Modern Firms Research Articles

Cultural norms and tax compliance: Evidence from China

Existing studies suggest that formal institutions can effectively constrain corporate tax evasion and increase tax compliance, but little has been said about the role of informal institutions regarding tax compliance. This study empirically examines the long-term effect of Confucian cultural norms on corporate tax compliance using unique cultural and historical data from China. We find that the intergenerational transmission of the Confucian culture can significantly promote the tax compliance of modern firms, thereby effectively reducing tax evasion. Simultaneously, the compliance effect is more pronounced in informal firms, such as small-scale, non-listed, and local firms. In terms of mechanism analysis, the normative effect of the Confucian culture is a key mechanism for explaining variations in corporate tax compliance behaviors under different cultural norms. Overall, this study fills a gap in the research on how informal institutions regulate the behavior of firms to a certain extent, and at the same time supplements the existing literature on understanding the long-term effects of the Confucian culture.

New Waves in Academic Accounting Research: Capturing the Future

The science of accounting is continually evolving alongside changes in economic landscapes and development in technology. As a result, accounting academic research must adapt to address these new facts. This paper delves into the most significant areas that are shaping the field, highlighting the exciting possibilities for future research. One major force driving this change is technological growth. Blockchain, with its secure and transparent ledger system, holds immense potential for streamlining financial reporting. Going further, academic research is exploring how this new technology can revolutionize fields such as supply chain management and intellectual property tracking. Moreover, automation is becoming a significant element in changing the method tasks are accomplished. The use of artificial intelligence and robotic process automation is revolutionizing the way accountants handle repetitive tasks. This process allows professionals to concentrate on higher-level analysis and strategic decision-making. Research is being conducted to understand the impact of automation on the accounting workforce and figure out how to develop the necessary skill sets to succeed in this new environment. Going further, the amount of data we have access to is increasing rapidly, and it’s becoming more complex. As a result, accounting research is now more focused on data analytics and visualization tools. These tools help accountants find important insights from financial and non-financial data, which can be used for better decision-making and enhanced forecasting. More deeply, the concept of “agile accounting” is becoming increasingly popular. This method prioritizes adaptability and up-to-date information to offer constant images to firms. Experts are studying how conventional accounting practices can adjust to become more agile and better respond to the changing requirements of modern firms. In addition, the profession of accounting is undergoing a significant change. According to research, there is a shift towards a more advisory role for accountants. This means that accountants are now expected to act as strategic partners to businesses. To fulfil this new role, accountants need to develop new skill sets such as strong communication, data analysis, and problem-solving abilities. Thus, the field of accounting is constantly evolving, and many exciting trends are shaping its future. Researchers in this field will play a crucial role in developing innovative solutions and ensuring that the profession remains relevant and valuable in the years to come. These are just a few of the trends that we can expect to see in accounting research as it continues to evolve. Based on the foundation laid earlier, let’s go deeper into some of the new areas in academic accounting research: Blockchain: Beyond the Hype Blockchain’s potential extends beyond secure transactions. Researchers are exploring its applications in various areas. (A) Auditing: Blockchain-based audit trails can provide a tamper-proof record of financial transactions, increasing audit efficiency and reducing fraud risks. (B) Financial Reporting: Real-time and transparent financial reporting becomes possible with blockchain, enhancing investor confidence and stakeholder decision-making. Automation: Efficiency with a Human Touch While AI and RPA promise significant efficiency gains, research is exploring the human element alongside automation. Key areas of focus include: (A) Impact on Jobs: Studies are analysing how automation will affect the accounting workforce, identifying skillsets needed for future success. This could involve areas like data analysis, critical thinking, and client relationship management. (B) Human-AI Collaboration: Research is exploring how AI can augment human capabilities, freeing accountants for tasks requiring judgment and expertise. This could involve AI handling routine tasks while humans focus on interpreting data and providing strategic insights. Data Analytics: From Numbers to Narratives The explosion of data necessitates new approaches to analysis and interpretation. Accounting research is delving into: (A) Advanced Analytics Techniques: Machine learning and big data analytics are being explored to uncover hidden patterns and predict future trends within financial data. (B) Data Visualization: Research is examining how to effectively communicate complex data insights to stakeholders through clear and compelling visualizations. Agile Accounting: Embracing Change Traditional accounting practices are being re-evaluated through the lens of agility. Research is focusing on: (A) Real-time Reporting: Developing methods for continuous reporting and analysis to provide businesses with up-to-date insights for faster decision-making. (B) Integration with Technology: Research is exploring how to integrate accounting systems with other business functions for a holistic view of operations. The Evolving Accountant: Consultant, not Calculator The accountant of tomorrow is envisioned as a strategic partner, not just a number cruncher. Research is exploring: (A) Developing Advisory Skills: Studies are focusing on how to equip accountants with strong communication, problem-solving, and business acumen to provide valuable strategic advice to clients. (B) The Future of the Profession: Research is examining how accounting education and training can be adapted to prepare future accountants for the evolving demands of the profession.

Beyond cultural norms: how does historical rice farming affect modern firms' family control?

AbstractThe private sector contributes the majority of China's GDP, with family firms responsible for most of the contribution. Prior studies find that firms' family control is influenced by certain cultural norms, such as family ties. This study explores the underlying historical and agricultural roots of these cultural norms that influence modern businesses. Combining a set of high‐quality, nationally representative Chinese firm and household surveys with prefectural data, we first show the positive impact of rice farming on family control of local firms. We establish robust causal inferences by exploring the impact of historical agricultural legacies and discussing alternative measures, spatial autocorrelations, omitted variables, instrumental variables and self‐selection. More importantly, our results demonstrate that the rice cultivation practice enhances the local people's preferences for strong family ties. Instead of claiming a direct role of these cultural traits as in the existing literature, we recast them as cultural mediators and persistent channels through which historical rice farming can shape contemporary corporate structure.

Customer Relationship Management as a Firm-level Factor and its role in Firm Performance: A Study on the Firms Listed at Nairobi Securities Exchange

The study sought to examine the relationship between customer relationship management and performance of firms listed at Nairobi Securities Exchange. While the listed firms remain integral in the country’s economy, their continued performance has been declining over the years. This has seen some of the firms get delisted and others suspended from trading due to subsequent years of loss-making. Customer relationship management on the other hand has been found to be instrumental in determining the performance of modern firms, in the midst of growing competition and dynamic operating environment. The motivation of this study was therefore the limited literature on the relationship between customer relationship management and performance of listed firms. The study utilized a descriptive-exploratory research design, where 240 senior management personnel drawn from the 64 listed firms were surveyed using a structured questionnaire. The data was analysed using SPSS and Amos software for descriptive statistics, regression model and structural equation modelling respectively. The findings revealed that customer relationship management had a significant influence on the performance of firms listed at the NSE (R2 = .265; β = 0.353; P=0.0001<0.05). It was therefore concluded that customer relationship management as a frim-level factor is instrumental in determining the performance of the listed firms at the NSE. The study recommended the need for the management of the listed firms to be at the forefront of pushing for enhanced customer relationship management so as to strengthen the firms performance.

Remote working and firms’ environmental profile: a study on the Greek population

Remote-working arrangements could serve as an indirect traffic management control measure and can potentially be used as mitigative factors towards the improvement of urban air quality and against climate change. Primary data were collected using a structured questionnaire which included questions related to environmental health parameters, such as energy and water consumption, greenhouse gas vehicle emissions, and waste management. Structural Equation Modeling has been used for analysing the data and testing the initial hypotheses. The results suggest that modern firms are interested in improving their environmental performance, but they have knowledge gaps related to crucial environmental health parameters. Moreover, their environmental awareness affects employees’ electricity consumption and waste separation. There is also evidence that employees behave in a more sustainable way while being at their home. Even though this study finds evidence associating firms’ environmental profile with remote-working arrangements, no linkage between teleworking and energy saving was identified.

Impact of Social Media Usage on Financial and Non-Financial Performance of Organization through Social CRM

Social media usage improves Social Customer Relationship Management (CRM) is highly important for modern firms to create value for business after the rapid growth of technology adoption by customers. Studies on social media and organizational performance are limited so the present study has to extend this topic for a brief analysis of this domain. Hence, the current study aims to investigate further how social media usage benefits both financial and non-financial aspects of organizational performance through social CRM. A quantitative cross-sectional research design was carried out to collect the primary information using a structured questionnaire using two separate surveys; one was filled out by the top management of the organizations while the other was filled out by the respective customer of the organizations from different sectors of Pakistan which were also active on Facebook and lastly each 209 participants in both surveys were selected for data analysis. AMOS and Smart PLS were employed to test this proposed model. All findings of this study are found significantly positive and the social CRM acts as a positive mediator between the direct association of social media usage and organizational performance. Furthermore, the present study offers marketers and businessmen to explain the linkage of CRM with advancing social media technologies to improve organizational performance either financial or non-financial performance.

Investing in green intellectual capital to enhance green corporate image under the Influence of green innovation climate: A Case of Chinese Entrepreneurial SMEs

Modern firms have been urged to play their role toward a sustainable business environment. The relevance of green prospects in the work environment continues to expand. Still, little research has been conducted to understand the role of green intellectual capital plays in promoting environmental behaviours and outcomes. With China's higher level of carbon emission, it has become imperative for businesses to investigate ways to improve their environmental performance. For this purpose, we collected the data from 451 entrepreneurial small and medium-sized enterprises based in Jiangsu province of China and then analyzed it through partial least square-structural equation modeling (PLS-SEM). Based on the social cognitive theory assumptions, this research study argues that; green intellectual capital, measured with green human resource, relation capital, and structural capital, positively influences green core competence. And, Green core competence positively impacts the green corporate image (environmental performance and green innovation practices). Additionally, Green core competence was found to mediate the relationship between green intellectual capital and green corporate image. Lastly, the study's outcome delineated that innovative green climate moderates the relationship between green core competence and green corporate image. This study broadens the scope of social cognitive theory and presents a viable solution for entrepreneurial small and medium-sized enterprises stakeholders to use the knowledge generated by green intellectual capital and core competence to improve their green corporate image.

Secured and unsecured debt in creditor-friendly bankruptcy

This article develops a continuous-time asset pricing model for valuing corporate securities in the presence of both secured and unsecured debt. We consider a framework where creditors dominate the negotiation process. This is consistent with the increasing influence of creditors in bankruptcy. We show that the unsecured creditors are incentivized to liquidate the firm prematurely relative to the first-best threshold. However, if the firm’s liquidation value is very low, it should complement its secured debt with unsecured debt as a form of insurance to avoid early liquidations. Our results have important implications for the debt structure and the resolution of financial distress of modern firms with substantial intangible assets.

Selection of Manufacturing Technologies in the Context of Digital Transformation: A Systematic Review

Currently, the digital transformation phenomenon is evident in all decision areas within modern firms and directly impacts the technology management process. For manufacturers, the management and selection of appropriate manufacturing technologies are relevant processes for the achievement of strategic objectives, including a digital strategy. This work is characterized as a review paper, based on a systematic literature review approach. It is derived from the observation of a real problem in a recognized world-class automaker, regarding the selection of manufacturing technologies. The identified problem consists of the lack of a structured and consolidated decision-aiding procedure to support managers in selecting manufacturing technologies in the context of digital transformation, from defining performance objectives to recommending technologies according to the decision objective. The main theoretical implications is the proposition of a research agenda for the development of a decision-aiding procedure concerning two main decision objectives: (i) develop a technology roadmap for a long-term investment plan, and (ii) address specific issues to improve manufacturing performance. The main managerial implication is the synthesis of decision methods and decision criteria observed in the set of related works that can be used for future applications regarding the selection of manufacturing technologies.

Antecedents and Consequences of Banking Customers' Behavior towards Social Media: Evidence from an Emerging Economy.

Due to the aggressive competitive climate in practically every sector, modern firms in the digital age confront a variety of hurdles for survival and growth. Technology, mainly digital technology, has altered global business practices. To stay ahead of their competitors, marketers need to develop new strategies that make use of digital technology. Using more conventional forms of competition will not result in spectacular outcomes. In this respect, the rise of social media is a game-changer in marketing since it provides marketers with a strategic touchpoint to engage customers with a brand. Still, it is also important to note the customer's attitude towards social media. Previous studies have, for the most part, ignored the connection between programs involving corporate social responsibility (CSR) and positive experiences for customers. As a result, the current study intends to evaluate the relationship between customer-related CSR activities on social media, customer attitude towards social media, and consumer behavioral outcomes, such as purchase intentions (PI) and electronic word of mouth (E-WOM). Information was collected from banking customers in a developing economy and evaluated with Smart PLS 4.0. According to the findings, customer-related corporate social responsibility activities carried out on social media have an effect on attitudes toward social media, customer behavioral outcomes, such as electronic word of mouth (E-WOM), and buying intentions. The findings also show that a consumer's feelings toward a brand can bridge the gap between customer-related CSR, E-WOM, and purchase intentions. The current study's outcomes can help policymakers comprehend the value of CSR practices from the standpoint of marketing, which is something that most CSR researchers overlook.

A Study of the Impact of Strategic Human Resource Management on Organizational Resilience.

Organizational resilience is a key capability for modern firms to survive and thrive in the VUCA environment. The purpose of this study is to investigate the mechanism of strategic human resource management on organizational resilience and the mediating and moderating roles of self-efficacy and self-management, respectively, in the relationship between the two. A total of 379 valid questionnaires were obtained from employees of Chinese companies in August 2022, and the data were analyzed using SPSS 22.0 and Amos. The results showed that strategic HRM can effectively contribute to organizational resilience; self-efficacy plays a mediating role in the relationship between strategic HRM and organizational resilience; self-management can effectively contribute to the impact of self-efficacy on organizational resilience; and self-management can hinder the ability of strategic HRM to contribute to organizational resilience. This paper breaks with the previous literature that studied organizational resilience from a single perspective by studying organizational resilience from the perspective of strategic human resource management (SHRM) and verifies that SHRM can be a possible path for Chinese firms to improve organizational resilience.

On the Early History of the Firms in the Ottoman Balkans: A Coasean Approach

Abstract This article puts the well-known Coasean concept of the firm into the concrete historical environment of the nineteenth-century Ottoman Balkans. The goal is to test whether it can explain the establishment of the first modern firms in conditions predominated by a self-sufficient semimarket economy. On the basis of Bulgarian-owned firms, the authors find that the Coasean concept is useful in explaining the establishment of and the benefits from the firms during the proto-industrial period. The authors contribute to the available literature by adding some clarifications to the main question of Coase concerning the existence of the firms. The firm provides the necessary financial and human capital in sectors such as silk, wool, and textile production and leather goods, where the proto-industrial organization of production is first and foremost applied. The organization of the Bulgarian firms clearly shows the success formula for the presence of a company with small (sometimes even decreasing) capital not only on the relatively huge Ottoman market but even outside it (Wallachia, Georgia) for a long period of time—from approximately the 1820s to the third quarter of the nineteenth century.

The essence and features of the measurement of modern firms in the knowledge economy

The article considers a knowledge firm whose work is mainly focused on creating new knowledge , expanding the scope of existing knowledge , which today is a rapidly spreading form of economic organization , reflected in the theory of the firm .

Business analytics competencies in stabilizing firms’ agility and digital innovation amid COVID-19

Digital innovation is not a technology in itself but businesses’ ability to exploit digital technology to resolve outmoded problems. Digital innovation is leveraging improvements or innovating technology to reimagine business practice. The Coronavirus disease 2019 exerted enormous effects on people's physical and psychological health. In addition, this pandemic adversely affected the global economy, from sole proprietors to multinational firms. However, such an effect did not hinder versatile products, services, and upgraded versions of technologies. Modern firms rely heavily on available data sets to make decisions through analytics. Manufacturing is one of the most dynamic industries due to market pressures and continually changing customer demands. This study examines the relationship between business analytics competencies and digital innovation and explores the mediating role of absorptive capacity and firm agility. Data are collected from 493 managers of manufacturing firms and analyzed by using structural equation modeling through smart-PLS. Results reveal a positive relationship between business analytics competence and digital innovation mediated by absorptive capacity and firm agility. With its theoretical contributions, this study can initiate practical research outcomes in manufacturing firms.

The Politicization of Corporate Governance: A Viable Alternative?

Abstract It is now well-established that different markets may develop different growth-supporting institutions that can give rise to public firms and set capital markets in motion. Yet, the paradigm view still holds local alternatives as merely stepping stones, a transitional passage toward achieving a deeper and more advanced market, at which point conventional legal and market institutions—modeled on Anglo-American corporate capitalism—are still held necessary. Four decades of economic development in China challenge these conventions. With modern firms with global prominence and a capital market that is the second largest in the world, corporate governance in China seems to have passed the point of an “adjust or perish” prognostic. The system that governs Chinese firms and the ways in which capital markets function sustain strong governance attributes that go against many fundamentals in economics and legal thought. Political involvement and state ownership, both assumed to stand in the way of capital market growth, remain prevalent while the market continues to advance. Most strikingly, harmonization with conventional corporate governance been pushed aside as the Chinese Communist Party has decided to exercise an ever-more expansive and direct role in market activity. Public firms in present-day China are increasingly being governed by a “politicized corporate governance.” Political institutions with corporate governance capacities have been deployed both inside and outside firms. These institutions now buttress or even replace weaker traditional corporate governance mechanisms in the Chinese market. The implications are striking. First, despite justified reasons for alarm, a politicized corporate governance system in China can perform the main functions of corporate governance elsewhere, thereby offering some benefits for public firms and their stockholders. Second, these developments show how path-dependent corporate governance attributes, here political institutions, reject convergence predictions yet have enough plasticity to evolve and to support modern firms and markets beyond assumed thresholds and developmental milestones. In so doing, China’s politicized corporate governance casts doubts on law and development conventions as well as on both sides of a long-standing governance convergence debate. Finally, the politicization of corporate governance in China offers a new direction in comparative corporate governance scholarship, providing evidence of an instituted reversal from outwardly convergent corporate governance toward a new form of a planned economy.

How to Improve the Corporate Sustainable Development?—The Importance of the Intellectual Capital and the Role of the Investor Confidence

In the era of the intelligent economy, to achieve business development, companies have shifted from focusing on physical resources to intangible resources and increasingly rely on investment in intangible assets. This phenomenon is a consensus. Intellectual capital is a skill that is difficult for competitors to replicate and is the most significant intangible asset of modern firms. Research on intellectual capital mainly focuses on the impact of companies’ performance; however, this study focuses on the sustainable development effects of companies. Taking manufacturing companies from Chinese A-share listings from 2015 to 2020 as the sample space and adding innovation capital based on the traditional intellectual capital model, a two-way fixed-effects model was used to conduct empirical research on the relationship between companies’ intellectual capital and corporate sustainable development. Meanwhile, research was conducted to test whether investor confidence innovatively played an intermediary role. This study showed that intellectual capital was positively correlated with the sustainable development of companies and investor confidence. In general, investor confidence was a bridge that connected intellectual capital and sustainable development. The results provided an empirical basis for companies that can enhance their sustainable development capabilities through intellectual capital investment. Managers should focus on the development of activities that have a positive impact on companies’ intellectual capital, increase the investment of intellectual capital, and achieve high-quality, sustainable development.

Integrating green business strategies and green competencies to enhance green innovation: evidence from manufacturing firms of Pakistan.

Green innovation has become a norm and crucial element of success for modern firms. Manufacturing firms come up with alternative ideas to achieve green innovation. This study proposes that green innovation can be enhanced by amalgamating green business strategies and mastering green competencies within a firm. It isolates itself from previous research by focusing on inherent internal competencies, which could bolster green innovation performance. This integration not only helps firms achieve green innovation but could also improve green value co-creation. Meanwhile, green value co-creation will also mediate the relationship between integrated competencies and green innovation. Data has been collected from the managers of original equipment manufacturers within Pakistan via survey. A total of 319 responses were analyzed using partial least squares structural equation modeling, and empirical results support the proposed hypotheses. The study's findings suggest that green competencies coupled with green business strategy positively influence green value co-creation and green innovation. Moreover, green value co-creation elevates firms' green performance and help firms to achieve green innovation. Consequently, theoretical and managerial implications are presented, which adds to this study's significance under the dynamic capability view.

The Important Role of Collective Leadership in the Face of Change: Literature Review

Many organizations have considered different leadership styles to ensure effective operations. The most pronounced style of these leadership styles involves collective leadership. This leadership style involves accentuation of power distribution among different entities within a firm. The leadership style aggregates individual talents, expertise, and strengths to impact change. Various forms of this leadership style exist, including decentralization and density, and concentration. Collective leadership involves leaders assuming several roles. These roles include mentoring, organizing, problem-solving and motivating. These responsibilities make collective leadership very popular in modern organizations because they often have an accentuated need for motivation and employee morale. Modern organizations have also embraced technology as a tool for growth and competition. Successful implementation and maintenance of new technologies require collaboration. This situation makes collective leadership the most suitable leadership style for keeping pace with emerging technologies. Organizations’ members should have social consciousness for modern organizations to remain relevant amid significant technological evolution that is taking place. Self-awareness and collective leadership have an intrinsic link that makes it vital for modern organizations to embrace it to keep pace with changing social consciousness. This change is also causing a considerable shift in customer expectations and requirements. Modern organizations have solved this complexity by promoting togetherness and accommodating varying viewpoints through collective leadership. The distributed influence in collective leadership is also leading to the pooling of unique skills and expertise, which is in turn, creating a more reliable framework for modern companies to engage with their customers. The changes in society mean that the workforce in modern firms is also evolving. This situation requires modern organizations to build the organizational culture that reflects the conscious nature of employees’ needs and respects the existing communication channels. Such culture emanates through collective leadership. External stakeholders are also members of the rapidly changing society. Modern firms have ensured harmony between internal stakeholders such as employees and external stakeholders such as investors through collective leadership. This process ensures that the company’s actions and decisions reflect the will of the internal and external stakeholders. Consequently, collective leadership ensures that each person affiliated with an organization is heard and their opinions considered in decision-making hence achieving equity and inclusivity.

Arbitrage spaces in the offshore world: Layering, ‘fuses’ and partitioning of the legal structure of modern firms

In this article, we discuss the way offshore financial centres are used by the multi-subsidiary, multi-jurisdictional group structure known as the ‘multinational enterprise’ to arbitrage between social geographies of political jurisdictions. We define arbitrage as the use of corporate legal entities located in diverse jurisdictions to arbitrate a third country's rules and regulations. Using a new method to categorize firm-level data from Van Dijk’s Orbis, we operationalize the notion of arbitrage to systematically detail and compare the structural sequencing choices firms are making, likely in part for reasons of arbitrage. We base our techniques on legal theory of the firm, acknowledging the underpinning of social technologies of law and accounting by which business enterprises are constructed and maintained. We conclude that two specific types of entities, ‘standalones’ versus ‘in-betweeners’, are qualitatively different from others in the activities they perform. We also highlight the existence of liability structures, or ‘fuses’, which typically take the form of a split ownership arrangement. Ultimately, we demonstrate that the position of a firm’s subsidiary within the overall network ecology of that firm is as important as its jurisdictional registration location.

Legally astute managers as a source of value in organizations

The legal and compliance departments in organizations have more influence than ever before. Why then are companies so vulnerable to legal liability? The problem may not be with talented legal professionals, but with the lack of legal knowledge held by MBAs and other business school graduates that make day-to-day decisions in modern organizations. Firms can close this knowledge gap and minimize legal liability by training their managers in legal astuteness—the ability of a manager to address legal issues successfully—by instilling four essential traits: respecting the rule of law, recognizing legal issues, resolving problems proactively, and reporting complex legal issues to experts. Job candidates should also be screened for traits of legal astuteness. A legally astute candidate, especially a graduate of a business school that requires legal education for all its students, can be a cultural ambassador for legal astuteness and a valuable liaison between legal and compliance departments and the candidate’s functional area. A legally ignorant candidate will require significant training and a frank assessment of the legal risk they bring to the organization. Modern firms in today’s legal environment face two choices: hire a legally astute manager now or deal with a compliance headache later.