Firm Performance Research Articles

EFFECT OF GREEN INNOVATION AND DIGITAL TRANSFORMATION ON SOLO RAYA SMEs

This study is motivated by the low awareness among SMEs in Solo Raya regarding the importance of environmental factors and digitalization for firm performance. Although stakeholder pressure and environmental concerns are increasing, few studies have explored how stakeholder pressure, green dynamic capability, green innovation, and digital transformation jointly influence the performance of SMEs, particularly in developing regions like Solo Raya. The aim of this research is to explore the combined impact of these factors on the performance of SMEs in Solo Raya. This research employs a quantitative approach, collecting data through a survey of 131 respondents from various SMEs in Solo Raya. The data was analyzed using Smart PLS 4. The results indicate that stakeholder pressure, green dynamic capability, green innovation, and digital transformation, all have a positive and significant effect on firm performance. In conclusion, although awareness of these critical factors remains low, SMEs in Solo Raya that respond to stakeholder pressure by enhancing their green dynamic capabilities, implementing green innovations, and adopting digital transformation strategies are better positioned to significantly improve their performance. This highlights that integrating environmental sustainability with digitalization can be a key driver of competitive advantage in the region.

Levels of mandatory CSR compliance and the payoff: evidence from India

Purpose This paper aims to examine the diverse levels of corporate social responsibility (CSR) expenditure among Indian companies and its influence on their performance. The study aims to determine whether exceeding the mandatory CSR spending limit provides an edge to companies that outperform in enhancing corporate firm value. Design/methodology/approach A dynamic model using system generalized method of moments (GMM) was used to analyze a balanced panel data set of 191 firms over seven years, spanning from 2016 to 2022. Return on assets was used as a proxy to gauge financial performance. At the same time, the study also examined the robustness of the results by considering return on equity and Tobin’s Q as additional measures. Findings The study results indicate that, in a mandatory CSR setting, all companies are generally perceived as performing and reporting on CSR equally. Hence, it will not make any payoff, although few companies outperform. Therefore, companies should differentiate themselves regarding CSR spending and reporting to claim a competitive advantage in the market. The study also suggests that the payoff of mandatory CSR expenditure for both performing and outperforming companies is reflected more in non-quantifiable firm characteristics than in measurable performance metrics. Research limitations/implications The period of study covers 7 years, i.e. 2015–2016 to 2022–2023. This may limit capturing long-term CSR practices and firm performance trends. Additionally, data from only 191 Indian companies restrict generalizability; future research should include diverse geographic regions with mandated CSR spending to provide a more comprehensive view. In subsequent studies, contextual factors like regulatory changes and macroeconomic conditions could be considered moderating variables. Practical implications The study provides valuable insights to top management, indicating that spending beyond the threshold limit of mandatory CSR spending does not enhance corporate firm value. Instead, this additional investment may yield benefits in the form of goodwill and reputation over the long term. Social implications This study assists corporations in optimizing their CSR strategies to enhance their social and financial performance impact. Moreover, the study suggests ways to improve the CSR payoff and the need for increasing stakeholder satisfaction. Originality/value The study provides original insights into the relationship between mandatory CSR spending and firm performance in the Indian context, revealing that CSR spending does not significantly impact financial metrics, and it highlights the importance of considering a non-quantitative matrix to enhance the firm value in a mandatory CSR setting.

The Effect of Product Selection in Live Streaming on Firm Performance: The Roles of Interaction, Scenario, and Brand-Consumer Congruence

ABSTRACT Purpose Live streaming e-commerce is an emerging e-commerce model within the realm of the mobile Internet, based on video-centric social media interaction. However, there is currently a lack of in-depth research on live streaming from a business perspective and the impact of product selection in live streaming on firm performance. To fill these gaps, the current study investigated how brand – consumer congruence moderates the influence of product selection in live streaming on firm performance and how this effect varies across retailers. Methodology/approach The model and hypotheses were tested by applying partial least squares regression to data collected from 302 online retailers in the Chinese live streaming market. Findings Product selection in live streaming had a significant positive impact on firm performance. Brand – consumer congruence in live rooms partially mediated the relationship between product selection and firm performance. Live room scenario matching and live room interaction had significant positive moderating effects on the main effect of product selection in live streaming on firm performance. Research implications The literature has focused on the impact of live streaming on customer purchase behavior. Few studies have explored the value of live streaming from a business-to-business marketing perspective. Our findings offer theoretical insights into the relationship between product selection and firm performance. Originality/value/contribution This is the first study to examine the value of product selection in live streaming. In addition, it reveals how product selection affects firm performance through brand – consumer congruence. Practical implications This study has implications for online retail managers based on the effect of product selection in live streaming on firm performance and the roles of brand – consumer congruence, interaction, and scenario in live streaming of business-to-business marketing.

The impacts of digital and learning orientations on supply chain resilience

PurposeThis study quantitatively investigates the impacts of digital and learning orientations on supply chain resilience (SCR) and firm performance (FP), aiming to fill the gaps in understanding their specific impacts in the context of Industry 4.0 developments and supply chain disruptions.Design/methodology/approachThis study utilized survey techniques and structural equation modelling (SEM) to gather and analyse data through a questionnaire based on a seven-point Likert scale. Hypotheses were formulated based on an extensive literature review and tested using Amos software.FindingsThe study confirms SCR’s significant impact on FP, aligning with existing research on resilience’s role in organizational competitiveness. This study uncovers the nuanced impacts of digital and learning orientations on SCR and FP. Internal digital orientation (DOI) positively impacts SCR, while external digital orientation (DOE) does not. Specific dimensions of learning orientation – shared vision (LOS), open-mindedness (LOO) and intraorganizational knowledge sharing (LOI) – enhance SCR, while commitment to learning (LOC) does not. SCR mediates the relationship between DOI and FP but not between DOE and FP.Research limitations/implicationsThis research focuses on digital and learning orientations, recommending that future studies investigate other strategic orientations and examine the specific contributions of various digital technologies to SCR across diverse contexts.Practical implicationsThe empirical findings emphasize the significance of developing internal digital capabilities and specific learning orientations to enhance SCR and FP, aligning these initiatives with resilience strategies.Originality/valueThis study advances knowledge by distinguishing the impacts of internal and external digital orientations and specific learning dimensions on SCR and FP, offering nuanced insights and empirical validation.

Can the MD&A Tone of Listed Firms’ Annual Reports Predict Their Future Performance? Empirical Evidence Based on Machine Learning Text Analysis*

AbstractBased on a sample of listed companies in China's A‐share market between 2009 and 2019, we analyze the tone of the Management's Discussion and Analysis (MD&A) section of 15 743 annual reports through machine learning. The MD&A tone displays a significantly positive association with the firm's future financial performance, proving that the textual tone of MD&A includes forward‐looking aspects regarding management's intentions for the company's prospects, and investors can use it to forecast the firm's future performance. Additionally, higher levels of internal control quality, stronger analyst following, and higher holdings by institutional investors can enhance the correlation between the MD&A tone and the company's future performance.

Corporate social responsibility and firm performance: Evidence from Korea

ABSTRACT This study explores the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP) in listed Korean companies over ten years. The results show a significant positive effect of CSR on CFP in the manufacturing sector, but no notable impact in the non-manufacturing sector. A detailed analysis identifies social contribution as the key driver of this positive effect, while the other CSR sub-categories play a minor role. Higher ownership by majority shareholders and treasury stock is associated with lower CSR. This research enhances understanding of the CSR-CFP link in Korea, offering valuable insights for insiders and investors in decision-making.

Entrepreneurial orientation and firm performance: The role of creativity and managerial ties

Entrepreneurial orientation and firm performance: The role of creativity and managerial ties

The paradoxical impact of CEOs’ humility and narcissism on absorptive capacity: evidence from small firms

Purpose Because small firms are dependent on external knowledge to overcome various constraints, absorptive capacity (ACAP) is an important capability from a knowledge management perspective. Furthermore, extant research has noted the seemingly contradictory yet potentially complementary interaction of Chief Executive Officer (CEO) traits – humility and narcissism on knowledge management. This study aims to explore the impact of CEO humility and narcissism on ACAP and short-term firm performance. Design/methodology/approach This paper uses a quantitative approach using multisource data from small Indian firms comprising survey responses from 225 CEOs and 216 general managers of small automotive firms. The data were analyzed using partial least squares – structural equation modeling. Findings This paper sheds new light on the process through which small firms build ACAP and the role of CEO leadership traits in this regard. This study finds that in a highly turbulent environment, CEO’s humility and narcissism affect the development of a small firm’s ACAP. This study also discusses important implications for managerial practice and policy making. Originality/value To the best of the authors’ knowledge, this is the first study to empirically examine the impact of the paradoxical leadership traits of narcissism and humility on the short-term performance of small firms, from a knowledge-based perspective through the lens of absorptive capacity.

Idiosyncratic factors that shape shareholder reward policies in capital intensive companies

This study empirically explores multiple company-specific determinants of dividend distributions and stock buybacks, by utilizing a panel dataset of maritime shipping companies and a panel dataset of matched companies from various industries, as well as by employing Generalized Method of Moments instrumenting for endogeneity. The results provide evidence that idiosyncratic factors, such as the reputation of dividend distribution, firm market value, free cash flow, firm profitability, analyst’s coverage, free float, firm size, leverage, firm liquidity, stock liquidity, collateralizable firm assets, risk, investment opportunities, institutional ownership, and firm performance, are important antecedents of dividend distributions in both capital intensive and diverse industries. Moreover, the reputation of stock buybacks, firm market value, free cash flow, analyst’s coverage, free float, firm size, leverage, firm liquidity, stock liquidity, collateralizable firm assets, risk, institutional ownership, and firm performance, are important determinants of stock buybacks in capital intensive industries. Lastly, the reputation of stock buybacks, firm profitability, analyst’s coverage, free float, firm size, leverage, stock liquidity, collateralizable firm assets, risk, investment opportunities, institutional ownership, and firm performance are important factors of stock buybacks in diverse industries. These empirical findings enrich the literature and yield practical implications for principal officers and investors as discussed herein.

Technological intensity and innovation capability: evidence from an emerging country

Purpose In general, it is believed that firms belonging to the high technological intensity stratum have a more innovation capability. However, evidence has begun to appear in the literature demonstrating that firms in the low-tech stratum also have the innovation capability. This paper seeks to solve this dilemma. Through an analysis of industrial firms in an emerging country, this study aims to identify the existence of innovation capability in all strata of technological intensity. Design/methodology/approach The authors empirically assessed the impact of innovation capability on the performance of firms in all strata of technological intensity. The authors studied a sample of 910 firms from different industries and technology intensities operating in Peru, by applying a partial least squares structural equation model (PLS-SEM). Findings This study obtained three important findings. First, the authors show that innovation capability is present in all strata of technological intensity. Second, innovation capability differs according to the technological stratum. Third, firms in the lowest technological stratum can use more capabilities than those in the other strata. Originality/value This study pioneers the empirical analysis of innovation capability and technological intensity simultaneously to verify that innovation capability exists in the four strata of technological intensity.

Blockchain for supply chain: performance implications and contingencies

PurposeThis study aims to examine the performance implications of blockchain implementation in the supply chain and explore how blockchain functions and supply chain processes of blockchain implementation moderate the effect on firm performance.Design/methodology/approachUsing 220 blockchain implementations announced between January 2015 and December 2022, we use the event study methodology to estimate the effects of blockchain implementation on the firm value. Regression analyses are conducted to examine the moderating effects of blockchain functions and supply chain processes.FindingsFirst, there is a positive and statistically significant relationship between blockchain implementation in the supply chain and firm value. Second, we find that abnormal returns from blockchain implementation are higher when used with blockchain’s contract automation function and applied in downstream processes, supporting the moderation effects.Originality/valueThe study provides empirical evidence on the effects of the blockchain implementation on firm performance, taking into account the complexity of blockchain functions and supply chain processes. It enriches the current understanding of how blockchain implementation in the supply chain contributes to firm value.

The impact of innovation and differentiation strategy on financial performance with emphasis on the role of risk management and intellectual capital

Purpose The purpose of this study is to investigate the impact of innovation and differentiation strategy on financial performance with a focus on the role of risk management and intellectual capital of companies listed on the Tehran Stock Exchange. Design/methodology/approach In this research, differentiation and innovation strategy criteria are the independent variables, performance criteria are the dependent variables and risk management effectiveness and intellectual capital are the moderating variables. The statistical population of this research includes all the companies listed in the Tehran Stock Exchange during the 10-year period, and 127 companies were selected as a statistical sample using the systematic elimination method. The research model fitting and hypothesis testing were carried out using structural equation modeling and SPSS, Smart PLS software. Findings The results of the hypothesis testing showed a positive and significant relationship between the innovation and differentiation strategy and the firm performance. In addition, effective management of risk and intellectual capital also had a significant and positive impact on this relationship. Research limitations/implications Given that this research was conducted at the Tehran Stock Exchange, it was difficult for the researchers to collect data. Also, since the Tehran Stock Exchange is a new market, a lot of research needs to be done in different areas of this market to identify the existing problems and shortcomings and to provide reasons for its growth and development. Practical implications According to the results of the research on the impact of intellectual capital and risk management on corporate performance and the impact of strategy on this relationship, this paper can expect to see an improvement in corporate performance and an increase in shareholder wealth as a result of applying the results of this research. Social implications Considering that corporate strategy, intellectual capital criteria and risk management to increase the financial performance of companies have informational content; therefore, according to the results of this research, an increase in the performance of listed companies is expected, and naturally, this increase in performance will lead to the prosperity of the economic sector, increase in job creation and as a result, improve the quality of social life. Originality/value In the Tehran Stock Exchange, by properly evaluating the financial performance criteria of companies and identifying the factors that increase intellectual capital and risk management, they provide the means to improve knowledge in this area of research.

Corporate Board Characteristics of Family-Managed Firms and it’s Impact on Firm Performance

Well-balanced and active corporate boards ensure effective corporate governance in family firms. Studies in the area of corporate governance across the globe made considerable effort to study the composition of corporate boards and their effectiveness. The present study is an effort to evaluate the impact of board characteristics on the performance of selected Indian family-managed firms. The paper encompasses how various board parameters such as board size, board independence, the duality of the chairman, gender diversity, and inclusion of foreign directors in the board impact a firm's market and accounting performance measures. The data is collected from the CMIE PROWESS Database, consisting of 173 family-managed firms belonging to 11 macro-industrial sectors selected. The panel data used for the study consist of 2076 observations for 12 years, from 2010-11 to 2021-22. The study uses regression analysis to evaluate the impact of board characteristics on performance measure indicators Tobin’s Q and ROA of the firms.

Military conflicts and the performance of state-owned enterprises: a study of Ukraine’s aerospace, defense, and electro-engineering industries before and after the 2014 Crimea and Donbas occupation

Abstract This study addresses the under-researched role of state-owned-enterprises (SOEs) in global value chains/production networks (GVCs/GPNs). It examines how the economic performance, foreign trade, and value capture of Ukrainian firms – classified by ownership, position in GVCs/GPNs, size, and diversification of their customer base – have evolved following the Russia’s occupation of Crimea and parts of Donbas in 2014. The study reveals significant differences in the distribution of SOEs, private, and foreign enterprises between the aerospace/defence and electro-engineering industries. Overall, since the Russian aggression in 2014, the aerospace and defence industries have outperformed electro-engineering firms, largely due to strong state support. The study concludes with broader observations that while even intensive mutual trade could not prevent the war, the war does not necessarily lead to a complete cessation of mutual trade.

COMPARATIVE ANALYSIS OF CORPORATE GOVERNANCE PRACTICES: A SYSTEMATIC LITERATURE REVIEW OF INDIA AND GCC NATIONS

This systematic literature review aims to review the effect of corporate governance on the firm’s financial performance and relationship between corporate governance mechanisms, government regulation and firm financial performance across different regions. The review therefore integrates conclusions from several related papers to establish how good governance practices improve sustainability, profitability, and investor satisfaction of firms. Applying the analytic approach studying the reaction of the corporate boards indicating that their diverse and actively participating in the strategic decision making has a positive impact to the increase of the financial performance and the betterment of their corporate health. In the similar vein, this study defines how strong regulatory measures that align them to the hubs and local fiscal and culture settings influences transparency and accountability to fuel financial performance. This study also reveals the new implementation problems and constraints of the governance practice including differential application of the laws and rules, and dynamic requirements for the local and global business environments for the models of the governance. The results accentuate the importance and continuous need for governance changes and serve as a platform for further research, especially focusing on digital governance and ESG factors. This research will therefore fit into this existing body of knowledge by showing how corporate governance is an imperative prerequisite for sustainable business success and stakeholder trust.

Made to survive

Purpose This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings This paper identified that digital platforms can help food entrepreneurs to develop and build resilience to improve firm performance. Originality/value The briefing saves busy executives, strategists and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Marketing agility during deep uncertainty using a sensemaking perspective: the performance influence of digitization and government intervention in retail healthcare

PurposeCommunity pharmacies are critical healthcare providers facing unprecedented trading conditions during deep uncertainty. As such, this study aims to inform scholars and practitioners about the efficiency of marketing agility in enhancing firm performance while considering the mediating roles of government interventions and digitization.Design/methodology/approachA conceptual framework is constructed and validated. Six hypotheses are tested using partial least squares structural equation modeling (PLS-SEM), with 254 responses attained via a questionnaire.FindingsMarketing agility facilitated firm performance and digitization. However, findings elucidate the impact of government involvement and underscore the necessity for re-evaluating conventional metrics for firm performance amid deep uncertainty.Originality/valueThe efficacy of marketing agility has been acknowledged amidst deep uncertainty, yet more research is needed within the retail healthcare sector. This research addresses this gap.

GREEN LOGISTICS PRACTICES AND FIRM PERFORMANCE: THE MEDIATING EFFECT OF ENVIRONMENTAL PERFORMANCE AMONG LOGISTICS FIRMS IN KENYA

Objective: The objective of this study was to determine the effect of green logistics practices on performance and mediating effect of environmental performance on this relationship in logistics companies in Kenya. Theoretical Framework: This study is anchored on the resource-based view and the natural resource-based view. Method: The study employs cross-sectional survey research design. A structured questionnaire is used to collect data from a sample of 300 firms which is analyzed using CB-SEM. Results and Discussion: Study establishes a significant positive relationship between green logistics practices and performance which is in line with the argument of the natural resource-based view. Secondly, the mediating effect of environmental performance on the relationship between green logistics practices and firm performance is found to be non-significant. Research Implications: The study recommends that logistics firms should implement environment-friendly practices of green packaging, route optimization, fuel efficiency, carbon emission measurement and reverse logistics. The expenses associated with implementing these practices impede the firm’s ability to improve performance in the context of a developing country. The findings provide a basis for the development regulatory framework in pursuit of environmental sustainability. Originality/Value: Research on ecological sustainability has mainly concentrated on the entire supply chain. This study concentrates on the logistics aspect which is responsible for a quarter of emissions of Green House Gases (CHGs). The research employs a measurement model of green logistics practices construct in the service sector hence moving away from the manufacturing organizations.

Retraction: Factors affecting the green investment and assessing sustainable performance of firms in China

Retraction: Factors affecting the green investment and assessing sustainable performance of firms in China

Distinctiveness from whom? Evaluation of startups' distinctiveness from multiple referents in angel investment platforms

AbstractResearch SummaryOptimal distinctiveness can enhance firm performance, but we know little about how startups can achieve optimal distinctiveness when faced with multiple referents. This study investigates the strategic positioning of startups relative to two interdependent referents—incumbents and peer startups. Analyzing data for 3266 business plans from an angel investment platform in China, we find that a startup's distinctiveness from incumbents positively influences angel investors' evaluations. However, the positive effect is weakened by the startup's distinctiveness from peer startups within the same platform category. Economic signals emitted by the startup can mitigate the negative interaction between distinctiveness from both referents. Our findings suggest that startups can use a nuanced approach to attain optimal distinctiveness by aligning with peers while differentiating themselves from incumbent firms.Managerial SummaryHow can startups use their business plans to differentiate themselves from competitors and attract angel investors? Using data from business plans submitted to an angel investment platform in China, we find that a startup's distinctiveness from incumbent competitors helps attract angel investors, but this advantage diminishes when its distinctiveness from peer startups is also high. Nevertheless, startups can alleviate the negative interaction by presenting economic signals, such as financial records. Overall, our study suggests that startups can achieve optimal distinctiveness by aligning with peers while distinguishing themselves from incumbents, with economic signals acting as a legitimacy buffer to enhance their acceptance by investors.