Motives Of Firms Research Articles

Peer effects in government R&D subsidies: evidence from the awareness-motivation-capability perspective

ABSTRACT Previous studies have investigated the factors that influence firms’ decision engaging in government innovation programme, but some important horizontal factors have been largely ignored, such as the effect from industry peers. Based on signal theory and expectancy theory, this paper studies the role of industry peers who have obtained government R&D subsidies in raising awareness and motivation of other non-funded firms to engage in the same project. Using Chinese listed firms between 2008 and 2016 as the empirical sample, this paper introduces the awareness-motivation-capability (AMC) framework and uses the Logit regression to examine the associations between peer effects and strategy choice. The empirical results indicate that the number of funded firms in an industry and their superior performance have positive impact on non-funded firms to obtain government R&D subsidies, and these relationships are further strengthened by non-funded firms’ innovation ability and profitability. This study makes contributions to literature on government R&D subsidies and peer effect by providing a view of imitation behaviour in innovation activities.

Labor Market Size and Firms’ Social Security Contribution Rate in China

As an important component of operating costs, excessive social security contribution reduces the willingness and contribution rate of small- and medium-sized firms. In China, one third of firms do not participate in social security, and the other firms generally have the problem of evasion and arrears. Specifically, Feng (2013) finds that the contribution rate of Chinese industrial firms is uneven, and the average rate is only 10.82%, far lower than the legal rate. How to explain the variation in social security contribution rate among firms? Is social security contribution the burden of business activities? Answering these questions helps to understand the motivation of firms’ social security contribution, bolster up the design of social security collection system, and provide theoretical and practical reference for the “cost reduction” of supply-side structural reform.This paper investigates the relationship between labor market size (LMS) and firms’ social security contribution rate (SSCR) based on the profit maximization framework. Given the dual effects of SSCR on firms’ labor productivity and financial distress cost, optimal SSCR is achieved when marginal income equals to marginal cost. As LMS expands, decreasing search cost and compensating differentials for job loss risk increase optimal SSCR. Further, the empirical results measuring LMS by industrial employment capacity find that LMS significantly increases firms’ SSCR belonging to the same industry, especially for firms with serious financial constraints, high unemployment cost and private ownership. In addition, increasing SSCR significantly deteriorates firms’ performance, suggesting that the cost effect plays a leading role.Our findings demonstrate that the behaviors of social security by firms are subject to industrial environment, suggesting that it is necessary to account for the issue when policymakers adjust economic policies. Our paper contributes to the literature in three aspects: First, from the perspective of endogenous social security contribution, we explore the impact of labor market size on firms’ social security contribution, which enriches the labor “thick market” theory and relevant literature of firms’ social security contribution. Second, we build a theoretical framework to explain the endogenous logic of labor market size affecting firms’ social security contribution. Third, understanding the logic of firms’ social security contribution provides a micro basis for the reform of social security collection and contribution system.

The Peer Effect of Targeted Poverty Alleviation Activities of Listed Firms

Targeted poverty alleviation is a major transformation measure for China to overcome poverty. Prior literature on the motivations of listed firms participating in targeted poverty alleviation mainly focuses on firms’ own characteristics, such as financial performance, property right, and managerial heterogeneity. It assumes that firms make their targeted poverty alleviation decisions independently, without considering the mutual impact between different firms. Firms intend to learn and imitate the activity of other firms in the same industry or the same region in the process of decision-making and implementation. This phenomenon is called the peer effect. Firms often consciously pay attention to the practice of competitors, and ultimately produce interactive decisions. Based on the data of Chinese listed firms from 2016 to 2019, this paper empirically tests whether the targeted poverty alleviation activity of listed firms has the peer effect, and further explores its mechanism, influencing factors and economic consequences. The results show a significant positive industrial peer effect of targeted poverty alleviation activities of listed firms. The investment and amount of targeted poverty alleviation in the same industry will significantly positively affect the targeted poverty alleviation decision of other firms. The mechanism test shows that social learning and competitive pressure are the main reasons for the peer effect of targeted poverty alleviation activities of listed firms. Considering the types and quality of targeted poverty alleviation, we find that the peer effect is mainly reflected in the non-industry-development investments instead of industry-development investments. We do not find a significant peer effect in the quality of targeted poverty alleviation of listed firms. Further analyses show that state-owned firms, firms with more financial constraints , and firms with less information transparency tend to imitate peer firms’ targeted poverty alleviation activities. In addition, targeted poverty alleviation activities based on the peer effect have a positive impact on firm value. The contribution of this paper is as follows: First, from the perspective of firm interaction, this paper expands the research on the influencing factors of targeted poverty alleviation, makes up for the deficiency of the existing research on the driving factors of targeted poverty alleviation, which only focuses on the characteristics of firms themselves, and helps to deeply understand the motivation of firms to fulfill their social responsibility. Second, the existing finance literature mainly investigates the peer effect in corporate financial decision-making and corporate governance mechanism, while this paper expands the field of peer effect from the perspective of corporate social responsibility. Third, in terms of practical significance, this paper provides decision-making reference for the regulatory authority to encourage and guide listed firms to participate in the practice of targeted poverty alleviation and give full play to the role of capital market in consolidating the national poverty alleviation achievements.

Financial background of controlling shareholder and corporate financialization

ABSTRACT This paper studies the effect of the controlling shareholder’s financial background on the corporate financialization. We find that controlling shareholder’s financial background has a significant positive impact on corporate financialization, and the positive impact is more obvious in credit advantage firms and firms with poor institutional environment and real investment environment. Firms with financial controlling shareholders will increase long-term value reserving financial investment, and firms’ financialization trend with lower financing constraints is more sensitive to controlling shareholders’ financial background, suggesting that speculating is the essential motivation of firms’ financialization, rather than precautionary saving. The mechanism test shows that controlling shareholder’s financial background mainly promotes corporate financialization by increasing the financial long-term equity investments at the parent company level. Finally, there is an inverted U relationship between corporate financialization and investment efficiency, and the marginal effect of corporate financialization on investment efficiency is greater in firms with financial shareholders.

Sustainability reporting and agriculture industries’ performance: worldwide evidence

PurposeThis study investigates the impact of sustainability reporting on agriculture industries’ performance (operational, financial and market).Design/methodology/approachUsing data culled from 1426 observations from 31 different countries for ten years (2008–2017), an independent variable derived from the Environmental, Social and Governance (ESG) score is regressed against dependent manufacture performance indicator variables [return on assets (ROA), return on equity (ROE) and Tobin's Q (TQ)]. Two types of control variables complete the regression analysis in this study: firm-specific and macroeconomic.FindingsThe findings elicited from the empirical results demonstrate that there is no significant relationship between ESG and operational performance (ROA), financial performance (ROE) and market performance (TQ). Surprisingly, when each component of ESG is regressed separately against the performance, the results reveal that governance disclosure has a positive impact on market performance.Research limitations/implicationsThis study captures only quantity rather than the quality of ESG disclosure. Therefore, the results of this study may not necessarily give the “true” motivation for firms to disclose sustainability activities.Originality/valueThis study highlights the agriculture industry management lacunae manifesting in terms of the weak nexus between each component of ESG and agriculture industries’ performance.

Who's Afraid of Sunlight? Explaining Opposition to Transparency in Economic Development

AbstractFirms and governments often negotiate economic development deals, such as tax abatements, with limited transparency, using exceptions to public records laws or other strategies for nondisclosure. In this article we explore the motivations of firms for keeping economic development deals out of the public eye. We explore legal challenges to public records requests for deal-specific, company-specific participation in a state economic development incentive program. By examining applications for participation in a major state economic program, the Texas Enterprise Fund, we find that a company is more likely to challenge a formal public records request if it has renegotiated the terms of the award to reduce its job-creation obligations. We interpret this as companies challenging transparency when they have avoided being penalized for noncompliance by engaging in nonpublic renegotiations. These results provide evidence regarding those conditions that prompt firms to challenge transparency and illustrate some of the limitations of safeguards such as clawbacks (or incentive-recapture provisions) when such reforms aren't coupled with robust transparency mechanisms. We speculate that the main motivation for these challenges is to limit scrutiny of these deals that could lead to backlashes against future economic development agreements.

Corporate social responsibility motives of Indian firms

PurposeThe purpose of this paper is to explore the motives of Indian firms for engaging with corporate social responsibility (CSR) practices and their interplay by using interpretive structural modelling methodology (ISM) and Matrice d’impacts croisés multiplication appliquée á un classment (MICMAC) analysis.Design/methodology/approachThe research uses ISM and Matrice d’impacts croisés multiplication appliquée á un classment (MICMAC) analysis to find the structural relationship among the CSR motives of the Indian firms identified from the past literature and agreed upon by the experts.FindingsThe ISM model indicates that firms primarily engage in CSR either because of top management commitment to certain values, to meet the legal mandate or of the pressure from the NGOs. The top management commitment gives a strategic orientation to CSR, which results in community engagement by the firm as one of the important components of the strategy. The community engagement helps in engaging with its employees and investors along with finding sources of innovations, which, in turn, help the firm in engaging its customers, managing corporate reputation and getting a cost advantage. Collectively, these help them in improving their financial performance. However, the model highlights two autonomous sources, meeting legal mandate and pressure from NGOs also motivate firms to engage in CSR without having any strategic thought or engagement with its strategic system.Originality/valueThe study provides a comprehensive listing of CSR motives of Indian firms along with the structural relationships among the identified CSR motives. The model developed provides CSR professionals and policymakers an understanding of the primary CSR motives along with their driving power and dependence. This insight will help them in manipulating these motives for better CSR engagement by the Indian firms.

Mining Consumer Minds: Downstream Consequences of Host Motivations for Home-Sharing Platforms

AbstractThis research sheds light on consumer motivations for participating in the sharing economy and examines downstream consequences of the uncovered motivations. We use text-mining techniques to extract Airbnb hosts’ motivations from their responses to the question “why did you start hosting.” We find that hosts are driven not only by the monetary motivation “to earn cash” but also by intrinsic motivations such as “to share beauty” and “to meet people.” Using extensive transaction-level data, we find that hosts with intrinsic motivations post more property photos and write longer property descriptions, demonstrating greater engagement with the platform. Consequently, these hosts receive higher guest satisfaction ratings. Compared to hosts who want to earn cash, hosts motivated to meet people are more likely to keep hosting and to stay active on the platform, and hosts motivated to share beauty charge higher prices. As a result, these intrinsically motivated hosts have a higher customer lifetime value compared to those with a monetary motivation. We employ a multimethod approach including text mining, Bayesian latent attrition models, and lab experiments to derive these insights. Our research provides an easy-to-implement approach to uncovering consumer motivations in practice and highlights the consequential role of these motivations for firms.

The Role of Debt in REIT Equity Issuance at a Discount to Net Asset Values

Empirical evidence shows that REIT managers time their equity offerings based on the value of share prices relative to the value of their underlying assets in the property market. Managers’ equity issuance decisions are strongly impacted by net asset value (NAV) premiums. In this paper, we examine the impact of overall leverage and near-term debt maturities on the equity offering behavior of REITs. For a sample of 170 REITs involved in at least one seasoned equity offering from 2001 to 2017, our results indicate that higher leverage and near-term debt maturities have a significant positive impact on a REIT’s decision to issue equity at a discount-to-NAV. Furthermore, we document that REIT managers who issue equity at a discount-to-NAV become less active in property acquisitions. Taken together, our results suggest that the underlying motivation for REIT firms issuing equity below their underlying asset values is to avoid a possible default on debt repayments. Higher leverage constrains a REIT’s ability to time the market in their equity issuance decisions.

Proposed E-Services Quality Model and its Impact on the Indian Society

The web technology now is a strong medium to provide information and services to the public in just a short span of time. Basically an e service provides information through the websites or web applications which can interact billions of people at a given time. This could not be possible through the traditional services and approaches. Electronic services are very famous and effective in terms of e-commerce. Type of e-service depends upon the motives of firms or organizations. The motive may differ with the objectives of the firm. For example, banking sector and e commerce organizations may provide their services to the society. Governments may provide schemes for the welfare of society with these means along with lot of benefits, such infrastructure is also a very easy to use and time consuming, so peoples are getting dependents of the e services and mobile applications, especially for the mentioned sectors like insurance, banking, shopping, finance, educations, real states, social media relationship, political elections, billing, entertainments, online movies, web-series, food ordering and delivery, and health sector etc. So as people are getting used to of it, risk of cyber fraud is also increasing. As the use of online transaction has increased rapidly, especially during the lockdown and after this, peoples are dealing with e-cash rather than the cash, for this they are using either their bank accounts directly, or the e-wallets for making payment. . So hackers are doing fraud by so many ways, bank accounts and e-wallets are the prime target of them. Several cases have been reported for so far, this fraud. So there is a huge impact of the e-services and applications on the society.

China's outward foreign direct investment in the Belt and Road Initiative: What are the motives for Chinese firms to invest?

Because of the potentially large and important effects of the extremely ambitious Belt and Road Initiative (BRI) launched by China in late 2013, considerable attention has been given to the motives for, and repercussions of, the BRI-driven infrastructural projects. Yet, the non-infrastructural outward foreign direct investment (FDI) from China to BRI countries, which varies quite substantially across different sectors and different countries, has not yet received much attention. In contrast to some recent studies showing that the massive initiative has increased China's total FDI outflows to fellow BRI countries, in this paper, based on our sector-level difference-in-differences models, we find that effect to be statistically insignificant. Yet, at the same time, we provide empirical evidence on the sectoral pattern of China's outward FDI before and after 2014 indicating that China's FDI outflows to BRI countries have significantly increased in sectors characterized by overcapacity and contributing to pollution in China, thereby demonstrating that China's BRI-driven outward FDI has been very selective in terms of sectors. We confirm these findings with a variety of robustness checks and show that it is BRI countries with relatively low institutional quality that have been more likely to receive these types of FDI from China. We thus speculate that Chinese firms have been motivated to place FDI investments in BRI countries for the sake of alleviating China's own overcapacity and pollution problems. Our findings lead us to suggest that, although these sectoral patterns are consistent with the different stages of economic development in which China and its fellow BRI-identified countries find themselves, Chinese investors and host country governments should be more concerned with the potential for unwanted side-effects of the FDI investments so that the mutually beneficial effects of the BRI can be sustained into the indefinite future among all countries involved.

Institutional Effect on Firms’ Internationalization: From the Perspective of Development Zones

With the development of economic globalization, firms in emerging economies are motivated to implement internationalization strategy increasingly. This rapid expansion is not only due to the development of home economy, but also because of the domestic institutional environment. Institutional factors in home countries play an important role in shaping the international expansion behavior of firms in emerging market.Accordingly, this paper takes the development zone as an analysis unit, and explores the local institutional environment optimization effect of development zones on firms’ internationalization by using the data of Chinese listed companies. Through empirical analysis, this paper gets the following conclusions: Firstly, settling in development zones will generate a positive institutional isomorphism and external enabling effect on firms’ internationalization behavior. That is, compared with firms outside the development zone, firms inside the zone are more inclined to implement internationalization strategy. The above conclusions still hold after using instrumental variables to deal with endogeneity and several robustness tests. Secondly, the positive internationalization effect is universal for different kinds of development zones. That is, settling in development zones of different levels, functions and locations all can improve firms’ motivation to carry out internationalization strategy significantly. Thirdly, the internationalization effect of development zones will be moderated by formal and informal institutional factors of higher levels. With the increase of local policy support and the deepening of regional embeddedness, the positive effect of development zones on firms’ internationalization will be strengthened significantly.This paper has the following contributions and implications: Firstly, it discusses the influence of institution optimization on micro firms’ internationalization from the perspective of institutional isomorphism and institutional enabling. By converging firms’ internationalization practice in development zones to the logical framework of institutional theory, it not only enriches the related research of internationalization and institutional theory, but also effectively complements BTOF（Behavioral Theory of the Firm）. Secondly, it puts forward that firms’ internationalization is not purely institutional escapism, but the feedback of local institutional isomorphism and institutional enabling, which not only expands the research dimension of institutional environment, but also enriches the research scope of the relationship between internationalization and institutional environment. Finally, it deepens the interpretation of the economic effect of development zones and the growth motivation of micro firms’ internationalization behavior. The conclusions of this paper provide theoretical support for governments to promote the growth of real economy and firms’ internationalization by setting development zones.

Competitive advantage and processor demand for local and imported food ingredients: analysis from an urban dairy market in West Africa

PurposeIn Mali, dairy processors mostly use imported powdered milk rather than local fresh milk, constraining the development of a domestic milk sector. We investigate factors motivating a firm's choice of milk input, to identify measures that can encourage demand for fresh milk.Design/methodology/approachWe utilize case study data from nine firms that use fresh and powdered milk to varying degrees, and which are representative of dairy processing in Bamako. To model firm motivations, we assess how each input contributes to or detracts from firm competitive advantage, through its influence on cost and differentiation.FindingsFirms using fresh milk pay a higher input price, incur higher transaction costs and face additional challenges in production and distribution. Firms distinguish themselves from competitors through four potential sources of differentiation: novel product types, quality enhancements, quality-signaling and unique packaging. However, fresh milk firms are less likely to exploit each source of differentiation.Research limitations/implicationsCompetitive advantage is a useful framework for understanding firm behavior in developing markets and can be applied in other contexts to strengthen external validity.Originality/valueThe extant economics literature on African dairy development has been surprisingly silent on the threat of import competition. This research is one of the first to investigate this issue in the under-studied middle segment of food value chains.

Corporate Social Responsibility Performance-Evaluation Based on Analytic Hierarchy Process-Fuzzy Comprehensive Evaluation Model

The widely held opinion that firms should undertake corporate social responsibility (CSR) sometimes conflicts with profit maximization, which is a primary motivation for firms. CSR performance-evaluation may resolve this conflict. Taking real estate firm as an example, this study build a CSR performance-evaluation index system that includes economic performance, business ethics, environmental protection and social contribution based on stakeholder theory and symbiosis theory. This study combines the analytic hierarchy process (AHP) with the fuzzy comprehensive evaluation (FCE) method to propose an improved analytic hierarchy process-fuzzy comprehensive evaluation (AHP-FCE) algorithm. Improved by the personality-trait theory, the algorithm is used in the CSR performance-evaluation model. This research may provide a useful opinion based on which the public may choose predictive indexes for assessment of CSR, and conduct accurate supervision at all levels of CSR. The AHP-FCE model proposed in this research applies widely in the evaluation of CSR performance.

Resource allocation in multi-divisional multi-product firms

This paper is concerned with specifying and estimating the productive characteristics of multidivisional multiproduct companies at the divisional level. In order to accomplish this, we augment division-level information with inputs that are imputed based on profit-maximizing allocations within each division. This study builds on work by De Loecker et al. (2016) as well as Olley and Pakes (1996), Levinsohn and Petrin (2003) and Ackerberg et al. (2015), and extends this work by lifting a key assumption that single- and multi-product/division firms have the same production technique for the same product/segment. We estimate the production function and impute input allocations simultaneously in the absence of this key assumption as well as the constant share constraint of the input portfolio. Finally, our approach is applied to estimate the division-specific productivity of firms that compete in five segments of the global oilfield market to better understand the motivation of firms’ investment, divestment, mergers and acquisitions (M&A).

Constraint absorption in emerging economies: the role of business groups

PurposeThe purpose of this paper is to highlight the motivation for firms in emerging economies to engage in constraint absorption. It illustrates the mechanisms that enable business group (BG) affiliated firms to manage interdependencies vis-à-vis standalone firms in emerging economies.Design/methodology/approachThe propositions outlined in this study are rooted in the theoretical lens of resource dependence theory (RDT). The authors integrate RDT with the resource-based view and institutional theory to explain the effect of BG affiliation on the relationship between the two types of interdependence (i.e. mutual dependence and power imbalance) and the likelihood of constraint absorption.FindingsThis paper theorizes that BG affiliation influences the relationship between mutual dependence/power imbalance and the likelihood of constraint absorption. However, if both the firms in a dyad are affiliated to a BG, the likelihood of constraint absorption is likely to be low owing to a process called “co-optation” even if mutual dependence or power imbalance between the firms is high.Originality/valueThis paper highlights how BG affiliated firms are better at managing contingencies in the external environment vis-à-vis standalone firms. This paper also advises managers that the type of organizational form is an important factor to be considered while engaging in constraint absorption in an emerging economy.

Patenting motives of pharmaceutical firms: a perspective on changing role of patents and firms' strategy in business

Patenting motives of pharmaceutical firms: a perspective on changing role of patents and firms' strategy in business

Investment incentives as instrument of motivation of firms and economic stabilization

Investment incentives are mostly presented as an efficient tool of economic policy to eliminate negative impacts of economic cycle and also as the tools of motivation of firms to generation of investment. The aim of the paper is to verify the relationship between investment incentives and business cycle in the Czech Republic. There is used the data of CzechInvest, Czech Statistical Office and Organisation for Economic Cooperation and Development. To verify the link between the investment incentives and the business cycle, the Pearson correlation coefficient and Spearman correlation coefficient was used. There has been identified moderate positive relationship between the volume of the state support and the growth of the gross domestic product in constant prices. The link between investment incentives and output gap was not statistically significant. The study brings new insights on the field of investment incentives as an instrument of stabilization of economy. Investment incentives are important in terms of stimulating the investment activity of firms. Findings of the study answer the question of whether the government behaves responsibly in the area of investment incentives. The findings show that the policy of investment incentives does not respond flexibly to the current needs of the Czech economy.

Evolution and Pattern of Indian Outward FDI in ASEAN Region

This study focuses on the evolution of Indian outward foreign direct investment (OFDI) flows into the Association of South-East Asian Nations (ASEAN) region since 1980. It describes the changing nature of ASEAN focused Indian OFDI and infers about the causes behind such changes over different periods. It highlights sectoral composition, ownership structure, firm size, and acquisitions that most visibly characterise patterns of investments undertaken by Indian firms in ASEAN region. It also briefly discusses the development impact of Indian FDI in ASEAN. Indian OFDI in ASEAN region has been found to be concentrated in Singapore followed by Malaysia and others. The major sectors in which investment is being done in ASEAN region include services like transport, storage and communication, financial, insurance, real estate and business services while in manufacturing sector most of the investment is in the transport and motor vehicle equipment. The main motivations of Indian firms might be to improve the market strength or to seek assets, business strategies and resources in ASEAN countries.

E-HRM and Motivation: A Case of Manufacturing Companies in Tanzania

Organisations are encountering more challenges than ever, owing to the speedy and dynamic development of e-business. This has headed companies to pursue better opportunities to run HR operations more effectively by adopting technology in the human resource department. Today, top leaders entirely comprehend the power of information technology (IT) tools for the attainment of business targets. Thus, the purpose of this paper is to assess the current and emergent concepts of the Electronic Human Resource Management (E-HRM) in Tanzanian organisations and study how it characters employees’ motivation. A survey was carried out; PLS-SEM technique was used to examine the effects of E-HRM on motivation. The paper outcomes suggested an apparent influence of electronic-human resource management on motivation. We have inspected research done on E-HRM and have developed a model of the factors which directed to HR electronic use and motivation study. This paper gives a brief outline of the prospects of E-HRM and Motivation in Tanzanian firms.