Firm-related Characteristics Research Articles

Financial Institution Type and Firm-Related Attributes as Determinants of Loan Amounts

Access to formal credit remains critical for business operations, particularly for firms unable to generate sufficient funds internally. Using the World Bank’s Enterprise Survey dataset, 2018, we analyzed 230 Kenyan firms that applied for loans. These loans are sourced from banks (private, commercial, or state-owned) or non-banking financial institutions. Specifically, the paper explores the effect of financial institution type and firm-related characteristics on loan amounts advanced. The results show that the preferred credit provider matters, with the sensitivity level varying among the three institutional types. Additionally, the collateralization value, the owner’s equity proportion of fixed assets, and any existing credit facility correlate positively with the outcome variable. There is an inverse relationship between the largest shareholder’s ownership and the loan amount. The study uses the new product (service) launches to measure innovation. The findings suggest that firms in the innovation process access higher loan amounts than their non-innovative peers. Be that as it may, the difference in amount effect size between the two groups is small based on Cohen’s d rule. The paper highlights the theoretical and practical implications of these findings.

How to face a political boycott: the relevance of entrepreneurs’ awareness

Despite the growth in the number of consumer boycotts, the marketing literature has paid little attention to the factors that could explain such behavior or the effect of boycotts on entrepreneurial initiatives. Several studies have examined the motivations of customer boycott behavior. Nevertheless, its relation to other attitudinal variables and with firm-related characteristics has not been analyzed or has been dealt with only partially even though the implications are crucial for incumbents and start-ups to adapt their strategies. This paper examines the factors that could explain the consumer’s decision to boycott a brand because of its location in a specific country. The relevance of addressing this gap is based on the boycotts’ impact on local firms and start-ups performance. This study addresses this issue by proposing a model that considers consumer-related variables and the perceived importance of brands. The hypotheses proposed in this research are verified via variance-based partial least squares structural equation modeling. The authors tested their framework during an actual boycott to Catalonian products and firms promoted on social media in Spain. The discussion of the results and their implications contribute to improving entrepreneurs, managers and academics’ comprehension of the determinants of customers’ intentions to participate in a boycott. This can also provide entrepreneurs and managers with a guide to orientate the design and implementation of strategies that enable the reduction of customer abandonment due to political boycotts. The main value of this research is that it provides a comprehensive model that includes different sorts of variables that could be involved in consumer boycott behavior. This model can support flexible entrepreneurial and managerial practices to help entrepreneurs to adapt rapidly to changes in the market due to boycotts.

Extent and distribution of unregistered employment in the service industries in Europe

ABSTRACTAlthough a voluminous literature exists on the prevalence of the informal economy, few studies evaluate unregistered employment and none its prevalence and distribution across the service industries. This paper fills that gap. Reporting a 2015 European Working Conditions Survey based on 43,850 face-to-face interviews, the finding is that 7% (1 in 14) of service industry employees have no written contract of employment across the 35 European countries surveyed, although this varies from 34% in Cyprus to 1% in Sweden. A logistic regression analysis at the European level reveals significant associations between the propensity to work with no contract and various individual-, household- and firm-related characteristics, with unregistered employment more prevalent among women, younger people, those with fewer years in education, migrants, those living in households unable to make ends meet, those working in smaller businesses, and the hospitality and household service sectors. The theoretical and policy implications are then discussed.

Corporate Boards, Insider Ownership and Firm-Related Characteristics: A Study of Indian Listed Firms

The basic purpose of this article is to ferret out whether there exists any association amongst board characteristics, insider ownership and firm-specific characteristics (firm size and age) in relation to Indian corporates listed on Bombay Stock Exchange (BSE). A total of 15 measures including several proxies and modulations has been contrived, which reflect the composition, independence, diligence as well as functioning period of corporate boards. Empirical investigation has been performed using one-way Analysis of Variance (ANOVA) and Welch ANOVA under Robust Tests of Equality of Means (including post-hoc tests) on the sample of top Indian firms ranked on the basis of market capitalisation. The present research findings involve the use of several modulations and formulations in the spectrum of board characteristics regarding the testing of board governance in India. Findings of the study have contributed to the extant corporate governance literature by deprehending significant relationships between board, insider ownership structures and firm-specific characteristics that would guide the policymakers to devise suitable policies for Indian corporate boards in future.

On the Relation of Good Corporate Governance and Firm-Related Characteristics of Firms Listed on the Market for Alternative Investment (MAI), Thailand

On the Relation of Good Corporate Governance and Firm-Related Characteristics of Firms Listed on the Market for Alternative Investment (MAI), Thailand

Reputational damage of operational loss on the bond market: Evidence from the financial industry

We examine bond market reactions to the announcement of operational losses by financial companies. Thanks to the fact the corporate debt is senior to equity, we interpret the cumulated abnormal returns on the bond market of the companies having suffered those losses as a pure reputational impact of operational loss announcements. For a given operational loss, bond returns might be affected at up to three different periods: at the first press release date, when the company recognizes the loss itself and at the settlement date. These impacts hold stronger than for common stocks. We also study the effect of investors' knowledge of the loss amount, and show that the type of operational event and the proportion of the loss in the firm's market value influence the effect of the loss announcement. Cross-sectional analysis indicates that the abnormal return is mostly affected by market-based characteristics for the first press release date, while firm-related characteristics largely affect bond returns upon loss recognition.

Understanding inter-industry wage structures in the euro area

This article focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the Organization for Economic Co-operation and Development (OECD) Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in eight euro area countries for 1991–2002. Data inspection confirms the existence of a fairly stable inter-industry wage structure that is similar across countries. We then apply panel data techniques to identify factors explaining inter-industry wage differentials in the euro area. Both workforce characteristics (e.g. human capital variables) and firm-related characteristics (e.g. capital intensity, productivity) contribute significantly. However, considerable wage heterogeneity across sectors remains. Idiosyncratic sector and country specifics, reflecting different socio-cultural and institutional backgrounds, appear to bear a major role. While our empirical analysis only uses direct evidence from workforce and firm-related characteristics, we also relate the remaining heterogeneity to institutional characteristics, based on related literature.

Unreported Employment and Envelope Wages in Mid-Transition: Comparing Developments and Causes in the Baltic Countries

This paper compares the prevalence and determinants of unreported employment in the three Baltic countries in 1998 and 2002 using a hitherto little used data set. The prevalence of unreported employment varies substantially across the three countries and across the two sampling years. Microeconometric estimations show that firm-related characteristics, such as sectoral activity, firm size and employment changes, are important determinants of unreported employment in all three countries. The impact of socio-demographic factors, such as gender, age and education, is generally less important and varies across countries and time. Only a small part of the changes in unreported employment between 1998 and 2002 can be accounted for by changes in firm-specific factors and socio-demographic characteristics. Exploratory calculations suggest that the gain for individuals undertaking unreported employment is modest or non-existent, in particular among individuals who engage regularly in such activities. This suggests that the many of the recipients of envelope wages may have few alternatives to accepting unreported employment.

Understanding Inter-Industry Wage Structures in the Euro Area

This paper focuses on the euro area wage structure and its potential determinants from a sectoral viewpoint. Merging information from the OECD Structural Analysis database with data from the EU Labour Force Survey, we construct a cross-country panel of 22 industries in 8 euro area countries for 1991-2002. Data inspection confirms the existence of a fairly stable inter-industry wage structure that is similar across countries. We then apply panel data techniques to identify factors explaining inter-industry wage differentials in the euro area. Both workforce characteristics (e.g., human capital variables) and firm-related characteristics (e.g., capital intensity, productivity) contribute significantly. However, considerable wage heterogeneity across sectors remains. Idiosyncratic sector and country specifics, reflecting different socio-cultural and institutional backgrounds, appear to bear a major role. While our empirical analysis only uses direct evidence from workforce and firm-related characteristics, we also try to relate the remaining heterogeneity to institutional characteristics, based on related literature.

Evidence on the glass ceiling effect in France using matched worker-firm data

In this article, we investigate the relevance of the glass ceiling hypothesis in France, according to which there exist larger gender wage gaps at the upper tail of the wage distribution. Using a matched worker-firm data set of about 1 30 000 employees and 14 000 employers, we estimate quantile regressions and rely on a principal component analysis to summarize information specific to the firms. Our different results show that accounting for firm-related characteristics reduces the gender earnings gap at the top of the distribution, but the latter still remains much higher at the top than at the bottom. Furthermore, a quantile decomposition shows that the gender wage gap is mainly due to differences in the returns to observed characteristics rather than in differences in characteristics between men and women.

Financing of women-owned ventures: The impact of gender and other owner -and firm-related variables

While women-owned ventures represent an increasing proportion of new businesses in most western countries, most of them have particular financing patterns and encounter barriers in their access to financing. Recent research on the question argues that barriers to financing are mainly dependent on factors other than gender, such as owner- and firm-related characteristics. This quantitative and qualitative study, through descriptive statistics and interview analysis, examines the relationship between financing patterns and barriers and gender from the woman entrepreneur's viewpoint. It explores the behaviours and representations of women entrepreneurs towards financing, and considers to what extent the women see their own approaches as being different from those of men. Our study suggests that a gender effect still exists, and tries to identify its location and the corresponding implications for further research and action.

Sourcing performance satisfaction: A study of the critical success factors and firm-related characteristics

The aim of this paper is to identify the critical success factors (CSFs) of production sourcing for small and medium-sized clothing firms in Hong Kong, and to explore the effects of these factors and firm-related characteristics on satisfaction with production sourcing performance. A two-stage methodology was applied. In the first stage, a multiple-case study of ten small and medium-sized clothing firms in Hong Kong was undertaken to identify the CSFs and critical performance indicators of production sourcing. In the second stage, a questionnaire-based survey was conducted among 104 small and medium-sized clothing firms to test the developed hypotheses. Based on the findings, the two most significant success factors of production sourcing are the sustaining of long-term relationships with production providers and choosing production providers carefully. The two aspects of production sourcing performance that are most likely to lead to satisfaction are on-time delivery and better quality. The results show that the level of satisfaction with sourcing performance is influenced by certain CSFs and firm-related characteristics.

Theory and Evidence on the Glass Ceiling Effect Using Matched Worker-firm Data

We investigate the glass ceiling hypothesis according to which there exist larger gender wage gaps at the upper tail of the wage distribution. We demonstrate that in some circumstances, more qualified women may be offered lower wages than men at the equilibrium. This occurs for instance in a competitive model of wage determination where employers face gender-specific probabilities concerning the stability of their employees in their firms. Then, we focus on the relevance and the magnitude of the glass ceiling effect in France using a matched worker-firm data set. We estimate quantile regressions and use a principal component analysis to summarize information specific to the firms. Our different results shows that accounting for firm-related characteristics reduces the gender earnings gap at the top of the distribution, but the latter still remains much higher at the top than at the bottom.

The Motivations for Sourcing Production Offshore: A Multiple Case Study of Small and Medium-Sized Clothing Firms in Hong Kong

This paper studies the factors that motivate small and medium-sized clothing firms in Hong Kong to shift their production offshore, and identifies the interrelationships between these factors and firm-related characteristics, sourcing strategies, and buyer-supplier relationships. Using a multiple case methodology to study ten firms and a two-phase approach to collecting data involving, in-depth interviews and mail questionnaires, the two most important factors motivating the sourcing of production offshore are identified, as follows: (1) cost advantage of, and (2) availability of labour in, the host country. The results also show that industrial sector and firm size are the only firm-related characteristics that have an effect on the factors motivating offshore production. Furthermore, sourcing strategies and buyer-supplier relationships are sometimes influenced by these motivational factors.