Textile Firms Research Articles

The Moderating Role of Debt Financing on the Relationship Between Leverage and Performance: An Empirical Analysis of the Textile Sector of Pakistan

The study examines how debt financing affects the leverage and performance relationship of the textile sector of Pakistan. The study also strives to elaborate the determinants of debt financing. Data has been collected from the annual reports of the textile companies listed at Pakistan Stock Exchange (PSE) for the years 2010-2015. Panel data techniques including Pooled OLS, Fixed Effect model, Random Effect model, and Moderated Panel Regression model were used for estimating the relationship between debt ratio, leverage and company-specific variables such as profitability and size. The results depict that the listed textile companies of Pakistan financed more than half of its assets by external borrowing. There is high asset tangibility in the Pakistani textile industry. The tax shield, which is the alternative of depreciation, is limited for the textile firms of Pakistan (Qamar, Farooq, Afzal & Akhtar, 2016). The independent variables’ interaction term with debt ratio shows a positive relationship with ROA other than asset tangibility. The trade-off theory suggests to follow a targeted optimal capital structure which is more favorable for a firm. Pakistani textile industry should adopt the model of optimal capital structure for balancing the costs and benefits.

Is e-marketing a source of sustainable business performance? Predicting the role of top management support with various interaction factors

The evolution of the sustainable business performance in relation to the technology integration reveals a significant revolution but regrettably is given little global attention, thus compelling the firms to reexamine the approach for their business growth. Considerably, e-marketing has been recognized as an emerging practice and plays a vital strategic tool to bring sellers and buyers on a digital platform. Besides, this study analyzes the moderating effects of trading partners (TPs) and competitive pressure (CP) in the relationship between top management support (TMS) and use of e-marketing (UEM). Moreover, the interactive role of government support (GS) and technological opportunism (TOP) was also analyzed between the UEM and sustainable firm performance (SFP). The study also discussed the mediating role of e-marketing usage between TMS and SFP. The data (n = 293) were collected from the marketing managers employed in the textile firms of Pakistan. Additionally, the findings revealed that TMS had a significant direct relationship with the UEM and the SFP. Moreover, UEM mediated the relationship between TMS and SFP. Finally, TP’s pressure moderated the relationship between TMS and UEM, and TOP moderate the relationship between UEM and SFP, whereas CP and GS were unable to moderate the relationship particularly in current study context. However, this study has contributed empirically to several recognized relationships among the variables and extends the existing knowledge of literature. The study has contributed empirically to several recognized relationships among the variables and extends the existing knowledge of literature by leaving certain aspects of research for future studies.

The Effect of Transport Management on Organizational Performance Among Textile Manufacturing Firms in Kenya

The purpose of the study was to analyze the effect of transport management on supply chain performance in terms of profitability, reliability, cost, responsiveness, flexibility and asset management efficiency of textile manufacturing firms in Kenya. The study was guided by the cooperative game theory. The study adopted the convergent parallel mixed methods design. The study targeted a total of 196 respondents drawn from employees of procurement departments and departmental heads of respective 15 textile manufacturing industries operating in Nairobi County. The sample size was therefore 139 respondents. Stratified and simple random sampling methods were used to select employees of procurement departments from their respective textile firms. Questionnaires and interview schedules were used to gather the data from primary sources. The study applied the use of both qualitative and quantitative data which was analyzed using statistical package for social sciences (SPSS Version 22). Inferential statistics using hierarchical multiple regression and Correlation analysis was applied to test the relationship between the variable and formulated hypothesis. The final analyzed results were presented using tables, graphs and charts. The study concludes that transport management possess the potential of positively influencing supply chain performance of Textile firms and therefore recognizes the importance of transport management in the supply chain. Therefore in order to attain successful organizational performance the study recommends that the management of the textile firms have to put mechanisms in place for addressing transport such as vehicle scheduling, route planning, fleet management, and vehicle tracking for purposes of ensuring competitive edge against other market competitors thus improving superior performance of textile manufacturing firms.

The Effect of Inventory Management on Organizational Performance Among Textile Manufacturing Firms in Kenya

The purpose of the study was to analyze the effect of inventory management on supply chain performance in terms of profitability, reliability, cost, responsiveness, flexibility and asset management efficiency of textile manufacturing firms in Kenya. The study was guided by the inventory management theory. The study adopted the convergent parallel mixed methods design. The study targeted a total of 196 respondents drawn from employees of procurement departments and departmental heads of respective 15 textile manufacturing industries operating in Nairobi County. The sample size was therefore 139 respondents. Stratified and simple random sampling methods were used to select employees of procurement departments from their respective textile firms. Questionnaires and interview schedules were used to gather the data from primary sources. The study applied the use of both qualitative and quantitative data which was analyzed using statistical package for social sciences (SPSS Version 22). Inferential statistics using hierarchical multiple regression and Correlation analysis was applied to test the relationship between the variable and formulated hypothesis. The final analyzed results were presented using tables, graphs and charts. The study established that textile manufacturing firms in Kenya have adoption of inventory management as a factor of supply chain influencing performance. The study concludes that inventory management possess the potential of positively influencing performance of Textile firms in and therefore recognizes the importance of inventory management in the supply chain and have put clear mechanisms in place and invested in current material flow systems to oversee smooth and transparent material flow that can be tracked along a supply chain.

Analyzing Determinants of Dividend Payout Practices in Pakistan Textile Industry (2008-2013)

This study of 151 textile firms, each having 6 yearly (2008-13) data, provided a total sample size of 906 observations for analyzing dividend payout practices and its various determinants. Of a total sample of 151 textile firms, 14% were found having negative and 86% were found having positive equity. Majority (75%) of these negative equity bearing firms, on average, have total assets worth Rs.709, 834 million against which they each have to pay Rs. 871, 213 million as total debts. These firms are paying no dividend and their dividend cover ratio (number of times an organization is capable of paying dividends to shareholders) is also equal to zero. Hence these firms are technically bankrupt. Of the total 129-130 positive equity bearing firms, 45-46 firms (35%) are yielding negative and 84 firms (65%) positive net profit before tax (NPBT). The leverage of former type of firms is much higher (2.9 times) than that of later type of firms. The average total asset of latter firms is 392.78 times of that of the former. The average dividend payout of the latter firms is 935.92 times of the former. The average total debt of the latter firms is 316.50 times of the former. The average total equity value of the latter firms is 615.89 times of that of the former. The average sale of the latter firms is 22,345.39 times of that of the former firms. Analysis of the 84 positive NPBT yielding firms portrays statistically significant negative relationship between dividend payout and leverage and dividend payout and debt while statistically significant positive relationship between dividend payout and variables like net profit, sales and equity. Since fourteen percent of the total 151 sampled textile firms on the basis of 6 years data (2008-13) appear to have negative equity values, suggesting that such firms have already gone in to bankruptcy. Thirty-five percent of the remaining firms, which though have positive equity values, yield negative net profit before tax (NPBT) and 65% firms yield positive NPBTs. High debts and high ratios of leverage are suspected as the prime reason for bankruptcy and negative NPBTs of the firms. A detailed enquiry is recommended to reconfirm our findings and for an appropriate remedial step. Eighty-four firms (55.63% of total 151 sampled textile firms) bear positive equity values and also yield positive NPBTs; an analysis of such firms indicate a statistically significant positive relationship between dividend payout and net profit before tax, firms’ total sales and equity value of the firms but statistically significant negative relationship between dividend payout and leverage and debt. Since a stable dividend payout practice is considered desirable and dividend payout and equity financing are positively correlated, it is therefore recommended that firms pay greater attention towards equity-financing relative to debt-financing of the firms.

Empirical Analysis of Firm’s Risk by their Degree of leverages: Employ at Textile Industry of Pakistan

This paper measures the risk of firms with respect to their degree of total leverage (DTL), degree of operating leverage (DOL) and degree of financial leverage (DFL). This paper is more concerned with the application of proposed relationship found in literature about these theories with the level of risk by taking actual data of companies. Further, prior researchers prove this theory of DTL by using some assumptions and hypothetical data but this research has analyzed actual records of Textile Firms listed at Karachi Stock Exchange to check the durability of the theory. For this, firstly DTL, DOL and DFL of selected companies have been calculated by using their true records. Then, in the following year changes had been analyzed that whether changes occurred according to the same results as predicted by DTL or not. Result suggests that there is more variation in profits (loss) than expected according to their degrees, which shows that on average firms under consideration are riskier. At the end, this study also highlighted some factors which may cause the variation more than expected and make the firms riskier.

Evaluation and improvement of warehousing systems: a case study of x firm in Turkey

In today’s rapidly growing and changing business environment, keeping their competitive edge in the market is becoming harder and harder for organizations. Thus, today’s organizations have to constantly re-engineer their business practices in order to meet the increasing competition and at the same time to meet customer expectations. This requires smoothly operating a process that yields high-quality products/services in a short response time with a low cost in an organization. This can be achieved by integrating a well-operating supply chain system into the businesses conducted. With this scope, being a member of the supply chain, warehousing and distribution systems play one of the key roles in achieving competitive advantage. However, in Turkey, warehousing has not been given the degree of consideration that it deserves. Yet, recently, few companies have realized the vital of warehousing and studies regarding the subject have begun accordingly. One of the companies in Turkey that have acknowledged the need for innovation in X Textile Firm. It has undertaken to re-engineer of its core operations. Within this frame, this research handles one of the branches of the study, Analysis, Assessment and Improvement of the Warehouse System. With the reviews that the results of the studies have presented, proposals are formed and existed what should have been done in order to achieve the objectives that have been stated at the beginning of the study. Then, after interviewing with top management of the firm on needs, constraints, and specifications, detailed proposals covering the core issue are prepared. When warehousing operations are considered as a whole, the issue inherently requires an elaborate analysis of the supply chain. However, because of time constraints and the scope designated at the outset, detailed design proposals are kept and sustained within the initial frame. At the end of the study, the proposed structure and concept is presented to the management and this research provides as an initial step and it supports on how the firm should follow throughout the progress of the research.

Organizational learning, differentiation strategy and perceived firm performance of textile firms

Organizational learning, differentiation strategy and perceived firm performance of textile firms

Causes, Effects, and Remedies in Conflict Management

While workplace conflicts have been widely studied in the literature, this research provides a holistic view of the causes and effects of such, and how managers or a management can resolve the conflicts among their teams and organization through a detailed, multidimensional framework carried out on one of the biggest textile firms of Pakistan. With an initial sample of 145 respondents, 37 questionnaires were dropped because of invalid and incomplete answers; therefore, the study was carried out on 108 respondents. Conflicts are a part of human nature, but management should play an important role in dealing with these issues, as there can be enormous chances of conflicts due to a diverse workforce. Conflict also results in poor work performance and low productivity; therefore, it’s suggested to create teams or groups which may encourage a competitive culture in the organization. Additionally, a few remedies are identified, which may resolve some issues; managers must look at those techniques for a better culture.

Post-Entry On-going Organizational Changes in Core Activities of Foreign Subsidiaries and Firm Survival

By applying conventional organizational adaptation theory, this study explores the relationship between post-entry on-going organizational changes in core areas of foreign subsidiaries, such as investment amount, ownership, and product, and the subsequent survival of such subsidiaries in a host country. This study further investigates the relative importance of subsidiary’s organizational change in core areas. For these research questions, this study employs a sample of 2,582 foreign direct investment cases by Korean textile firms. The findings show that a foreign subsidiary’s post-entry ongoing organizational changes in the core areas are negatively associated with its mortality rate. However, we carefully qualify this result: ongoing changes in investment amount and product areas help reduce the mortality rate, whereas changes in ownership do not.

The Impact Of Leadership Behavior On The Business Growth Through The Organizational Innovation And Managerial Practices

The main objective of this empirical study is to determine the affect of leadership behavior with the organizational innovative techniques and managerial practices on the businesses’ growth in Pakistan particularly in textile sector. Firstly, the study discusses the relationship between leadership behavior and organizational innovation, between organizational behavior and managerial practices. Furthermore, this relationship is also measured between organizational innovation and business growth and between managerial practices and business growth. Secondly, the study investigates that these relationship are strongly reinforced in the firm with the support of theoretical evidences made but not determined theoretically in the prior literature. Managerial practices take place in textile community for interaction in which organizational cognition is developed and expanded dynamically between the cognitive and behavioral changes. Organizations with greater organizational acquisition and practices create a learning network that will become easier to learn that what they use to learn and to initiate, enabling the firm to preserve its effective and competitive aversion as a textile technological center. Nomothetic research method is applied to test the hypothesis, developed for this study. The research examined a sample of one hundred ten textile firms with sample unit of senior managers, executives, administrative and other-level managers. A research model is formulated for the study and hypotheses are tested with the use of structural equation model. This study purposes that the leaders of firms initiate a transformational role, which facilitate organizational innovation and managerial performances and consequently enhance the business growth especially in textile firms.

Effect of Corporate Governance Index on Dividend Policy: An Investigation of Textile Industry of Pakistan

This study empirically observes the impact of corporate governance index on dividend payout policy by using the data on thirty textile firms listed at Karachi Stock Exchange. The data cover the five-year period from 2009 to 2013. The data were gathered from financial statements of all the sample firms. Multiple regression models were used to check the impact of corporate governance on dividend policy. No effect of corporate governance index on firm dividend policy was found, and the largest shareholders also had no impact on dividend payout policy. A significant positive relationship was found between payout policy and stock value. Gross profit margin and operating profit margin had significant positive impact on the firm’s dividend payout policy. There is a significant correlation between the firm’s performance and payout policy.

The Determinants of Relationship between Marketing Mix Strategy and Drivers of Export Performance in Foreign Markets: An Application on Turkish Clothing Industry

Abstract The aim of this study is to investigate the effects of firm characteristics and marketing mix strategies on export performance. An integrative approach is used in designing the research model. Firm-specific characteristics and external factors as antecedents of export performance are included in the model as existed in the literature. Their effects on marketing mix strategy and export performance are investigated in Turkish clothing-textile industry. Based on competition strategies theory, marketing mix strategy is added into the model and its mediating effect on export performance is studied. Variables in the proposed research model were measured by scales already existed in the literature. A questionnaire form is used both via e-mail or face-to-face interviews for gathering data in the survey. Data were collected from export based Turkish textile firms operating in clothing sector. Empirical results indicate that firm characteristics, environmental characteristics, international experience and international commitment are linked to higher levels export performance in Turkish clothing export firms. Another finding implies that marketing-mix strategy has a mediating effect on the relationship. The findings can be generalized only for that sector and provide export managers with useful insights. Another limitation is the restriction of antecedents of export performance to external environment and firm-specific internal factors like international commitment and experience. This paper demonstrates a value for its sector-specific findings. In the Turkish clothing industry, financial, strategic, and competitive dimensions of export performance has been evaluated. Internal and external antecedents and marketing-mix strategy effects for the sector have also contribution in the field.

Agency Problems, Product Market Competition and Dividend Policies inPakistan

The present study investigates the influence of product market competition on the dividend policies of the listed companies at KSE 100 index in Pakistan. It identify whether product market competition mitigates agency problems between controlling shareholders and minority shareholders. In particular, we examine firm dividend policies in competitive market, the study use three statistical measures for the analysis of 30 textile firms. The result shows that the product market competition have no significant impact on dividend policies of Pakistan. This study recommends that the product market competition can be an effective tool that can force the managers to give cash to shareholders.

LIQUIDITY RISK VS. UNDERINVESTMENT PROBLEM : AN EMPIRICAL STUDY OF THE TEXTILE SECTOR OF PAKISTAN

This research study tests the underinvestment hypothesis and the liquidity risk hypothesis in the textile sector of Pakistan. A panel data set of 105 textile companies has been employed over eight years extending from 2004-2011. Using 2-Stage Least Square Estimation procedure (2SLS) and the Generalized Method of Moments (GMM), the empirical findings reveal that textile firms in Pakistan use high level of long term debt to shrink the liquidity risk which allows the firms to use more debt. Moreover growing firms use less leverage than the non growing firms when exposed to high growth opportunities. The growth opportunities exhibited a negative relationship with debt maturity but no significant economic relationship with leverage. In the textile sector of Pakistan leverage and short term debt maturity structure tends to complement each other to hedge the firms against the liquidity risk.

Enhancing environmental management in the textile sector: An Organisational-Life Cycle Assessment approach

An increasing number of textile firms are adopting sustainability strategies for achieving long-term competitive advantage. In this paper, a new decision-making process for the textile sector, exploiting the Organisational Life Cycle Assessment methodology, is proposed. It provides a management system able to support companies in monitoring and evaluating environmental performances with a dynamic perspective and identify which activity and/or mechanical plant needs to be improved or changed in order to reduce the environmental impact, enabling cost savings, and at the same time, developing the business case for sustainability. In particular, for each Organisational Life Cycle Assessment phase, an operational tool was established. The tools were developed both by reviewing specific literature and by conducting in-depth semi-structured interviews in six textile companies. Across firms, informants included the Managing Director, the Plant Manager, shop floor supervisors and workers, and representatives from Corporate Social Responsibility Committee, Manufacturing, Quality, and Accounting. Additionally, direct observation (e.g., plant tours) was also used as data collection method. A case study of a spinning company reveals the potential benefits of this decision-making process.

Determinants of Corporate Cash Holdings: 'A Case of Textile Sector in Pakistan'

The topic on cash holding has attracted strong debate in the field of financial management for the past half century. A number of researchers studied the topic corporate cash holding and its determinants in the past in developed economies while a little attention is given to the corporate cash holdings of developing economies. The objective of the study is to identify and measure the relationship of firm size, profitability, net working capital and leverage and their effect on corporate cash holdings. A sample of 30 textile firms of Pakistan listed on Karachi Stock Exchange (KSE) was selected for the study, for the reason of examining their relationship. Secondary data for the period 2006-2013 was selected for the study. Variance Inflation Test (VIF) was used to check the problem of multicollinearity. Multiple regression models were used to conduct the results. Results calculated by regression model show consistency with the literature available. Profitability (ROA) and firm size (FS) show a positive and significant relation with cash holding. However negative and significant relationship was found between net working capital (NWC) and leverage (LEV) with cash holding. The findings of the study may be useful for financial managers, financial management consultants and investors.

The impact of international brands and awards on Indian textile and apparel firms’ social disclosure practices

This study empirically investigates the extent of corporate social disclosure (CSD) practices by Indian textile and apparel (TA) listed firms for the 2010-2012 time period. In spite of an upward trend in CSD practices by Indian TA listed firms, the results indicate a consistent low level of such important disclosure practices over the three year period with an overall mean disclosure of 10.44%. The overall low extent of CSD by Indian TA firms and the potential large adverse impact of this sector to the country’s social environment have major implications for future development of social reporting standards. Further analysis reveals that Indian TA listed firms commonly communicate social information relating to ‘labor practices and decent work’ while disclosure of ‘human rights’ is virtually non-existent. The finding may indicate that Indian TA firms place increasing importance in communicating labor practices related information as a possible strategy to alleviate tension amongst stakeholders in order to secure their societal legitimacy. Potential concern arises from noncommunication of social activities and related risks. Poor or non-existent disclosure may lead to questions whether Indian firms and their international brand-name affiliations have been transparent and accountable regarding their production and supply activities. The dearth of social disclosure by Indian TA firms has implications for foreign purchasers of branded products as international companies have been implicated in numerous sub-optimal social practices or incidents, at times leading to fierce criticism. The findings on the significant and positive influence of international brands and the interaction of this variable and international awards obtained on disclosure practices imply that such international exposures may put a higher level of pressure on Indian TA firms to communicate more social information as part of an overall package to better address global concerns on such crucial issues. The affiliation with international brand-name firms perhaps is the ultimate driver for the firms to provide more social information as a response to the growing awareness on such issues of their foreign renowned buyers. Firm characteristics control variables firm size, profitability and year of reporting are positively associated with the extent of CSD whereas CEO duality is negatively associated with the extent of CSD.

Determinants of Corporate Cash Holdings “A Case of Textile Sector in Pakistan”

The topic on cash holding has attracted strong debate in the field of financial management for the past half century. A number of researchers studied the topic corporate cash holding and its determinants in the past in developed economies while a little attention is given to the corporate cash holdings of developing economies. The objective of the study is to identify and measure the relationship of firm size, profitability, net working capital and leverage and their effect on corporate cash holdings. A sample of 30 textile firms of Pakistan listed on Karachi Stock Exchange (KSE) was selected for the study, for the reason of examining their relationship. Secondary data for the period 2006-2013 was selected for the study. Variance Inflation Test (VIF) was used to check the problem of multicollinearity. Multiple regression models were used to conduct the results. Results calculated by regression model show consistency with the literature available. Profitability (ROA) and firm size (FS) show a positive and significant relation with cash holding. However negative and significant relationship was found between net working capital (NWC) and leverage (LEV) with cash holding. The findings of the study will be useful for financial managers, financial practitioners, consultants and investors.

Marks & Spencer and the Decline of the British Textile Industry, 1950–2000

From the end of World War II, British clothing retailers—most notably, Marks & Spencer (M&S)—increasingly dominated the domestic textile industry, to some extent arresting its decline. This article uses financial and archival evidence to examine the distribution of costs and benefits in the M&S vertical network. It shows that these benefits became less tangible for textile firms from around 1985, in the context of lower-cost overseas competition. We chart the visible and invisible evolution of network management, demonstrating that retailer-producer collaboration evolved from a bilateral vertical partnership model to a hybrid version that retained partnerships with leading suppliers and an emphasis on domestic sourcing, but also facilitated offshore production. Since 1945, staple domestic industries in Western economies have been replaced with global production networks. In the United Kingdom, the cotton textile industry, and then the textile industry in general, declined in the face of increasing overseas competition. Survival strategies were based on restructuring and concentration. During a period of rapid transformation after 1960, cotton was absorbed into vertically structured textile conglomerates. Still, the decline continued, and as protection was phased out, fabric and apparel manufacturing faced similar threats, although rates of decline and strategic response depended on relative position in the vertical production chain. An alternative survival strategy based on vertical partnerships was led by retailers, particularly the dominant clothing retailer Marks & Spencer (M&S).