Short-term Financial Performance Research Articles

Unveiling The Impact of Green Accounting and Sustainability Disclosure On The Firm Value

This study examined the impact of green accounting and sustainability disclosure on firm value in the Indonesian palm oil industry. The objective was to empirically assess how environmental performance measured by PROPER and sustainability reports affects firm value. Using quantitative research methods, the study analyzed data from 124 palm oil company observations listed on the Indonesia Stock Exchange from 2018 to 2022. The research variables included firm value proxied by Tobin’s Q, green accounting proxied by PROPER scores, and sustainability disclosure indexed from the companies’ sustainability reports. The study also included profitability, firm size, and leverage as control variables. The results indicated that green accounting had a negative impact on firm value, suggesting that environmental compliance imposes short-term financial burdens on companies. However, sustainability disclosure did not significantly influence firm value, indicating that investors in the palm oil industry may prioritize short-term financial performance over long-term sustainability considerations. These findings contribute to the literature on corporate governance and sustainability, particularly in industries with high environmental impact, like palm oil.

Exploring the Multi-Dimensional Effects of ESG on Corporate Valuation: Insights into Investor Expectations, Risk Mitigation, and Long-Term Value Creation

This paper investigates the multifaceted mechanisms through which Environmental, Social, and Governance (ESG) factors influence corporate value. ESG performance, reflecting a company's adherence to sustainable practices, has become increasingly significant in contemporary business strategy due to its potential impact on firm profitability and market perception. While ESG initiatives are known to enhance corporate transparency and stakeholder trust, contributing positively to a companys reputation and operational efficiencies, they also present financial challenges by potentially elevating operational costs and impacting short-term financial performance. Utilizing a comprehensive review of existing literature and theoretical frameworks such as stakeholder theory, agency theory, and signaling theory, this study delineates the balance firms must achieve between fostering long-term strategic advantages and managing immediate financial implications. By analyzing empirical evidence and case studies across diverse industries, the paper elucidates how robust ESG practices can attract better investment, improve risk management, and secure sustained economic benefits. This research contributes to academic discussions on ESGs role in corporate value creation and offers practical insights for companies aiming to integrate these practices into their core strategies effectively. The findings highlight the importance of strategic ESG implementation and the necessity for firms to align these initiatives with broader corporate objectives to optimize both societal impact and shareholder value.

Impact of CSR on stock return resilience during the 2020 public health emergency: Evidence from the Chinese financial market

Corporate Social Responsibility (CSR) can enhance firm value through non-profit channels, but it may also divert operational resources, potentially harming short-term financial performance. A key question in the literature is whether CSR can improve stock return resilience during negative shocks. Drawing on stakeholder theory, we hypothesize that CSR investment enhances stock resilience, though the effect may vary among firms. This paper analyzes financial data from 3153 Chinese listed companies alongside CSR ratings from the Hexun CSR database. Our findings indicate that firms with higher pre-event CSR ratings demonstrated stronger stock performance during the early stages of the public health emergency in 2020. These results remain robust across various checks and are supported by two instrumental variable approaches: local Confucian cultural influence and Lewbel's heteroskedasticity instrument. We further investigate the factors influencing the effectiveness of CSR in protecting firm value, revealing that CSR activities focused on shareholder responsibility are particularly effective. This protective effect is most pronounced in firms facing poorer financial conditions, lower proportions of institutional investors, heightened industrial competition, and those not operating in socially sensitive industries. Overall, our findings provide evidence that active engagement in CSR can enhance a company's resilience to negative shocks during global health crises.

The Impact of Value-Added Intellectual Capital on Corporate Performance: Cross-Sector Evidence

This study explores the relationship between intellectual capital (IC) and the financial performance of 250 publicly traded companies in France, Germany, and Switzerland from 2009 to 2018, addressing the gaps in prior research regarding the differential impacts of IC components across countries and industries in Western and Central Europe. Using the Value-Added Intellectual Coefficient (VAIC™) approach, this study evaluates human capital efficiency (HCE), structural capital efficiency (SCE), and capital employed efficiency (CEE). Panel regression analyses at the country and industry levels were conducted to assess their effects on financial metrics, such as return on equity (ROE), return on assets (ROA), and asset turnover ratio (ATO). The findings reveal a significant positive association between SCE, CEE, and firm performance, with CEE showing the most substantial effect, while HCE had a relatively weaker impact. Additionally, the study uncovers a trade-off between the accumulation of patents and trademarks and short-term financial performance, raising new considerations for intellectual property management. This research contributes to the literature by providing a nuanced understanding of how IC components influence financial outcomes across different contexts and offers practical insights for firms aiming to optimize structural capital and capital-employed strategies for improved financial performance while acknowledging the limitations regarding the sample of publicly traded firms.

THE EFFECT OF THE IMPACT OF DIGITAL TRANSFORMATION STRATEGY ON FINANCIAL PERFORMANCE MODERATED BY COGNITIVE CONFLICT IN PARTNER COMPANIES OF PT. ERDIVA DAYA TECHNOLOGY SOLUTIONS

This study aims to verify whether digital transformation strategy (DTS) enhances organizational performance and to analyze the necessity of implementing DTS, considering perspectives like "Skewed conflict," "minority dissent theory," and the "too-much-of-a-good-thing" principle. This research uses a quantitative method with a descriptive and explanatory survey approach to examine the cause-and-effect relationship between variables. The research concludes that DTS significantly influences both short-term and long-term financial performance, providing insights into how cognitive conflict influences DTS effectiveness and highlighting the need for enterprises to manage such conflicts to maximize financial performance.

The Influence of CSR Programs on Financial Performance in the Banking Sector

The basis of the study is the idea that corporate social responsibility, or CSR, suggests that doing this kind of activity will help the company by establishing its reputation and generating positive community feedback. The purpose of the study is to determine how a company's financial performance is impacted by its commitment to Corporate Social Responsibility (CSR). This report includes research conducted in China, India, Indonesia, and Pakistan. This research indicates that Corporate Social Responsibility (CSR) activities lead to continual performance improvement. Using a meta-analysis methodology, this study investigates the connection between financial success and corporate social responsibility (CSR). Based on theoretical assertions and real facts from the literature, ascertain whether there is a favorable association between financial performance and corporate social responsibility (CSR). If the research results are specified correctly, researchers find that although Corporate Social Responsibility (CSR) does not have much positive impact on short-term financial performance, Corporate Social Responsibility (CSR) offers extraordinary long-term fiscal benefits.

An Empirical Analysis of the Relationship Between ESG Factors and Corporate Performance

In today's globalized business landscape, a corporation's Environmental, Social, and Governance (ESG) performance has become a crucial metric for overall sustainability. This study delves into the empirical analysis of the connection between corporate ESG performance and economic performance, with a focus on the role of green innovation. Green innovation, a vital component of ESG, encompasses activities aimed at reducing environmental impact and improving resource efficiency. The study aims to unravel the internal mechanisms and influence paths of this relationship. The literature on the correlation between ESG performance and economic performance presents divergent perspectives. While some assert a positive link, contending that robust ESG performance enhances corporate reputation and operational efficiency, others argue that investing in ESG activities may raise costs and impact short-term financial performance. Through an analysis of publicly available corporate data, this study explores how green innovation, within the realm of ESG, shapes corporate economic performance. Factors such as corporate size and market environment are considered to ensure comprehensive applicability and profound insights. The study seeks to provide practical guidance for corporations in navigating the intricate balance between ESG responsibilities and economic objectives. Additionally, it aims to furnish policymakers with valuable recommendations to foster green innovation. Ultimately, by unraveling these complex relationships, the study endeavors to contribute to a deeper understanding of the interplay between ESG and economic performance, offering insights that can inform strategic decisions for both corporations and policymakers.

CSR Disclosure and Bank’s Financial Performance Nexus: Evidence from Pakistan.

Present research intends to evaluate the nexus among the corporate social responsibility (CSR) disclosure and financial effectiveness of banking industry in Pakistan. This investigation applies a quantitative research approach using panel data from a sample of Pakistan’s commercial banking institutions over timeframe limited from 2009 to 2020. The outcomes of mixed effect model visualize that there is inverse significant association among CSR disclosure ROE. Whereas no statistically significant linked in the context of short-term financial performance, by using a proxy of ROA. The results suggesting that the focus on CSR events and initiatives may have a detrimental effect on financial effectiveness. It is generally acknowledged that CSR offers numerous non-financial benefits, such as enhancing social media campaigns and luring ethical investors from both domestic and foreign markets. In developing countries context (i.e., Pakistan), we can conclude that the “cost of the CSR initiatives” and “shift of focus view” can affect the performance of banking industry. The lack of a positive correlation among corporate social responsibility (CSR) and financial performance in the Pakistani financial services sector can be attributed to a lack of interest and engagement in socially conscious investing. These findings indicate that the adoption of socially responsible investment has not gained significant cultural traction in Pakistan. The results emphasize the importance of banks, regulators, and stakeholders reassessing the balance between social responsibility and financial performance, considering the possible negative consequences of revealing CSR initiatives.

Farm debt and the over-exploitation of natural capital

This paper uses a stochastic optimal control model to show how standard loan contracts create incentives for farmers to focus on short-term financial performance at the expense of farms’ long-term natural capital. These incentives are a manifestation of the debt overhang problem. Extending this model shows how sustainability-linked loans can be used to weaken these incentives in a way that potentially benefits farmers and their bankers. The magnitude of the economic benefits generated by these loans depends on farm characteristics. The paper investigates the optimal design of sustainability-linked loans.

The Role of Human Resources in the Financial Performance of the Lodging Industry: Evidence Based on Financial Accounting Numbers in Korea

Purpose - This study investigates the role of human resource investment in the tourist accommodation sector of Korea. Specifically, it aims to explore the impact of human resource investment, particularly through employee education and training, on both the short-term and long-term financial performance within the Korean lodging industry.
 Design/Methodology/Approach - Utilizing data f rom private firms for 2011-2020, the study examines how financial performance, including sales growth, is related to expenditures on education, training, and benefits as proxies for human resource investment. The research primarily employs a series of multivariate regression analyses.
 Findings - The findings reveal that human resource investment itself does not affect short-term financial performance, but complements and supports financial outcomes of capital expenditure (PPE investment). However, the sales-based performance attributable to human resource investment becomes apparent within two years, and the supporting effect on financial performance generated due to capital expenditure still holds. Additionally, these results are significant for large-sized firms, but not for those small.
 Research Implications - Overall, human resource i nvestment plays a critical role i n fi rm performance by serving as a key factor in managing company resources efficiently. This study highlights the need for the simultaneous periodic management of capital- and human resources. Furthermore, this study sheds light on the role of human resource investment in the lodging industry by providing empirical results based on financial accounting numbers, an aspect that has not previously been extensively considered.

Overcoming the liability of patenting in early-stage ventures with market orientation

ABSTRACT Early-stage ventures often face bounded rationality from a lack of experience as well as limited resources. A strategic choice to patent a firm’s innovations to prevent competitor infringement involves significant resource commitments. We hypothesise that for early-stage ventures, having a patent could create liability on short-term financial performance; however, higher levels of market orientation could overcome it. We find support for our hypotheses using a sample of early-stage ventures that apply to business accelerators for support. This study contributes to the extant literature on innovation and entrepreneurship, as well as on market orientation, to show that for early-stage ventures, a potential liability of patenting exists, but it can be mitigated by higher levels of market orientation.

The comparison of RBV-based competitiveness of Hungarian family-owned and non-family-owned SMEs

PurposeThe purpose of this paper is to identify the differences between Hungarian family-owned businesses (FOBs) and non-family-owned businesses (NFOBs) concerning the elements of SME competitiveness and financial performance.Design/methodology/approachThe research covers the Hungarian data set of the Global Competitiveness Project (GCP, www.sme-gcp.org) of 738 (data collection between 2018 and 2020) non-listed SMEs, of which 328 were FOBs. The study uses the comprehensive, multidimensional competitiveness measurement of the GCP built on the resource-based view (RBV) and the configuration theory. Financial performance was captured with two composite indicators: short-term and long-term financial performance (LTFP). The comparative analysis between FOBs and NFOBs was conducted using binary logistic regression.FindingsThe results show that FOBs are more prone to focusing on local niche markets with higher longevity and LTFP than NFOBs. However, FOBs have lower innovation intensity and less organised administrative procedures. The most contradicting finding is that the FOBs’ higher LTFP is accompanied by significantly lower competitiveness than in the case of NFOBs.Originality/valueThis study goes beyond other GCP studies by including composite financial performance measures among the variables examined. The combination of performance-causing (resources and capabilities) and performance-representing (financial performance) variables provides a better understanding of the non-listed SMEs in terms of family ownership. The results help academia to enrich the RBV-competitiveness, the non-listed SME management and finance literature, and policymakers to design business development and support schemes. They also show future entrepreneurs the impact of family ownership on entrepreneurial success.

Board Governance, ESG, and Firm Value: The Mediating Effect of Short Term Financial Performance

Board Governance, ESG, and Firm Value: The Mediating Effect of Short Term Financial Performance

A STUDY ON PERFORMANCE EVALUATION OF A STATE PUBLIC SECTOR UNDERTAKING IN HIMACHAL PRADESH

Himachal Pradesh occupies sixth position in the country in respect of its forest coverage. Forests are an important resource of the state and it occupies an area of 36,986 sq. km. This accounts for about 66.4% of the total geographical area of the state. ‘Himachal Pradesh State Forest Corporation Ltd.’ being unique in its nature has to perform numerous activities relating to Timber extraction work, Bamboo extraction work, Resin extraction work, and Resin processing and marketing work etc. So, it becomes very essential to study the performance of the Corporation to pin point its strength and weakness. In this study an attempt has been made to evaluate the performance of Himachal Pradesh State Forest Corporation. In order to make this study intensive and more comprehensive, it covers a period of thirteen years i.e. from 1994-95 to 2006-07. The basic purpose of this study is to evaluate the financial performance of the Corporation. It includes short-term financial performance, long-term financial performance, and profitability performance. This doctoral level scholastic investigation is being presented in a nutshell. Here only evaluation of Secondary Data towards performance of Himachal Pradesh State Forest Corporation Ltd is being shown.

Research on investment incorporating both environmental performance and long (short) term financial performance of firms

Firstly, with the rapid popularisation of the ESG concept and the deepening of the conception of green and low-carbon development, the performance of a firm in protecting and improving the ecological environment and the level of green technology investment has gradually become the reference criteria for judging whether the firm has social value and sustainability in development. Secondly, to pursue short-term survival and long-term development, the firm will also vigorously strive for short-term profit creation and long-term capital accumulation. Thirdly, due to the existence of information asymmetry, the principal-agent parties in a firm may generate agency conflicts in the pursuit of maximising their own interests, which may lead to losses or even bankruptcy. Therefore, making rational short-term, long-term, and green technology investment decisions that consider both characteristics of firm and agency conflicts is essential for the survival and sustainable development of the firm. From the perspective of contract theory, this paper considers the design of an optimal dynamic financial contract that considers the environment's improvement and the achievement of the firm's long- and short-term financial performance while satisfying incentive compatibility. On this basis, we explore how the optimal investment strategies vary with firm characteristics. The results of the study suggest that the decisions of green technology investment, short-term investment, and long-term capital investment should be appropriately adjusted according to the level of financial slack and the effect of different market shocks to facilitate the achievement of the dual objectives of long- and short-term profitability and environmental improvement.

Intelligent Evaluation of Innovative Enterprise Performance - Construction of BPNN Model based on Improved WOA Optimization

With the economic progress, the environment in which enterprises operation is becoming increasingly complex. Intelligent performance evaluation of innovative enterprises is of great significance for their own development. The traditional performance evaluation indicators of enterprises rely too much on their financial indicators, leading producers and operators to pay more attention to the short-term financial performance growth of the enterprise. The long-term development of enterprises is neglected, resulting in weak core competitiveness. Therefore, to better achieve the scientific evaluation of innovative enterprise performance, based on the innovative enterprise performance evaluation index system, an innovative enterprise performance intelligent evaluation model with the whale optimization algorithm optimized backpropagation neural network is constructed. For the shortcomings of the whale optimization algorithm in the operation, the wolf swarm algorithm isintroduced to optimize it. The experimental results show that the evaluation model based on the improved whale optimization backpropagation neural network proposed in the study has very small errors in the evaluation results of different samples, with no more than 3%. This indicates that the performance evaluation index system for innovative enterprises can objectively reflect enterprise performance. This evaluation model can offer a reasonable analysis of enterprise performance, providing reference for intelligent evaluation of innovative enterprise performance.

Do CSR Activities Improve Short-Term Financial Performance? Competitive Mediating Effects of Job Satisfaction

Do CSR Activities Improve Short-Term Financial Performance? Competitive Mediating Effects of Job Satisfaction

Enterprise sustainable development and green fund concern: The analysis and test of R&D from listed companies in China

According to active ownership, the development of green funds in the capital market should promote the sustainable development of enterprises. However, when green funds practice green screening strategies, myopic managers may ignore the long-term innovation activities of enterprises because of the attraction of capital flow and the construction of managers' reputations. This study uses long-term and external corporate R&D to explain changes in green fund holdings and further examines the impact of fund characteristics and corporate heterogeneity on green fund holdings. The results show that the greater the corporate R&D, the less the green fund holdings, and the better the short-term financial performance, the weaker the negative relationship, indicating that green funds may be myopic and not concerned about corporate innovation. In particular, this study did not find that the traditional fund adopted a negative screening strategy for enterprises like the green fund. In addition, myopic green funds pay more attention to capital flow attraction and performance ranking improvement and do not pay attention to long-term, sustainable, and market-oriented corporate governance behavior. This conclusion has important implications for understanding and developing China's green fund market.

Nexus between Sustainability Reporting and Firm Performance: Considering Industry Groups, Accounting, and Market Measures

The relationship between Sustainability Reporting and corporate financial performance is overlapping and multifaceted and it has been an interesting issue for both academics and professionals since the beginning of the millennium. Studies have found divergent results on this relation and the industrial differences are omitted in many papers. Moreover, studies considering developing countries are scarce. The purpose of this study is to shed light on the relationship between sustainability reporting and firm performance in a developing country context. The impact of sustainability reporting is investigated using pooled ordinary least square (OLS) method for panel data regression through two models based on Tobin’s Q and ROA. A total of 920 observations for 46 companies with 3 different impact levels based on their environmental effect and 5-year quarterly panel data between 2016–2020. The research used data from Borsa Istanbul (Istanbul Stock Exchange) and also independent variables such as leverage, risk, size, current ratio, growth, sustainability reporting, and the environmental impact level of companies. The results showed that sustainability reporting has a significant positive impact on financial performance according to the ROA model, and a significant negative correlation between risk and financial performance according to both ROA and Tobin’s Q models. Considering the environmental impact of companies, the results also reveal a positive relationship between high impact companies’ sustainability reporting and short-term financial performance as ROA is an accounting-oriented measure that reveals the company’s short-term financial performance. Further research should investigate the impact of sustainability reporting in different markets based on the impact level of companies and the development degree of countries.

Research on Impact of Internet Corporate Social Responsibility on Corporate Financial Performance Based on Linear Regression Model

Since China was fully connected to the Internet, the local Internet has continued to grow along with its economic strength, and Internet companies such as artificial intelligence, e-commerce, big data, block chain and electronic payment have risen rapidly. In the process of development, Internet enterprises realize the importance of social responsibility and take the initiative to shoulder social responsibility, and make a lot of contributions to the society. The relationship between social responsibility and the financial performance of Internet companies has always been the focus of academic and research discussions. Based on the linear regression model, innovation capability was introduced to explore the boundary conditions between social responsibility and the financial performance of the companies. An empirical study was conducted using a research sample of listed Internet companies in China from 2018 to 2020. The results show that (1) social responsibility of the Internet corporate has a positive effect on short-term financial performance, (2) Internet corporate social responsibility has a positive effect on the long-term financial performance of enterprises, (3) innovation capability weakens the impact of Internet corporate social responsibility on short-term financial performance, and (4) the influence of innovation capability on the long-term financial performance of Internet companies in social responsibility. The research conclusion provides Internet enterprises with social responsibility strategies and evaluation of long-term and short-term financial performance.