Long-term Financial Performance Research Articles

Analyzing the impact of environmental strategies on corporate governance and long-term performance

This study delves into the complex relationships between corporate governance, environmental strategies, and the enduring success of publicly traded companies. Through empirical analysis, the study explores how adopting diverse sustainability measures influences stakeholder involvement, board structure, and shareholder value creation. This study combines an extensive dataset of financial information from listed companies with a quantitative examination of corporate governance practices. It also incorporates detailed case studies of leading firms implementing noteworthy environmental strategies. The study uses correlation analysis to assess environmental strategies' influence on corporate governance dynamics and long-term performance within this sector. The study highlights a positive correlation between robust environmental strategies and enhanced corporate governance practices. These include heightened board diversity, increased stakeholder engagement, and strengthened risk management frameworks. Notably, the study establishes a strong link between proactive sustainability efforts and outstanding long-term financial performance, as evidenced by key performance indicators such as return on equity and total shareholder return.

Risk and Return Trade off: A Study of Indian Pharmaceutical Sector's Stocks

The Pharmaceutical sector experienced major shifts and obstacles as a result of the COVID-19 pandemic. In the post-pandemic era, the industry's continued significance and prominence can be attributed to a multitude of factors. The market prices of Pharma equities have risen substantially as a result of the expansion of the Pharmaceutical industry, which has also garnered the interest of numerous investors. Policies and efforts taken by the government include increasing foreign direct investment, research and development, and a focus on healthcare infrastructure has led to the tremendous growth of Pharmaceutical businesses in India. In order to make well-informed investment decisions, investors, financial analysts, and decision-makers rely heavily on the risk and return characteristics of businesses. The utilisation of risk and return profiles enables stakeholders and investors to assess the long-term financial performance of a company. 17 Pharmaceutical companies out of 20 Pharmaceutical companies in India's Indexed Nifty Pharma Index are included in the sample. The daily returns of a subset of companies were evaluated for the years 2013 to 2023. The retrieved data was used to compute the daily average return, standard deviation, variance, and beta for each selected company, in addition to the Nifty Pharma Index. The correlation coefficient was also computed for each individual stock and the NSE Nifty Pharma Index. Utilising the Sharpe ratio, Treynor, Jensen Alpha, and M square formulas, the most volatile stocks were determined in the Pharmaceutical sector.

The Role of Human Resources in the Financial Performance of the Lodging Industry: Evidence Based on Financial Accounting Numbers in Korea

Purpose - This study investigates the role of human resource investment in the tourist accommodation sector of Korea. Specifically, it aims to explore the impact of human resource investment, particularly through employee education and training, on both the short-term and long-term financial performance within the Korean lodging industry.
 Design/Methodology/Approach - Utilizing data f rom private firms for 2011-2020, the study examines how financial performance, including sales growth, is related to expenditures on education, training, and benefits as proxies for human resource investment. The research primarily employs a series of multivariate regression analyses.
 Findings - The findings reveal that human resource investment itself does not affect short-term financial performance, but complements and supports financial outcomes of capital expenditure (PPE investment). However, the sales-based performance attributable to human resource investment becomes apparent within two years, and the supporting effect on financial performance generated due to capital expenditure still holds. Additionally, these results are significant for large-sized firms, but not for those small.
 Research Implications - Overall, human resource i nvestment plays a critical role i n fi rm performance by serving as a key factor in managing company resources efficiently. This study highlights the need for the simultaneous periodic management of capital- and human resources. Furthermore, this study sheds light on the role of human resource investment in the lodging industry by providing empirical results based on financial accounting numbers, an aspect that has not previously been extensively considered.

The comparison of RBV-based competitiveness of Hungarian family-owned and non-family-owned SMEs

PurposeThe purpose of this paper is to identify the differences between Hungarian family-owned businesses (FOBs) and non-family-owned businesses (NFOBs) concerning the elements of SME competitiveness and financial performance.Design/methodology/approachThe research covers the Hungarian data set of the Global Competitiveness Project (GCP, www.sme-gcp.org) of 738 (data collection between 2018 and 2020) non-listed SMEs, of which 328 were FOBs. The study uses the comprehensive, multidimensional competitiveness measurement of the GCP built on the resource-based view (RBV) and the configuration theory. Financial performance was captured with two composite indicators: short-term and long-term financial performance (LTFP). The comparative analysis between FOBs and NFOBs was conducted using binary logistic regression.FindingsThe results show that FOBs are more prone to focusing on local niche markets with higher longevity and LTFP than NFOBs. However, FOBs have lower innovation intensity and less organised administrative procedures. The most contradicting finding is that the FOBs’ higher LTFP is accompanied by significantly lower competitiveness than in the case of NFOBs.Originality/valueThis study goes beyond other GCP studies by including composite financial performance measures among the variables examined. The combination of performance-causing (resources and capabilities) and performance-representing (financial performance) variables provides a better understanding of the non-listed SMEs in terms of family ownership. The results help academia to enrich the RBV-competitiveness, the non-listed SME management and finance literature, and policymakers to design business development and support schemes. They also show future entrepreneurs the impact of family ownership on entrepreneurial success.

Assessing the Role of Sustainability Disclosure on Firms’ Financial Performance: Evidence from the Energy Sector of Belt and Road Initiative Countries

This study examines the influence of sustainability disclosure on a firm’s financial performance in the energy sector, taking into account the role of ownership concentration as a moderating factor. This study utilized secondary data from 239 energy companies from the Belt and Road Initiative (BRI) nations from 2009 to 2022. This study employed the Common Correlated Effect Mean Group and the Pooled Mean Group estimators for the analysis. To determine which component of sustainability disclosure influences a firm’s financial performance, this study divided the measurement of sustainability into three themes: environment, social, and governance. The findings revealed a positive relationship between environmental disclosure and financial performance. Similarly, we found a positive relationship between social disclosure and financial performance. However, governance disclosure does not contribute to financial performance. Furthermore, we found that ownership concentration positively moderates the association between environmental disclosure and financial performance, as well as social disclosure and financial performance. The results suggest that energy firms in developing countries should prioritize disclosing their environmental and social policies to ensure long-term financial performance.

Review Paper- Study of Investment Strategy in WINWIN PLUS

Abstract -This study delves into the investment strategy of WinWin Plus Company, aiming to provide a comprehensive understanding of its approach to financial management and wealth creation. WinWin Plus is a fictional company used as a case study for the purpose of this research. The research encompasses an analysis of WinWin Plus Company's investment philosophy, risk tolerance, and diversification strategies. It explores the company's historical financial performance and its impact on investment decision-making. Additionally, the study investigates the key factors influencing investment choices, such as market conditions, industry trends, and macroeconomic variables. Furthermore, the research scrutinizes the role of technology and innovation in WinWin Plus Company's investment strategy. In an era of rapid technological advancements, understanding how the company leverages innovation for competitive advantage and sustained growth is crucial. The study evaluates the integration of digital tools, artificial intelligence, and data analytics in decision-making processes related to investments. In the context of sustainable investing, the research examines WinWin Plus Company's commitment to environmental, social, and governance (ESG) criteria. The study analyzes the company's adherence to responsible investment practices, ethical considerations, and its impact on long-term financial performance. The findings of this research are based on a combination of quantitative and qualitative analyses, incorporating financial statements, market data, and interviews with key stakeholders within WinWin Plus Company. The results aim to provide insights into the effectiveness of the company's investment strategy, offering valuable information for investors, financial analysts, and researchers interested in understanding successful investment approaches in the corporate landscape. Keywords :- Investment Strategy, Financial Management, Wealth Creation, Risk Tolerance,Diversification Strategy, Market Conditions,Industry Trends,Macroeconomic Variables

How brand loyalty and its marketing activities affect Japanese fashion companies' financial performance

PurposeTo investigate (1) the relationship between young adults' behavioural brand loyalty (BBL) and Japanese fashion companies' financial performance (FP) and (2) FP improvement from the perspectives of social media brand engagement (BE) and loyalty programmes (LPs) by applying the complexity theory.Design/methodology/approachA mixed methodology was employed by combining qualitative and quantitative approaches to examine the prediction of outcomes by various variables in a realistic context. The integrated model associated BE and LPs with BBL and FP, which are essential for fashion companies. We selected 14 fashion brands belonging to 14 publicly traded Japanese fashion companies and surveyed 183 Japanese consumers (aged 18–25 years) who chose these brands as their favourites, engaged with the brands and participated in LPs.FindingsThe findings reveal the positive and negative effects of the variables (BE and LP) on the outcomes (short- and long-term FP). They offer marketing implications regarding brand strategy and financial improvement by considering various combinations of causal factors and complex situations, such as the fashion brands' and consumers' characteristics.Originality/valueExisting empirical studies consider consumers' symmetric reactions to the benefits and losses from variables (BE, LP and BBL) but do not realistically reveal the negative and positive effects on outcomes (FP). This study addresses this gap by applying the complexity theory and offers multiple solutions to target different consumer types to predict high FP.

Effects of environmental sustainability practice in the economy hotel to Gen Zer’s purchase decision: Behavior economy approach using choice based conjoint analysis

Generation Z consumers value sustainability and affordable accommodation. To target this demographic and gain a competitive edge, hotels should adopt socially responsible practices. Implementing a well-crafted CSR plan lays the foundation for sustainable development, that can lead to enhancing long-term financial performance of hotel companies. Few studies have explored environmentally friendly or green economy hotels. This study investigates consumer willingness to pay for green economy hotels, using a DCE and conjoint analysis to uncover generational differences. Findings reveal that Generation Z consumers exhibit a higher willingness to pay for environmentally sustainable economy hotels. The results indicate that due to an increased maximum willingness to pay for green features and green brand perception, economy hotels could charge up to $36 USD more for green economy hotel rooms. This research provides valuable insights for identifying consumer’s willingness to pay with and consumer segmentation among Generation Z and non-Generation Z consumers.

Sustainability Unleashed through Innovation: Knowledge-Driven Strategies Igniting Labor Productivity in Small- and Medium-Sized Engineering Enterprises

This research is focused on knowledge-based performance drivers, which are often intertwined with intellectual capital (IC); specifically, the value-added intellectual coefficient (VAIC) and its profound influence on labor productivity (LP), with the pivotal inputs of training and research and development (R&D) as moderating, in the realm of small- and medium-sized (engineering) enterprises (SMEs). The aim is to offer this as a sustainable model for practical implementation to empower engineering managers, donors, and policy researchers. The motivation catalyzes more informed decision-making investing in human or structural capital. It attempts to foster sustainable growth and societal stability through job creation within the knowledge-intensive engineering sector of developing countries. Methodologically, the research draws upon statistical analysis, employing Pearson’s correlation, multivariate regression, and model testing executed through specialized statistical software. The World Bank Enterprise Survey Instrument was used to collect data on 213 aviation-related firms. Primary data were collected for the years 2013–2022. Several hypotheses were developed between the variables expected to relate positively, because intellectual capital, training, and research and development should lead to better labor productivity. The findings revealed the critical issue of the misallocated investments in structural capital that this model brought forth. Furthermore, the notable contribution to national intellectual capital (NIC) studies is the significant VAIC value of 4.58 and an impressive labor productivity value of 6.78 within the knowledge-intensive ecosystem of SMEs. More insightful findings were the modest 17% positive variation attributable to the VAIC on LP, accompanied by an absence of significant influence exerted by training and R&D on this relationship. While underscoring the model’s overall validity, this intriguing discovery emphasizes the impact of intangibles on knowledge firms’ overall sustainability calculations, specifically structural capital, which accounts for a substantial 31% of labor productivity. The practical implication is that this model can be used to expose long-term financial performance hiccups through intellectual capital measures. The novelty is employing the labor productivity metric sourced from the engineering literature instead of the customary asset productivity (ATO) ratio from the IC literature.

Motivations for Backdoor Listing and Post-backdoor Performance of Range Technology under the Registration System

The successful launch of the registration system in the Science and Technology Innovation Board Star Market in 2019 opened the prelude to the reform of the registration system in my country, followed by the reform in the growth enterprise market in June 2020. The registration system overcomes the subjectivity, lag, and inefficiency of the merit regulation system to some extent and clears the way for high-quality scientific and technological innovation enterprises to achieve listing and financing. This paper takes the backdoor listing event of Range Technology in September 2022 after the implementation of the registration system as the research object and studies the motivation of the event and its long-term and short-term performance after listing. The research found that the companys backdoor listing was hindered by its own financing needs and the difficulties of the IPO. We use the event study method to study and find that the backdoor event has a significant positive impact on the short-term performance of Shells stock. In addition, the data of long-term financial performance indicators show that after the backdoor listing, Range Technologys financial performance is good, and the stock financing channel provides a guarantee for the improvement of its operating performance.

The Impact and Challenges of ESG Investment Philosophy on Chinese Capital Market and Investment Practice

Environmental, social and governance (ESG) investment philosophy has gained significant traction in recent years. This philosophy focuses on investments in companies that prioritize environmental sustainability, social responsibility, and good corporate governance practices. This paper examines the impact of ESG investment philosophy on the Chinese capital market and investment practices. It highlights the growing interest in ESG investments in China and the challenges that arise in implementing ESG practices. Additionally, this paper discusses the need for increased transparency and standardization in the ESG information disclosure and rating system, as well as the importance of education and training for investors and professionals in the financial sector. It also explores the potential benefits of ESG investment, such as long-term financial performance, and positive social and environmental impacts. Overall, this essay concludes that the ESG investment philosophy presents both challenges and opportunities for the Chinese capital market and investment practices, and that continued efforts are needed to foster sustainable investing practices in China.

Financial Innovations and Financial Performance of Deposit-Taking Saccos in Kenya

Financial innovation can be considered to be one of the crucial determinants for the performance of an organization. Various financial institutions have adopted various ways to enhance competition from other financial institutions and enhance their profitability in the market. In Kenya, SACCOS are noted to be the main drivers of the economy. They offer quick services such as quick and flexible loans to individuals seeking finance from micro-institutions rather than commercial banks. This study sought to investigate the effect of financial innovation on the financial performance of DT-SACCOS operating in Kenya. The target population of the study was the 69 DT-SACCOS from where 49 were used based on data availability. Primary data was gathered from operational managers through self-administered questionnaires after a pilot test is conducted to test the validity of the questionnaire. The data collected was condensed and analysed descriptively using the mean and standard deviation and inferentially using correlation and regression analyses. The findings of the first objective reveal that Institutional financial innovations have a statistically significant effect on the financial performance of DT-SACCOs in Kenya; Financial Products Innovations has a statistically significant effect on financial performance of DT-SACCOs in Kenya; Financial Process Innovations had a statistically significant effect on the ability of DT-SACCOs in Kenya to maintain their financial performance; a demonstrably beneficial impact that Financial Process Innovations has on the long-term financial performance of DT-SACCOs in Kenya.

Long-Term Debt and Financial Performance: A Study of Abbott Manufacturing Firm in Brussels, Belgium

Long-Term Debt and Financial Performance: A Study of Abbott Manufacturing Firm in Brussels, Belgium

Balancing short-term gains and long-term success in lodging: The role of customer satisfaction and price in hotel profitability model

This study examines the relationship between revenue and profit drivers and long-term financial performance in the hotel industry based on 17-years data (2004–2020) of six US hotel chains. The analysis creates, tests, and analyzes a cross-level model that examines the complex endogenous relationships, underlying long-term financial performance of hotels. Specifically, we examine the interaction of room price (ADR) and customer satisfaction (ACSI) within a sales-volume-driver framework that impacts financial performance through profitability, measured at both the operating and accounting levels. This study seeks to advance our understanding of these relationships, their characteristics, and their implications for long-term financial performance in the hotel industry. The findings reveal that customer satisfaction is more important than price in achieving long-term financial success in the hotel industry, whereas room nights sold is significant positive driver of all performance levels.

Market Mispricing Timing and Post-acquisition Performance: Evidence from Chinese A-share Firms

This study examines the impact of market mispricing timing on the short-term and long-term performance of acquiring firms in the context of China's capital market. Using a comprehensive dataset of A-share listed companies engaged in mergers and acquisitions (M&A) between 2007 and 2021, we investigate whether M&A activities conducted during periods of market overvaluation lead to enhanced short-term performance while failing to generate sustained long-term benefits. Our findings reveal that acquisitions executed during market overvaluation exhibit significantly improved short-term stock market performance, reflecting the alignment of merger announcements with optimistic investor sentiment. However, such positive effects on short-term performance do not extend to long-term outcomes. The study underscores the critical influence of market timing on the immediate post-acquisition performance of acquiring firms but highlights its limited impact on long-term financial and market performance. These insights contribute to a better understanding of M&A behavior within the Chinese capital market, demonstrating that while capitalizing on market mispricing can yield short-term advantages, sustainable long-term gains hinge on other factors beyond market timing.

Industry and Stakeholder Impacts on Corporate Social Responsibility (CSR) and Financial Performance: Consumer vs. Industrial Sectors

We examine the longitudinal relationship between corporate social responsibility (CSR) performance and financial performance by investigating attributes among firms operating in different industry sectors longitudinally. Using panel regression analysis on Australian publicly listed firms from 2007 to 2021, we find that CSR performance positively influences financial performance. Furthermore, our industry-specific analysis uncovers notable distinctions. Specifically, within the consumer product markets, including recreational facilities, travel and tourism, lodging, dining, and leisure products, firms benefit from stakeholder rewards for their CSR efforts, leading to sustained financial gains. However, this positive association is absent for firms operating in industrial product markets, where stakeholders do not offer similar rewards for CSR performance. The significance of stakeholder engagement becomes evident in consumer market sectors, as firms with higher levels of CSR performance secure stakeholder support, resulting in superior long-term financial performance. Our findings contribute to the existing CSR literature and offer practical insights and implications for managers operating in diverse product market industries, including the dynamic field of tourism and hospitality seeking to harness CSR performance, meet stakeholder expectations, and achieve financial advantages.

Sustainable Business Performance for Local Business Development: Evidence from Indonesia Coffee Shops

Drawing on the concept of sustainable business performance, this study proposes a research model to investigate how variables such as digital organizational culture, organizational learning culture, ethical sensitivity, and access to finance contribute to the formation of a business performance model that is expected to contribute to long-term business performance in local industries dominated by coffee shops. The measure of sustainable business performance is the performance of economic, social, and environmental factors. The PLS-SEM approach was utilized to estimate this investigation's sustainable business performance model. The study examined 111 coffee shop owners, managers, and employees, selected based on their present position within the company, using a questionnaire distributed between July and November 2021. Several factors, including the organizational learning culture, the digital organizational culture, ethical awareness, and financial access, significantly influence the long-term financial performance of the coffee shop's business. This study contributes to the existing theory and the existing body of literature on topics such as the importance of ethical awareness, access to finance, digital organizational culture, and organizational learning culture. To improve overall business performance, business owners, managers, and even employees should examine the role that sustainable company performance plays in the development of each human resource's talents.

The Corporate Social Responsibility and Its Impact on Financial Performance: A Case of Developing Countries

In developing nations, environmental policies have not given nearly enough consideration to the role that environmentally friendly innovation plays. Green innovation and long-term financial performance are extremely dependent on one another. Despite the fact that numerous studies have investigated the impact that a variety of corporate social responsibility (CSR) activities have had on environmental sustainability, relatively few have investigated the implications of green innovation strategies and sustainability. From the mid-2021 through to mid-2022, information was gathered from 184 businesses listed on the Pakistan Stock Exchange (PSX) across 12 different industries. Estimates of the results were obtained by the use of structural equation modeling using partial least squares (PLS-SEM). The outcomes of the study indicated that all parts of CSR were positively significant in the process of fostering environmentally sustainable growth, with the exception of one aspect of CSR that was directed toward customers. Additionally, sustainable development contributes to the mediation impact that green innovation has, making this effect even more powerful. The data show that CSR activities have an exceptional impact on financial performance (FP) in all aspects other than one, and that green innovation (GI) also has a high-quality impact on FP, which demonstrates the significance of CSR practices in enhancing sustainable environment.

Research on Impact of Internet Corporate Social Responsibility on Corporate Financial Performance Based on Linear Regression Model

Since China was fully connected to the Internet, the local Internet has continued to grow along with its economic strength, and Internet companies such as artificial intelligence, e-commerce, big data, block chain and electronic payment have risen rapidly. In the process of development, Internet enterprises realize the importance of social responsibility and take the initiative to shoulder social responsibility, and make a lot of contributions to the society. The relationship between social responsibility and the financial performance of Internet companies has always been the focus of academic and research discussions. Based on the linear regression model, innovation capability was introduced to explore the boundary conditions between social responsibility and the financial performance of the companies. An empirical study was conducted using a research sample of listed Internet companies in China from 2018 to 2020. The results show that (1) social responsibility of the Internet corporate has a positive effect on short-term financial performance, (2) Internet corporate social responsibility has a positive effect on the long-term financial performance of enterprises, (3) innovation capability weakens the impact of Internet corporate social responsibility on short-term financial performance, and (4) the influence of innovation capability on the long-term financial performance of Internet companies in social responsibility. The research conclusion provides Internet enterprises with social responsibility strategies and evaluation of long-term and short-term financial performance.

When and where does it pay to be green? – A look into socially responsible investing and the cost of equity capital

We investigate the circumstances under which socially responsible investing (SRI) enhances firm long-term financial performance, and therefore provides incentives for firms to self-regulate their environmental performance. Aggregating portfolios across SRI mutual funds, we estimate the effect of SRI investment with environmental screening criteria on firm cost of equity capital. We find that accounting for interactions between firm and non-shareholder stakeholders, and potential agency costs associated with certain environmental activities of the firm, SRI can facilitate the alignment of firms’ environmental and financial goals. We also find that an industry group’s environmental performance and diversity influence the extent to which a firm in that group can benefit from SRI investment.