Industrial Firms Research Articles

Industrial Mining Policy, Innovation, and Firm Business Performance in Indonesia: A Literature Review

This study uses a qualitative approach in the form of a literature review to explore existing scholarly sources, identifying the most important themes and points of view related to mining policy, innovation and firm performance in Indonesia. The study aims to identify how these factors contribute to sustainable development, improve mining operations, and enhance overall company performance. Existing scholarly sources form the basis of the analysis, which identifies key themes and insights. The results reveal the prominent role of innovation as a mediating link between policy and firm business performance. It is because innovation can help create new methods and technical developments that fill the gap between policy stipulations for mining companies’ success. However, more empirical verification is needed to support these findings. From a practical point of view, companies in the mining sector should target process and product innovation to achieve sustainable competitive advantage. Highlighting technological advancements and environmentally friendly ways of operation can improve operating efficiency and reduce environmental impact while helping one survive in a competitive international market. In sum, this model gives an encompassing view of the link between mining policy, innovation, and company performance; it shows that regulation is a factor in promoting sustainable development.

Selling and monetizing data in B2B markets: Four data-driven value propositions

Data has become a powerful source of competitive advantage in contemporary business-to-business (B2B) markets, enabling vendors to create enhanced and completely new value propositions. However, while many firms can generate a lot of data from their businesses, they struggle to translate it into sellable offerings. To address this issue, this study examines how firms can sell and monetize data in B2B markets. Based on an extensive multiple case study, this study identifies four archetypical data-driven value propositions (data as a product, data-enhanced products, data-driven services, and data-enabled performance outcomes) and illuminates the key data-related capabilities and challenges related to each value proposition. The findings contribute to the digital servitization and data monetization literatures by illustrating how industrial firms can harness, package, and monetize data in B2B markets. For managers, this study offers important insights into the various strategies and capabilities needed to sell and monetize data in B2B markets.

Climate policy uncertainty and corporate dividends

This paper investigates whether climate policy uncertainty (CPU) matters to a firm's dividend policy. Using Gavriilidis's (2021) novel measure of uncertainty related to climate policy and a large sample of US publicly traded firms over the period 1987–2022, we found a positive association between CPU and dividend payouts. This association is stronger for firms with talented managers and less pronounced for firms in climate sensitive industries and headquartered in US States with more stringent environmental regulations. These results contribute to the nascent literature on the implications of uncertainty related to climate policy to corporate financial decisions.

Green innovation for sustainable development: leveraging green knowledge integration, blockchain technology and green supply chain integration

PurposeDespite the importance of green supply chain integration (GSCI) in advancing green innovation (GI) is recognized, it remains unclear how firms can translate their GSCI efforts into GI. Therefore, this study aims to understand how GSCI affects GI, with its dimensions (exploitative GI and exploratory GI), as well as to investigate the mediating role of green knowledge integration capability (GKIC) and the moderating role of blockchain technology (BCT) adoption.Design/methodology/approachOn the basis of data collected from 247 managers working in Indian firms in the automotive industry, the authors tested the proposed model using the PROCESS macro tool via SPSS software.FindingsThe empirical results indicate that GSCI is positively associated with both exploitative and exploratory GI, with a higher effect on exploitative GI. In addition, GKIC mediates the link between GSCI and exploitative GI in contrast to exploratory GI. Notably, the relationship between GSCI and GKIC is stronger when BCT adoption is high.Originality/valueThis study opens the black box of how GSCI affects exploitative and exploratory GI by revealing the mediating role of GKIC and the moderating role of BCT adoption. It provides valuable insights for practitioners to translate GSCI efforts into GI through developing GKIC and adopting BCT.

The Effect of Tangible Promotions on an Intangible Environment

Promotions are frequently deployed by firms in service intensive industries like tourism as a way to boost numbers like visitation and occupancy in times when excess capacity may be anticipated. While promotions may indeed augment revenues and other accounting measures commonly used by tourism firms to assess the success of marketing interventions, the impact of these sales tools on long-run finance-based indicators remains largely unexplored. Exploiting a rich dataset consisting of over 300 corporate level hotel promotions spanning nearly three decades, this study shows that promotions can be detrimental to long run performance of tourism firms. This erosion of the market value is particularly acute for promotions that involve tangible monetary components, such as price discounts. While this result supports the tenets of the hierarchy-of-effects theory and prospect theory, the observed effects of the tangible component of sales promotion entail an extension of these theoretical approaches to an intangible environment. Also available in Spanish. See supplemental material for details.

Critical Success Factors in the Technology Commercialization Process: A Comparative Case Study of International Licensing Alliances among Small and Medium-Sized Enterprises

In contemporary academia and industry, the commercialization of technology through licensing has emerged as a prevalent strategy. This paradigmatic shift has prompted numerous industrial firms to intensify their focus on technology commercialization as a mechanism to optimize the returns on their research and development investments, while concurrently leveraging their comprehensive technology portfolios. However, despite growing interest in this area, there exists a conspicuous gap in scholarly literature exploring how small and medium-sized enterprises (SMEs) can effectively and efficiently capitalize on this opportunity in a global context. The objective of the present study is to fill this void by offering an in-depth analysis of the key determinants that contribute to the successful commercialization of technology via licensing. Employing a qualitative research methodology, this paper presents a comparative case study that explores four separate international licensing alliances, each formed between the same licensor, specializing in solar mounting system engineering, and four different licensees, all engaged in the production and marketing of this specialized technology. Data were meticulously gathered through a triangulated approach that incorporated interviews with both licensor and licensees, extensive desk research, and on-site observations. Our empirical findings reveal that the critical success factors identified in existing literature are not uniformly significant. Specifically, four elements—relational dynamics, cultural considerations, human capital, and resource allocation—emerged as pivotal in ensuring the successful implementation of technology commercialization strategies. By elucidating these nuanced factors, this study contributes to both academic discourse and practical applications, thereby serving as a valuable resource for SMEs aiming to navigate the complexities of technology commercialization in international settings.

Socioemotional Wealth and Financial Performance of
 Single-Family-Owned Food Processing Firms: Evidence from Tanzania

This study assessed how Socioemotional Wealth (SEW) influences the financial performance of single-family-owned firms in the same industry. Previous research on family firms has yielded conflicting results. Thus, this study fills a gap. Data is collected from firms' owners using a structured questionnaire. Family continuity, family prominence, and family enrichment are used to measure the SEW. The financial performance was subjectively assessed. Multiple regression analysis is used to examine the data obtained from 267 firms. The findings suggest that the three dimensions of SEW - family continuity, family enrichment and family prominence - significantly influence single-family-owned firms' financial performance (p = 0.00). This study adds context-specific insights, empirical facts, and a deeper understanding of family-owned firms' subjective financial performance to the SEW development literature—the discipline of SEW theory and its application benefit from its research and practice implications. Future research should examine how firm culture affects SEW-financial performance ties by employing a larger sample.

Foreign Direct Investment and Labor Productivity: Evidence from Industrial Firms in Türkiye

Foreign Direct Investment and Labor Productivity: Evidence from Industrial Firms in Türkiye

Power transitions and pollution reduction: Decoding the impact of municipal leadership changes on firm-level pollution in China

This research examines the influence of political system changes, particularly official turnover, on pollution reduction in Chinese industrial firms—a response to the environmental challenges posed by China's economic growth. Utilizing micro-panel data from 2000 to 2014 and an official turnover database, this study assesses how these turnovers affect firm-level pollution. The analysis confirms that official turnovers significantly reduce emissions, with the effect more pronounced in non-state-owned enterprises, under officials who are male, hold PhDs, and are older. This impact is also stronger in areas with a larger tertiary sectors and higher economic growth. A detailed comparison reveals that mayoral turnovers have a greater abatement effect than those of municipal secretaries, especially in cases of abnormal turnovers. Crucially, this study demonstrates that mayoral turnovers lead to pollution reduction by promoting corporate exports and innovation. The baseline regression results, confirmed as robust after extensive robustness checks, underscore the significance of these findings. This paper sheds light on the political dynamics of environmental governance in China, advocating bureaucratic reforms to reduce emissions and providing strategic recommendations to improve national environmental sustainability.

Identification of heterogeneous elasticities in gross-output production functions

This paper presents the identification of heterogeneous elasticities in gross-output production functions with non-separable unobserved productivity. We propose that the ex-ante flexible input cost shares identify the heterogeneous output elasticities with respect to flexible inputs for each firm. Applying the proposed method to a panel of firms in the food production industry in Chile, we find that the extent of heterogeneity in the output elasticities with respect to intermediate inputs has significantly declined from 1985 to 1995, with its distribution tending to concentrate toward zero as time progresses.

Are layoffs an industry norm? Exploring how industry‐level job decline or growth impacts firm‐level layoff implementation

AbstractCorporate layoffs are a globally prolific organisational activity, but little is known about how industry‐level employment loss or gain impacts firm‐level layoff implementation. Grounded in institutional theory, this study posits that firms in industries experiencing employment decline align with a cost‐containment approach, while firms in industries experiencing employment growth focus on social exchange theory when executing employee layoffs. Analysis of 573 mass layoffs from March 2013 to May 2019 compared downsizing scope (layoff severity and frequency), explanations, alternatives, advance notice, and firm characteristics (unionisation and firm size) in employment gain versus loss industries. The findings indicate that meaningful differences exist. Firms operating in employment loss industries implement layoffs focused on cost‐containment, including less severe layoffs, less extensive but more demand‐decline focused explanations, and use more cost‐reduction layoff alternatives, when compared to layoffs in employment gaining industries. Firms operating in industries experiencing growth execute layoffs in a manner that maintains the social exchange expectations between employee‐employer. In addition, firms in declining industries are more likely to be unionised and larger than firms in growing industries. This research helps reconcile divergent layoff perspectives by considering how variations in external factors impact corporate layoffs.

Unlocking the double-dividend: Evaluating the impact of SO₂ emissions trading scheme on firm's environmental and economic performance

The optimal design of environmental instruments demands a balance between environmental enhancement and economic growth. Utilizing microdata from the China Environmental Statistics Database and the China Industrial Firm Database, this study employs the difference-in-differences (DD) methodology to explore the dual effects of the SO₂ Emissions Trading Scheme (ETS) on the environmental and economic performance of micro-firms. The findings suggest that: (1) The SO₂ ETS not only induces emission reduction effects among firms in pilot areas but also improves their industrial added value. (2) The SO₂ ETS exhibits heterogeneous impacts across firms of diverse ownership, export status, and size. (3) While the SO₂ ETS prompts firms to advance technologically, boosting desulfurization capacities and subsequently enhancing total factor productivity, it also inadvertently results in companies offsetting some environmental compliance costs by curtailing employee wages.

The disclosure of climate-related risks and opportunities in financial statements: the UK’s FTSE 100

PurposeThis paper aims to explore current trends in how companies disclose climate-related risks and opportunities in their financial statements. As part of the authors’ analysis, they examine: whether forward-looking assumptions and judgements are typically considered in reporting climate-related risks/opportunities; whether there are differences in the reporting practices of firms in carbon-intensive industries versus non-carbon-intensive industries; and whether negative media reports have an influence on the levels of disclosure a firm makes.Design/methodology/approachThe authors chose content analysis as their methodology and examined the financial statements published by firms listed on the UK’s FTSE 100 between 2016 and 2020. This analysis is framed by Suchman’s three dimensions of legitimacy, being pragmatic, cognitive and moral.FindingsClimate-related disclosures in the notes and financial accounts of these firms did increase over the period. Yet, overall, the level the disclosures was inadequate and the quality was inconsistent. From this, the authors conclude that pragmatic legitimacy is not a particularly strong driving factor in compelling organisations to disclose climate-related information. The firms in carbon-intensive industries do provide greater levels of disclosure, including both qualitative and quantitative (monetary) content, which is consistent with cognitive legitimacy. However, from a moral legitimacy perspective, this study finds that firms did not adapt responsively to negative media coverage as a way of reflecting their accountability to broader public norms and values. Overall, this analysis suggests that regulatory enforcement and a systematic reporting framework with adequate guidance is going to be critical to developing transparent climate-related reporting in future.Originality/valueThis paper contributes to existing studies on climate-related disclosures, which have mainly examined the ‘front-half’ of annual reports. Conversely, this study aims to shed light on these practices in the “back-half” of these reports, exploring the underlying reasons for reporting climate-related risks and opportunities in financial accounts. The authors’ insights into the current disclosure practices make a theoretical contribution to the literature. Practitioners can also draw on these insights to improve how they report on climate-related risks and opportunities in their financial statements.

Using artificial intelligence to advance sustainable development in industrial markets: A complex adaptive systems perspective

The vast complexity involved in dealing responsibly with sustainable development is daunting. Such complexity increases significantly due to the interdependencies and trade-offs associated with the 17 UN Sustainable Development Goals (SDGs). To address sustainability across multiple domains, recent advances in technology and innovative adaptations offer some promise, as exemplified by the increased prominence of artificial intelligence (AI) in the marketplace. However, as more industrial firms leverage AI to address sustainable development goals, it becomes even more critical for them to account for these interdependencies and trade-offs among the SDGs. Relatively few existing studies guide industrial marketers in accounting for these interdependencies when deploying AI-enabled solutions. Herein, guided by complex adaptive systems theory and principles of systems engineering, the authors introduce a responsible AI deployment model that articulates key steps in the development and deployment of AI solutions to advance sustainable development firms.

The impact of profitability and asset management on firm value and the moderating role of dividend policy: Evidence from Jordan

The objective of this study is to examine the influence of profitability and asset management on the valuation of a firm. The data utilized in this study was sourced from the financial statements of industrial firms that are publicly traded on the Amman Stock Exchange. The fixed effects model was utilized for all four economics models in the analysis of the panel data. One of the principal discoveries of this investigation is the favorable impact of the profitability and asset management metrics on the valuation of a corporation. The research findings indicate that the inclusion of dividend payments as a moderating factor in the association between profitability and asset management results in an augmentation of a firm's worth. The positive correlation between dividend payouts and a company's worth is attributed to their link with profitability and asset management. This study has the ability to offer valuable insights into corporate management by examining the aspects that can enhance a company's value. Moreover, it holds significance for both existing and potential investors to discern the determinants that have the potential to augment the worth of a corporation.

Research on the Improvement Path of Total Factor Productivity in the Industrial Software Industry: Evidence from Chinese Typical Firms

The high-quality development of the industrial software industry is of strategic significance to enhancing the core competitiveness of the manufacturing industry and promoting the high-quality development of China’s industrial economy. By integrating the “capital-technology-environment-human” production factor theory and configuration perspective, this paper constructs a comprehensive analysis framework that drives the total factor productivity (TFP) of the industrial software industry. This paper uses 40 typical industrial software firms in 2018–2020 as case samples and uses fuzzy set Qualitative Comparative Analysis (fsQCA) to empirically explore the influencing factors and complex mechanisms that achieve high-quality development of the industrial software industry. It is found that: (1) a single industrial factor is hardly a necessary condition to drive the industrial software industry; (2) there are four paths to achieving high TFP, which are summarized as “technical-human-environmental” balanced driving type, “capital-human-environmental” balanced driving type, “technical-capital” dual driving type, and “capital” single driving type. There are four driving mechanisms. There are also four not-high TFP configurations with asymmetric characteristics; (3) under certain conditions, the combination of capital factors, technical factors, environmental factors, and human factors can drive TFP in an “all roads lead to Rome”. In this process, the government’s attention plays a more universal role. The study not only expands the application scenarios of fsQCA but also provides decision guidelines for the practice of strategic emerging industrialization represented by the industrial software industry.

Personal Taxes and Firm Skill Hiring: Evidence from 27 Million Job Postings

Using big data on U.S. job postings, we show that firms increase skill requirements when hiring workers in states that cut personal income taxes. We trace a significant driver of this effect to companies’ reallocation of skilled job postings across states based on tax differentials. The tax-induced upskilling is observed within occupations and is more pronounced for high-skill positions within firms. It is accompanied and amplified by concurrent increases in information technology expenditures at local-level establishments. In characterizing the mechanism at play, we show that job upskilling is triggered by tax changes affecting middle- and upper middle-class workers. It is pronounced for high-growth firms, for firms in tradable industries, and in urban areas, but it is mitigated among profitable firms. A narrative-based analysis helps us establish causal inferences. This paper was accepted by Victoria Ivashina, finance. Supplemental Material: The data files and online appendix are available at https://doi.org/10.1287/mnsc.2022.01211 .

Applying sustainable development goals in financial forecasting using machine learning techniques

AbstractThis study seeks to identify the impact of sustainable development goals (SDGs) in predicting corporate financial performance (CFP) in the information communications technology (ICT) industry. Data over the period of 2016–2020 that are relevant to financial reporting and corporate social responsibility (CSR) reporting have been extracted for 208 firms in the ICT industry. Important variables have been identified to help predict the financial performance in the following years upon the publication of CSR reports. Drawing on resource‐based view and stakeholder theory, the purpose of this study is to find the quintessential variables that influence the prediction accuracy of financial performance. To better forecast earnings per share (EPS), machine learning feature selection methods have been implemented. The findings suggest that certain variables such as return on total assets, SDGs adoption and whether the firm has established KPI for SDGs achievements can help enhance EPS prediction. With the various predictive models, the artificial neural network model is the most effective in predicting CFPs. Most importantly, the adoption of SDGs can be utilized to sharpen the forecast on financial performance as it enables firms to bolster stakeholder engagement and evaluate environmental, social, and corporate governance efforts.

The effect of shareholder scrutiny on corporate tax behavior: Evidence from shareholder tax litigation

AbstractThis study examines the effect of shareholder scrutiny of corporate tax avoidance behavior and its related financial reporting. Specifically, we explore the factors associated with shareholder tax litigation and its effect on the future tax behavior of the sued firm and its peers. We find that sued firms have lower cash and GAAP effective tax rates (ETRs) and engage in extreme tax avoidance before litigation. After litigation, they decrease tax avoidance activities, relative to matched control firms. Peer firms in the same industry as sued firms similarly reduce their level of tax avoidance and the likelihood of extreme tax avoidance after the litigation, relative to control firms. Additional analyses suggest that sued firms change their tax avoidance behavior, rather than merely their tax financial reporting. Finally, the spillover results are strongest for peer firms with the most tax avoidance (i.e., the lowest cash ETRs) when the sued firm's alleged misconduct is revealed.

Inventory and financial performance in the pharmaceutical industry: what transpired over the last two decades?

PurposeThe objective of this study is to explore the structural attributes of the pharmaceutical industry before the onset of the COVID-19 pandemic by examining the relationship between inventory and firm performance and developing a taxonomy of pharmaceutical firms based on the earns-turns matrix.Design/methodology/approachThis study examines the inventory–firm performance linkage, considering both total inventory and its discrete inventory components in pharmaceutical firms. In addition, this research develops a new taxonomy of pharmaceutical firms based on the earns-turns matrix. A large panel dataset of firms in the US pharmaceutical industry was collected for the period 2000–2019.FindingsThe results reveal that strategic groups identified based on this taxonomy show different levels of profitability and inventory turns in the earns-turns matrix. Most pharmaceutical firms moved from the low-right to the top-left section in the earns-turns matrix, indicating that these firms have generally pursued profitability rather than effective inventory management.Research limitations/implicationsThis study explores the structural attributes of the pharmaceutical industry using the earns-turns matrix. This two-dimensional analysis may not, however, capture the full complexity of inventory–firm performance dynamics.Practical implicationsThe mapping of strategic groups on the earns-turns matrix provides a useful tool for visual representations of the dynamics of strategic groups in terms of financial performance and inventory management performance. Practitioners can use the earns-turns matrix to benchmark their firm's position against their competitors.Originality/valueThis study broadens the scope of operations management research by introducing the earns-turns matrix as an empirical validation tool for operational and strategic management theories. This study emphasizes the effectiveness of the earns-turns matrix in analyzing strategic groups of pharmaceutical firms.