Moderating Effect Of Firm Size Research Articles

Does Firm Size and Age Strengthen the Relationship Between Ambidexterity and Financial Performance? Empirical Evidence in MSME Perspective

A firm that combines entrepreneurship is often recognized as a critical contributor to economic growth, job creation, and development, as well as an essential component of economic vitality. This study investigates the moderating effect of firm size and age on the association between ambidexterity and financial performance. The idea is tested using a quantitative methodology in this study. The research instrument was a questionnaire that respondents filled out. The participants in this study are all MSME leaders in Tangerang City, Banten, Indonesia. For this study, 216 participants were chosen randomly, and data were analyzed using a structural equation model (SEM). Its results discovered that ambidexterity has a favorable and statistically significant effect on financial performance. In addition, firm age improves the association between all ambidexterity aspects (product exploration, product exploitation, market exploration, and market exploitation) and financial performance. However, company size has no moderating effect on the association between product and market exploitation and financial performance, only on the relationship between product and market exploration and financial performance. This research is contributing to the size of businesses with structural distinction through mechanisms underpinning resources and capabilities. In addition, the firm's age and expertise with contextual systems and processes, as well as the mechanisms underlying organizational learning, enable the company to maximize its performance. Although using MSMEs as the study's sample boosted internal validity, caution should be exercised when extending these findings to other industries, such as manufacturing.

Impact of green supply chain management practices on the triple bottom line: a study on apparel manufacturers of Sri Lanka

PurposeThis paper aims to assess the impact of green supply chain management (GSCM) practices on the triple bottom line’s economic, social and environmental performance of Sri Lankan apparel manufacturers.Design/methodology/approachThis quantitative study uses a deductive approach. The practice-based view is used to support the conceptual framework. The partial least square structural equation modelling technique empirically assessed the conceptual model using 164 responses from Sri Lankan apparel manufacturers through a structured survey questionnaire. Apart from examining the direct effects of GSCM practice on the triple bottom line, the study also investigated the moderating effects of firm size and duration.FindingsThe results show that GSCM practices positively affect the organisation’s triple bottom line while business size and duration moderate the said relationship.Research limitations/implicationsThe fact that this study is based on Sri Lankan apparel producers may impact the generalizability of the findings across different industries and countries. Furthermore, the survey only looked at export manufacturers. This raises questions about the results’ relevance to other non-export groups of the current population with distinct characteristics.Practical implicationsThe paper provides insights for both academia and practitioners on the importance of adopting GSCM practices for the business performance of apparel manufacturers in Sri Lanka. The paper includes implications for devising strategic solutions for organisational performance and sustainability by using GSCM practices in apparel manufacturers in Sri Lanka.Originality/valueThe research contributes to the body of knowledge in the GSCM field in general. This research also contributes to the limited literature on GSCM practices in Sri Lanka. To the best of the authors’ knowledge, this is the first attempt to explain how apparel manufacturers in Sri Lanka are organised.

INVESTIGATING THE E-SERVICE ADOPTION OF SMEs IN OMAN USING THE TECHNOLOGY READINESS MODEL 2.0 WITH A FOCUS ON BUSINESS SIZE

The study examines the technology readiness of SMEs for the adoption of e-services based on company size. This reveals opportunities to better exploit the potential of e-services adoption for SMEs in Oman. The problem this study focused is that despite the increasing availability and benefits of e-services, many small and medium enterprises (SMEs) in Oman have been slow to adopt them. This lack of adoption can limit their ability to compete and grow in an increasingly digital market. Studies show that business size plays an important role in the adoption of e-services, and this is one of the main reasons for conducting this study. A quantitative survey method was used to select the sample among SMEs in Oman. SmartPLS 4.0 was used to conduct a multigroup analysis (MGA) to determine the moderating effect of firm size of SMEs in Oman.The main findings show that motivators (optimism and innovativeness) are important predictors of SMEs' willingness to adopt e-services. The study also found that among demographic factors, firm size significantly explains differences between SMEs' readiness to adopt e-services, while it is predicted by motivators and inhibitors.This study has added to the literature by investigating the moderating effect of firm size on SMEs' readiness to adopt e-services in Oman. It could also provide additional benefits to many SMEs that could lead to the adoption of e-services.
 Keywords: Technology Readiness, Technology Adoption, E-services, SME, Business Size.

The Impact of Digital Marketing Innovation on Firm Performance: Mediation by Marketing Capability and Moderation by Firm Size

Digital marketing innovation plays an important role in a company’s performance. Since this concept is quite new, there are not many empirical studies on the impact of marketing innovations. The purpose of this study is to examine the impact of digital marketing innovation on firm performance, consider the mediation effect of marketing capability on the impact of digital marketing capability on firm performance and explore the potential moderating effect of firm size on the mediation effect. Using KOSPI and KOSDAQ data and a linear moderated mediation estimation, we found that digital marketing innovation on firm performance through marketing capability has significant direct and indirect effects, with indirect effects greater than direct effects. Theoretical and practical implications are also discussed in this article.

Board diversity and export intensity: the moderating role of firm size

PurposeBuilding on resource dependence theory and contingency theory (CT) and focusing on an emerging market setting, this study investigates how demographic board diversity (BD) influences the export intensity (EI) of firms listed on Borsa Istanbul (BIST), with the moderating effect of firm size, as a contingency factor, on this interaction.Design/methodology/approachUsing a sample of 65 exporting firms listed on the BIST Industrials Index, this study explores how demographic attributes of board members, represented by the board diversity index (BDI), affects EI by employing panel data analysis over the period of 2016–2020.FindingsThe results suggest that there is a negative relationship between BD and EI, but firm size has a positive moderating effect on the association of BD and EI, indicating that large firms with diverse boards are more prone to access foreign markets and make export. The findings further indicate that board size and CEO duality have a negative and significant effect on EI, while marketing intensity has a positive and significant impact.Research limitations/implicationsThe sample covers only public companies listed on the BIST Industrials Index, and the impact of board characteristics on the EI is analyzed for a limited time frame, i.e. from 2016 to 2020.Practical implicationsThe findings help business executives better understand the contribution of the firm size on the interaction of BD and EI and offers valuable insights to companies to gain a competitive edge in international markets.Originality/valueThe study provides evidence on the effects of board attributes on the EI from the perspective of emerging countries. It also helps to gain a deeper understanding of how board dynamics contribute to the internationalization of companies.

Green Human Resource Management Practices and Performance: Testing the Moderating Role of Firm Size Using Evidence from Firms Listed on the Nairobi Securities Exchange, Kenya.

The study aimed to establish the moderating effect of firm size on the relationship between green human resource management (HRM) practices and the performance of firms listed on the Nairobi Securities Exchange (NSE). It employed a positivist research philosophy and a cross-sectional research design and was guided by universalistic and contingency theories. A pilot study was conducted in 12 firms not listed on the NSE. Reliability was examined using Cronbach’s coefficient yielding a value of 0.95. Validity was ascertained through peer review by HR experts. A census of the 62 firms listed on the NSE was taken. Primary data was collected using a structured questionnaire and analysed using both descriptive statistics and regression. The results revealed that firm size has a positive and statistically significant moderating effect on the relationship (regression coefficient, 0.386,p-value 0.000<0.05). Therefore, the null hypothesis that firm size has no statistically significant relationship with the performance of the NSE-listed firms, was rejected concluding, that firm size positively moderates this relationship. The results further validate the contingency theory revealing its applicability to green HRM studies. The study recommends further studies to; explore the effect of firm size on the implementation of green HRM and assess the moderating role of firm size on cross-listed firms. The study contributes to green HRM theory and practice and offers insights to HR practitioners and policymakers as they institute green HRM practices.

Leasing: A Critical Financing Option in the Nigerian Financial Arena

The study examined the effect of lease financing on the performance of quoted consumer goods companies in Nigeria for the period - 2009 to 2018. Specifically, the study assesses the effect of finance or capital lease, leveraged lease and the moderating effect of firm size on lease financing and performance of consumer goods companies. It also employed historical research design in investigating cause and effect relationship among the variables. Using Desk Survey Method, data were collated from Annual Reports and Accounts of the companies. The Ordinary Least Square (OLS) Multiple Regression Technique, as well as descriptive statistics, was employed in the analysis of data. Pre-tests such as Panel Unit Root test and Johansen/Fisher combined co-integration were adopted to check the presence of non-stationary and long-run relationship respectively. Vector Auto Regressive Lag and Panel Vector Error Correction Model were also employed to address the issue of short-run and long-run dynamics. Estimated results showed that finance lease had a significant positive effect on the performance of quoted consumer goods companies in Nigeria. Leveraged lease and firm size exerted a significant negative effect on the performance of quoted consumer goods companies in Nigeria. Based on the results, it was recommended amongst other things that the amount of debt used in the firm capital mix should be proportionate to the size of the firm in terms of its assets and capacity to produce consumer goods. Also, firms should reduce the use of finance or capital lease as a financing option given the overall negative effect of lease financing on the performance of consumer goods companies in Nigeria; and rather adopt the use of operating lease which has an overall significant positive effect, especially in the short run.

재고최소화와 기업성과 간의 관계에 대한 실증분석

Purpose - Over the past two decades, many Korean steel companies have actively introduced lean practices into operations for competitive improvement. Taking this point into account, this study investigates the relationship between lean practices and firm performance in Korean Steel Companies.
 Design/Methodology/Approach - We employ the empirical leanness indcator (ELI) suggested by Eroglu and Hofer (2011) to measure the firm’s inventory leanness; this reflects how effectively a firm applies the lean practices, and we use the return on sale (ROS) and return on asset (ROA) as the firm performance variables. In order to analyze the impact of inventory leanness on firm performance, we investigate the relationship between the ELI and both ROS and ROA with regression. We conduct the analysis using 55 Korean steel companies for the period 2009-2019.
 Findings - First, ELI has a positive effect on ROS and ROA. Second, there is a positive relationship between firm size and firm performance. Third, the moderating effects of firm size on the relationship ELI and ROS (ROA) are insignificant.
 Research Implications - The main result of this study implies that the efforts of Korean steel companies to apply lean operations were fruitful in terms of firm performance. In addition, we propose that managers in the steel industry need to actively introduce lean approach for operational improvement.

The Impact of Online Sales on Recovery from COVID-19

The massive spread of the COVID-19 outbreak has widely disrupted business activities around the world. In such a context, more manufacturing enterprises have to turn to online sales to restore sales and workforce. However, the actual effects of above relationships are still unknown. The aim of this study is to analyze whether and how online sales affect sales and workforce recovery from COVID-19. Meanwhile, we deeply explore the mediating effect of cash flow adequacy and the moderating effect of firm size. Drawing from a cross-country survey with 2714 manufacturing enterprises during the COVID-19 pandemic and controlling for self-selection bias, we find an inverted U-shaped effect of online sales on sales and workforce recovery. Online sales also exert an inverted U-shaped effect on cash flow adequacy, whereas this effect is weaker for small and medium enterprises (SMEs). Furthermore, cash flow adequacy positively facilitates sales and workforce recovery, indicating the role of cash flow adequacy in partially mediating the relationship between online sales and recovery. In addition, we confirm that firm size moderates the indirect effect of online sales on sales and workforce recovery through cash flow adequacy. This study not only expands e-commerce and emergency management research domain and enriches the results of related research, but also provides management implications for the recovery of manufacturing enterprises from the perspective of online sales during the COVID-19 pandemic.

The Impact of Sustainable Energy on Liquidity and Financial Performance of the Textile Industry

Sustainable energy is considered to be the most important input for any organization owing to its noteworthy impact on the liquidity and performance of the firms. Hence, it is imperative to evidence the impact of sustainable energy on a firm’s liquidity and performance. As the disruptions in sustainable energy adversely impact the performance of manufacturing firms by reducing production directly and amplifying operational leverage, it is significant to investigate the impact the sustainable energy on a firm’s liquidity and performance. Further, the impact of disruptions in sustainable energy is size specific, therefore, the study also assumes the moderating role of firm size in shaping the stated relation. So, the aim of the current research is to investigate the impact of sustainable energy supply on liquidity and performance of the firms keeping in view the moderation effect of firm size. Using financial data of 120 textile firms from the year 2010 to 2022, the current investigation has employed a panel data methodology to quantify the impact of the sustainable energy disruption on a firm’s liquidity and performance. The results revealed that the sustainable supply of energy sources significantly impacts liquidity and working capital management as well as the performance of the textile sector in Pakistan. Further, firm size tends to moderate the relation between sustainable energy supply and performance. Although the effect is found to be partially moderated. It is recommended that in the long run, the firms might opt for alternate energy sources resulting in savings from huge performance losses. Encouraged by the inadequacy of empirical evidence in developing economies like Pakistan and keeping in view the importance of working capital management and performance efficiency, the current work is the need of the day. The impact of sustainable energy sources must be researched to gauge the impact on the manufacturing industry’s performance.

The relations of corporate risk, operating efficiency, and firm size to managerial compensation: Evidence from Taiwan stock market-listed companies

This study uses Taiwan stock market-listed company data to analyze relationships between managerial compensation, corporate risk, and operating efficiency. This study focuses on three aspects. First, we examined how different types of corporate risk can relate differently to top manager salaries. Second, we investigated whether management efficiency is associated with managerial compensation in Taiwan. Last, we explored how firm size moderates the relationships between top-manager salaries, corporate risk, and operating efficiency. Our findings reveal that credit risk is remarkably different from other risks related to managerial compensation. Moreover, the moderating effect of firm size varies across various factors. Furthermore, most estimated results supported all our hypotheses. We provided subsequent explanations for the outcomes. The particular phenomenon found in this study also gave implications for the contract design of managerial compensation.

Firm LGBT-Friendliness and Investor Reaction to Pulse Nightclub Shooting

Firm LGBT-friendliness reflects the attitudes of firms toward their LGBT employees, consumers, and investors. While existing literature has largely documented the positive audience reactions to that such as those from investors (Shan, Fu, & Zheng, 2017) and employees (Hossain, Atif, Ahmed, & Mia, 2020), our study argues that firm LGBT-friendliness can be both celebrity and infamy. Negative audience reactions exist and are significant during LGBT-related exogenous social events. Specifically, we choose the Pulse Nightclub Shooting as an example. The event study results show that investor reactions to firms with high-level and low-level LGBT-friendliness are more positive than reactions to firms with medium-level LGBT-friendliness in the event. The moderating effects of firm size and Twitter announcement are examined. The findings cast new light on understanding firm practices based on social values and social events.

On Name Distinctiveness and Stock Market Performance

This study seeks to establish that having a distinct name can help firms attract investors’ attention, leading to better stock market performance. Furthermore, we examine the moderating effects of firm size, firm age, industry size, and industry performance. By studying all publicly traded firms in both CRSP and Compustat, our results show that there is a positive relationship between firm name distinctiveness and firm annual stock return, and this relationship is stronger for younger firms, small firms, firms in small industries, and firms in high-performance industries. Supplemental analyses are performed to address the endogeneity issue.

The horizontal S‐shaped relationship between corporate social responsibility and financial performance: The moderating effects of firm size and industry dynamism

AbstractThe relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) is inconclusive. Building on CSR power and stakeholder power arguments, slack resource theory, and agency theory, this study constructs a three‐stage model to compare CSR benefits and costs. This comparison indicates a horizontal S‐shaped CSR‐CFP relationship. Using a sample including 27,628 firm‐year observations of Chinese listed firms from 2010 to 2020, we find evidence for this horizontal S‐shaped CSR‐CFP relationship, which reveals that the S curve is more pronounced for smaller firms and for firms operating in more dynamic industries. Our findings contribute to the CSR‐CFP literature, CSR power and stakeholder power arguments, and the evaluation of the moderating effects on the S curve. Accordingly, these findings highlight key implications for decision‐makers and policymakers.

Financial Risk, Firm Size and Financial Distress: Turbulent Times for Firms Listed at the Nairobi Securities Exchange, Kenya

In Kenya, at least 6 listed firms became insolvent and got into liquidation over a period of 10 years (2009-2018) leading to loss of income, unemployment and other negative outcomes. Hence, the financial stability of the existing listed firms should be examined closely since the firms are expected to be stable at any point in time. Firm Size has been observed to moderate the relationship between various variables and financial distress of firms though there is little empirical evidence in developing economies particularly for firms that are listed at the Nairobi Securities Exchange in Kenya. Hence an empirical issue that remains is to determine what moderating effect firm size has on the relationship between financial risk and financial distress of the listed firms. The general objective was to investigate the moderating effect of firm size on the relationship between financial risk and financial distress of firms listed at Nairobi Securities Exchange, Kenya for the period 2009-2018. This study was based on Wreckers theory of financial distress, Trade off theory, Distress theory, Early Bankruptcy theory and the Altman’s Z-Score Model for financial distress. The study adopted positivism research philosophy and explanatory and descriptive research designs. The targeted population entailed all 66 firms listed at the Nairobi Securities Exchange, Kenya as at 2018. Time Series Cross-Sectional secondary data was analyzed. The following diagnostic tests were carried out before delving into data analysis: Tests for Multicollinearity, Outliers, Heteroscedasticity, Autocorrelation, Linearity, Goodness of Fit, Stationarity and Model Specification. Data analysis was done using descriptive statistics and inferential statistics using Binary Logistic regression model. The findings indicate that Firm size indeed moderates the relationship between financial risk and financial distress of firms listed at the NSE, Kenya at 5% significance levels. Optimal firm sizes should be set up for listed firms to manage financial distress.

Examining the Relationship Between Product Market Competition and Chinese Firms Performance: The Mediating Impact of Capital Structure and Moderating Influence of Firm Size.

This study emphasized the relationship between the Chinese companies’ product market competition and organizational performance. This article explored the mediating effect of capital structure and the moderating impact of firm size in achieving better performance of Chinese companies. This study employed a sample of 2,502 Chinese firm observations and identified that market competition positively influenced firm performance. Additionally, capital structure partly mediated the relationship between product market competition and firm performance. Similarly, the present study also tested the moderating effect of firm size (both small and large) on the association between product market competition and firm performance. The results showed that moderating large businesses affects the nexus between product market competition and firm performance. Conversely, small firms’ moderating role revealed a substantial adverse impact on the association between product market competition and firm performance. These findings contribute to the literature on the complex implications of market competition on business firms’ performance. The results provide insightful and practical implications for future research directions.

Strategic or substantive innovation? -The impact of institutional investors' site visits on green innovation evidence from China

Green innovation is a critical path for enterprises to improve their sustainable development level. As an important external force of corporate governance, institutional investors may play a role in promoting green innovation. This study analyzes the direct effect of institutional investors on green innovation and the moderating effect of firm size, and empirically verifies it with the data from 957 Chinese manufacturing enterprises from 2012 to 2019. We find that institutional investors' site visits are positively correlated with the level of green innovation, and that firm size positively moderates this relationship. Further, this study finds that site visits by pressure-sensitive institutional investors will only induce enterprises to cater to investors and carry out strategic green innovation, while pressure-resistant institutional investors will promote enterprises to carry out substantial green innovation. In additional analysis results, we find that the promotion effect of site visit on green innovation is more significant in enterprises with dual CEO positions and in low-competitive market environment.

Sustainability performance as a result of frugal innovation. The moderating effect of firm size

This study aimed to analyse the influence of frugal innovation on the sustainability performance of Mexican SMEs and evaluate the moderating effect of firm size. A quantitative, predictive, and cross-sectional research design was carried out through Partial Least Squares Structural Equation Model (PLS-SEM). Using a simple random sampling technique and a self-administered questionnaire to gather data from a sample of 225 business managers in the state of Guanajuato, Mexico. The outcomes indicate that frugal innovation significantly contributes to sustainability performance. Moreover, the firm size plays a significant moderating role in the relationship between frugal innovation and sustainability performance, thus, when these types of firms achieve greater size, the relationship between frugal innovation and sustainability performance increases to the same extent as the size of the interaction.

The Relationship Between CEO Duality and Business Firms' Performance: The Moderating Role of Firm Size and Corporate Social Responsibility.

This study focuses on exploring the relationship between chief executive officer (CEO) duality and firm performance. We focus on how the size and corporate social responsibility (CSR) of firms moderate this relationship. In terms of size, business organizations are of two types: small and large firms. This study uses datasets of listed Chinese business firms included in the China Stock Market and Accounting Research database. It employs a generalized method of moment’s technique to explore the connection between CEO duality and the performance of Chinese business firms through double mediation effects. Our empirical analysis showed that CEO duality has a significant negative relationship with firm performance. We also explored the moderating effects of firm size (small and large) and CSR practices on the relationship between CEO duality and improved performance of Chinese firms. Large firms and CSR practices showed significant and positive moderating effects on the relationship between CEO duality and firm performance. Conversely, with CEO duality, small firms showed a negative moderating influence on firm performance. This inclusive model provides valuable insights into how the dual role of the CEO of a firm affected the performance of Chinese firms through the moderating role of CSR practices and firm size for better business performance. The study offers empirical and theoretical contributions to the corporate governance literature. This research framework might help researchers in designing robust strategies to evaluate the effects on firm performance. Researchers may gain helpful insights using this methodology.

Nexus Between Debt Financing and Market Value Moderated by Firm Size: Panel Data Evidence from India

This study examines the effect of debt financing on market value of firm and evaluates the moderating effect of firm size on this relationship. Tobin’s Q and market-to-book value ratio are used as proxy for market value whereas long-term as well as short-term debt ratios are considered to indicate debt financing. Using data of 164 capital goods sector companies for 10 years (from 2010 to 2019), panel least square (PLS) regression with fixed and random effects (RE) model has been applied for data analysis. Based on findings, the study reports significant negative impact of borrowings (both long-term and short-term) on market value of selected companies. Further, the outcome of study confirms that firm size moderates the relationship between debt financing and firm value. The magnitude and significance of the effect of debt are stronger for small firms as compared to medium and large firms. Present verdicts will assist managers in designing capital structure policies by considering its impact on market value according to firm-size.