Private Manufacturing Firms Research Articles

Assessing the influence of effective leadership on job satisfaction and organisational citizenship behaviour

PurposeIn the time of coronavirus disease 2019 (COVID-19) epidemic, the effective leadership is what all the organisations are now requiring. Retaining and satisfying the employees in these tough times has become very difficult. In view of this, the present study attempts to investigate three objectives: first, to find out the direct effect of effective leadership on job satisfaction and organisational citizenship behaviour (OCB); second, to examine the relationship between job satisfaction and OCB and, third, to investigate whether effective leadership positively moderate and mediate the link between job satisfaction and OCB among managerial employees of private manufacturing firms of Chhattisgarh state.Design/methodology/approachCorrelational research design was applied in the present study. Cluster sampling was used to finalise sample region, and simple random technique was applied to collect primary responses. Employees working at the managerial positions were chosen as participants in the present study. About 530 questionnaires were sent to the participants in which 400 responses were found useable for analysis.FindingsThe results explained a significant relation of effective leadership with job satisfaction and OCB. In addition, job satisfaction also revealed a positive correlation with OCB. The moderating and mediating effect of effective leadership in the link between job satisfaction and OCB was also noted in significant association.Originality/valuePrivate sector enterprises were economically harmed by COVID-19's sudden arrival. This forced corporations to minimise expenses by cutting staff, production and operations. Employees felt alone, needed assistance and guidance. This research demonstrates how effective leadership may reconnect workers and boost organisational performance.

Assessing the impact of Financial Obstacles on Manufacturing Firm's capacity utilization: Bayesian Approach

This study investigates the relationship between financial obstacles and the capacity utilization of manufacturing firms. It departs from previous studies by employing a Bayesian linear regression analysis. The results demonstrate the considerable negative effect that financial constraints have on the capacity utilization of manufacturing enterprises, while access to credit lines has a positive effect. The sample consists of 1,494 private manufacturing firms in 31 European and Central Asian countries. Financial obstacles were perceived as a major impediment to business operations by 65% of the enterprises surveyed. Furthermore, 52% of enterprises in the sample have access to loans from financial institutions, while 47% have no access to credit lines. This implies that the manufacturing sector’s capacity to tap into financial market resources and surmount financial barriers both is vital to its survival and presents a significant challenge.

Determinants of Hedging Decisions in State-Owned and Private Manufacturing Firms on the IDX

The purpose of this study is to examine the determinants of hedging decisions in state-owned and private manufacturing firms on the IDX. Based on the previous research from Mediana & Muharam (2016), several determinant factors of hedging decisions were identified, namely liquidity, leverage, firm size, profitability and public ownership. The analytical method used is logistic regression analysis using a sample of 175 state-owned and private manufacturing firms from 2018-2020. The results of the analysis show that only liquidity and firm size have a significant influence on hedging decisions, which are negative and positive, respectively. The implication that can be taken is that when the firm makes a hedging decision, the firm needs to reduce liquidity or invest in working capital. On the other hand the firm needs to increase firm size through its fixed asset investment activities. Result of this study supports the optimal hedge ratio theory of Carter (2003).

Determinants of Hedging Decisions in State-Owned and Private Manufacturing Firms on the IDX

Determinants of Hedging Decisions in State-Owned and Private Manufacturing Firms on the IDX

Analysing the risk-return relationship in privately held firms: the contingent effect of being a family firm

ObjetivoLa relación riesgo-rentabilidad ha sido ampliamente analizada en el ámbito de las empresas cotizadas. Sin embargo, la literatura existente deja al descubierto una importante área de estudio en relación con las empresas no cotizadas. Para cubrir esta brecha, el presente estudio analiza el binomio riesgo-rentabilidad en el contexto de empresas privadas. Adicionalmente, incorporamos el efecto contingente de ser una empresa familiar sobre esta relación.Diseño/metodología/enfoqueUtilizando información de la base de datos SABI (Sistema de Análisis de Balances Ibéricos) se analizó una muestra de 2.297 empresas manufactureras privadas para el período 2009–2016. Para comprobar las hipótesis propuestas se aplicó la metodología de datos de panel, específicamente, utilizamos el Método de los Momentos Generalizado (GMM).ResultadosLos resultados muestran que, de acuerdo con la Teoría Prospectiva, las empresas no cotizadas presentan una mayor aversión al riesgo cuando su nivel de rentabilidad es superior al valor de referencia establecido, mientras que presentan una mayor propensión al riesgo cuando su rentabilidad es inferior al valor de referencia. Además, el hecho de ser una empresa familiar suaviza la relación riesgo-rentabilidad en ambos escenarios.Originalidad/valorEste es uno de los primeros estudios en abordar la relación riesgo-rentabilidad en el contexto de empresas no cotizadas. Además, la inclusión de ser una empresa familiar como factor contingente es completamente novedosa.

Cost of carry, financial constraints, and dynamics of corporate cash holdings

This paper provides new evidence on how the cost of carry is linked to corporate cash policy in the presence of financial frictions. Using both time-series and firm-level data for US public and private manufacturing firms, we find a negative correlation between cash holdings and the cost of carry for financially unconstrained firms. We find no evidence of such a relation for financially constrained firms. Our results suggest that financial constraints play an important role in adjusting cash to changes in the cost of carry. We introduce a simple model in which firms differ in their cost function of external finance, where the constrained firms' highly curved cost function drives a steeper cash demand, leading to their lower cash sensitivity to the cost of carry.

Sustainable development through CSR practices in the area of community services: evidence from select Indian public and private manufacturing firms

Sustainable development through CSR practices in the area of community services: evidence from select Indian public and private manufacturing firms

Sustainable development through CSR practices in the area of community services: evidence from select Indian public and private manufacturing firms

Sustainable development through CSR practices in the area of community services: evidence from select Indian public and private manufacturing firms

Digital Technologies, Circular Economy Practices and Environmental Policies in the Era of COVID-19

The degradation of the environment is associated with economic activity, particularly with the linear way in which the economy does not make efficient use of resources. However, the circular economy is opposed to this linear paradigm, since it makes the most of the resources in trying to achieve zero waste. In this context, this study investigates the relationship between industry 4.0 technologies, COVID-19 outbreak, environmental regulation policies and circular economy practices. A questionnaire is designed to collect information from 214 big and private manufacturing firms in Ecuador, and subsequently, through CB-SEM, the information is processed, and the study paths are validated. The results suggest that industry 4.0 technologies and environmental regulation policies are driving circular economy practices during the pandemic. The study finds no evidence favoring COVID-19 being a determining factor in the adoption of the circular economy. The results provide a policy framework for the adoption of a circular economy.

Capacity utilization under credit constraints: A firm‐level study of Latin American manufacturing

AbstractIn developing countries, the credit market usually is underdeveloped. Low access to credit affects firms' production decisions and restrains them from optimizing inputs to achieve the maximum output. This article examines the link between credit constraints and capacity utilization and whether it varies across manufacturing subsectors. The sample consists of 4,790 private manufacturing firms in six Latin‐American countries. The endogenous switching model is applied to control for endogeneity between credit constraint conditions and capacity utilization and heterogeneity between credit‐constrained and credit‐unconstrained firms. The counterfactual analysis based on the estimation results suggests that constrained firms would have seen an increase of 26.8% capacity utilization had they not been constrained and unconstrained firms a decrease of 23.7% capacity utilization had they been constrained. Credit constraints generally affect medium‐high‐tech firms more severely than low‐tech firms. The counterfactual analysis further reveals that, for credit‐constrained high technology firms, depressed outputs are primarily related to labor productivity rather than capital productivity.

Exploring the nexus between innovation and firm performance: new evidences from manufacturing innovation survey of Pakistan

ABSTRACT In this article, we examine the innovative behaviour of private manufacturing firms using a unique Innovation Follow-up Survey (2015) first time conducted by the World Bank for the Pakistan economy. To model the structural relationship between R&D, innovation, firm performance, and export we specify an extended version of CDM model proposed by Crepon et al. (1998. Research, innovation and productivi [Ty: An econometric analysis at the firm level. Economics of Innovation and New Technology, 7(2), 115–158), modified by (Griffith, R., Huergo, E., Mairesse, J., & Peters, B. [2006]. Innovation and productivity across four European countries. Oxford Review of Economic Policy, 22(4), 483–498; Hall, B. H., Lotti, F., & Mairesse, J. [2009]. Innovation and productivity in SMEs: empirical evidence for Italy. Small Business Economics, 33(1), 13–33) and further extended by this study via introducing propensity to export stage. Our econometric results show that technological innovations (product and process innovation) have significantly positive impacts on firm performance which plays a key role in the firm’s decision to engage in exporting activities. The elasticity of labour productivity with respect to process is slightly higher than the product innovation. Robustness analysis reports that, except for organisational innovation, the predicted research intensity has a positive impact on innovation output no matter which proxy is used for the firm-level innovation. Moreover, non-technological innovations (marketing and organisational innovation) have no impact on firm performance for all the alternative econometrical specifications and are mostly in line with the existing literature. The findings have practical implications for policymakers with respect to firm productivity and export propensity, and highlight the significance of innovation in empowering firms to increase economic performance and catch up.

Cost of Carry, Financial Constraints, and the Dynamics of Corporate Cash Holdings

This paper provides new evidence on the link between financial constraints and corporate cash policy. Using time-series data for US public and private manufacturing firms, we find negative correlation between cash holdings and cost-of-carry for large firms. We find no evidence of such a relation for small firms. We also perform a firm-level analysis supporting our time-series results that unconstrained firms have a propensity to adjust cash when cost-of-carry changes, whereas constrained firms do not exhibit this propensity. We provide a basic model predicting changes in the cost-of-carry drive variations in optimal cash holdings, considerably more for financially unconstrained firms.

Industry Characteristics And Voluntary Disclosure In Private Mining And Manufacturing Firms In Tanzania

Disclosure of corporate information forms an integral part of the corporate governance framework and lies at the center of most of the corporate governance codes, principles and reports around the world given its indispensable contribution to market and firm performance. Unfortunately, corporate disclosure is not a central aspect of corporate governance in Tanzania. It is noted that the lack of adequate voluntary corporate disclosure is one of the biggest challenges facing the implementation of effective corporate governance in Tanzania. In turn, lack of sound corporate governance has fueled corruption and cronyism while suppressing sound and sustainable economic decisions. To address this major problem, this paper investigates the determinants of voluntary disclosure in 107 private Tanzanian mining and manufacturing firms. This study uses a longitudinal approach as variation across firms and over time. To this end, 2011–2015 is selected for the longitudinal analysis. Annual reports of 107 private firms was used to collect data in relation to ownership structures, financial performance and firm size. This data was analyzed using a random effects Generalized Least Squares (GLS) model with Mundlak (1978) corrections. Our results show that ownership structures are associated with voluntary disclosure. Specifically, ownership concentration is negatively associated with voluntary disclosure in mining companies while it is positively associated in manufacturing firms. Foreign ownership is positively associated with voluntary disclosure for both mining and manufacturing firms. Further, the results reveal that financial performance is associated with voluntary disclosure where leverage is positively related to voluntary disclosure in mining and manufacturing firms while liquidity is significantly associated with voluntary disclosure in mining companies only. Our results also show that mining companies disclose 3.2% more information than manufacturing firms. Relevant policies to promote voluntary disclosure should be directed at facilitating foreign direct investment and leverage. These policies include developing impartial court systems, development of infrastructure, provision of quality education, tax holidays and tax credit. It is recommended that loan guarantee provided by public financial institutions can be used to reduce risk. In addition, foreign exchange liquidity facilities can reduce risk associated with borrowing money in different currencies.

Determinants of Intangible Investment and Its Impacts on Firms' Productivity: Evidence from Chinese Private Manufacturing Firms

AbstractUsing data from the 2012 China Enterprise Survey conducted by the World Bank, this study examines the determinants of intangible investment by private manufacturing firms and its impacts on firms' productivity in China, thus shedding light on the recent development of intangibles in one of the largest emerging economies in the world. Higher human capital, larger firm size and better institutional quality are found to increase the propensity and the amount of intangible investment, yet fiercer market competition generally decreases both the propensity and the amount invested in intangibles. We provide evidence that the disaggregated components of intangibles are positively correlated with firm productivity and there is complementarity between software and organization investment. Implications for policies to enhance investment in intangibles are identified from the empirical results.

Influence of Tax Shield on Capital Structure of Private Manufacturing Firms in Kenya

Influence of Tax Shield on Capital Structure of Private Manufacturing Firms in Kenya

Subnational Governance Institutions and The Development of Private Manufacturing Enterprises in Vietnam

This paper examines the impacts of subnational governance institutions on the development of private manufacturing firms in terms of new entry, firm size and labor productivity growth during 2006-2014 in Vietnam. Vietnam’s context during this period provides the best opportunities for examining the effects of subnational institutions on the entry and growth of private firms, given vast differences in the institutional quality across provinces and the increasing contribution of the private sector to the national economy. The empirical results suggest that aspects of the provincial governance institutions differ significantly in terms of their effects on private firms’ entry and growth during the study period. The conventional approach of entry deregulation seems to not induce the entry and sustained growth of private firms, but more fundamental aspects of transparency, private property protection, and contract enforcement better serve the private sector development over longer time horizons. These findings have important implications for the next stage of institutional reforms in a transitional economy such as that of Vietnam.

The Entrepreneur's Network and Firm Performance

Diverse organizational forms coexist in China's market economy, adapting and evolving in intensely competitive production markets. We examine the networks of founding chief executive officers of private manufacturing firms in seven cities of the Yangzi River Delta region in China. Through sequence analysis of ties that entrepreneurs relied on for help in the founding and critical events of their businesses, we identify three discrete forms of network governance: traditional kin-based, hybrid nonkin, and rational capitalist. We find that in traditional kin-based network governance, structural holes are linked to higher returns on assets and returns on equity. By contrast, in the rational capitalist form, structural holes and higher firm performance are not linked. We thus show that the content of the tie matters critically in the relationship between structural holes and firm performance.

Examining the Relationship between Corporate Social Responsibility and Financial Performance of Manufacturing Companies in Tigray Regional State, Ethiopia

Recently the concept of corporate social responsibility (CSR) is being discussed globally. Previous studies investigated the relationship between CSR and corporate financial performance (CFP) and findings show varied results. In this study, we explore and test the relationship between financial performance and social responsibility activities undertaken by private manufacturing firms in Tigray Regional State, Ethiopia. We used survey instruments to collect data from 34 firms over a period of three years. Then, using empirical methods we tested the hypothesis of the direction of the relationship between CSR and CFP. Findings indicate that CSR is positively related to better financial performance, as represented by ROA, ROE, and ROS. This relationship is statistically significant at the p<0.01 level of significance, supporting the view that socially responsible firm performance can be attached with achieving higher financial benefits. Hence, firms should recognize and instill CSR initiatives into their corporate culture and business operations because increases in CSR investments can lead to higher CFP while balancing the needs of their internal and external stakeholders.Keywords: Corporate Social Responsibility, Financial Performance, ROA, ROE, and ROS.

Public Debt and Private Firm Funding: Evidence from Chinese Cities

In China local public debt issuance between 2006 and 2013 crowded out investment by private manufacturing firms by tightening their funding constraints, while it did not affect state-owned and foreign firms. Using novel data for local public debt issuance, we establish this result in three ways. First, local public debt is inversely correlated with the city-level investment ratio of domestic private manufacturing firms. Instrumental variable regressions indicate that this link is causal. Second, local public debt has a larger negative effect on investment by private firms in industries more dependent on external funding. Finally, in cities with high government debt, firm-level investment is more sensitive to internal funding, also when this sensitivity is estimated jointly with the firm's likelihood of being credit-constrained. Altogether these results suggest that, by curtailing private investment, the massive public debt issuance associated with the post-2008 fiscal stimulus sapped long-term growth prospects in China.

Network effects, cooperation and entrepreneurial innovation in China

The rapid rise of an innovative private manufacturing economy in China challenges standard economic explanations of growth, which typically assume the existence of well-defined formal institutions such as property rights and company laws safeguarding investor and creditor interests. We highlight the social structure of cooperation that enables innovative activity in private manufacturing firms when formal property rights protection remains weak. We show how network effects linked to inter-firm cooperation in industrial clusters allowed private entrepreneurs to quickly develop reliable business norms to reduce the inherent risk of malfeasance and contract breach in formal and informal collaborative efforts. Survey data from a sample of 700 manufacturing firms located in China’s Yangzi Delta region confirms that both formal and informal types of inter-firm collaboration are effective, though in different areas of innovative activity.