Firms In Manufacturing Industry Research Articles

Exploring the relationship of discrete components of inventory with financial performance in Indian automotive industry

Inventory holdings and its discrete components [i.e., raw material inventory (RMI), work in process inventory (WIPI) and finished goods inventory (FGI)] are very important factors influencing the firm performance. The objective of this paper is to study the relationship between discrete components of inventory [raw material (RM), work-in-process (WIP), and finished goods (FG)], and financial performance in manufacturing companies. Statistical analysis has been applied to the financial information of 522 Indian automotive manufacturing firms over the ten-year period from 2002-2003 to 2011-2012. Through the analysis, this paper finds statistically significant relationships between the discrete components of inventory and measures of financial performance (at both the gross and operating levels) for firms in automotive manufacturing industries. This paper adds to previous literature by discussing and testing the relationship between the discrete types of inventory (RMI, WIP, and FGI) and firm's profitability of operations, both at the gross and at the operating profit levels.

Governing Interfirm Relationships for Social Sustainability: The Relationship between Governance Mechanisms, Sustainable Collaboration, and Cultural Intelligence

The concept of social sustainability is gaining attention within the field of supply chain relationships and international business. There are conflicting arguments regarding the effectiveness of contract governance and collaboration in an interfirm relationship. Previous studies have investigated the effect of a national culture on contract governance and opportunism. This study examines the effects of contract governance on collaboration, incorporating the moderating influence of cultural intelligence. Survey data were collected from 239 export manufacturing firms in different industries. The current authors suggest that contract governance might be more effective under conditions of a greater level of firm cultural intelligence capabilities. Cultural intelligence plays an important role in the shaping and implementation of collaboration and is the key to manage cross-culture relationship management in a supply chain. Cultural intelligence constitutes one potential way for the export industry to manage intercultural differences and profitably achieve an increase in collaboration. Collaboration with a socially responsible partner brings about improved social performance. The social dimensions of sustainability, such as fair labor practices and decent worker conditions, health and safety, no child labor, and employee empowerment must be addressed to accomplish the most sustainable growth. Managers also need to take advantage of cultural intelligence to adapt, collaborate, and share cultural knowledge.

Halal food standard implementation: are Malaysian firms proactive or reactive?

PurposeThe purpose of this paper is to investigate the reasons behind halal food standard (HFS) implementation among food manufacturers in Malaysia. Additionally, it examines whether firms in the Malaysian food manufacturing industry are proactive or reactive in implementing HFS.Design/methodology/approachA field survey was conducted in 210 halal-certified food manufacturers. A partial least squares structural equation modeling technique was used to examine the relationships between the reasons and implementation of HFS.FindingsThe empirical assessments revealed that organization’s commitment, operational improvement and marketing functions are the internal reasons. Meanwhile, government intervention and consumer pressure are the external reasons to implement HFS. Findings also indicated that Malaysian food manufacturers are proactive in implementing HFS.Practical implicationsThe knowledge from this research could encourage non-certified firms to implement HFS and entices halal-certified firms to remain certified. It guides managers toward adopting a better strategy, particularly in prioritizing the internal factors and resources for a more sustainable and positive implication.Originality/valueThis research is among the few studies that scrutinized the rationale behind the rapid growth of halal food industry. It argues that the pursuit of HFS is not solely a religious obligation, but it is also driven by safety, quality and marketing motives.

Is U.S. economic policy uncertainty priced in China's A-shares market? Evidence from market, industry, and individual stocks

This paper is motivated by Bali, Brown, and Tang (2017) who find U.S. economic policy uncertainty (EPU) is priced in the cross-section of U.S. stock returns, and uses weekly data from March 2006 to April 2016 to study whether shocks in U.S. EPU also influence prices of China's A-shares from a market, industry, and individual stock perspective. Our methodology relies on an ARMA (1,1) model to extract shocks in the U.S. EPU series and a GARCH (1,1) model to examine how returns of China's A-shares respond to these shocks after controlling for business conditions proxied by term and credit spread in China. Generally, we find that shocks in U.S. EPU significantly and negatively explain returns of Chinese A-shares with a lag of one week. In addition, the market index containing small and growth stocks is more sensitive to shocks in U.S. EPU than the index containing big and value stocks. Furthermore, we find that firms in manufacturing, information technology, and media industries in China are more sensitive to shocks in U.S. EPU, while firms in agriculture and real estate industries respond less to shocks in U.S. EPU. Finally, China's A-shares which decline more in response to shocks in U.S. EPU have higher returns, smaller market capitalization, weaker operating profitability, higher asset growth, and better past year's cumulative returns. Overall, our findings show that investors in the Chinese A-shares market require a premium to hold stocks that are sensitive to shocks in U.S. economic policy uncertainty.

The Role of Exports in the Transmission of Horizontal and Vertical Spillovers of Foreign Direct Investment: The Case of Turkish Manufacturing Industry

This study examines the role of exports in the transmission of horizontal and vertical spillovers of foreign direct investment for the Turkish manufacturing industry by using firm‐level data. Our objective is to test whether the export capacity of firms is one of the determinants of the occurrence of the horizontal and vertical spillovers generated by foreign direct investment. In order to determine whether the productivity effects arising from horizontal and vertical (backward and forward) spillovers are conditioned by the exports of firms, value added and total factor productivity equations for Turkish manufacturing industry firms for the years 2003–11 are estimated using the panel data method. Our estimation results show that the productivity effects generated by horizontal, backward, and forward spillovers of foreign direct investment are more pronounced for export‐oriented firms.

Engagement partner attributes and earnings quality: evidence from Borsa İstanbul

This paper investigates the effects of engagement partners' attributes on earnings quality using 725 firm*year observations between 2008 and 2013 from Borsa Istanbul manufacturing industry firms. We use two indicators of earnings quality to test the effects of gender, educational background, experience and certification from among engagement partners' attributes. Our findings emphasise that engagement partners' attributes do not have any impact on real activities-based earnings management but have an impact on accruals-based earnings management. Female engagement partners have a negative effect on the absolute value of discretionary accruals, especially in negative discretionary accruals. On the other hand, we find that engagement partners with longer experience have negative impact on the absolute and negative discretionary accruals.

Is U.S. Economic Policy Uncertainty Priced in China's A-Shares Market? Evidence from Market, Industry, and Individual Stocks

Motivated by Bali et al. (2016) who find U.S. economic policy uncertainty (EPU) is priced in the cross-section of U.S. stock returns, we use weekly data from March 2006 to April 2016 to study whether shocks in U.S. EPU also influence prices of China's A-shares from market, industry, and individual stock perspectives. Generally, after controlling business conditions in China, we find the shock in U.S. EPU significantly and negatively explains returns of China's A-shares with a lag. In addition, the market index containing small and growth stocks react more significantly to the shock than the index containing big and value stocks. Furthermore, we find firms in manufacturing, information technology, and media industries in China are more sensitive to the shock in U.S. EPU, while firms in agriculture and real estate industries in China correspond less to the shock in U.S. EPU. Finally, China's A-shares which decline more in response to the shock in U.S. EPU have higher stock returns and those stocks have smaller size, weaker operating profitability, higher asset growth, and better past year's cumulative return. Overall, our findings show that investors of China's A-shares require a premium to hold stocks sensitive to the shock in U.S. EPU.

PENGARUH KUALITAS MANAJER PAJAK TERHADAP PENGHINDARAN PAJAK DENGAN ETIKA MACHIAVELLIAN SEBAGAI PEMEDIASI

This study aims to examine the effect of tax managers' quality on tax avoidanceof manufacturing industry firms listed on the Indonesia Stock Exchange withmachiavellian ethics as intervening. Using path analysis model with WarpPLS 5.0. This study examined the primary data for tax manager qualities and machiavellian ethics obtained from 103 tax managers working in manufacturing industry firms at IDX and secondary data from financial statements for tax avoidance. There are 10 tax avoidance indicators used as a proxy. This study gives results that the quality of tax managers have a significant positive effect on Machiavellian ethics. However, machiavellian ethics can not mediate the influence of tax manager quality on tax avoidance.

How emerging digital technologies affect operations management through co-creation. Empirical evidence from the maritime industry

Globalization, variation in customer expectations, and the developments connected to Information & Communication Technology are usually considered as the main drivers of changes in Operations Management (OM) strategies by firms in both manufacturing and service industries. Emerging digital technologies, such as Internet of Things or Cloud Computing, represents a novel paradigm that is rapidly affecting on several aspects of everyday-life of private and business users. This paper contributes to extant literature about the relationship between emerging digital technologies and OM, by stressing the value co-creation issue. Specifically, we investigate how emerging digital technologies affect OM through value co-creation in the maritime industry. Our study reports the case of FairWind project, an open technology marine service and graphic user interface enabling sailors to personalize their experience on board through 3rd party boat applications. The case of Fair Wind points out how emerging digital technologies contribute to OM within both organizations and, more in general, maritime industry, as well as the critical role of user’s co-creation in defining and managing on-board operations.

Engagement Partners Attributes and Earnings Quality: Evidence from Borsa stanbul

This paper investigates the effects of engagement partners’ attributes on earnings quality using 725 firm*year observations between 2008 and 2013 from Borsa Istanbul manufacturing industry firms. We use two indicators of earnings quality to test the effects of gender, educational background, experience, and certification from among engagement partners’ attributes. Our findings emphasize that engagement partners’ attributes do not have any impact on real activities-based earnings management but have an impact on accruals-based earnings management. Female engagement partners have a negative effect on the absolute value of discretionary accruals, especially in negative discretionary accruals. On the other hand, we find that engagement partners with longer experience have negative impact on the absolute and negative discretionary accruals.

Industrial Development: Assessment of Economic Performance and Competitiveness, Johannesburg in 2015

Following the financial crisis in 2008 and the drop in commodity prices, the performance of firms in the manufacturing industry continues to worsen. The data released by Statistics South Africa in 2016 alludes to poor performance by firms and the manufacturing sector’s continual decline to contribution to economic growth. This decline has been coupled with increasing unemployment, inequality and poverty levels. Notwithstanding this, one of the key objectives of South Africa’s Department of Trade and Industry’s Industrial Policy Action Plan is to stimulate greater economic growth and develop labour-absorbing sectors, particularly in the manufacturing sector. The sustainability of the manufacturing sector is key, however, there is limited information on the factors that drive it. Recognising and appreciating the nature of manufacturing and the challenges faced by firms can assist policymakers to devise interventions which can stimulate inclusive growth and job-creation in Johannesburg. The Centre for Competition, Regulation, and Economic Development (CCRED) at the University of Johannesburg undertook a firm-level survey to understand the nature of economic activity in Johannesburg’s 26 industrial nodes. Based on this survey, this paper analyses responses on economic performance, competitiveness and the challenges faced submitted by over 300 firms. In-depth interviews with 45 firms were also conducted to deepen the insights from the survey. Changes in growth; exporting patterns; investments and level of skills were assessed as an indication of economic performance and competitiveness. Despite the consensus that economic performance is weak, this study offers a different perspective. A significant proportion of firms exhibited growth in the past 3 years due to their sector grouping, access to the export market and investment in machinery and equipment, among other factors. The paper offers recommendations to address ways to stimulate economic performance and competitiveness in Johannesburg.

The role of horizontal and vertical new product alliances in responsive and proactive market orientations and performance of industrial manufacturing firms

This study examines different roles of new product alliance partners in enhancing responsive market orientation (RMO) and proactive market orientation (PMO) of industrial manufacturing firms in the context of learning in business-to-business (B2B) relationships. A survey of 146 firms shows that horizontal new product alliances with competitors provide access to similar industrial knowledge and know-how and thus help improve a manufacturing firm's RMO through exploitative learning. Although vertical new product alliances with suppliers may grant access to similar domains of knowledge, the findings of this study do not provide any support for their effect on a manufacturing firm's RMO. In contrast, the study shows that vertical new product alliances with research institutions provide access to a broader knowledge base and greater know-how with higher levels of non-redundancy and thus help improve a PMO through explorative learning. In addition, the results suggest that both RMO and PMO developed in different types of new product alliances enable a manufacturing firm to improve its new product performance and eventually its overall performance.

Inter-firm Relationships and Asset Prices

This paper proposes a novel link between the propagation of shocks within production networks and asset prices. It develops a dynamic network model in which the propagation of firm cash-flow shocks via inter-firm relationships affects the economy's equilibrium asset prices. When calibrated to match key features of customer-supplier networks in the United States, the model generates long-run risks, high and volatile risk premia, and a low and stable risk-free rate. Consistent with data from firms in manufacturing and service industries, the model predicts that central firms in the network command lower risk premiums than peripheral firms, and that firm-level return volatilities exhibit a high degree of co-movement.

Effect of firm s export-orientation on backward spillovers of foreign direct investment in Turkish manufacturing industry

This study examines the direct and indirect or spillover effects (horizontal and vertical) of FDI with special emphasis on the backward spillover effects. My main purpose is to examine whether the effect of backward spillovers generated by export oriented foreign owned firms is larger on productivity of domestic firms than backward spillover effect generated by domestic oriented foreign owned firms by using firm-level data for the years 2003-2011. With this purpose, value added and total factor productivity equations with two different measures of backward spillover effects for Turkish manufacturing industry firms are estimated by using the panel data method. My empirical results are consistent with the existence of positive horizontal and vertical spillovers of FDI. My estimation results also show that the backward spillover generated by export oriented foreign owned firms is larger than the backward spillover generated by domestic oriented foreign owned firms.

Dynamic R&D choice and the impact of the firm's financial strength

ABSTRACTThis article investigates how a firm's financial strength affects its dynamic decision to invest in R&D. We estimate a dynamic model of R&D choice using data for German firms in high-tech manufacturing industries. The model incorporates a measure of the firm's financial strength, derived from its credit rating, which is shown to lead to substantial differences in estimates of the costs and expected long-run benefits from R&D investment. Financially strong firms have a higher probability of generating innovations from their R&D investment, and the innovations have a larger impact on productivity and profits. Averaging across all firms, the long-run benefit of investing in R&D equals 6.6% of firm value. It ranges from 11.6% for firms in a strong financial position to 2.3% for firms in a weaker financial position.

Sources of resources, alliance green management, and alliance performance in an emerging economy

The question of how to improve green management (GM) is very important for the sustainable development of the world. While this topic has been extensively investigated at the single firm level in the developed countries, it was insufficiently examined in the context of interfirm alliances, especially in developing countries like China. The current study examines how different sources of resources (internal resource accumulation and external resource acquisition) affect the level of alliance green management (AGM). In addition, entrepreneurial orientation (EO) that represents the willingness of firms to adopt new practices has moderating effects on the above relationships. Moreover, the effect of AGM on alliance performance is also examined. We collected multisource data from 164 alliance firms in Chinese manufacturing industry. The results generally support the proposed hypotheses. This study contributes to both GM and alliance research by identifying the internal and external resource factors that influence firms from emerging economies to practice GM in their alliance operations.

Do stock returns provide a good hedge against inflation? An empirical assessment using Turkish data during periods of structural change

This paper provides empirical evidence on the relation between stock returns and inflationary expectations using a panel of firm level data covering a broad range of industries and Turkish common stock market index from 1986 to 2013. I use survey of inflationary expectations to examine Fisher hypothesis where I show, no matter the data is aggregate or disaggregate; ex-ante inflationary expectations and stock returns are positively related, whereas ex-post inflationary realizations are negatively related. I find that holding stocks of manufacturing industry firms provide for about 15% better hedge in comparison to that of service industry firms.

Leveraging internal resources and external business networks for new product success: A dynamic capabilities perspective

Internal resources such as technological and human capital, together with a firm's business network, are vital sources of knowledge for new product development. Previous studies largely assume that a firm's internal resources and its external resources embedded in a business network are complementary in new product development. This study draws on the dynamic capabilities perspective to take the existing literature one step further. Our hypotheses were tested using a sample of 130 Chinese manufacturing firms in high-technology industries. Interestingly, the findings reveal a more complex picture of resource interplay between internal resources and external resources embedded in a firm's business network. More specifically, the findings show that a firm's power in its business network influences the effect of its internal resources on its ability to sense and seize opportunities, a vital dynamic capability. More importantly, the findings suggest that such dynamic capability plays a pivotal role in translating the benefits of resource-interplay into new product success.

Entrepreneurial orientation and human resource management: effects from HRM practices

Purpose– The purpose of this paper is to explore the relationship between HRM practices and entrepreneurial orientation (EO) in large established firms. More specifically, the purpose is to add to the understanding of the influence of HRM practices on EO.Design/methodology/approach– An e-mail survey was distributed to a sample of Swedish and German manufacturing firms in high-tech and medium high-tech manufacturing industries, and firms in knowledge-intensive services sectors, with more than 250 employees. In total, 810 surveys were distributed, with a response rate of 12.7 per cent.Findings– The results show that an emphasis on entrepreneurial aspects leads to an increased EO only in the case of training and development. A conclusion therefore is that it seems difficult to recruit personnel or to use appraisal and rewards as to create EO on a firm level.Practical implications– The study indicates that firms aiming to increase their EO should make sure to emphasize entrepreneurial aspects during staff training and development activities.Originality/value– This empirical study paves the way towards a better understanding of the link between HRM practices and EO. The results should be of interest for both HR professionals and researchers interested in understanding this important relationship.

A Research on the Performance and Characteristics of the Firms in Turkish Manufacturing Industry

This study aims to determine the factors affecting the performance of companies operating in the Turkish manufacturing industry. The sample of the study consists of 25394 firms which have been active in Turkish manufacturing industry between the years 2005 and 2011. Heckman sample selection model is used for the assessment of the growth and survival probabilities of the firms. According to the research model, it was found that the factors affecting firm performance are firm and industry based factors. It is concluded that Innovation, R&D, export and branch variables have positive significant effects on the performance of the manufacturing industry firms.