Role In Firm Performance Research Articles

How can firms get benefits from the innovation ecosystem? Empirical evidence from Pakistan

PurposeThis research intends to analyze the innovation ecosystem factors that play a vital role in firm performance. As a result, large-scale empirical studies on the innovation ecosystem are rare, and fewer efforts have been made to determine if and how different factors affect the ecosystem models of firms. There has yet to be a substantial empirical study on the innovation ecosystem.Design/methodology/approachData were acquired from Pakistani IT companies. The results show that factors of the innovation ecosystem significantly contribute to business performance. The essential assumption is that resource endowment, organizational culture, knowledge and competence, and technology capability are allied to the innovation ecosystem.FindingsThe findings are crucial from a managerial view because firms must focus on changing their innovation ecosystem factors model to achieve greater performance. Radical changes in the firms will only be worthwhile if they value their resource endowments. To attain superior firm performance via influential factors of the innovation ecosystem, IT administrators need to build organizational cultural capacities to adapt to changes brought on by digitization quickly and effectively. However, this must be supplemented by improving organizational knowledge, competencies and technological capabilities to enable organizations to modify their ecosystems.Originality/valueEventually, firms can better respond to changes in their settings if they combine these variables by implementing an effective innovation ecosystem model, which leads to greater sector and superior financial performance.

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

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

The Relationship between Innovation and Risk Taking: The Role of Firm Performance

One perspective suggests that firms heavily involved in innovation may face increased risks. It is essential to know the suitable proxies in measuring innovation related to risk taking. Many studies use research-and-development intensity (RDI) and research-and-development spending (RDS) as proxies for innovation related to risk taking. However, little evidence shows that positive association with risk taking. This study addresses this gap by using RDI and RDS as metrics for measuring innovation and assessing innovation-related risks. This study incorporated performance as a potential factor affecting the interaction between these variables. It is essential to consider the risks associated with innovation and allocate the RDI and RDS effectively to maximize revenue. We used a dataset of 3955 firm-year observations obtained from 548 listed firms in the Indonesian stock exchange for 2012–2021. We found that RDI and RDS positively affect risk taking. The test results show that the interaction between innovation and firm performance negatively affects risk taking. Thus, firm performance may mitigate the risks associated with innovation. Therefore, firms must balance their innovation projects with improved performance to minimize risks and achieve long-term success.

Subsidiary Survival in the Foreign Market: The role of Cultural Distance and International Experience

Existing studies on the foreign subsidiaries’ survival have acknowledged that the role of firm performance is critical. However, the research remains inconclusive on how institutional and organizational factors influence firm survival in foreign markets. This study aims to fill this scholarly gap by considering the role of international experience of the parent firm and cultural differences between host and home countries on firms’ survival in foreign markets. Using a sample of 680 Chinese foreign subsidiaries operating in 24 countries during the period 2011 to 2020, we find that subsidiaries having poor financial performance are more likely to withdraw from the foreign markets. This effect is more pronounced when the cultural distance between home and host countries is higher. However, the international experience of the parent company helps its foreign subsidiaries to survive in the host country for a longer period. These findings have important implications for MNCs operating in foreign markets.

Mediation role of human capital on gender diversity and credit risk: Evidence of Indonesian rural banks

This study uses human capital that shows the intangible asset’s core in reducing the risk or improving firm performance to solve previous inconsistent results of women’s role in firm performance. Thus, this paper examines the role of human capital as the mediator in the influence of gender diversity on credit risk in a rural bank. This examination involves 433 rural banks based on the purposive sampling method. The result reveals that higher gender diversity has higher human capital (α = 0.135, ρ = 0.005) and higher human capital has lower credit risk (α = –0.205, ρ = 0.000). It also revealed that when gender diversity is controlled by human capital as a mediator on credit risk, gender diversity does not affect credit risk (α = –0.022, ρ = 0.625). However, human capital still affects credit risk (α = –0.205, ρ = 0.000). It implies that the higher a woman on the board of directors, the lower the credit risk through her education competence. Women as organization leaders have high self-appreciation from organization members in implementing their strategies and supervising them. High credit risk in rural banks needs appropriate management as a part of an internal governance mechanism. This study contributes to gender diversity literature through the ability to manage risk in measuring women’s role as strategic agents. This study also contributes to investor protection through the reputation of women on boards as monitoring agents.

Trust and pay gap: Quasi-natural experimental evidence from China

Although the pay gap plays an important role in firm performance, little attention is paid on the impact of trust on within-firm pay gap. Using the construction of China's social trust system as a quasi-natural experiment, we examine the causal effect of trust on within-firm pay gap based on the data of China's A-share listed companies from 2010 to 2018. We find that trust can significantly reduce such gap. Our findings are more pronounced in non-state-owned enterprises, firms with weaker corporate governance, and firms with lower media attention. Finally, we provide evidence that trust enhances firm productivity by reducing pay gap. Overall, this study enriches the research on the driving factors of pay gap at the firm level and the consequences of social trust.

The impact of employees' perceptions about top management engagement on sustainability development efforts and firm performance

AbstractBecause sustainability management plays a vital role in firm performance, it is critical to understand the underlying mechanisms that drive better firm performance with sustainability adoption. Thus, drawing upon responsible leadership theory and the dynamic resource‐based view, this study examines how the level of sustainability adoption influences firm performance, both environmental and financial, emphasizing the role of top management beliefs and participation in sustainability adoption. With responses from 310 employees working in manufacturing, healthcare, and retail industries, the SEM analysis results support that (i) perceived top management's strong beliefs lead to a higher level of sustainability adoption by organizations; (ii) perceived top management's active participation positively moderates the relationship between perceived top management beliefs and the level of sustainability adoption; (iii) the higher level of sustainability adoption results in better environmental and financial performance; and (iv) environmental performance positively and partially mediates the relationship between the level of sustainability adoption and financial firm performance. Finally, we offer guidance to managers who would like to leverage top management attributes to achieve environmental and financial performance via environmental sustainability practices.

Sales order backlog and CEO power

Research shows that CEO power can play an instrumental role in firm performance. We examine the link between CEO power and sales order backlog, a leading firm performance indicator. We find a significant positive relation between sales order backlog and CEO power, suggesting that firms with a higher level of sales order backlog have more-powerful CEOs. This is consistent with prior research that links CEO power to improved firm performance. We also find support for upper echelons theory by showing that this relationship is largely driven by firms with younger CEOs, firms with male CEOs, or firms with longer-tenured CEOs. Our study extends research on CEO power providing evidence of how CEO power relates to enhanced firm value. The study also extends accounting and capital markets research by informing the market of the link between the leading firm performance indicator of sales order backlog and CEO power.

International marketing capabilities development: The role of firm cultural intelligence and social media technologies

ABSTRACT The purpose of this study is to analyze how firm cultural intelligence and social media technologies influence the international marketing capabilities of multinational enterprise (MNE) regional offices. The data used in this study were obtained from MNE regional offices located in the Emirate of Dubai, which were analyzed using structural equation modeling. The results of the study indicate that firm cultural intelligence and social media technologies have unique and complementary contributions to the development of international marketing capabilities, and these capabilities play an essential role in firm performance by lessening the adverse effects of foreign market turbulence.

The impact of intangible assets on firm performance: Evidence from an emerging economy

Purpose- This research investigates intangible assets' role in firm performance in the Tehran Stock Exchange's firm performance. Design/methodology/approach- Multiple Linear Regression is conducted to examine a large pool of data for 1350 company-year over ten years from 2008 to 2018. Four measures are used for performance, including return on assets, return on equity, net profit, and profit margin. Findings - The findings show that unrecorded and recorded intangible assets positively impact firm performance (return on assets, return on equity, net profit, and profit margin). The authors also find that last year's recorded intangible assets and performance (return on assets, return on equity, net profit, and profit margin) are related positively. This paper magnifies the significant role of intangible assets on firm performance. Originality/value- The outcomes of the current study may give insight to managers to provide serious attention to intangible assets in developing nations to improving performance. This study can provide brighter empirical shreds of evidence about the relationship between recorded and unrecorded intangible assets and performance in listed companies on the Tehran Stock Exchange. I believe that this research can significantly contribute to future studies.

STI-DUI innovation modes and firm performance in the Indian capital goods industry: Do small firms differ from large ones?

Despite the importance of informal modes of learning and innovation for developing countries, there is little empirical evidence on their role in firm performance. This paper examines the effect of formal and informal learning modes followed by small and large firms on their overall performance in the capital goods industry. Following the wider literature on national innovation systems, we categorise the innovation modes as formal Science, Technology and Innovation (STI) and informal learning by Doing, Using and Interacting (DUI) mode. We observe that in the case of small firms the informal learning and experience-based innovation is related to improved performance, while the formal STI mode does not have any effect. On the other hand, for large firms, both STI and DUI innovation modes are positively related to their sales growth. Our results indicate that building certain DUI capabilities may act as a pre-condition to enhance the strength of science and technology-based innovation strategies.

Intellectual capital and bank performance in Vietnam

PurposeFor the past two decades, intellectual capital has played an increasingly important role in firm performance around the world. However, the importance of intellectual capital in Vietnam, and especially in the banking sector, has largely been ignored in the literature. This study is the first to examine the effect of intellectual capital on bank performance in Vietnam. In this paper, intellectual capital is decomposed into three components: (1) capital employed efficiency, (2) human capital efficiency and (3) structural capital efficiency.Design/methodology/approachThe paper uses an unbalanced panel dataset on 14 listed banks in Vietnam for the period 2009–2018 for which required data are available, with the generalized method of moments.FindingsThe findings indicate that intellectual capital contributes significantly and positively to bank performance in Vietnam. In addition, bank performance is driven primarily by capital employed efficiency. Although human capital efficiency appears to contribute positively to bank performance, the effect on bank performance appears to be marginal.Originality/valueThe literature review indicates that the effect of intellectual capital on bank performance is mixed. This effect can be positive or negative or even show a U-shaped relationship. The effects of intellectual capital on firm performance are not consistent, depending on factors such as the quantitative technique and sample used. As such, this paper extends analysis of Vietnam to cover the 10-year period from 2009 to 2018. The literature review reveals that the contribution of intellectual capital to bank performance has largely been ignored in the context of Vietnam. Studies have been conducted on the Gulf countries, such as Buallay et al. (2020). However, because the context in Vietnam differs from that of the Gulf countries, their experience might not be relevant to Vietnam. Vietnam is an emerging market in Southeast Asia, whereas Gulf countries have high income levels. So, it is necessary to examine direct evidence on Vietnam.

The effects of firm aspirational performance on changes in leadership structure

Despite the popularity of CEO duality as a research topic, relatively few empirical studies have explored the antecedents of this leadership structure. Prior research has generally produced null findings concerning the role of firm performance in predicting whether firms decide to separate (or combine) the CEO and board chair roles. We consider CEO ownership to be an important boundary condition that will help explain why the direct effects of these relationships lack significant results. Using a sample of S&P 1500 firms over a ten year span that begins with the 2008 financial crisis—a period in which CEO duality has experienced renewed scrutiny—we find that there is no direct effect between a firm’s performance and the likelihood that the board will separate (or combine) the CEO and board chair roles. However, we find that CEO ownership is a significant moderating factor when observing how poor (good) performance can affect the likelihood of separating (combining) these roles.

Factors Affecting the Stock Price: The Role of Firm Performance

Factors Affecting the Stock Price: The Role of Firm Performance

Going green during COVID-19: Examining the links between green HRM, green supply chain and firm performance in food Industry of Bahrain: The moderating role of lockdown due to COVID-19

The objective of this study was to examine the role of green Human Resources Management (HRM) in the green supply chain (SC) and firm performance. The relationships between green HRM, green SC, lockdown, and firm performance were examined. In addition to this, the mediating role of green SC and the moderating role of lockdown was examined. The population of the study was based on the food industry of Bahrain and various companies were selected for data collection. Therefore, data were collected from the food supply companies in Bahrain. A questionnaire was used for data collection in which cluster sampling was applied. The findings of the study highlighted that green HRM has major importance for food supply companies. It has a positive role in promoting the performance of food supply companies in Bahrain. Furthermore, green SC also plays a vital contribution to the performance of food supply companies. However, COVID-19 has a negative role in firm performance. The situation of lockdown due to COVID-19 has a negative effect on the performance of these companies.

The impact of customer compassion on face-to-face and online complaints

ABSTRACT Customer complaints play an important role in firm performance as complaints enable service recovery and provide feedback for new product development. This study is among the first to investigate the impact of customer compassion on face-to-face complaints and online review posting behaviors following a service failure. Using an experimental design, either compassion or neutral emotion was primed. In an ostensibly unrelated task, individuals read a service failure scenario in the restaurant (Study 1) and hotel setting (Study 2). In Study 1, results show that individuals primed with compassion (vs. neutral emotion) were less likely to lodge a direct complaint. In Study 2, results show that participants were equally likely to post a negative online review regardless of the emotion prime. Practitioners might want to consider diversifying their customer complaint channels to deter compassionate customers from turning to social media to voice their dissatisfaction.

The Roots of Corporate Transparency: A Mediated Moderation Model to Predict Foreign Institutional Investment

ABSTRACTThis study analyzes the dynamics of attracting foreign institutional investment, using the mediated moderation approach to investigate whether corporate transparency can mediate the interactive effects of firm performance and family or policy on foreign institutional investment. This study has several findings. First, corporate transparency does not mediate the relationship between firm performance and foreign institutional investment. Second, firm performance can interact with the policy effect to affect foreign institutional investment. Third, based on the second finding, a further test found that the mediating process through corporate transparency does not account for the moderation effect of policy on the relationship between firm performance and foreign institutional investment. The findings can provide academics, practitioners, and policy makers with evidence regarding the role of firm performance and corporate transparency, as well as the effects of family and policy in encouraging foreign institutional investment.

Analysing the dynamics of mental models using causal loop diagrams

Substantial evidence suggests that managerial mental models play an important role in firm performance. Yet managerial mental models are not static but dynamic. This research investigates the creat...

Corporate Governance: Theory and Practice Impact of Corporate Governance on Firm Performance

Corporate governance is one of most widely researched topics in the different fields of management sciences. Additionally, governance plays equal role in firm performance in all countries especially developing countries become more important like Pakistan which contain equal importance to be studied with in subject to developed countries as to be well known in governance values, moreover there is increased interest to observe impact of corporate governance on different dimensions of firm performance. The objective of this paper is to underlay the corporate governance theories and practices and we have studied and try to analysis the impact of corporate governance structure on firm performance. This is a descriptive type of study in which we analysis different studies as coded all studies as they may have different implications in developed countries but here they may have different results as in developing countries and Pakistan is different among other Asian countries because of number of reasons as discussed in introduction with respect to its governance structure. We also have find interesting results as from other empirical studies recently a part of Pakistan perspective research and having number of important implications with respect of changes need to be made in Pakistan’s governance structure. Findings shows there is impact of corporate governance on firm performance and market performance of firm also been effected with governance style

Entrepreneurship and Livelihood Restoration at Sindh Pakistan: Mediating Role of Firm Performance

Natural Disasters are real phenomenon that occurs in one or another part of the world throughout the year. Disasters affected counties suffer losses such as loss of economy and infrastructures; whilst affected people lose their lives, health, wealth, shelter, education; people become displaced and lose means to earn livelihood. The affected societies become vulnerable to suffer tension and depression, which may lead society to inhuman actives. In order to restore livelihood in such situation, most of the studies are done in developed countries, less are done in developing countries in this perspective. This study determines the relationship in between entrepreneurship and livelihood through firm performance. A research framework was designed to observe such relationship. The population parameters were set and a sample of 446 entrepreneurs was selected from disaster affected districts of Sindh Province at Pakistan using multistage sampling. Self-Administrated Questionnaires was used to collect entrepreneurs’ responses. Prior to final data analysis, data was screened out to eradicate/transform the outliers and missing values; furthermore, the testes were performed to check normality, linearity, Homoscedasticity, and Multicollinearity in data. Final data was analyzed using Hierarchical Multiple Regression Analysis in stepwise manner as suggested Baron and Kenny. Data analysis revealed that entrepreneurship has positive relationship with livelihood restoration and firm performance partially mediated this relationship. Therefore, it concludes that disaster affected society may recover and restores their livelihood promoting entrepreneurship and improving firm performance.