Motives Of Firms Research Articles

Dynamic competition in the digital darwinism: focal firms responding to competitors’ digital transformation

ABSTRACT The fierce dynamic competition in the digital age has led to digital Darwinism. Under pressure from the digital transformation of their competitors, focal firms must adjust their situation to cope with digital Darwinism. Based on the awareness-motivation-capability (AMC) framework, this study uses Chinese high-tech enterprises listed from 2012 to 2022 as the research sample. Results show that the digital transformation of the competitors and the motivation of the focal firms (competitive industry environment) significantly promote the digital transformation of the focal firms, whereas the awareness (relative scale) and ability (financing constraints) of the focal firms have the opposite effect. This research contributes to investigations on the mechanisms of the digital transformation of counter pairs within the industry by using the AMC framework.

Customer backlash against pandemic Surcharges: The mediating role of inferred negative motives and implications for the “Surcharge Economy”

The services sector was adversely affected by the pandemic. Supply chain disruptions, staff shortages, and low customer traffic led revenues to decline. To offset these challenges, some businesses introduced pandemic surcharges, which were not well received by customers. The current work aimed to understand customer backlash against pandemic surcharges and test potential strategies to reduce negative reactions to such surcharges. Across three experiments, results offer evidence for a key mediator whereby surcharges increase perceived negative firm motives, which leads to lower purchase, return, and tipping intentions. Making the surcharge optional and justifying it based on lost business were ineffective in reducing negative response to the surcharge. However, explaining that the surcharge was needed to cover additional cleaning costs or buy safety equipment reduced inferred negative motives and consequently increased purchase and tipping intentions. Implications for a broader “surcharge economy” are discussed.

A comparative analysis of financial and nonfinancial rewards on work motivation and knowledge sharing in a postpandemic era

PurposeThis paper aims to examine the impacts of financial and nonfinancial incentives on the development of employee work motivation and knowledge sharing in the postpandemic environment. The paper further investigates the role of transformational leadership as a moderator in enhancing the relationship between work motivation and knowledge sharing.Design/methodology/approachAdopting a quantitative approach, the study uses data collected from multiple informants, specifically senior managers, in Nepalese manufacturing and service business-to-business (B2B) firms.FindingsContrary to prior research, the results reveal that nonfinancial incentives have a stronger impact on work motivation in the postpandemic era. This enhanced work motivation, in turn, contributes to knowledge sharing, with transformational leadership further strengthening the relationship.Practical implicationsThe findings suggest that B2B firms should consider moving toward leveraging nonfinancial incentives to motivate employees to develop knowledge sharing initiatives, especially in challenging circumstances such as those experienced in the postpandemic era. In addition, it is recommended that chief executive officers adopt a transformational leadership style to facilitate effective knowledge sharing within their firms.Originality/valueIn a developing economy and amid the challenges of the global pandemic, there has been limited research exploring the possible effects that financial and nonfinancial incentives could have on work motivation and knowledge sharing. This research bridges this gap by providing a fresh perspective on work motivation and knowledge management in B2B firms, contributing novel insights to the literature.

Does public environmental concern cause pollution transfer? Evidence from Chinese firms' off-site investments

The power of public environmental concern cannot be ignored. It is vital in promoting environmental legislation, corporate social responsibility, and sustainable development. Existing studies have discussed the positive governance effects of public environmental concern on environmental quality but have neglected the issue of environmental inequality due to pollution transfer resulting from differences in public environmental concern. We used the data from the off-site investment of Chinese heavy polluting firms to reveal the impact of public environmental concern on pollution transfer. Our research revealed that (1) Public environmental concern causes polluting firms to transfer out, thus generating the pollution transfer phenomenon. (2) Public environmental concern can cause pollution transfer through increased environmental penalties. From the perspective of external environmental incentives, market competition, market potential, and government environmental concern strengthen the positive influence of public environmental concern on pollution transfer. In terms of the intrinsic motivation of firms, risk-taking capacity, green innovation ability, and asset-stranding risk weaken the positive influence of public environmental concern on pollution transfer. (3) The public environmental concern is also characterized by “grasping the large and letting go of the small”. Public environmental concern remarkably induces pollution transfer when firms' environmental awareness is low and local government officials' political incentives are high. These findings help policymakers to place greater emphasis on the power of public concern. Moreover, they can further improve the pluralistic governance structure of environmental regulation.

Does the economic motivation of firms to address the United Nations’ Sustainable Development Goals (SDGs) promote the SDGs or merely SDG-washing? Critical empirical evidence from Japan and Vietnam

AbstractThe United Nations’ Sustainable Development Goals (SDGs) call on all firms to apply their creativity and innovation to solving sustainable development challenges. There is then an argument that firms should address the SDGs by applying the creating shared value (CSV) framework. However, we cannot exclude the possibility that this is nothing more than “business as usual” implemented in the name of the SDGs, or so-called SDG-washing, thereby limiting firm contributions to the SDGs. Although the SDG Compass, the most referenced business guideline on SDGs, currently encourages firms to address the SDGs using their economic motivation, it is uncertain whether it provides the right direction for achieving them. The purpose of this study is to address whether the economic motivation of firms to achieve the SDGs is practically preferable in contrast to the ethical motivation. Using data on Japanese and Vietnamese firms, we empirically analyse whether the degree of a firm’s proactiveness to address the SDGs depends on its economic and/or ethical motivations from a stakeholder management perspective. Our estimation results clarify that an ethical motivation continues to play a more significant role for firms in addressing the SDGs. Put differently, while CSV appears an attractive framework for firms to address the SDGs, its actual contribution remains partial and tentative, and it has thus been criticized for overemphasizing any economic motivation that potentially promotes SDG-washing. It is important to note that this could also ultimately decrease economic value by harming the firm’s reputation.

Awareness begets action: public climate attention and corporate green innovation

ABSTRACT In this study, we examine the effect and mechanism of public climate attention on corporate green innovation. We find that green innovation strengthens with increasing degrees of public climate attention. Moreover, the impact of public climate attention on green innovation is more significant when enterprises face more green development pressure and hold more resource reserves. Further investigation reveals that public climate attention contributes more to green innovation in samples of state-owned enterprises (SOEs), non-high-tech companies, and under more frequent extreme climate disasters. Finally, based on the differences in firm motivation for engaging in green innovation, we also explore the influence of public climate attention on firms’ substantive and strategic green innovations and find that public climate attention significantly contributes to both types of innovation. Our research results are of theoretical and practical significance for achieving dual-carbon goals and promoting sustainable social development and high-quality economic development.

Crash risk and conservatism: Evidence from Borsa Istanbul

This study assesses the relationship between the likelihood of future stock price crashes and conservatism—an accounting characteristic that leads to the undervaluation of accounting net assets relative to economic net assets. This undervaluation is achieved by less stringent verification criteria in acknowledging losses compared with gains, resulting in more timely recognition of economic losses. Utilizing a sample of firms traded on Borsa Istanbul from 2009 to 2019, this study reveals that firms with a greater degree of conservatism witness a significant reduction in crash risk after accounting for firm-specific determinants of crash risk along with firm and year fixed effects. This result corroborates the findings in the literature on conservatism, revealing that conservatism diminishes the ability of managers to withhold unfavorable information. In addition, the results are economically meaningful and hold after a set of tests to assess robustness. The findings are particularly relevant for underperforming firms, indicating that an increase in adverse information enhances the motivation for firms to obscure and delay sharing the information. Further analysis demonstrates that accounting conservatism offers advantages by mitigating future crash risk, especially for firms with high intangible intensity.

Does short selling reduce classification shifting?—— Exploration of market-oriented governance mechanism

We empirically investigate the impact of short selling on classification shifting, exploiting the staggered lift of short-sale bans in China. Using a multi-period difference-in-difference research design, we find that the lift of short-sale bans mitigates the classification shifting. We also find that short selling alleviates the market's overpricing of the core earnings of firms engaging in classification shifting, thus reducing the expected benefits and motivations of firms for classification shifting. Further research shows that short selling has a more significant inhibitory effect on classification shifting in regions with developed financial intermediaries and it improves the persistence of core earnings.

How Do Existing Organizational Theories Help in Understanding the Responses of Food Companies for Reducing Food Waste?

Food waste is a serious global problem. Efforts to reduce food waste are closely linked to the concepts of circular economy and sustainability. Though food organizations across the world are making efforts to reduce waste in their supply chains, there is currently no theoretical explanation that would underpin the responses of food companies in reducing food waste. Based on interactions with food companies over a nearly 5-year period, we explore the applicability of some well-known and not so well-known organizational theories in the operations management literature to underpin the observed responses of companies in reducing food waste. This paper is one of the first attempts to study food waste from an operations and supply chains point of view, especially from the lens of existing theories in the operations management literature and newer sustainability theories borrowed from other disciplines. Our research findings not only show that existing organizational theories and societal theories can help explain the motivations of firms engaging in food waste reduction, but also call for more research that could help explain some interesting observations that are not apparent when existing theories are used. This paper contributes to the UN’s Sustainable Development Goals 1, 2 and 12.

Sustainable Development in Management Thinking: Past Contributions, Present Challenges and Future Directions

The aim of this paper is to present the main arguments around the concept of sustainable development as a business perspective and the influence that this concept has brought to firms and their operations. It explains relevant literature on sustainable development describing its foundations, their current challenges and some of the future directions along which the concept can achieve its intended purpose. The arguments suggest that before calling for a massive green campaign in business, there are unresolved issues around the concept of sustainable development, there is a particular need to understand the real motivation of firms for sustainable. For example, at the industry level, a firm’s behavior is a complex issue to control – either through pre-established legal parameters or through a voluntary approach. The interest in sustainable practices has created important implications for managers in almost every industry looking to better understand the arguments around the concept of sustainable development and the commitment that firms should make to address these environmental challenges. Research centered only on economic benefits or only on environmental issues can lead to an incomplete vision of the opportunities for firms that both approaches can generate if they are correctly combined.

Why do firms adopt employee ownership? An industry perspective

PurposeThis paper offers a new perspective on the potential motivation for the adoption of employee ownership based on market power. Employee ownership may be linked to market power, either through contributing to firm growth that leads to market power or through industry leaders adopting employee ownership as part of rent sharing or a broader consolidation of market position. Both employee stock ownership plan (ESOP) coverage and product market concentration (PMC) have been increasing in the past two decades, providing a good opportunity to see if and how these are related.Design/methodology/approachThe authors predict ESOP adoption and termination using multilevel regressions based on 2002–2012 firm- and industry-level data from the Census Bureau, Compustat and Form 5500 pension datasets.FindingsThe authors find that the top four firms in concentrated industries are more likely to adopt Employee Stock Ownership Plans (ESOPs), while having an ESOP does not predict entering the top four, apart from firm-level predictors. Tests indicate the first result does not reflect simple rent sharing with employees but instead appears to reflect an effort by firms to consolidate market power through the attraction and retention (or “locking in”) of industry talent. Other positive predictors of ESOPs include company size, being in a high-wage industry and having a defined benefit (DB) pension.Research limitations/implicationsTo better distinguish among hypotheses, it would be helpful to have firm-level data on managerial attitudes, strategies, networks and monopsony measures. Therefore, future research using such data would be highly useful and encouraged.Practical implicationsThe paper includes implications for the potential usefulness of ESOPs in attracting and retaining talent and for the design of nuanced policy to encourage more broadly based sharing of economic rewards.Originality/valueWhile prior research focuses on firm-level predictors of employee ownership, this study uses market concentration and other industry-level variables to predict the use of ESOPs. This study makes a unique contribution, broadening the current thinking on firm motives and environmental conditions predictive of firm ESOP adoption.

Beyond regional endogenous and firm-centric accounts: Contextualizing multiple and multiscalar industrial branching mechanisms for the emergence of biotechnology industries in Guangzhou, China

Industrial branching proposed by evolutionary economic geographers exhibits robustness in illustrating the spatial emergence of new industries in regions. However, extant studies are primarily confined to a single type of industrial branching mechanism, such as spin-off or firm diversification, and biasedly equate them as regional endogenous and firm-centric processes, regardless of wider contextual embeddedness. Therefore, this paper seeks to take into account the contribution of multiple and multiscalar industrial branching mechanisms embedded in industrial nature and territorial contexts to emerging industries in regions, with a particular case study of biotechnology industries in Guangzhou, China. The emergence of biotechnology industries in Guangzhou during 1978–2019 is characterized by an overall fluctuating trend and recent remarkable expansion in the 2010s. The emerging process is driven by the combination of spin-off, start-up, and firm diversification, sourcing from actors across multilevel geographical scales (e.g., urban, regional, national, global). Multiple and multiscalar industrial branching mechanisms are rendered by the spatiotemporally contingent articulations among micro-level firm motivations, meso-level industrial nature, and macro-level territorial contexts, which is encapsulated in Guangzhou's strategic position in China's economic reform and opening-up in a gradual manner and Guangzhou's latecomer position in biotechnology development and industrialization. With an emphasis on moving beyond regional endogenous and firm-centric accounts, this paper aims to articulate actor-specific motivations with industrial and territorial embeddedness to gain a multilayered and context-sensitive understanding of the emergence of new industries in regions.

Impact of manager’s motivation on fraudulent accounting: An empirical study

This study empirically examines the motives of Indian firms’ managers to violate Generally Accepted Accounting Principles (GAAP) and engage in so-called fraudulent accounting. Managers’ motivations for fraudulent accounting rather than profit adjustment are empirically analyzed using data from Indian-listed companies. The sample includes 91 firms and the period of study is March 2001 to March 2022. The tests were conducted using single and multiple variables by the empirical methods used in other studies on profit adjustment. In the case of single variables, the tests are the chi-square test of independence for dummy variables and the significance test of the difference between the mean and median for continuous variables. In the case of multiple variables, the sample firms with a dependent variable of 1 and the control firms with a dependent variable of 0 are analyzed using the logit model. The estimation is done by the robust covariance method. The findings indicate that firms that engage in fraudulent accounting are significantly worse off than other firms in terms of their financial position and operating results, have significantly higher financing needs, and significantly more frequently conduct initial public offerings (IPOs).

Export motivation and clustering of Greek yogurt firms

Export motivation and clustering of Greek yogurt firms

Balancing acts: The relationship between corporate environmental irresponsibility, charitable donations, and financial performance

AbstractThis study examines the practices of listed firms in heavily polluting industries in China and their approaches to corporate social responsibility. Specifically, it explores the relationship between corporate environmental irresponsibility (CEIR), charitable donations (CD), and financial performance. A sample of Chinese A‐share listed firms in heavily polluting industries from 2012 to 2019 is used to empirically test this relationship. The results show that CEIR has a penalty effect on financial performance; firms with higher levels of environmental irresponsibility experience poorer financial performance. However, CD can mitigate this negative impact. This paper sheds light on the underlying motivations of firms neglecting their environmental responsibilities while being diligent in charitable activity. It provides theoretical foundation and policy recommendations for addressing imbalances in corporate social responsibility based on whether firms can offset environmental shortcomings through charitable acts.

What motivates firms to adopt a green supply chain and how much does it matter?

This study integrates the elaboration likelihood model, institutional theory, and the image management perspective to identify the internal and external forces that can effectively drive firms to adopt a green supply chain. Using survey data from a sample of 246 firms in the Chinese manufacturing sector, we empirically examine how the internal green process and green product innovation of firms and different types of external institutional pressures contribute to their adoption of a green supply chain, which in turn can explain the variation in their environmental and new-product development performance. Results of our structural equation modeling analysis reveal that the internal green process and green product innovation of firms and three types of external institutional pressures (i.e., coercive, normative, and mimetic pressures) play an important role in driving green supply chain adoption. Moreover, firms can improve their environmental and new-product development performance by adopting a green supply chain. In addition, though the image management motivation of firms tends to play a negative moderating role in the relationship between their green process innovation and green supply chain adoption, such motivation positively moderates the contribution of coercive pressure to their green supply chain adoption. Our findings can help explain why emerging-market firms tend to adopt a green supply chain and do not follow the pattern predicted by classical strategic management theories. The results of our study clearly demonstrate the determinants and consequences of the adoption of a green supply chain of firms and confirm that their green supply chain adoption can exert a positive effect on their environmental and new-product development performance. Overall, our research highlights the importance of recognizing internal innovation and external institutional forces in driving the green supply chain adoption of firms, which in turn will contribute to their environmental and new-product development performance. In this regard, our study extends the stream of research on green supply chains and sheds new light on the importance of abandoning the conventional supply chain and adopting a green one. Our study also provides important implications for research, practice, and policymaking.

Countervailing Claims: Pro-Diversity Responses to Stigma by Association Following the Unite the Right Rally

Why do firms take positions on divisive social issues? In this article, I draw on theories of stigma by association to explain why firms’ mere proximity to controversial political actors may lead stakeholders to presume that firms silent on social issues are misaligned with the stakeholders’ sociopolitical preferences. Firms, in turn, countervail these presumptions of misalignment by eschewing silence and claiming sociopolitical positions. Substantiating this theory in the context of employee recruitment following the 2017 Unite the Right White supremacist rally in Charlottesville, Virginia, I show that Charlottesville’s employers combated presumptions that they shared demonstrators’ anti-diversity positions by making countervailing pro-diversity claims in their online job postings. In supplementary analysis, I show that the rally was associated with a newfound wage premium in job postings by Charlottesville’s employers but that this premium was lower when employers made pro-diversity claims. This study advances understanding of strategic sociopolitical positioning whereby firms make calculated appeals to stakeholders. It contrasts with related research showing that firms use social claims to combat negative evaluations resulting from their own actions or to differentiate from competitors. In doing so, it suggests opportunities for further research investigating, for example, additional motivations for firms’ sociopolitical positioning, how positioning might evolve in the context of growing political polarization, and how positioning might relate to workplace inequality and diversity.

A Tale of Two: How Network Agency Influences Network Creation for Start-ups

There is an existing consensus that networks positively impact start-ups. New ventures gain access to market information, funding, emotional support and improved legitimacy from networking. However, existing efforts at articulating network creation and impact on new ventures are skewed due to a strong focus on structural properties. Although these properties contribute to understanding network creation and impact, they often ignore the individual who is either a network beneficiary or broker. This study examines the role of the network actor’s agency in entrepreneurial network creation. Understanding agency is critical for explaining how individuals make sense of network opportunities available within their context. Network agency reveals how entrepreneurial networks are created, what influences actor motives and behaviour, and the brokerage methods adopted to meet these motives. This study explores network agency in two contexts: the interventionist incubator context and the location-induced cluster context. The Lagos Technology Ecosystem comprised of different incubator models and cluster is examined. 31 semi-structured interviews with start-ups from both contexts were conducted to get a nuanced view of how the context influences entrepreneurs' network agency. This paper reveals that network motives like personality, reciprocity, and legitimacy as the main motives for tenant firms to engage in network activities. Conversely, cluster firms listed trust, and the need to access knowledge, information and opportunity as key reasons for engaging in network action. In both contexts, direct and indirect brokerage is utilised to meet the motives triggered. However, the dynamics and nature of these brokerage methods are different across the two contexts. Tenant firms demonstrate a tertius Iugnes behaviour, while cluster firms demonstrate separation behaviour.

The effects of digital economy on breakthrough innovations: Evidence from Chinese listed companies

The rapid development of digital economy challenges the innovation theory under the traditional economic background. The consequences of digital economy on breakthrough innovations remain unknown, especially in emerging markets. Using patent data of 1728 listed companies in China from 2010 to 2020, we study the impact of digital economy on firms' breakthrough innovations. The results show that digital economy can significantly promote breakthrough innovations in Chinese firms in the short and long term. In contrast to existing research documenting a tension between breakthrough and incremental innovations, we find that the promoting effect on breakthrough innovations does not come at the expense of incremental innovations. Further analysis reveals that digital economy provides resources and motivations for firms to develop breakthrough innovations by easing financing constraints, promoting talent aggregation, and increasing uncertainty in the competitive landscape. Additionally, digital economy can promote breakthrough innovations in non-state-owned, growing and aging firms more than in state-owned and mature firms; and its positive impact is more significant in high-tech firms than in non-high-tech firms.

Effect of populism on the internationalization of emerging market firms

PurposeThis paper aims to determine whether policy uncertainty caused by institutional decay in countries with populist rulers influences the internationalization decision of emerging market firms (EMFs).Design/methodology/approachThe study used binary logit analysis on firms from Latin American countries undertaking cross-border greenfield investment projects.FindingsThe results suggest that internationalization decision is demotivated by policy uncertainty generated by populist chief executives and promoted by that of political parties.Originality/valueThis study uses populist rhetoric to describe policy uncertainty due to chief executives and ruling parties, which influences internationalization decision by increasing anticipated transaction costs. This inquiry identifies populism as a variable that influences EMFs to internationalize, while empirically testing the claim of theoretical scholarship that populism reconfigured the sociopolitical and institutional forces that shape the world’s business. This study further advances institutional theory by offering a fresh perspective on the influence of home instead of host-country institutions on the internationalization motivation of firms due to institutional decay caused by populist regimes.