Large Firms Research Articles

The drivers of lean, agile and green principles towards business competitiveness among manufacturing firms in Malaysia

PurposeBusiness competitiveness is critical for a thriving economy that requires companies to be more efficient and innovative to outperform their rivals. This paper investigates the main determinants of business competitiveness from the resource-based view (RBV) perspective.Design/methodology/approachData were collected from 140 discrete and large manufacturing firms in Malaysia through a cross-sectional quantitative-based survey with a convenience sampling procedure. The findings from the PLS-SEM analysis showed that implementing LAG manufacturing significantly amplifies business competitiveness.FindingsIt was found that cost leadership strategy drives lean and agile manufacturing implementation, while differentiation positively amplifies the implementation of lean, agile and green manufacturing. This study contributes to the body of knowledge and provides insight to practitioners in tailoring strategies to steer manufacturing firms toward being more competitive.Originality/valueThis study identifies the effect of LAGP implementation on business competitiveness. This paper will benefit practitioners and managers by providing insights into tailoring strategies to steer manufacturing firms towards being more competitive. This paper follows a structure that includes: an introduction to the study, a review of relevant literature on business competitiveness, lean, agile and green manufacturing implementation, the development of hypotheses, the presentation of research methodology and findings, and finally, a conclusion with a discussion, implications, limitations and suggestions for future research.

Assessing Factors Influencing ESG Ratings in Malaysian Companies: An Empirical Study

This study explores the determinants of Environmental, Social, and Governance (ESG) ratings within the Malaysian corporate sector. Employing panel regression analysis on data collected from 40 companies listed on Bursa Malaysia between 2018 and 2022, this research investigates the roles of company size, board diligence, digital transformation, Shariah compliance, and gender diversity in influencing ESG performance. The results indicate that larger firms are generally associated with lower ESG ratings, suggesting that achieving sustainability at scale remains a significant challenge. In contrast, gender diversity on corporate boards emerges as a robust positive predictor of ESG ratings, highlighting the essential role of inclusive governance in enhancing sustainability outcomes. Contrary to expectations, the study finds no significant direct impact of board diligence and digital transformation on ESG outcomes, suggesting the need for a critical reassessment of these factors within existing sustainability frameworks. By identifying key drivers and uncovering unexpected findings, this research contributes to the ongoing discourse on ESG practices, offering valuable insights for policymakers, corporate leaders, and stakeholders committed to advancing sustainable business practices. The study not only maps the landscape of ESG performance drivers in Malaysia but also sets a direction for future research aimed at developing more nuanced and effective sustainability strategies in similar emerging market contexts.

Digital Transformation and Firms' Foreign Direct Investment: Evidence from Chinese Listed Companies

Against the backdrop of a new wave of economic globalization, digital transformation empowers firms' foreign direct investment, becoming a key lever for achieving high-quality international circulation. This paper takes A-share listed companies on the Shanghai and Shenzhen Stock Exchanges from 2011 to 2022 as the research sample to explore the effect and mechanisms of digital transformation in promoting firms' FDI. The study finds that digital transformation significantly promotes firms' FDI, and this conclusion holds after a series of robustness and endogeneity tests. Mechanism tests reveal that alleviating financing constraints and incentivizing green innovation are important transmission paths through which digital transformation promotes firms' FDI. Heterogeneity analysis shows that the effect of digital transformation on FDI is more pronounced in large firms and state-owned enterprises. This paper deepens the theoretical understanding of the internal logical relationship between digital transformation and firms' economic behavior, providing valuable insights for driving firms to better expand into overseas markets.

Evaluating ESG performance: The influence of firm size and gender diversity

This study examines the relationship between firm size and Environmental, Social, and Governance (ESG) scores, with a focus on the growing importance of sustainability and corporate social responsibility (CSR). Drawing on data from 4,525 U.S. companies, an Ordinary Least Squares (OLS) regression analysis reveals a significant positive association between firm size and ESG performance, suggesting that larger firms are better positioned to allocate resources toward sustainability initiatives. Furthermore, the findings indicate that board gender diversity has a positive impact on ESG scores, underscoring the importance of diverse perspectives in corporate governance. The results highlight the need for standardized ESG reporting and provide insights into how firm characteristics shape sustainability outcomes. This research offers practical guidance for corporate leaders and policymakers seeking to advance sustainability practices across organizations.

The vulnerable workforce: COVID-19 and the fate of atypical workers

The Coronavirus disease 19 (COVID-19) pandemic has significantly affected the global workforce, with certain occupational groups facing greater challenges than others. Atypical part-time, temporary, and gig job workers are among the most vulnerable. This paper first examines the impact of the COVID-19 health crisis on atypical/ contingent workers by firm size, industry, and region. Second, we explore the factors determining the increase/decrease of the temporary labor force at the firm level. Third, we aim to verify the empirical validity of the Schumpeterian “destruction creative” hypothesis since any crisis is associated with destroying old jobs and creating new job needs. We mobilized a firm-level database of 12,193 firms from 19 countries and a dynamic logit model methodology. Our empirical results show that atypical workers were among those most impacted by COVID-19. Results by firm size show that small firms raised the probability of increasing the level of the temporary labor force, as opposed to medium- and large-sized firms. Results by sector of activity revealed that firms operating in sectors other than construction (hotels and restaurants, retail trade, IT, transport, machinery, and equipment) were less likely to increase their temporary labor force. Geographic location is a key driver of the increase or decrease in a firm’s temporary workforce. Furthermore, insufficiently educated labor and regulations drive temporary labor variations. Finally, the Schumpeterian “creative destruction” hypothesis was empirically confirmed.

Internationalisation as a boost for many firms: evidence from Germany

AbstractThe advantages of globalisation have been increasingly called into question, and protectionist tendencies have entered the stage. So what experiences have firms had after going international in an open economy over the past years? With respect to foreign investor takeovers of initially national firms, we see predominantly positive effects for acquired manufacturing firms in terms of productivity, sales and expenditures on the labour force – likely due to higher employment – in the short and long term. Looking at the results, firm size matters: positive effects are stronger among large firms. In the case of firms starting to invest abroad, positive effects are very rare and limited to short-term sales of acquiring small manufacturing firms. All in all, the largely positive evidence is generally supportive of internationalisation and thus largely contradicts the negative views sometimes present in the public sphere, though even unaffected firms may see themselves as relative losers.

The Effect of Natural Disaster on Regional Economic Growth: Evidence from an Earthquake in İzmir/Türkiye

This study examines the economic impact of the Aegean Sea Earthquake, which struck İzmir, Türkiye, on October 30, 2020, focusing on how it affected local businesses and financial resilience. Using a combination of survey data and regression analysis, the study investigates the operational disruptions experienced by companies of varied sizes and sectors. Findings show that while large firms displayed resilience, small businesses suffered significant operational and financial setbacks, prolonging the economic recovery process. The study also highlights the compounded effects of the COVID-19 pandemic, which intensified the challenges that companies faced. The results underscore the importance of developing robust crisis management strategies and fostering economic structures that are more resilient to both natural disasters and global crises. The study concludes with recommendations for policymakers and business leaders to enhance financial resilience to future shocks.

Beyond binary: exploring the interplay of China’s digital transformation and firm performance through dual mechanism analysis

ABSTRACT Utilizing data from Chinese A-share listed firms we explore the paradoxical effects of digital transformation on firms’ financial and operational performance. Through text mining, mechanism and heterogeneity analyses, the study’s findings indicate that digital transformation may inflate operational costs and compromise firm performance. When considering financial restrictions and R&D, the productivity gains emanating from digital transformation, underscores the symbiotic potential of concurrent technological and financial strategies. Heterogeneity analyses reveal a differentiated impact: larger firms and specific sectors, such as technology, witness a significant boost in productivity, whereas state-owned entities and joint ventures are less susceptible to performance downturns.

Performance management systems for sustainability in SMEs: An interventionist approach

To address global sustainability, engagement from every social sector is necessary. In this context, businesses can play a pivotal role. Therefore, it is urgent to establish proper management tools in order to support or-ganizations' top management in addressing these goals. While larger firms are making progress in measuring, managing and reporting sustainability performance, small and medium enterprises (SMEs) are lagging behind for various reasons – such as the lack of regulatory frameworks, standards, managerial competence and more. In OECD countries, SMEs account for 40% of private sector GDP. As such, their relevance and role in pursuing sustainability cannot be overlooked. This research aims to advance understanding of the development and implemen-tation of performance measurement and management (PMM) systems taking into account the sustainability dimensions of performance in SMEs. This is key to al-lowing businesses and their management to measure and monitor their impact at the economic, social and environmental levels. In order to do this, the research is based on action research and the incorporation of an interventionist approach. In particular, the authors have developed a sus-tainability PMM for a medium citrus company operating in the B-to-B market and based in Southern Italy.

The dynamics of cost behavior: Unveiling sticky costs in private companies

Purpose: While research on cost stickiness has predominantly focused on large public companies, the variability in results has cast doubt on the generalizability of sticky cost behavior to all companies. This paper investigates whether cost sticki-ness is observable in smaller private companies – i.e., firms without publicly traded securities – thus addressing a notable gap in the literature. Design/methodology/approach: This study adopts the empirical framework of Anderson et al. (2003), using data from private Italian firms from 1998 to 2022. Furthermore, it extends the scope of analysis to include such diverse cost catego-ries as selling, general, and administrative (SG&A) costs, total labor cost, purchase costs, rent costs, and other operating expenses. Findings: The findings indicate that SG&A costs in private firms are significantly less sticky than those reported for large public firms. Cost stickiness is also ob-served in labor, rent, and other operating costs but not in purchase costs. Notably, cost stickiness varies across industries. Originality/value: This study sheds new light into the dynamics of cost stickiness by highlighting how asymmetrical cost behavior in small and medium-sized pri-vate companies differs from that in large public companies, enhancing the under-standing of cost management practices across business contexts.

The paradox of dual orientation in human resource practices and its cross-level effect on innovation

This paper leverages paradoxical theorizing to develop the scale for Ambidextrous Human Resource Practices (AHRP) and contributes to the literature on emerging economies by providing a guide for managers on best practices for implementing ambidexterity within HR. A mixed −methods approach was used. Study 1 generated the item pool for the AHRP scale with the help of extant literature and in-depth interviews conducted with 37 managers from five large Chinese firms, including two Fortune 500 companies. The items generated in Study 1 were tested for validation through a second study with a sample of 216 employees. Study 3 employed multilevel structural equation modeling on data from 257 employees across 64 teams from 31 firms. The AHRP construct was developed with two dimensions: commitment-oriented HR practices (HRP-CM) and cooperation-oriented HR practices (HRP-CO). Analysis of multisource data indicates that AHRPs at the firm level had a strong positive relationship with innovation performance at the team level.

Analysis of European accounting and auditing firms: do they have different business viability?

PurposeThe Audit and Accounting Firms (AAF) companies are of great importance as they audit companies in different sectors and report on their economic-financial situation. The academic literature has analysed these firms but has not gone as far as to review their economic and financial health. Therefore, this study aims to focus on the analysis of whether these companies are viable companies beyond the large firms, whether they generate profits from their activity or whether they tend to go bankrupt. In addition, the impact of COVID-19 has been studied, since it is questionable whether the effect on AAF has been negative or positive.Design/methodology/approachIn order to answer the hypotheses put forward in this study, analysis of the profitability, liquidity and solvency situation of AAF considering their size and age, as well as the impact of the pandemic on this sector has been done. In total, 12,469 European companies are analysed. After the descriptive analysis of the companies by ratios, the Altman Z-score model is used as a methodology to assess whether they are bankruptcy-prone companies based on their characteristics.FindingsThe results of the analysis of the study have shown that these are companies of great importance to the European economy and that, depending on their characteristics, there are companies that may be closer to the risk of bankruptcy. This study is an essential contribution to the academic literature, public administration and the management of auditing and accounting firms.Originality/valueTo the best of the authors’ knowledge, this study is the first to analyse AAF at the European level with a panel data sample. The results obtained can be generalized and form the basis for future lines of research.

Self-Regulation for Reputation-Sensitive Buyers: SA8000 in China

Industries and firms have diverse motives for adopting self-regulatory institutions. This research develops and tests propositions about one motive—exploiting opportunities to do business with reputation-sensitive buyers—as distinct from self-regulation to defend against regulatory or activist threats. To study the adoption and effects of self-regulation for reputation-sensitive buyers, we study the SA8000 socially responsible employment certification among large firms in China in the early 2000s. Using official longitudinal industrial microdata, we test hypotheses generated by this assumed motive for self-regulation and find that (a) despite concerns about the corruptibility of certification bodies, SA8000 adopters in China exhibited higher precertification worker wages than comparable nonadopters, (b) self-regulation led to increased employment and sales to foreign markets, where reputation-sensitive buyers are concentrated, (c) the positive effect on exports was greater than the (insignificant, negatively signed) effect on domestic sales, and (d) there is no evidence that self-regulation increased worker wages beyond the initial high start. Contrasting these findings with prior research on industry self-regulation for other motives, this study highlights how both adoption patterns and downstream effects differ according to the audience for self-regulation. This paper was accepted by Olav Sorenson, organizations. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2020.01306 .

Independent Commissioners' Role in CEO Tenure, Capital Intensity and Firm Size Tax Avoidance

Purpose: This research aims to understand the influence of CEO tenure, capital intensity, and company size on tax avoidance, with a focus on how these relationships are moderated by the proportion of independent commissioners in manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2022. Methodology/approach: The study employs a purposive sampling strategy, selecting a total of 198 companies that meet the predefined criteria. The analysis relies on secondary data collected from the IDX website and utilizes panel data regression analysis on eViews 13.0 as the analytical technique. Findings: The data reveals that company size significantly affects tax avoidance, with larger firms tending to avoid tax less. Conversely, CEO tenure and capital intensity do not appear to impact tax avoidance significantly. The proportion of independent commissioners has a moderating effect on the relationship between firm size and tax avoidance, but not on the relationships between CEO tenure, capital intensity, and tax avoidance. Practical implications: These findings imply that corporate governance, represented by the proportion of independent commissioners, plays a crucial role in moderating the impact of company size on tax avoidance. However, its influence does not extend to the effect of CEO tenure and capital intensity on tax avoidance. This suggests that enhancing corporate governance practices could be a potent strategy for managing tax avoidance in large firms. Originality/value: This research contributes valuable insights into the factors influencing tax avoidance. It is unique in its use of independent commissioners as a proxy for corporate governance, testing its role in moderating the relationship between independent variables and tax avoidance. This is a departure from previous studies, which typically treat independent commissioners as independent variables.

The Interrelation between Corporate Governance Practises and the Financial Performance of Microfinance Institutions in CEMAC

This study aims to examine the relationship between corporate governance tools—specifically board size, board gender diversity, capital structure, ownership structure, and audit—and financial performance of microfinance institutions as measured by Return on Assets (ROA) and Operational Self-Sufficiency (OSS). Quantitative data is employed to identify the relationship between the variables. A dataset comprising forty-four microfinance institutes extracted from the Mix Market database for the period 2000 to 2021 is utilised. The research identified correlations between Microfinance Institutions’ financial performance and their board characteristics, capital structure, ownership structure and audit. The exploratory variables all produced significant results. The study identified significant relationships between the examined Corporate Governance practices and the financial performance of microfinance institutions in CEMAC. Capital structure positively influences the ROA and the constructed financial performance index but negatively influences the OSS of microfinance institutions in CEMAC when ownership structure is accounted for and audit is not accounted for. Ownership structure (those which have NGO and NBFI forms) positively influences the ROA and the constructed financial performance but negatively influences the OSS of microfinance institutions to a significant extent. Constructed board characteristics index (board size and board gender diversity) positively influences the ROA and the constructed financial performance index but negatively influences the OSS of microfinance institutions in CEMAC when ownership structure is accounted for and audit is not accounted for. Microfinance size has a positive effect on ROA and OSS but a negative one on the computed finance performance index. When audit is accounted for excluding ownership structure, we conclude that capital structure positively influences the OSS and the constructed financial performance index but negatively influences the ROA of microfinance institutions in CEMAC. The constructed board characteristics index (board size and board gender diversity) positively influences the OSS and the constructed financial performance index but negatively influences the ROA of microfinance institutions in CEMAC when audit is accounted for and ownership structure not. Being audited by large firms leads to a decrease in OSS, an increase in ROA and a general decrease in the constructed financial performance index in microfinance institutions in CEMAC when ownership structure is not considered. This study highlights the significance of corporate governance tools and their effectiveness in the success of organizations.

Accounting for cryptocurrencies in international practice

Introduction. With the expansion of the application scope of cryptocurrency, the current enterprise accounting processing and the supervision of relevant departments are facing great challenges: due to the lack of corresponding accounting standards, enterprises holding cryptocurrency rely more on the judgment of enterprise accounting when conducting relevant business processing. The main purpose of this study is to clarify the specific standards for including cryptocurrency in accounting entity, and provide basic guiding principles for the handling of such assets in accounting records and financial reports. The specific objectives of this research include in-depth analysis of the core characteristics of encrypted assets in financial accounting and determination of their appropriate classification attributes. Methods. Thisstudy strictly follows the scientific and systematicinquirymethod, integrates the conventional research techniques such as analysis, synthesis and generalization, and uses statistical tools as an aid. In order to achieve the research goal, this study carefully screened and deeply analyzed the academic literature and publications in related fields, and adopted interpretation and analysis methods. Through careful content analysis, this study not only reveals the similarities and differences in the literature, but also gives clear guidance on how to properly handle cryptocurrency in financial statements. International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) serve as theoretical references to evaluate the applicability of cryptocurrency accounting, and provide important standards for considering its impact on financial reporting. Results. Although cryptocurrencies have gradually developed rapidly, the accounting principles still include the International Accounting Standards Board (IASB). The nature of cryptocurrency is complex, and it is difficult to determine how to conduct accounting treatment. This situation may make the omission of corporate accounting information disclosure, and the relevant investors will bear higher risks. It may also lead to related enterprises encountering bottlenecks when seeking listing opportunities, and turn to overseas markets to outflow of opportunities. Therefore, we should set appropriate accounting standards for cryptocurrencies as soon as possible. By combing the current Australia, Britain, the United States, Canada has issued encryption currency accounting guidelines, and the relevant provisions of the international accounting standards and the opinions of large accounting firms, the current encryption currency accounting theory exploration, for accounting entities hold encryption currency accounting recommendations. Perspectives. A promising direction for further research is to improve the methodology of accounting for the movement of cryptocurrency, taking into account the volatility and dynamism of the market. The procedure for controlling electronic transactions using cryptocurrencies to ensure public trust in them, to confirm the reliability of electronic information and the completeness of the display of generalized indicators in various forms of reporting requires additional scientific and applied developments.

Polluting my downwind neighbor: Evidence of interjurisdictional free riding from air polluter locations in China

Based on comprehensive firm-level datasets and wind pattern information in China, I find evidence of the ‘polluting my neighbor’ phenomenon at the provincial level. Large air-polluting manufacturing firms tend to be disproportionately situated near downwind borders, particularly when wind speeds are lower. Quantitatively, the expected number of new large air polluters (top 10%) in a county-year cell decreases by 11% as the county’s distance to the downwind province border increases by one standard deviation (192 km). Additionally, a one-standard-deviation (0.27 m/s) increase in wind speed reduces the expected number of large air polluters by 6% in counties 100 km closer to the downwind border. The results are robust across various empirical strategies and withstand multiple placebo tests and robustness checks. This finding is predominantly driven by top 10% largest air polluters since placing larger polluters closer to the border can externalize more environmental costs. Furthermore, I demonstrate that this strategic siting of air polluters leads to air quality inequality, disproportionately affecting socioeconomically disadvantaged populations in downwind areas within a province.

Inhabiting influence of digital finance on stock price synchronicity

We examine how digital finance can influence stock price synchronicity in China for the period of 2011–2021. Results suggest that the digital finance index, coverage breadth, usage depth, and digitalization level can significantly reduce stock price synchronicity. The possible channels of this linkage are information opacity and stock price crash risk. We find that digital finance is effective in reducing stock price synchronicity only in state-owned enterprises and large firms. The results are robust and immune to reverse causality and endogeneity and have important implications for investors and policymakers.

“A retreat to safety”: Why COVID-19 make firms more risk-averse?

While existing research has explored the impact of COVID-19 on corporate financial performance and managerial behavior, its specific effect on corporate risk-taking (CRT) remains largely unexplored. This study investigates how the uncertainty caused by COVID-19 affected CRT in Chinese listed firms. Employing a Difference-in-Differences (DID) model with 52,792 firm-quarter observations from 3702 Chinese A-listed shares between 2018Q1 and 2021Q4, we find that firms exhibit a retreat to safety, increasing cash holdings by an average of 2.74 % in response to the pandemic. This heightened risk aversion is mediated by a decline in managerial overconfidence, suggesting that the uncertainty of COVID-19 dampened managers' expectations of future returns. This relationship is particularly pronounced in state-owned firms, larger firms, and those operating in highly competitive markets. These findings offer valuable insights into the interplay of external shocks, managerial psychology, and corporate strategic responses, highlighting the importance of incorporating behavioral factors into crisis management strategies.

Do climate change policies affect labour market distortions? Empirical evidence from China's low-carbon city pilots

ABSTRACT To mitigate climate change while ensuring that the substantial benefits of a green economic transition are widely shared, the concept of a just transition has emerged as a pivotal element in climate strategies. Although the effectiveness of climate policies has been a subject of ongoing debate, the integration of just transition principles is often overlooked as a key component. This study employs China’s Low-Carbon City Pilot policy (LCCP) as a quasi-natural experiment and uses a time-varying difference-in-differences (DID) methodology to assess the impact of LCCP on wage distortions within firms. Using data from listed companies between 2006 and 2022, our analysis shows that the low-carbon policy itself may be a source of inequity, disproportionately benefiting capital at the expense of labour, thus exacerbating wage distortions and preventing labour from receiving fair compensation. This inequity undermines the principles of a just transition, as the allocation of policy resources tends to favour large firms, enhancing their pricing power and diminishing labour market flexibility. The economic outcomes of LCCP are mixed: while it accelerates the growth of capital share, it also leads to an unequal distribution between capital and labour. Furthermore, our exploration of the role of export trade in mitigating these distortions reveals that exports actually widen the disparity in wage distortions. Our study underscores the urgent need to prioritize equity in climate policies and improve labour allocation efficiency within climate action frameworks. We aim to provide decision-making support for the design and implementation of more equitable low-carbon policies in developing countries.