Corporate Performance Measurement Research Articles

Revealing the potential of FinTech innovation through knowledge assets: a study of firm financial performance

Purpose This study aims to investigate the association of FinTech innovation (FinTechINN) and firm performance (FP) by considering the role of knowledge assets (KA) as a causal mechanism underlying the FinTechINN – FP association. Design/methodology/approach In this study, the authors consider panel data of 1,049 Chinese A-listed firm and construct a structural model for corporate FinTech innovation, knowledge assets and firm performance while considering endogeneity issues in analyses over the period of 2014–2022. The modified value added intellectual capital (VAIC) and research and development (R&D) expenses are used as a proxy measure for knowledge assets, considering governance and corporate performance measures. Findings According to the findings of this study FinTech innovation (FinTechINN) has a positive significant effect on firm performance. Particularly; the findings disclose that FinTech innovations has a link with knowledge assets, FinTech innovations indirectly affects firm performance, and the association between FinTech innovation and firm performance is partially mediated by knowledge assets (MVAIC and R&D expenses). Originality/value Rooted in the dynamic capability and resource-based view, this study pioneers an empirical exploration of the association of FinTech innovation with firm performance. Moreover, it introduces the novel dimension of knowledge assets (on firm-level), acting as a mediating factor with in this relationship.

Corporate Governance and Firm Performance in China: A Comparative Case Study of China National Petroleum Corporation and Other Four Asian Corporations

The study examines the impact of corporate governance on China Petroleum Nation Corporation and compares it with other selected four firms within China and Asia region. The variable identified for measuring corporate performance in this study includes return on Assets, Board size, duality, and interdependence of the board members as of 2022. The impacts of corporate governance on the firms were established through collecting information from the companys annual reports. The data obtained from the reports have been used for descriptive and correlational analysis. From this study, it has been established that firms within Asia tend to use various elements of structure to determine their performance. The variables used in the analysis, such as duality, the board size, and the interdependence of the board members, had a significant positive relationship with the firms performance. The study concluded that company directors should balance critical corporate structure variables to attain high organizational performance. Proper corporate governance has a significant impact on the performance of a company.

Intellectual Capital sebagai Pemoderasi Pengaruh Loan to Deposit Ratio dan Ukuran Perusahaan terhadap Kinerja Keuangan

The study aims to determine the effect of Loan to Deposit Ratio and Company Size on Financial Performance with Intellectual Capital as moderation. Moderating variables are variables that can strengthen or weaken the relationship between the Loan to Deposit Ratio and Corporate Performance Measures on Financial Performance. This research was conducted at banking companies listed on the Indonesia Stock Exchange (IDX). The population in this study were all banking companies listed on the Indonesia Stock Exchange totaling 45 companies. Determination of the sample using purposive sampling method. Banking companies selected as research samples were 32 companies. The analysis technique uses the Moderated Regression Analysis (MRA) method. The results of the analysis show that the Loan to Deposit Ratio (LDR) has no significant effect on financial performance (ROA), firm size (SIZE) has a positive and significant effect on financial performance (ROA), Intellectual Capital moderates the influence of Loan to Deposit Ratio (LDR) and firm size. (SIZE) on Financial performance (ROA)
 Keywords: LDR; Size; ROA; Intellectual Capital.

Analisis Evaluasi dan Pengendalian Manajemen Dalam Mengukur Kinerja Perusahaan

A company in achieving its goals needs good strategic management, including through management evaluation and control. However, in Indonesia there are still some problems in the performance implementation process. This study aims to analyze the evaluation and management methods in measuring and controlling company performance. The study has a qualitative descriptive approach with data generated from relevant journals. As for the results of discussions on this study, both evaluation and management control will play a crucial role in measuring corporate performance. With management evaluation and control, company goals can be achieved as planned

Corporate museums and performance measurement systems

ABSTRACT Corporate museums are facilities where companies showcase their history and interests in a museum-like setting. Similarly to traditional museums, they pursue cultural, social and economic performance goals. Differently from traditional museums, they also seek high organizational performance, because of their connection with their parent company. Given this business affiliation, the current systems to trace performance in traditional museums appear inadequate. Despite this peculiarity, today there are no studies on performance measurement systems for corporate museums. The present study aims to fill this knowledge gap by exploring how to design a performance measurement system to measure corporate museum performance. A collaborative action research project with Museimpresa, the Italian National Association of Corporate Museums, led to this discussion on a comprehensive and modular performance measurement system for this sector. The paper also offers suggestions on the process and the roles for development, which practitioners could find helpful in future implementations.

Women’s empowerment conditions, institutions and firm performance in the MENA region

ABSTRACT Women in corporate leadership roles are gaining recognition in business strategy decision-making. However, the impact of women’s business leadership roles in the Middle East and North Africa (MENA) region has only recently gained attention due to the considerable gender equality reforms. This study explores the extent to which gender-empowerment institutions affect the performance of firms operating in the different countries of the MENA region. Using firm-level panel data, the study deploys a country-level measure of the women’s empowerment conditions in eleven MENA countries and explores its impact on both the market-driven and accounting-driven measures of corporate performance. The results show that the institutional conditions promoting gender empowerment are a significant and positive predictor of corporate performance. The effect materialises directly and indirectly through board diversity. It is weaker with respect to the accounting-driven measures of performance and stronger with respect to the market-driven measures of performance. Institutions and culture mitigate the effect. Policymakers and private agents should coordinate their efforts to empower women’s position in the whole MENA region with tangible benefits on corporate performance.

Ethical impact of artificial intelligence in managerial accounting

Recent advances in technology have accelerated digitalization and intelligence in modern business. Particularly, the increasing use of Artificial Intelligence (AI) in managerial accounting is expected to accurately measure corporate performance, provide intelligent analyses, and predict the future of a company. However, along with the benefits, ethical concerns of using AI also arise, such as deprofessionalization, data breach, and isolation among accountants. This paper explores the ethical impact of AI in managerial accounting at both pre- and post-adoption stages. Based on 47 interviews conducted with companies, an AI system vendor, and regulators, we found that data security, privacy, and misuse; accountability; accessibility; benefits and challenges; and transparency and trust of AI are among the most common ethical risks in the development and use of AI in managerial accounting. Unique ethical impacts on four types of stakeholders: developers, managers in charge of AI adoption, managerial accountants, and regulators, were also discovered.

FINANCIAL REPORTING QUALITY AND CORPORATE PERFORMANCE OF BUSINESS ORGANIZATIONS IN NIGERIA

Evidence from previous studies revealed that quality of financial reporting has effect on firms’ performance by placing more emphasis on the financial measures of corporate performance with little emphasis on the non-financial measures. Therefore, this study appraises the impact of financial reporting quality on performance using both the financial and non-financial measures of corporate performance. This study focuses on the listed manufacturing companies in Nigeria. Data were sourced primarily and secondarily with the use of questionnaires and annual reports of the selected companies from the periods of 2017 to 2021 respectively. The information supplied in annual reports and the questionnaires were then analyzed distinctively by the use of multiple regression analysis. The result showed that financial reporting has an impact on both financial and non-financial performance of corporate entities in Nigeria. Hence, it recommended that companies should ensure to give credible and equal reports on both the financial and non-financial performance of their businesses.

Influence of CEO Human Capital and Behavioral Characteristics on Economic Profit of Russian Companies

We investigate how different personal traits of a chief executive officer (CEO) influence value creation in one of the largest emerging capital markets in Russia. Our research model considers several components of human capital of a CEO.
 Moreover, we include CEO’s behavioral biases looking at overconfidence measured by industry adjusted ratio of capital expenditures and narcissism captured by the analysis of CEO’s photos following previous academic research approaches. The CEO power is applied to understand its impact over value creation and possible mitigating effect. Our sample consists of 111 Russian publicly traded companies and 235 CEOs for 8 years (from 2013 to 2020). We apply economic profit criteria to measure corporate performance with economic value added (EVA) which captures the spread between actual return on capital derived from financial reports and overall cost of capital based on the risks of a company collected from Bloomberg .
 We use first-order differences in company’s contribution to EVA after adjustments to the industry and overall market contributions to EVA for the sample. We find empirical evidence that CEO’s human capital affects value creation measured by first-order differences to industry adjusted EVA yearly. Furthermore, the CEO power has positive impact over value creation in Russian corporations while behavioral biases such as overconfidence ad narcissism do not have significant relationship with the changes in EVA.

Corporate social responsibility and performance measurement systems in Iran: A levers of control perspective

AbstractThis study draws on Simons' levers of control model to explore how companies rely on the balanced use of diagnostic and interactive performance measurement systems (PMS) to translate corporate social responsibility (CSR) into superior performance. Data were collected based on a survey data set from 98 CFOs of public listed companies in Iran. The theoretical model was tested using partial least squares structural equation modeling (PLS‐SEM, SmartPLS 3.0), which enjoys minimum demands concerning normality assumptions and sample size. The findings show that CSR is positively associated with PMS and organizational performance. Moreover, CSR is indirectly related to organizational performance through the mediating effect of PMS. This study extends the previous literature by simultaneously incorporating resource orchestration theory in the management accounting and CSR settings. The findings provide further insights into the issue of how adopting proper management control mechanisms (e.g., balanced use of PMS) can support organizations in orchestrating the social, environmental, and economic impacts more effectively.

Impact of Financing Constraints on Firm Performance: Moderating Effect Based on Firm Size.

This paper selects the relevant data of Shanghai and Shenzhen NG listed companies from 2016 to 2020 as the research object. By drawing on relevant research results at home and abroad, the variable KZ is used to measure the degree of corporate financing constraints, and the variable Tobin Q is used to measure corporate performance. The test draws the following conclusions: financing constraints are conducive to improving corporate performance. The reason is that the higher the degree of corporate financing constraints is, the more cautious the managers are in the use of funds, and the company managers can formulate more scientific management strategies, so as to improve corporate performance. Through further research, it is found that, with the expansion of the scale of the enterprise, the degree of financing constraints has less negative impact on the performance of the enterprise. Performance has a positive impact. According to the above conclusions, the government should improve the financial market system, build a multilevel capital market, and fundamentally ease the financing constraints of enterprises, to develop and improve self-management.

Determinants of wine firms’ performance: the Iberian case using panel data

PurposeIn the macroeconomic environment of the Iberian Peninsula, this paper aims to understand which factors, intrinsic to management, affect the performance of wine companies.Design/methodology/approachThe sample comprises 3,113 wine Iberian companies between 2011 and 2018. This study has used the panel data methodology, specifically the generalized method of moments system estimation method of Arellano and Bond (1991); Arellano and Bover (1995); and Blundell and Bond (1998) to test the hypotheses proposed.FindingsUsing return on assets (ROA) and sales growth as measures of corporate performance, this study’s results suggest that sales growth is the variable that has the most significant determining factors, both specific to the company and given the macroeconomic environment. Investors and civil society well understand the meaning of sales growth, namely, in a sector close to the final consumer. When using ROA as a dependent variable, the results suggest that because it is a pure management variable, the manager tends to be more concerned with maintaining adequate levels of economic profitability to ensure sustainability and future solvency, without giving prominence to the macroeconomic environment.Originality/valueTo the best of the authors’ knowledge, this is the first time that a study has been carried out in the Iberian Peninsula on the wine industry using ROA and sales growth as measures of corporate performance. This study shows that sales growth is a measure traditionally known to external stakeholders, and to that extent, its determining factors are the variables that these players most value in the market.

EVALUATION AND EXPLORATION OF MANAGEMENT CONTROL SYSTEMS IN VILLAGE OWNED ENTERPRISES

Village-Owned Enterprises (BUMDes) Panggung Lestari is one of the reference BUMDes in Indonesia as it has run multiple business units and has successfully contributed significant Village Original Income (PADes) to the village. The research goal is to evaluate and provide solutions for implementing MCS in Panggung Lestari. Qualitative descriptive research method and case study approach by collecting data through observation, in-depth interviews, and documentation review. Then perform data triangulation so that the data can be interpreted and closed. The results showed that Panggung Lestari was regulated by Village Regulation No. 9 of 2016 and AD/ART. However, BUMDes Panggung Lestari did not have detailed operations guidelines, such as standard operating procedures and job descriptions. Panggung Lestari also did not yet have strategic planning and budgeting. Corporate level performance measurement is regulated from the top down but has not been well documented. While measuring performance at the business unit level, only the KUPAS Business Unit has performance measurement parameters for employees, while other business units do not yet have performance measurement parameters. Performance incentives are given in financial form but for employees who did not have a good system. The bottom line is that the BUMDes don't have a good MCS yet, so management needs improvement.

Thematic structure of accounting research by co-word analysis

This paper aims to discover the thematic structure of the accounting field and to highlight prominent, emerging, and fading themes across periods and regions. This study follows a systematic approach benefiting from co-word analysis through social network analysis and visualisation maps. This analysis considers the keywords presented within 7,250 articles published by 22 accounting journals over the period from 2000 to 2016. The results indicated that the themes of earnings management, corporate governance, disclosure, auditing, voluntary disclosure, conservatism, analyst forecasts, and executive compensation were the most prominent topics in accounting research. In addition, the regional co-word analysis found that while the regions of North America and Asia mostly focused on auditing- and earnings-related themes, Europe and Oceania focused on management accounting, corporate social responsibility, performance measurement, public sector, and accounting history. This is an initial attempt to examine the thematic structure of the accounting field using co-word analysis.

A Defense on Accounting Discretion: An Empirical Inquiry based on Users’ Awareness

Corporate performance is a key in corporate accounting. One of the earliest accounting measures of corporate performance is accounting income. Accrual accounting enables the measurement of changes in net assets of an entity. Accounting income is neither scientifically determined nor proven. Accounting information often results from approximation and estimation when choice among alternatives is professionally judged, rather than exact measures and perceptions. Divergence in application of accounting policies in corporations under similar conditions may present different results. Some criticize corporate accounting, particularly after scandals related to financial statement fraud, for choices among procedures that accounting standards permit. However, choices in the application of accounting permitted procedures that accounting standards allow are based on professional judgment. Professional judgment enables accounting as a profession and allows accounting professionals to claim status in their respective communities. Exploring users’ awareness of corporate reports in Saudi Arabia in terms of flexibility in using accounting methods when preparing corporate reports and analyzing their understanding of corporate reports, this study surveyed 72 financial statement users. Research has found that sufficient efforts must be made to obtain information when making investment decisions. As accounting income is a result of applied accounting procedures and methods, users perceive information published in the financial reports, including notes, as understandable. Flexibility in applying accounting standards is imperative for adapting to changes in the entity’s business environment. Potential capital market investors must maintain a minimum level of knowledge; otherwise, they might be gambling their wealth or savings against the odds.

A commitment to change? CEO pay and alignment with environmental, social, and governance objectives

In the 2019 Business Roundtable “Statement on the Purpose of a Corporation”, over two hundred executives committed to expanding the focus of their respective corporations beyond shareholder primacy. Following advice from agency theory, compensation committees traditionally seek to align executive pay with desired organizational outcomes. Our qualitative study examines whether the signatories made discernible changes to executive compensation structures to align executive incentives with a broader stakeholder view. We observe the compensation committee reports of 135 signatory firms’ proxy statements for the fiscal year ending 2020, to identify whether each firm’s incentive compensation structure included measures aligned with the firm’s commitment to a stakeholder focus. Nearly half of the sample firms continued to reward executives exclusively using measures to assess financial objectives, although thirteen made promises to include stakeholder corporate performance measures in their 2021 compensation programs. Although most leaders say they act in all stakeholder interests, we do not find evidence that these leaders are incentivized to implement the strategic and organizational changes to ensure their firms consider the environmental, social, and sustainable implications of their decisions. Future research should follow these firms’ financial performance to observe strategic consequences to action versus inaction to change.

Profit bridges that disambiguate impacts of currency fluctuations from other marketing variables

We extend the normalized approach to constructing profit bridges proffered in a recent paper to examine the impact of currency exchange rate fluctuations within a multinational corporation. In doing so, we describe a profit bridge that would measure corporate performance distinct from that which would measure the performance of business units, including metrics for the impact of volume, price, variable cost, offering mix, and exchange rate changes.

PENGARUH PENGENDALIAN INTERNAL, GOOD CORPORATE GOVERNANCE, DAN SISTEM PENGUKURAN KINERJA TERHADAP PENCEGAHAN FRAUD (Studi kasus pada Instansi Pemerintah di Daerah Istimewa Yogyakarta)

This study aims to examine the effect of internal control, good corporate governance, and performance measurement system on fraud prevention in government agencies of the Special Region of Yogyakarta. The method used in this research a quantitative method in the form of primary data using a questionnaire. The sampling technique used was the purposive sampling method. The population in this study were permanent employees and non-permanent employees in the Special Region of Yogyakarta with a sample size of 80 respondents. Data collection is done by giving questionnaires directly to respondents via a google form. The data in this study were tested using the Software Statistical Package for Social Sciences (SPSS) version 20. The results of this study indicate that internal control does not affect and fraud prevention, while good corporate governance and performance measurement system have a positive effect on fraud prevention. Keywords: Internal Control, Good Corporate Governance, Performance Measurement System, Fraud Prevention

Digital Transformation Consulting: Toward a Human-Technology Performance Model Digital Transformat

As the focus on digital transformation and its unexplored opportunities is prospering, consulting firms have also turned their attention to it. Despite this increased attention, digital transformation project failure rate remains high, thereby reaffirming the “IT productivity paradox” or “AI productivity paradox. The purpose of this paper is to holistically scrutinize the current approach of digital transformation consulting. A deductive qualitative study draws upon the Human Technology Performance model to elucidate papers on digital transformation published by four major management consulting firms in 2014-2019. Whereas the focus on customer-centricity and some measures of corporate performance is prominent in the consulting approaches, the study results have revealed several “blind spots” that are still either neglected or poorly covered. Three main blind spots are particularly prominent from the analysis. First of all, consulting firms often apply a “one size fits all” approach, thereby neglecting contextual factors, such as age, size, or industry. Secondly, they neglect process level in the return on investment of IT. Thirdly, the suitability of IS development methods remains poorly considered. Hence, the paper argues that, while consulting firms purport to support digital transformation exigences and efforts, they, in fact, adhere to traditional approaches to business consulting.

Does intellectual capital efficiency explain corporate social responsibility engagement-firm performance relationship? Evidence from environmental, social and governance performance of US listed firms

This paper examines the effect of corporate social responsibility on firm performance by accounting for the role of Intellectual capital efficiency as a mechanism underlying Corporate Social Responsibility (CSR)– firm performance association. In this study, we consider 2132 US companies and develop a structural model for CSR, Intellectual Capital (IC), and firm performance while contemplating endogeneity issues in analyses over the period of 2009–2018. The value-added intellectual capital co-efficient is employed as a proxy measure for IC performance, taking into consideration corporate performance and governance measures. The findings suggest that CSR has a significant effect on firm performance. In particular, the findings reveal that CSR has a link with IC, indirectly affecting a firm performance, and the association between CSR and firm performance is partially mediated by Intellectual capital efficiency.