Firms In Manufacturing Sector Research Articles

Globalisation and competitive strategies of firms in traditional manufacturing sectors of the West Midlands

In the context of globalisation, the sustainability of traditional manufacturing sectors depends on the ability of firms to modernise and diversify. To remain competitive against emerging economies in high-volume and low-technology areas, firms must engage in high-value manufacturing. This paper uses theoretical underpinnings from strategic management and place-based approaches to provide a historical account of competitive strategies of traditional manufacturing firms in the West Midlands region of the UK between 2010 and 2012 where the automotive, ceramics, glass and clothing sectors are examined. The research methodology is based on critical realist philosophy, which emphasizes an in-depth understanding of firm behaviour and acknowledges sensitivity to differences in decision-making. The paper highlights the complexity of competitive behaviour, which is influenced by enabling and constraining factors. While the evidence presented in the paper is from 2010 to 2012, it emphasizes the need for a participatory, farsighted, and proactive policy approach to retain the historic industrial character of the region.

How to configure the supply chain to stimulate firm innovation performance?

Supply chain characteristics are an important driving force for innovation at the focal firm. Previous research has separately examined the impact of structural, relational, and capability dimensions of the supply chain on firm innovation. Relying on the structure-relationship-capability framework, this study explores the configurational impact of geographical distance, business concentration, and partner innovation of both the supplier-base and the customer-base on firm innovation. Necessary causality analysis (NCA) and fuzzy-set qualitative comparative analysis (fsQCA) are employed. Based on a dataset of 123 Chinese listed firms in high-tech manufacturing sectors, we provide novel insights on the antecedent configurations of the partner characteristics in both ends of supply chains for facilitating firm innovation. Our findings indicate that there are no necessary conditions for high firm innovation performance. We identify three distinct paths - namely, innovation-driven, customer-dominated, and relationship-driven configurations - that consistently lead to high firm innovation performance. From a configurational perspective, this research contributes to the innovation and supply chain literature and provides practical implications for managers to facilitate firm innovation.

SME digital transformation and the COVID-19 pandemic: a case study of a hard-hit metropolitan area

Abstract Cities and regions are facing diverse challenges, and the transformation to a digital economy is a core issue. The coronavirus disease-2019 (COVID-19) pandemic has had widespread impacts on business, and it has heightened the need for digitalization. We analyse if and to what degree the COVID-19 pandemic has accelerated the digital transformation of small and medium-sized enterprises (SMEs) in the metropolitan region of Madrid. Our research strategy is based on a quantitative analysis of survey data at the company level. Our results show that a large share of SMEs invested in digital technologies as a response to the pandemic, but there are also important differences between basic and more advanced digital technologies and between manufacturing and service sector firms. SMEs’ previous knowledge and technological resources and capabilities, as well as their collaboration networks with providers are found to trigger adoption of digital technology. Implications for postpandemic policies are highlighted.

An analysis of capital structure heterogeneity for manufacturing and service sector firms

PurposeWe aim to analyze the capital structure heterogeneity for manufacturing and service sector firms. Additionally, we analyze the impact of the COVID-19 pandemic on the leverage adjustments of corporate firms.Design/methodology/approachThis study applies the two-step system generalized method of moments (system-GMM) and panel data of 1,115 manufacturing and 482 service sector firms listed with the Bombay Stock Exchange (S&P BSE) from 2010 to 2023. We developed and analyzed three models. Model 1 analyzes the leverage determinants and speed of adjustment (SOA) for the manufacturing and service sectors. Model 2 evaluates the leverage SOA for various sub-sectors, and Model 3 analyzes the impact of the COVID-19 pandemic on the leverage SOA.FindingsThis study suggests the three following. First, the direction of leverage determinants suggests that manufacturing firms are highly tangible. In contrast, service sector firms are high-growth firms and recorded a higher SOA (12.01%) than manufacturing (9.09%). Second, analyzing the leverage heterogeneity, we found that SOA varies across the sub-sectors. For manufacturing, food and beverage sub-sector recorded the highest SOA (12.58%), while consumer durables reported the lowest (6.38%). Communication recorded the highest (24.15%) for services, while industrial services recorded the lowest (11.18%). Third, firms across sectors and sub-sectors increased their SOA during COVID-19 pandemic.Research limitations/implicationsThis in-depth analysis of leverage heterogeneity for different sectors and subsectors will assist policymakers, corporate managers and other stakeholders in making agile financial decisions.Originality/valueThe analysis of leverage heterogeneity for the manufacturing and service sector from the emerging Indian economy marks a novel contribution to existing literature.

Implementation of Corporate Governance in Emerging Markets: Indonesia Stock Exchange and Singapore Stock Exchange

The objective of this study is to examine the execution of corporate governance in manufacturing sector firms listed on Indonesia and Singapore's stock exchanges. The study reveals that an increase in the frequency of audit committee meetings has a substantial and favorable impact on Indonesia's financial performance. Conversely, in the case of Singapore, there is a notable adverse impact on financial performance. However, the presence of an independent board of commissioners, a higher frequency of commissioner’s meetings, a more significant percentage of managerial share ownership, and the magnitude of the Board of Commissioners have a substantial adverse impact on ROA. Conversely, the frequency of board commissioner meetings and the extent of managerial share ownership hurt Tobin's Q. The presence of an independent board of commissioners and the number of commissioners on the Board does not substantially impact Tobin's Q. In the case of Singapore, the presence of an independent board of commissioners, the size of the Board, the frequency of board meetings, and the overall percentage of managerial share ownership do not have a noteworthy impact on ROA. Conversely, the quantity of Board of Commissioners meetings has a favorable impact on Tobin's Q. The overall proportion of ownership held by managers negatively impacts Tobin's Q. Both the autonomy of the Board of Commissioners and its size do not substantially influence Tobin's Q.

Mendeteksi Faktor-faktor Pressure Terhadap Kecurangan Laporan Keuangan Menggunakan Artificial Neural Network

Fraudulent financial statements are the result of misstatements resulting from intentional acts or omissions, which could materially mislead readers of the financial statements. The focus in this research is to determine the most important pressure factors in detecting fraudulent financial statements. Pressure is one of the fraud risk factors in the fraud triangle. Pressure is a condition felt by management due to incentives to commit fraud, consisting of: financial stability by proxy (GPM, ACHANGE, SCHANGE, CATA, SALAR, SALTA, INVSAL), external pressure (LEV, FINANCE, FREEC), personal financial need (OSHIP), and financial target (ROA). Data collection method using secondary data on the manufacturing sector firms that are publicly listed on the Indonesia Stock Exchange in 2017-2021. The research method used is quantitative and the sampling method uses a purposive sampling technique, obtained 137 sample companies with 685 total data observed. Data were analyzed using an Artificial Neural Network. The findings indicated that the gross profit margin (GPM), cash flow from operating to total assets (CATA), demand for financing (FINANCE), leverage (LEV) and return on total assets (ROA) is the most important proxy in detecting fraudulent financial statement, while other proxies are not too important in detecting fraudulent financial statements.

Dividend Payout Policy in Respect of company Performance: An Overview of Manufacturing Sector of Pakistan

Purpose: The suggestion between dividend distribution policies and the commercial success of Pakistani cement business is explained by the current study.
 Design/Methodology/Approach: Four factors were used to control the relationship between the dividend distribution strategy and business success, taking into account pertinent theories. These factors include the firm's Extent and growth, its debt to equity ratio and its municipal supremacy index. Over the course of six years from 2012 to 2017 panel data was used.
 Findings: The study lays out a route that may direct further investigation into more definitive and useful discoveries. Future research may be examined the potential upshots of tax laws, regulations, occasions, and bonus payout patterns on upshotiveness and payout strategy would likely be of interest to academics and other stakeholder. Future research should take into account additional controlling analysts and industry performs, to see if they can be significant in creating a bonus strategy.
 Implications/Originality/Value: Present-day investigation's discoveries has a number of ramifications and help to simplify the bonus payout strategy's business performs in non-fiscal firms in Pakistan's top manufacturing sectors. Given that pay out-based bonus payout rules increase a firm's upshotiveness, fiscal executives are advised to develop a commitment to these rules and take steps to stabilize their bonus payment rules.

Firms Financial Inclusion and Export Performance: Evidence from Manufacturing Sector Firms in Pakistan

Financial inclusion of firms is crucial to create jobs, boost economic growth, and promote sustainable development. The study examines how financial inclusion affects enterprise export performance based on access to finance ratios. The study analyses the effects of firms’ financial inclusion determinants and macro environment factors on firms’ export values. The data comes from Pakistan’s manufacturing sector covering 400 firms listed on Pakistan Stock Exchange from 1999-2021. Driven by the nature of the data, the Method of Moment Quantile Regression is employed to assess the below and above mean regression estimations, and a two-step system GMM approach is used to address endogeneity concerns. The results of the study are robust against different specifications. The study reveals that assets positively impact a firm’s export performance, emphasising the importance of asset investment for foreign market competition. Asset tangibility negatively impacts export performance, except for low-gearing corporations, and fixed assets dominate. A balanced asset mix is crucial for improving exports. Debt-to-equity ratios, except for high-gearing firms, boost export performance, but domestic firms with high leverage ratios are more likely to fail. To avoid excessive leverage risks, firms must balance debt and equity. Diversifying the asset mix to include liquid and intellectual property can boost export success. Gearing affects export performance differently depending on a firm’s debt levels. Low-geared enterprises can leverage assets and debt to boost exports, while high-geared enterprises may be financially constrained and face challenges from excessive debt. Therefore, enterprises must carefully examine their gearing levels and make informed decisions on optimising their asset composition for optimal export performance. The study also opens up the possibility of further research on the role of exchange rates and firms’ investment in line with export performance.

Firms Financial Inclusion and Export Performance: Evidence from Manufacturing Sector Firms in Pakistan

Financial inclusion of firms is crucial to create jobs, boost economic growth, and promote sustainable development. The study examines how financial inclusion affects enterprise export performance based on access to finance ratios. The study analyses the effects of firms’ financial inclusion determinants and macro environment factors on firms’ export values. The data comes from Pakistan’s manufacturing sector covering 400 firms listed on Pakistan Stock Exchange from 1999-2021. Driven by the nature of the data, the Method of Moment Quantile Regression is employed to assess the below and above mean regression estimations, and a two-step system GMM approach is used to address endogeneity concerns. The results of the study are robust against different specifications. The study reveals that assets positively impact a firm’s export performance, emphasising the importance of asset investment for foreign market competition. Asset tangibility negatively impacts export performance, except for low-gearing corporations, and fixed assets dominate. A balanced asset mix is crucial for improving exports. Debt-to-equity ratios, except for high-gearing firms, boost export performance, but domestic firms with high leverage ratios are more likely to fail. To avoid excessive leverage risks, firms must balance debt and equity. Diversifying the asset mix to include liquid and intellectual property can boost export success. Gearing affects export performance differently depending on a firm’s debt levels. Low-geared enterprises can leverage assets and debt to boost exports, while high-geared enterprises may be financially constrained and face challenges from excessive debt. Therefore, enterprises must carefully examine their gearing levels and make informed decisions on optimising their asset composition for optimal export performance. The study also opens up the possibility of further research on the role of exchange rates and firms’ investment in line with export performance.

Is the Effect of Organizational Ambidexterity and Technological Innovation Capability on Firm Performance Mediated by Competitive Advantage? An Empirical Research on Turkish Manufacturing and Service Industries

The strategic management literature reveals that organizational ambidexterity (OA) and technological innovation capabilities (TIC) have separate effects on competitive advantage (CA) and firm performance (FP). However, these two capabilities have not been investigated simultaneously and in comparison with the sector. The main aim of this study is to reveal the mediating role of CA in the effect of OA and technological innovation capabilities on FP. Using the research model based on quantitative data, the primary data were collected by applying an online survey to 770 people selected by the random sampling method from the textile/ready-made garment/leather sector representing the manufacturing sector and the information technology sector representing the service sector working under the Istanbul Chamber of Commerce (ICOC) in Istanbul. The data collected were analyzed using SPSS. The results showed that CA mediated positive and statistically significant effects of OA and technological innovation capabilities on FP, and this mediating effect differed by sectors. The current study provided insights into manufacturing and service sector firms. Based on these results, recommendations for researchers and firm managers are presented in the conclusion section.

Board diversity and firm value: A study on Malaysian listed firms in manufacturing and non-manufacturing sectors

The main purpose of this study is to examine the relationship between board diversity and firm value in firms in the manufacturing and non-manufacturing sectors listed on Bursa Malaysia. The methodology of this study utilized 200 samples of Malaysian listed companies from 2014 to 2016. The board diversity variables in this study were gender, age, educational level, outsider director, and nationality. Diversity data were collected from the annual report, while all financial data, such as firm age, firm value, and firm leverage, were collected from the Eikon database. The findings show that educational level has a negative relationship with firm value, while outsider director has a positive relationship with firm value in the manufacturing sector. In the non-manufacturing sector, gender and nationality have positive relationships with firm value. In conclusion, the manufacturing industry needs outsider directors’ expertise to improve production operations. A higher level of education may lead directors to focus on fewer business aspects rather than the overall business. The non-manufacturing sector requires knowledge and skills that enhance customer satisfaction and thus increase firm value. The practical implication is that regulators such as Bursa Malaysia can enforce boardroom diversity through rules and regulations, which will affect firm value.

Effects of Subcontracting on Firms in India's Informal Manufacturing Sector: An Empirical Investigation

ABSTRACT: Subcontracting occurs when a producer outsources a part of its production. We study the effect of subcontracting from a firm with buyer power on the profits of subcontracted upstream firms, and how profits vary on the basis of location of firm and owner's gender. Subcontracting is the treatment in our study and the dependent variable is the ratio of Gross Value Added to Sales adjusted or unadjusted for wages. The decision of a firm to subcontract or not is endogenous, so we cannot use OLS regression. Since we cannot have information on a firm being treated and non-treated at the same time, we use the Average Treatment Effect on Treated (ATET) model with Nearest Neighborhood Matching (NNM) approach, in which each treated firm is matched to an untreated firm which is its nearest neighbor on other parameters, to see the effect of treatment on outcome variable on the treated group had they been not treated. We find the existence of a subcontracting premium where being in a subcontracting relationship is beneficial for the informal sector firm, though the magnitude of this premium is small, and female-headed firms gain less from subcontracting. Subcontracted male-owned firms earn a higher premium but also pay more wages out of their total revenue to labor as compared to female-owned firms, perhaps because the latter are more likely to be Own Account Manufacturing Enterprises (OAME) which do not employ hired workers. Our results show that buyer power of the subcontracting firms is offset by the benefits they provide to the subcontracted firms, possibly in the form of assured demand and payments. Thus, policies favoring the informal sector firms need to incorporate the benefits of subcontracting by exploring alternative modes of distribution with lower distribution margins, such as cooperative societies or online platforms for example Amul, MEESHO. Policies should also focus on reducing the profit margin differential between male and female owned firms by formulating a proper channel using mass media to communicate credit information and updates.

Role of Human Capital and Digitalization to Upgrade Innovation

Innovation is the mainstay of the business landscape of business. It not only improves the firms’ position in the market but also provides a sustainable competitive advantage. Such a competitive advantage is inimitable for rivals, as it resides in the human capital and structures of firms. With the help of human capital, firms can realize innovation in products as well as processes. Firms with developed human capital can encourage their employees to undertake entrepreneurial ventures that are more often called intrapreneurship. Intrapreneurship is the way of carrying out innovative and creative activities by the employees of firms that are fully supported by them. Therefore, this research investigates the influence of human capital on the intrapreneurial activities of firms as they are closely associated with each other. In doing so, the mediating role of digitalization and supply-chain competitiveness is also studied. After collecting data from 195 Malaysian manufacturing sector firms, PLS-SEM was applied to test the modeled relationships. The findings reveal that human capital positively improves the intrapreneurial activities of firms. In addition, this relationship is fully mediated by digitalization as well as supply-chain competitiveness. This study provides a novel contribution by exploring the association of human capital and intrapreneurship with digitalization and value chain competitiveness. Therefore, firms should develop their human capital in order to remain innovative and competitive. Furthermore, developed human capital will complement the digitalization and competitive value chain in this association. Future researchers are suggested to study this relationship sector-wise, such as investigation of service sector and textile sector firms.

The Role of Enterprise Risk Management in enhancing Firm Performance: does Strategic Renewal really matters?

This study aims to measure the impact of enterprise risk management (ERM) to improve firm performance in manufacturing companies in Indonesia. This study also examines the role of strategic renewal in ERM's influence on firm performance. The AMOS application's SEM analysis technique was used to evaluate the research model used in this study. Data from 207 different firms in Indonesia's manufacturing sector were obtained. The originality of this research is adding strategic renewal as a mediating variable that has not been widely used in previous research in analysing the relationship between the ERM and firm performance. The study's results show empirical evidence that internal resources in the form of ERM significantly affect firm performance. Additionally, according to the research findings, strategic renewal is the best way for businesses to deal with environmental uncertainty and dynamic changes. Companies are expected to have adequate resources, but they also need to make changes and implement strategies to turn those resources into better performance.

Supplier transaction, TMT characteristics, and the persistence of earnings: do their relationship contribute towards sustainable performance of Chinese listed manufacturing sector firms?

The construction of supplier transaction is one of the strategic choices of many firms. However, the impact of business strategies on the persistence of earnings remains to be further investigated. The innovation of this paper lies in interpreting the impact of supplier transaction on earnings persistence from the perspective of characteristics of the top management team (TMT). We consider Chinese listed manufacturing firms from 2012 to 2019 to examine the relationship between the supplier transaction and the persistence of earnings. Statistical results show that supplier transaction characteristics of the TMT have a significant moderating effect on the relationship between the supplier transaction and the persistence of earnings. This implies that the behavior of TMT can be vital to the firm in maintaining sustainable performance. The higher age level or longer average tenure of TMT can significantly improve the positive effect of the supplier transaction tenure heterogeneity of TMT that will significantly improve the negative effect. This paper expands the literature on supplier relationship, and corporate earnings from a new perspective that improves the empirical evidence of the upper echelons theory, and also provides evidence support for the construction of supplier relationship and TMT.

Firm-Level Innovations in an Emerging Economy: Do Perceived Policy Instability and Legal Institutional Conditions Matter?

Innovation has become a key factor of production, driving and sustaining firms’ productivity and competitiveness. Despite the growing importance attached to innovations, existing studies have produced different results on the factors driving firm-level innovations. This study investigates the factors driving innovations in the service and manufacturing sector firms in Thailand. The study tests proposed hypotheses using cross-sectional data on a sample of 613 firms from the World Bank enterprise survey of 2016. Our empirical results show that specific aspects of the business environment, such as policy instability, legal institutions, corruption, and informal competition, negatively influence non-technological innovations. Contrarily, we find that formal training, foreign technology licenses, research and development have marginal and additionality effects that positively enhance both technological and non-technological innovations. We provide practical implications for firm managers and policymakers in Thailand on adaptive measures to improve the business environment to make it conducive for firm-level innovations.

Exploring the underlying mechanism between fear of losing power and knowledge hiding.

Drawing on the assumptions of approach/inhibition theory of power and conservation of resource of theory, this study aims to empirically explore the relationship between fear of losing power and knowledge hiding. To explicate the relationship, this study examines the mediating role of self-serving behavior and moderating role of personal competitiveness. To evaluate the relationships, a moderated-mediation model is devised and tested. Data is collected through a web-based questionnaire from 194 individuals employed in both manufacturing and service sector firms of Pakistan. Multiple statistical software packages are used to analyze the data. After employing several statistical techniques, the findings of the study suggest that self-serving behavior fully mediates the link between fear of losing power and knowledge hiding. Moreover, the result of two-way interaction reveals that personal competitiveness further amplifies the indirect relationship between fear of losing power and knowledge hiding through self-serving behavior. The present study is one of those few types that investigates and uncovers the hidden links between fear of losing power and knowledge hiding. Lastly, theoretical, and practical implications along with future research directions are discussed.

The Mediating Role of Relational and Transactional Psychological Contract Fulfilment on the Relationship between Strength of the HR Signals and Job Satisfaction

The article is an employee-level, quantitative survey-based study investigating the relationship between HR signals and job satisfaction through the intermediary role of psychological contract (PC) fulfilment. Signalling theory and attributional theory provide the theoretical context to the study linking HR signals to job satisfaction. PC fulfilment has been viewed in terms of relational and transactional contract types. Analysis of the mediating ability of the two PC types reveals the differential extent of influencing the considered relationship. Primary data, in terms of employee responses from participating firms, have been collected through questionnaires. A two-step sampling process has been followed to select participating firms and respondents. Structural equation modelling has been carried out to examine the hypothesized relationships among the variables. The study contributes to the literature and has implications for practising managers. It provides evidence towards the attributional role of HR signals within firms. Moreover, it reveals a higher mediating effect by relational PC fulfilment than transactional PC fulfilment. Based on the study’s findings, practising managers need to pay closer attention to relational PCs than transactional PCs. The study contributes to a better understanding of the role of HR signals in manufacturing sector firms. The time, cost incurred for the survey and accessibility to firms for participation are some of the significant limitations affecting the study.

How innovative organization culture affects firm performance in the wake of enterprise resource planning? evidence from energy- and non-energy-sector firms in Pakistan

Rapid globalization during the last few decades has caused many difficulties for firms to survive, sustain, and maximize shareholders’ wealth. The Enterprise Resource Planning (ERP) system provides extensive access to data and upgraded information to achieve the specified objectives. This study examines how Innovative Organizational Culture (IOC) affects firm performance in Pakistan. In doing so, this study collects a comprehensive dataset from 234 high- and medium-level managers working in different sectors across six major cities of Pakistan. We construct several hypotheses and employ Partial Least Squares Structural Equation modeling to test the selected premises. The results reveal that IOC and the benefits of ERP are positively related to firm performance, IOC is also positively associated with the implementation of ERP, and the implementation of ERP is positively related to the benefits of ERP. Regarding mediating relationship among the constructs, this study shows that the implementation of ERP mediates the relationship between IOC and the benefits of ERP and the benefits of ERP mediate the relationship between the implementation of ERP and firm performance. Given that Pakistan has been facing a chronic energy crisis for the last few decades, this study conducts a subsample analysis and divides the sample into two groups—“energy and manufacturing” and “service and non-manufacturing” sector firms. Our robustness tests reveal that the implementation of ERP is positively and significantly related to firm performance only in the subsample of service and non-manufacturing sector firms. In contrast, it is negatively and insignificantly related to firm performance in the subsample of energy and manufacturing sector firms. The findings of this study provide numerous operational insights to managers to adequately emphasize and strengthen IOC to sustain the change management system. Specifically, this study suggests that senior- and medium-level managers should continuously monitor the implementation of ERP and determinedly engage themselves in the team management and communication process to achieve higher firm performance.

QUESTIONING THE NOVELTY IN A NOVEL BUSINESS MODEL: HOW DOES STRATEGIC ORIENTATION TEMPER FIRM PERFORMANCE?

Building on a robust data set of 281 manufacturing and service firms in the UK, the paper offers an empirical analysis of relationship between the three strategic orientations and novel business model (BM). The paper plugs the gap around design and implementation of new BM and role of diverse strategic orientations. The empiric in the paper is supported by structure equation modelling and findings confirm the validity of the model thereby providing theoretical support around complexity of BM and its relationship with three strategic orientations. In the light of strategic importance around renewed business model, our paper is a timely contribution to understanding some of the antecedents of novel business model, its link to business performance and implementation of BM across firms in manufacturing and service sectors.