Iranian Firms Research Articles

Evaluation of the effect of R&D subsidies on Iranian firms’ innovative behavior

PurposeThe purpose of this paper is to evaluate the effect of government intervention on a firm's innovation activities.Design/methodology/approachOn the basis of previous literature, this paper proposes a framework to explain behavioral changes in the firm resulting from government interventions. Using propensity score matching technique, this research tries to estimate the effect of R&D subsidies on Iranian firms (small and medium-sized enterprises and large-sized firms).FindingsThis paper identified that R&D subsidies have a significant effect on the innovation process. Furthermore, investigations indicate that behavioral variables (innovation capabilities, collaboration agreements and risk-taking) have been partly changed in both SMEs and large firms after subsidizing. The analysis of innovation outputs showed that although R&D subsidies significantly increase the number of new products/services or patents (especially for SMEs), it could not increase the total sale of the firms. These results show that the effect of R&D subsidies has not interestingly covered all variables influencing innovation activities.Research limitations/implicationsThe work used dynamic capability theory, transaction cost theory and behavioral theory of the firm to explain behavioral changes in the firm resulting from government interventions.Practical implicationsThis paper proposes several policy concerns which can help the policymakers to stimulate the innovation support procedures in Iran.Social implicationsThis paper provides insights for improved policymaking which in turn can aid boosting social welfare.Originality/valueThis paper re-conceptualized behavioral additionality based on firms’ behavioral theories and evaluated the effects of Iranian R&D subsidies on their measures.

Iranian firms in biopharmaceutical value chain: where to go now?

PurposeMotivated by the huge potential of biosimilars in the near future and rapid growth of Iranian biosimilar producing firms in recent two decades, this paper aims to explore the positioning of these firms in biopharmaceutical value chain and their path of technological capability building to extract policy-relevant advice.Design/methodology/approachAs part of a two-year research project, an online questionnaire was designed and sent to biopharmaceutical experts in Iran between May and October 2016. Respondents came from biopharmaceutical firms. Also, 12 semi-structured interviews were conducted to analyze the path of capability building in Iranian biosimilar-producing firms.FindingsThe findings show that Iranian biopharmaceutical firms (BPFs) are mostly concentrated on “pharmaceutical development,”, “drug manufacturing” and “ after-sales services’ activities.” The study also demonstrates that most BPFs in Iran are at the “assimilative” level of capability and a few of them have recently moved toward the “adaptive” level.Originality/valueThe findings show that Iranian BPFs are mostly concentrated on “pharmaceutical development,” “drug manufacturing” and “after-sales services” activities. The study also demonstrates that most BPFs in Iran are at the “assimilative” level of capability and a few of them have recently moved toward the “adaptive” level.

Investigating the Relationship between Working Capital Management and Stock Price Crash Risk

The main purpose of this study is to investigate the effect of working capital management on stock price crash risk. The sample includes 103 Iranian firms listed on the Tehran Stock Exchange from 2013 to 2017. Panel data analysis with fixed effect estimation has been used to analyze the relationship between working capital management and stock price crash risk. Cash conversion cycle, working capital requirement, current, and quick ratios were applied as comprehensive measures for working capital management, and Hutton’s model was applied as a measure for stock price crash risk. The results indicate that there is a negative relationship between working capital indicators and stock price crash risk. Therefore, managers can use working capital strategies to decrease the risk of the stock price crash. Furthermore, asymmetry information may, in fact, increase a manager’s incentive to use working capital strategies to reduce the stock price crash risk.

Determinants of dividend payout and dividend propensity in an emerging market, Iran: an application of the LASSO

ABSTRACTAccurate prediction of dividends is important for market participants such as investors, firm managers, and monitoring authorities, as they can, respectively, invest, manage dividend decisions, and monitor dividend policies more effectively. We identify the most relevant variables for predicting the dividend payout of the firms in an emerging market, Iran, using the least absolute shrinkage and selection operator (LASSO). The advantages of the LASSO include: enhancing the prediction accuracy of the dividend model, improving interpretation of the results, and applicability to high-dimensional data. We obtain several results. First, some fundamental determinants of dividends in the industrialized economies such as market-to-book ratio and current ratio, do not play a role in deciding dividends in Iran. Second, LASSO-selected variables outperform the variables commonly used in the literature in terms of model fit and prediction accuracy. Third, business risk, leverage, return on assets and effective tax rate are the most important predictors of dividend propensity of the Iranian firms. Fourth, if the support vector machine algorithm, an often-used classification method, is combined with LASSO-selected variables, it can better discriminate between dividend-paying and dividend non-paying firms than other methods such as logistic regression and linear discriminant analysis.Abbreviations: LASSO: Least Absolute Shrinkage and Selection Operator; TSE: Tehran Stock Exchange; RMSE: Root Mean Squared Errors; MAE: Mean Absolute Errors; ROC: Receiver Operating Characteristics; GMM: Generalized Method of Moments; MENA: Middle East and North Africa region; AIC: Akaike Information Criterion; BIC: Bayesian Information Criterion; LARS: Least Angel Regression; OLS: Ordinary Least Squares; AUC: Area Under Curve; BS: Brier Score ; OA: Overall Accuracy; LDA: Linear Discriminant Analysis; SVM: Support Vector Machine algorithm; LR: Logistic Regression.

An integrated fuzzy analytical network process for prioritisation of new technology-based firms in Iran

The performance evaluation and prioritisation of knowledge-based firms which are working in science and technology parks enable the decision makers (DMs) to specify the benchmarks (the best firms) and grant them or help other firms to improve their performance. In this paper, the performance of new technology-based firms (NTBFs) in Iran is evaluated through a multi-criteria decision-making method. To do so, at the first the most important criteria to assess the performance of the NTBFs are proposed according to the literature and experts' opinions. Then, due to complex relationship and correlation among these criteria, an integrated fuzzy analytic network process (ANP) is proposed to evaluate NTBFs under uncertainty of evaluation parameters. The results show that the applied approach is a suitable tool for prioritisation of NTBFs.

The Role of Customer Commercial Knowledge Management in Improving the Performance of Employees of Insurance Firms in Iran

The purpose of this article is to determine the effect of customer commercial knowledge management on the performance of employees of insurance firms. The population comprises the employees of all insurance companies of Ardabil province in Iran. Due to the small size of the population, no sampling was carried out and the population was examined through a census procedure. Data collection was carried out using Newman and Conrad's knowledge management questionnaire and Patterson's job performance questionnaire. A data analysis was conducted with Pearson correlation and regression analysis using SPSS software. The results showed that customer commercial knowledge management can predict staff performance; hence, it is one of the effective factors in improving staff performance.

An integrated fuzzy analytical network process for prioritisation of new technology-based firms in Iran

An integrated fuzzy analytical network process for prioritisation of new technology-based firms in Iran

Nonlinear relationship between institutional investors' ownership and capital structure: evidence from Iranian firms

The main objective of this study is to examine how institutional investors and different types of them influence the firms' capital structure. Using a panel data including 240 the main market Iranian firms from 2012 to 2016, the results of this study show that there is a nonlinear relationship between institutional ownership and capital structure. First, we look for a quadratic relationship but we did not find any evidence to support it. Further, we test for a cubic association in the next stage. The results reveal a cubic relationship between institutional ownership and capital structure but this association is different for different types of institutional investors. Pressure-sensitive institutions have positive, negative and again positive influence; while inversely pressure-insensitive institutions have a negative, positive and again negative impact on debt ratio in different levels of their ownership.

Nonlinear relationship between institutional investors' ownership and capital structure: evidence from Iranian firms

The main objective of this study is to examine how institutional investors and different types of them influence the firms' capital structure. Using a panel data including 240 the main market Iranian firms from 2012 to 2016, the results of this study show that there is a nonlinear relationship between institutional ownership and capital structure. First, we look for a quadratic relationship but we did not find any evidence to support it. Further, we test for a cubic association in the next stage. The results reveal a cubic relationship between institutional ownership and capital structure but this association is different for different types of institutional investors. Pressure-sensitive institutions have positive, negative and again positive influence; while inversely pressure-insensitive institutions have a negative, positive and again negative impact on debt ratio in different levels of their ownership.

Human Resource Management Challenges to Develop Pharmaceutical Industry: Evidence from Developing Countries.

Human resource management has increasingly become one of the most important challenging issues in the pharmaceutical industry in general and in developing countries in particular to increase the access of societies to needed medicines. In this study, an attempt was made to explore the challenges of human resource management practices surrounding pharmaceutical firms in Iran, as a developing country. To answer the research question, a qualitative descriptive study using thematic analysis was performed through 22 semi-structured interviews with the key informants of Iranian pharmaceutical industry. Extracted themes of interviews were categorized into three main groups namely ability, motivation, and opportunity challenges based on the AMO model and briefly discussed separately. This is the first study investigating HRM challenges in the pharmaceutical industry; the research contributes to developing knowledge of human resource practices and assist pharma managers with better understanding how well implement human resource practices.

Audit Firm Ranking, Audit Quality and Audit Fees: Examining Conflicting Price Discrimination Views

In this study, we examine whether highly ranked audit firms in Iran, as determined by the Securities and Exchange Organization (SEO), earn a fee premium, firstly, by providing superior quality audit services or, secondly, due to reputation created by the ranking system implemented by the SEO. We employ price discrimination theory, and we test quality discrimination versus brand reputation explanations in the context of a unique institutional setting (where international audit firms are not allowed to operate). The data are derived from firms listed on the Tehran Stock Exchange (TSE) for the period 2006 to 2015. Our results show that the quality of audit services (using all of our measures) provided by the highest ranked audit firms is not superior to that of the non-highest ranked firms. In addition, the audit fee models suggest that the highest ranked firms charge significantly more audit fees compared to lower ranked firms. We employ several sensitivity tests and the results do not change materially. Such findings go against the “quality-based price discrimination” view but support the reputation-based view, and make a significant contribution towards understanding the economic consequences of state-determined ranking of audit firms rather than allowing the market to determine quality differentiation.

Operational efficiency of plastic producing firms in Iran: a DEA approach

PurposeFirms are working in a complex environment in which the updated information increase the pace of precise decision making and reduce the risk of wrong decisions. Therefore, discovering firms’ performance is a major issue. The purpose of this paper is to evaluate the efficiency of Iranian plastic producing companies by using data envelopment analysis (DEA). It also discovers various drivers that significantly affect the efficiency of enterprises.Design/methodology/approachThe authors studied a sample of 17 manufacturing firms to examine the relative efficiency of companies. They, then, evaluated the effects of efficiency drivers and used two methods for these purposes: DEA and bootstrapped Tobit regression model.FindingsThe study has shown that two manufacturing firms out of selected 17 are efficient under the Charnes, Cooper, and Rhodes model. Also, nine out of 17 plastic producing companies are productive under the Banker, Charnes, and Cooper model. The results of Tobit regression shows that only two efficiency drivers out of four have a significant positive influence on the efficiency of plastic producing firms.Research limitations/implicationsConsidering one industry and country limits the generalizability of the results provided. Besides, data availability has limited the analysis in some parts, particularly in bootstrapped Tobit regression.Practical implicationsThe authors listed this section into benchmarking and strategical management; more importantly, the suggestions for improving the chemical industry and its future evolution are presented.Originality/valueThe paper is classified into two issues: the efficiency of plastic producing firms in Iran and evaluating the reason for inefficiency, apart from internal managerial procedures.

The Effect of Two Dimensions of CEO Political Ideology on Corporate Entrepreneurship

We examine how two dimensions of CEOs’ political ideologies – social and economic – each influences top management team (TMT) decision-making processes and in turn corporate entrepreneurship. We theorize that CEOs’ social liberalism influences the amount and types of information used during TMT decision-making processes, while CEOs’ fiscal liberalism influences the degree of cooperation occurred during TMT decision-making processes. We also hypothesize that these two ideology dimensions influence corporate entrepreneurship through TMT decision-making processes. We test our theory with a sample of 141 small and medium-sized Iranian firms. We find that TMTs with socially liberal CEOs tend to go through more extensive information search processes, which in turn is negatively related to corporate entrepreneurship, and that TMTs with fiscally liberal CEOs tend to go through more cooperative processes, which in turn is positively related to corporate entrepreneurship. This study re-conceptualizes executive political ideology by disentangling the distinct effects of social and economic dimensions of ideology and yields new theoretical insights on the implications of executive political ideologies for firm strategies and outcomes. In addition, through explicit examination of the mediating mechanisms, this study develops more precise theoretical explanations of how CEO political ideologies affect strategic behaviors.

Catch-up process in nanotechnology start-ups: The case of an Iranian electrospinning firm

This paper analyzes the catch-up process in nanotechnology firms in Iran and shows how an academic research team can grow and become an exporter of nanotechnology industrial equipment. To this end, an in-depth case study was done on a manufacturer of electrospinning systems for producing nanofibers. The quantitative data were analyzed and theorized using the technique of grounded theory. The study was designed based on the theoretical framework of technological catch-up with a sectoral innovation systems approach.The study explains how the key components of the system, including different sources of knowledge and technology, the structure of the market and customers, the government supports and foreign sanctions affected the catch-up process of the case firm. This study shows that the starting point and the stages of catch-up process by the firms in sanctioned countries may significantly differ from those for the companies in other developing countries.

Integrating Implicit Leadership Theories, Leader-Member Exchange, Self-Efficacy, and Attachment Theory to Predict Job Performance.

The impact of implicit leadership theories on performance and the mechanism linking them have received insufficient theoretical and research attention. Drawing on Bandura's social cognitive theory, the present study contributes theory through examining the assertion that higher congruence between followers' implicit leadership theory and the characteristics of supervisors enhance job performance through higher quality of leader-member exchange and self-efficacy. Moreover, in the proposed model, attachment insecurity was considered as the antecedent of the congruence and leader-member exchange in addition to the moderator of the relationship between them. Capitalizing upon Structural Equation Modeling (SEM), this study tested the model in a field study using a sample of employees in knowledge-oriented firms in Iran. The results suggest that the congruence between followers' implicit leadership theory and the characteristics of supervisors does not directly impact performance and leader-member exchange and self-efficacy are the full mediators. The results also showed that attachment insecurity is the predictor of neither the congruence nor the leader-member exchange. Additionally, attachment insecurity moderates the relationship between these two variables in a way that when attachment insecurity is high, the congruence has more positive impact on leader-member exchange.

Earnings quality and managerial access to debt financing: empirical evidence from Iran

PurposeThe purpose of this paper is to establish a linkage between two rarely researched areas, i.e. earnings quality (EQ) and access to external and internal debt financing. Specifically, the authors aim to examine whether the quality of a firm’s reported earnings is significantly associated with its access to both private and bank debt financing.Design/methodology/approachThe authors test the hypotheses by employing panel data analysis for a sample of 108 companies listed on the Tehran Stock Exchange (TSE) during 2006-2015. The tests were conducted by using R econometric software.FindingsAfter controlling for some firm-specific factors and consistent with the primary expectations, the results reveal a significant and positive relationship between EQ and managerial access to external (bank) debt financing. In addition, the findings indicate that EQ is negatively associated with internal debt financing which is measured as the changes in firm retained earnings.Research limitations/implicationsAlthough the authors cautiously conducted the present study, there are some limitations that merit further consideration. First, the authors collected the data manually from 14 categories of industries in the TSE and, accordingly, an aggregate analysis across multiple categories of industries might have missed industry-specific and unique issues. Second, the authors used a narrow conceptualization of accruals quality which merely assesses a firm’s EQ. The measures can be enhanced by including more actionable proxies. Third, since the data on debt financing were collected from two different sources, this might have caused common method variance in the results procedurally.Originality/valueSince the fundamental institutional assumptions underpinning the Western and even East Asia debt contracting and EQ models are not valid in the institutional environment of Iran, the findings could provide substantial implications for the understanding of both debt financing and the quality of earnings. These significant institutional and ownership differences are the factors affecting firms’ leverage and capital choice decisions. Indeed, the study has laid some groundwork upon which a more detailed evaluation of the Iranian firms’ financial structure could be based.

Key success factors for logistics provider enterprises: an empirical investigation in Iran

PurposeThis study aims to determine the key success factors of logistics provider enterprises in Iran, a country which has a significant potential for logistics activities among the Middle East countries, and connects the Asian, European and African logistics networks.Design/methodology/approachThis study is an applied one in terms of goal and descriptive according to the data collection method. Survey analysis is conducted with 130 Iranian logistics provider firms. The 119 responses to the questionnaire are evaluated statistically, and thereafter, analytic hierarchy process and decision-making trial and evaluation laboratory (DEMATEL) methods are used to prioritize the obtained key success factors.FindingsA comprehensive list of logistics provider firms’ key success factors are provided according to literature and opinion of experts. Among the aforementioned list, the authors found that management and leadership, internationalization and the competence of employees are the most important key success factors of logistics provider firms in Iran.Originality/valueThis is the first research that studies the key success factors of logistics provider firms in Iran. As Iran is an important intermediate country in the Middle East logistics corridor, it is worthy for practitioners and investors to know about success factors of logistics provider companies in Iran. In fact, focusing on the key success factors determined in this research assures the competitiveness of logistics provider firms in Iran. Moreover, the results can be also useful for some other countries in the Middle East such as Turkey and Emirates and can be used to enhance the logistical performance of the Middle East logistics network.

The antecedents of firm innovativeness: empirical evidence from small-sized firms

In this paper, we investigated the effect of customer relationship management initiation on firms marketing information and then we tested how these two factors accelerate idea generation (innovativeness) within small-sized firms. We tested these relations by using original data from 103 Iranian small-sized firms. Results indicate that customer relationship management initiation leads to the improvement of organisational marketing information significantly. We also found a positive relationship between firms' customer relationship management initiation and firm innovativeness and a positive relationship between firms' marketing information utilisation and firm innovativeness. Limitations of the study are indicated and directions for future research are noted.

The impacts of learning strategies and creativity on knowledge workers' innovation in Iranian knowledge-based firms

This paper aims to study the relations of learning strategies, creativity and workers' innovation in electricity distribution companies of Isfahan province. Particularly, learning strategies consist of two dimensions of exploitative and explorative learning and creativity is measured by two improvisational and compositional dimensions. A total number of 155 employees were included in the research which 112 of them were considered as sample according to Cochran's sampling techniques. Due to the small sample size, data collection was conducted by using a questionnaire-based survey in all firms. Data analysis was performed in two main phases with using variance based structural equation modelling by Smart PLS. The first phase assesses measurement model and the second one examines the hypotheses through analysis of the structural model. Results show that both exploitative and explorative learning's as well as compositional and improvisational creativities have positive and significant effect on knowledge workers' innovation.

Customer relationship management: Innovation and performance

The aim of this study is to empirically test a framework which identifies the relationships between customer relationship management (CRM) practices, organizational performance and innovation capability of Iranian manufacturing firms.,Data for the study were collected from a sample of 211 Iranian manufacturing firms. The research model was tested using structural equation modeling.,The results reveal that CRM practices have a positive and significant, though weak, effect on organizational performance and innovation capability of Iranian manufacturing organizations. Innovation improvement caused by CRM also results in better organizational performance.,Because this study is conducted in Iranian manufacturing organizations, it implies that the generalizability of this study’s findings is limited to the manufacturing firms in Iran and cannot be applied to other markets without a further validation.,This empirical research has extended our understanding of CRM components and their impact on business performance and innovation capability of Iranian manufacturing firms which have not been addressed together in previous empirical studies in Iran. Also, the obtained findings offer the Iranian manufacturing executives and managers strategic insights in relation to CRM implementation, CRM items and, more importantly, the most influential components of CRM on the manufacturing organizations’ performance and innovation.,This paper shows the importance of CRM practices and how they directly influence organizational and innovation capabilities of the Iranian firms. This study is among the few studies which attempt to empirically investigate the relationships between these variables particularly in the context of Iran.