analyses on the survey data of 604 firms from the Korean Women Manager Panel in order to examine the impact of family-friendly policies on the performance of firms. Factors associated with career flexibility, time flexibility, financial support, and cultural variables comprise the independent variables. Sales growth and return on assets (ROA) were regarded as indicators of firm performance.
 Findings - Career-flexibility policies such as parental leave and family care leave, in addition to time-flexibility policies such as working hour reduction and a 52-hour system, have a positive relationship with firm growth, while they have adverse effects on profitability.
 Research Implications - Results implies that the implementation of family-friendly policies has the potential to help employees to increase productivity and revenue. However, these policies also incur additional costs, which may have a negative impact on overall profitability. Considering the introduction of family-friendly policies implies the need for additional measures, such as devising strategies for revenue growth, to enhance profitability.

Impact of Capital Structure on Firm Performance: Empirical Evidence from Indian Manufacturing Sector

The present study has been carried out to investigate empirically the impact of capital structure on a firm’s performance in the Indian manufacturing sector from the year 2013 to 2022 and a comparative analysis of its findings with the results of previous studies. A sample of 51 firms from the Nifty India Manufacturing Index is selected for the study. The data are analyzed by employing the panel data technique and the random effect model is found to be consistent as per the results of Hausman test. The capital structure is proxied by debt-equity ratio, whereas return on equity (ROE) and return on assets (ROA) are used as firm performance indicators. Apart from these, some control variables such as firm size, liquidity, tangibility and growth are also included in the study. The results exhibit that the debt-equity ratio has a detrimental effect on the performance of the Indian manufacturing firms. This negative association is substantial when performance is measured using ROA as opposed to ROE. Among the control variables, only size revealed a negative relationship with firm performance. The comparative analysis highlighted that for the time being, the negative association between capital structure and performance is consistent over time for the developing nations. The outcomes of the study will have ramifications for the managers and policymakers responsible for decision making to enhance performance and will drive them to consider the influence of debt financing on performance before deciding the debt level. It also provides updated insights that can guide the strategic and financial decisions of the manufacturing firms in India.

Capital Structure, Firm Performance and Risk Exposure: New Evidence from OECD Countries

Optimal capital structure is a key tool to take advantage of the trade-offbetween firm performance and risk. Based on this, we examine how optimalcapital structure influences corporate performance and risk exposure.We use a strong-balanced panel of 3,344 firm-year observations from 10different OECDcountries for 2006–2016. Results reveal that firms havingshort-term debt normally experience high accounting-based performancewhile lowering market-based performance, firms using long-term and totaldebt are largely exposed to decreased accounting and market-based performance.The higher the long-term and total debt, the greater the chancesthat firms become vulnerable to insolvency risk. Findings are robust acrossalternative indicators of capital structure, firm performance and risk, alternativemodel development and the two-step system GMM estimator tocontrol endogeneity issues. This research will be of importance to firmmanagers and policymakers in designing an appropriate capital structurefor maximizing firm performance while minimizing debt-taking risks.

The Effect of Risk Management Committee Characteristics on Firm Performance: An Empirical Investigation

This research investigates how the characteristics of a risk management committee (RMC), as a recently emerging sub-committee within the board of directors, impact firm performance indicators. The investigation employs a dataset encompassing service and manufacturing firms that are listed on the Amman Stock Exchange (ASE) over the period 2019–2022, comprising a total of 236 firm-year observations. The primary statistical technique utilised in the study is fixed-effect regression with Huber–White standard errors. The findings demonstrate that RMC attributes such as size, independence and meeting frequency exert a significant and positive effect on return on assets, return on equity and Tobin’s Q. These insights hold practical implications for stakeholders, regulators and policymakers in assessing the influence of RMC characteristics on firm performance within the context of the ASE. Understanding these dynamics can inform decision-making and regulatory frameworks, promoting effective risk management practices in publicly traded corporations. The current study represents the initial empirical exploration within the corporate governance literature concerning the nexus between RMC qualities and firm performance in Jordan.

Greening the bottom line: a new scale to discern consumer perceptions of a firm’s green orientation

PurposeThe purpose of this paper is to introduce a new scale designed to assess a firm's green orientation from the consumer's perspective. Its effects are tested on a managerially relevant outcome variable and an objectively measured product-performance indicator.Design/methodology/approachFour studies based on various data sources identify and operationalize a green-oriented firm. Leveraging signaling theory, a model tests the orientation’s impact on two outcome variables, behavioral intentions and revenue, demonstrating its relevance to both scholars and practitioners.FindingsPrevious research has explored consumers’ reactions to green products, announcements and initiatives in a piecemeal fashion. This study suggests that firms are perceived as green-oriented when they operate in an environmentally friendly manner, develop green products and publicize these accomplishments. Consequently, consumers’ identification of a firm as green-oriented affected their behavioral intentions, which positively influenced firms’ revenues.Research limitations/implicationsGreen-oriented firms must incorporate environmental standards into production efforts and confidently trumpet such behaviors if they wish to profit from consumer perceptions.Practical implicationsTo accrue positive behavioral intentions from consumers and to increase the firm’s revenues, marketers should invest in developing green-oriented products, operating in an environmentally friendly manner and publicizing these efforts. Understanding consumer perceptions is critical, as they are a leading indicator of firm performance.Originality/valueThis novel operationalization of a green orientation captures consumers’ perceptions, demonstrating that firms can significantly benefit from this consumer-aligned strategy.

Impact of macroeconomic factors on firm performance: Empirical evidence from India

Understanding the macroeconomic factors is essential for all firms operating in the economy. Investment decisions, financing decisions, and risk management of firms are influenced by the existing macroeconomic factors, thereby impacting their performance. This paper examines the effect of macroeconomic factors on the performance of Indian manufacturing firms. Two-step generalized method of moments model is applied in this investigation to analyze the effect of firm performance from the financial year 2004-05 to 2021-22. Firm performance is proxied by two accounting-based measures and a market-based measure, namely, return on assets, return on equity, and Tobin’s Q, respectively, while the macro-economic factor is proxied by annual gross domestic product growth rate. The empirical findings show that firm performance has a positive relationship with macroeconomic factors. In addition, the findings reveal that firm size, firm age, leverage, sales growth, and operating profit impact firm performance. The study further extends to examine the moderating effect of financing constraints (measured by firm size and age) on macroeconomic factors and firm performance. The results show that the effect is more pronounced on small and young firms as compared to large and mature firms. The study also evaluates the impact of macroeconomic factors on firm performance excluding the crisis periods (the financial crisis of 2008 and the COVID-19 pandemic) and finds the impact on the market performance to be insignificant during non-crisis periods. This study recommends that lenders, managers, and other stakeholders should take proactive policy measures for any anticipated adverse changes in macroeconomic factors on the performance of Indian firms. AcknowledgmentsThe financial and infrastructural support provided by FORE School of Management, New Delhi, India in completing this paper is gratefully acknowledged.

The Role of Digitalization on Manufacturing SME Firm Performance in India

The Role of Digitalization on Manufacturing SME Firm Performance in India

Feedback persistence matters! Uncovering the varying effects of success and failure persistence on firm risk-taking

The motivational effects of success and failure on firm risk-taking have been widely documented in research rooted in a behavioral theory of the firm, with the resultant body of work yielding divergent theoretical predictions and empirical findings. Despite scholarly progress, recent studies ruminate that envisioning success and failure through the lens of realized performance and aspiration foregoes its temporal considerations and takes a narrow view of its information content. Emphasizing the temporality of performance feedback, this study proposes success and failure persistence as reliable indicators of firm performance. In particular, we propose a curvilinear relationship between success (failure) persistence and firm risk-taking, such that risk-taking by firms initially decreases (increases) and then increases (decreases) with an increase in success (failure) persistence. Using a data set of publicly listed Indian manufacturing firms from 1995 to 2018, we find robust support for the above-proposed curvilinear relationships. Our findings highlight the nonlinear, asymmetric influences of success and failure persistence on firm risk-taking and disclose the presence of strategic momentum effects. This study contributes to the research on a behavioral theory of the firm and performance feedback theory and offers managerial guideposts for handling success and failure.

Explorations in organized hypocrisy and a proposed direction for a sustainable future

PurposeSince the Brundtland report’s call for sustainability, planetary conditions have deteriorated. This paper suggests that corporate hypocrisy is a major barrier toward the adoption of sustainability and offers a typology of business behavior that can move closer toward the adoption of true and strong sustainability.Design/methodology/approachThis article uses a normative lens to build upon prior literature and anecdotal evidence from the field to present a typology of business archetypes that represent a variety of responses toward sustainability.FindingsThe authors propose five typologies of business behavior that represent responses toward sustainability: business-as-usual, hypocritical pretender, hypocritical co-opter, responsible enterprise and purposeful enterprise. The first three typologies represent existing hypocritical approaches using weak sustainability. The last two typologies decrease corporate hypocrisy; improve alignment of talk, decisions and action; and help an organization adopt true and strong sustainability.Research limitations/implicationsThis is a normative paper that critiques existing literature and practices in corporate sustainability and proposes new directions. It necessitates further research in the form of case studies and empirical cross-sectional and longitudinal analysis. It implies assessing firm impact in non-traditional ways and will call for the development of new measures and indicators of firm performance from a social and environmental perspective.Practical implicationsThe typology can provide practitioners and researchers with one possible solution to eliminate or decrease corporate hypocrisy in relation to sustainability, reporting and communications.Social implicationsPlanetary conditions have worsened, and business activity continues to contribute to deteriorating conditions. This research attempts to help businesses move away from hypocritical and destructive practices and to adopt true and strong sustainability practices for a flourishing planet. Furthermore, the authors articulate policy and practice recommendations in this context.Originality/valueAfter decades of failure to make progress in achieving planetary sustainability, this research offers a model for practitioners and researchers to use in defining the actions necessary to achieve the elusive concept of sustainability.

Environmental Costs and Key Financial Performance Indicators of Oil Firms in Nigeria

This study examined the effect of environmental costs on the key financial performance indicators of oil firms in Nigeria. The study specifically examined the effect of environmental cost on the retained earnings, earnings per share and the return on asset of oil firms in Nigeria. A sample of three firms was selected out of a population of eleven oil and gas firms listed on the Nigeria Stock Exchange during the period. Secondary data were collected from the selected firms and analysed using multiple regression analysis. Findings of the analysis shows that environmental cost has a positive and insignificant effect on the retained earnings of oil firms in Nigeria. It was also observed that environmental cost has a negative and insignificant effect on the earnings per share of oil firms in Nigeria. The study equally revealed that environmental cost has a positive and significant effect on the return on asset of oil firms in Nigeria based on the findings, the study recommends that oil firms should adopt uniform reporting and disclosure standards of environmental cost for the purpose of control and measurement of performance. Firms (especially smaller ones), should be encouraged to disclose their environmental practices in their annual reports to enhance their competitiveness which would subsequently lead to high corporate performance. Top management should ensure that they comply with the environmental laws of the nation as it will go a long way in enhancing sustainability.

Innovative Firm Performance Management Using a Recommendation System Based on Fuzzy Association Rules: The Case of Vietnam’s Apparel Small and Medium Enterprises

Purpose: This study aims to apply a classification algorithm based-on fuzzy association rules (FARs) to improve the effectiveness of firms' performance prediction problem. Particularly, this study investigates potential FARs exists between inputs and outputs of firms' performance management process. These extracted FARs could be used to help firm’s managers make better dicision to improve firm’s performance.
 
 Theoretical framework: Private enterprise development has been identified as key to Vietnam's economy that was commonly depended on state enterprise. For that, understanding and improving firms' performance and productivity is one of the most important tasks, from both macro and micro perspectives. There have been many studies on Vietnam's firm performance, but mostly relying on econometric methods that limit the understanding with structural equations. This study, instead, attempts to utilize new achievements of Artificial Intelligence (AI) for this task. Among AI techniques, fuzzy association rule is able to address the relationship between input factors and firm performance indicators. For each company, the finding FARs can be used to predict its performance and then change the business plan or react to improve weekness of organization.
 
 Design/Methodology/Approach: The proposal model is applied on data of small and medium-sized enterprises (SMEs) of the apparel industry in Vietnam in the period 2010-2015. The sample consist of a total of 23637 observation of Vietnam firms in apparel and textile industry and contains 16 main criterias for those firms.
 
 Finding: A recommendation system (RS) is constructed from disclosed FARs and is a key factor in a novel innovative firms' performance management process. The percentage of classified instances using the mining FARs is not quite high (about 82%), but it is not always the case. Vietnam’s apparel dataset includes rare classes of ROA, therefore applying only frequent FARs is not enough. This issue can be fixed by using both frequent and infrequent FARs. 
 
 Research, practical & social implications: The proposed model has a great opportunity to use not only in the small and medium-sized enterprises (SMEs) of the apparel industry but other industrial sectors. FARs support the well-understand of firm performance to firm’s manager and help them better to react. Besides, FARs could be used to create RSs that makes alerts about risk automatically.
 
 Originality/Value: The fact, our current study is the first to inspect the ability of FARs on SMEs of the apparel industry in Vietnam. This study provides theoritical potential knowledge and empirical evidence in the application of FARs technology in innovative firm’s management.