Signaling Theory Research Articles

Local–Global Cobrand Positioning and Consumer Evaluations in Emerging Markets

Cobranding initiatives between a local and a global brand have become a prominent practice. This research contributes to the cobranding and global branding literatures by investigating the effects of positioning strategy of the cobranded product (global consumer culture positioning vs. local consumer culture positioning) on consumer evaluations in emerging markets. In five experiments, the authors show that using global consumer culture positioning for the cobranded product leads to heightened word-of-mouth intentions and more favorable product valuations. This effect holds for both local and global product categories. Building on signaling theory, the authors show that brand credibility mediates the effect of positioning strategy on word-of-mouth intentions. Further, when the local (vs. global) brand is the announcement source, using a global rather than a local consumer culture positioning leads to enhanced word-of-mouth intentions. Yet, for consumers with stronger ethnocentrism, when the global brand makes the announcement of a cobranded product positioned on local consumer culture, word-of-mouth intentions are higher. Altogether, the findings have nuanced implications for local branding, global branding, and young consumers in emerging markets.

Why Do Companies Share Buybacks? Evidence from the UK

We examine the key drivers behind management decisions on share repurchase from various theoretical perspectives, including the free cash flow theory and the signaling theory/hypothesis. Specifically, we investigate the relationship between share repurchase and three key drivers: surplus cash, undervaluation, and leverage, along with several control variables. Using a sample of UK-listed non-financial companies from 2012 to 2022, we apply logistic regression, standard OLS regression, and Tobit regression to identify the factors influencing share repurchase. Our findings reveal that firms repurchase shares to distribute cash to shareholders with surplus cash and Surplus investing cash flow. This study also finds that undervalued smaller firms with lower market-to-book ratios and lower leverage are more likely to repurchase shares. Our study highlights the key factors motivating companies’ share repurchases, such as undervaluation, surplus cash, and leverage, examined from various theoretical perspectives, including the free cash flow theory and signaling theory. Focusing on the UK context, as well as adding a new angle in regard to applying logistic regression, standard OLS regression, and Tobit regression in combination, this research contributes to the existing body of knowledge in corporate finance. The outcome of the study has plausible implications for financial managers and investors in selecting stocks. Its practical implications will help investors gain a better understanding of the factors and forces influencing share repurchase decisions.

What use of proceeds do family IPOs signal? The influence of family generational stage and family CEO

PurposeThis study aims to investigate the relationship between the family generational stage and the intended use of the Initial Public Offering (IPO) proceeds disclosed in the prospectus. With the aim to explore family business (FB) heterogeneity, it also explores the moderating role of the family CEO.Design/methodology/approachWe draw on signalling theory and hand-collected data on Italian family IPOs that occurred in the period 2000–2020, disentangling the intended use of IPO proceeds as distinguished into three categories. We employ logit regression to test our hypotheses.FindingsAccording to our theoretical predictions, we find that the family generational stage positively affects the disclosure of the investment reason as the intended use of IPO proceeds, while it negatively influences the use for recapitalization and general corporate purposes. The first relationship is moderated by the presence of a family CEO. Our results remain robust with different FBs definitions and a different empirical method.Originality/valueTo the best of the authors’ knowledge, this paper is the first to address the topic of the intended use of IPO proceeds in FBs. In doing so, it opens avenues for future research by enriching an underdeveloped, albeit growing, area of research, that of preparing for the market scrutiny in family IPOs.

Early adoption of non‐financial disclosure in family firms

AsbtractThis study investigates when the reputation enhancing signals of family firms include early adoption of non‐financial disclosure. Drawing on signalling theory, we examine the effect of family ownership on the early adoption of non‐financial disclosure and the moderating role of contingency signals: founder chief executive officer (CEO) leadership and employee degrowth rate. We test our hypotheses with panel regressions on a dataset of Italian listed family firms over the period 2013–2017, years before the introduction of mandatory non‐financial reporting. The results reveal an inverted U‐shaped relationship between family ownership and early adoption of non‐financial disclosure, negatively moderated by the presence of a founder CEO and positively moderated by employee degrowth. We discuss the implications of our findings for theory and practice.

FINANCIAL INCLUSION AND PERFORMANCE OF TOP 100 SMALL AND MEDIUM ENTERPRISES IN KENYA

Access to services such as credit, insurance, and savings enables SMEs to invest in growth, innovation, and operational efficiency. SMEs leveraging financial inclusion can enhance their revenue generation, cash flow management, and overall profitability. The study sought to find out what impact finance inclusion has had on the performance of Kenya's top 100 SMEs. This study was guided by finance intermediation theories, technology acceptance theory, TAM signal theory and pecking order theory. The study1was carried1out on the basis of a descriptive research design. The target population consisted of top 100 medium size enterprises in Kenya as shown in the annual survey carried out by KPMG and nation media group in the years 2020. Respondents ware financial officers from Kenya's top 100 mid-sized companies. Stratified sampling was used to interview respondents based on company category. Respondents were selected using a purposeful selection process. Data1was collected using structured questionnaire. A pilot survey was conducted with 10 respondents, but the final survey did not include these respondents. Validity of research instruments was measured using content validity. The study examined the effects of micro savings, micro credit, micro insurance, and digital banking on the performance of Kenya's top 100 SMEs, revealing that tailored financial products significantly enhance operational efficiency and growth. Findings indicated that micro savings improve financial stability, while flexible repayment options for micro credit support sustainable business practices. Additionally, awareness and customized solutions for micro insurance products were found to bolster risk management among SMEs. Digital banking was highlighted as a critical enabler of faster transactions and better cash flow management. The conclusions suggest that targeted financial services and educational initiatives are vital for empowering SMEs to optimize their performance. Recommendations include developing customized financial products, enhancing digital banking infrastructure, and providing financial literacy training to improve overall business resilience and sustainability.

When great places to work aren't for everyone: How top employer awards can backfire for narcissistic applicants

Drawing on signaling theory, the current experimental study (N = 593) investigated the influence of top employer awards on the connections between the full spectrum of narcissistic personality features (i.e., agentic, antagonistic, neurotic, and communal) and perceived company prestige. The results of our experiment show that employer awards enhance prestige perceptions and that all narcissism facets are positively related to perceptions of prestige. However, the positive associations between narcissistic personality features and company prestige were less pronounced in the award condition than in the no-award condition. Our study contributes to the recruitment and employer branding literature by demonstrating that, while employer awards generally enhance an organization’s prestige, they may not do so for individuals with particular personality features.

The art of selecting the ECG input in neural networks to classify heart diseases: a dual focus on maximizing information and reducing redundancy.

Accurate diagnosis of cardiovascular diseases often relies on the electrocardiogram (ECG). Since the cardiac vector is located within a three-dimensional space and the standard ECG comprises 12 projections or leads derived from it, redundant information is inherently present. This study aims to quantify this redundancy and its impact on classification tasks using Convolutional Neural Networks (CNNs) in cardiovascular diseases. We employed signal theory and mutual information to introduce a novel redundancy metric and explored techniques for redundancy augmentation and reduction. This involved lead selection and transformation to evaluate the effects on neural network performance. Our findings indicate that optimizing input configurations through redundancy reduction techniques can enhance the performance of deep learning models in cardiovascular diagnostics, provided that the information is preserved and minimally distorted. For the first time, this research has quantified the redundancy present in the input by validating various redundancy reduction techniques using a CNN. This discovery paves the way for advancing biomedical signal processing research, simplifying model complexity, and enhancing diagnostic performance in cardiovascular medicine within reduced lead systems, such as Holter monitors or wearables.

Supply chain risk identification: Signaling companies’ social sustainability reputation

Over the past decades, supply chains have become global, longer, and consequently more complex to manage and control. This evolving context has shaped the current business landscape, which increasingly demands socio-environmental accountability from firms. This paper addresses these emerging business requirements, making an original contribution to its field by drawing on stakeholder and signaling theories to identify whether the adoption of supply chain risk identification practices exerts a positive effect upon firms’ social performance. Additionally, it assesses the role of digital technology in strengthening this relationship. A survey of manufacturing firms was conducted to gather data, which was analyzed via covariance-based structural equation modeling and AMOS 28.0 software. The research found that practices intended to identify supply chain risks make a considerable contribution towards signaling a positive social sustainability reputation and highlighting the application of digital technology to help attain better social performance. Stakeholder saliency is an aspect that still requires further research.

Creativity reputation allocation in open and distributed innovation

Much of today's creative work crosses organizational borders. This limits the possibilities for directly compensating creative workers. Thus, other forms of reward, such as reputation-building, are necessary. This study builds on the concept of creative reputation (reputation for creativity) and signaling theory. It asks how reputation should be assigned to creative workers to reflect their creative abilities most accurately. We illustrate reputation allocation using the example of the academic system and develop a simple computational model to compare how different reputation allocation mechanisms—varying in how they utilize observable information about creative workers' outcomes—produce reputations for individual creative workers. The insights derived from the model contribute to our understanding of open and distributed innovation systems. They also challenge current practices in evaluating and recruiting creative workers and motivate future research on creative reputation and reputation allocation.

How loud is consumer voice in product deletion decisions? Retail analytic insights

This study examines the role of online consumer reviews in product deletion decisions. Building upon product portfolio management theory and the signaling theory, we integrate consumer voice, represented by online consumer review behavior into organizational voice—strategic product deletion decision-making. We empirically evaluated the relationship between online consumer reviews and organizational product deletion decisions using text mining and logistic regression models. The results indicate consumer online review characteristics are significant factors for product deletion decisions. Findings suggest that products with lower review attribute ratings, or those with textual review content less pertinent to the core performance attributes, are more likely to be deleted. The linguistic retail analytic characteristics of online reviews also provide insights for product deletion decisions. Products with reviews having higher subjectivity, shorter length, and lower readability are more likely to be deleted. Pre-purchase consumer voice—the perceived helpfulness or unhelpfulness of online reviews also impacts product deletion decisions. A general conclusion is that online reviews can provide important retail analytics for smarter retail operations planning at the strategic and tactical levels when it comes to product planning and portfolio management through product deletion.

The Intersection of Gender, Operational Barriers, and Diversification Strategies: Evidence from Chinese Female Business Owners

This study examines the strategic responses of Chinese female business owners to perceived operational barriers, integrating insights from the Resource-Based View, Signaling Theory, Institutional Theory, and Social Role Theory. Data from the World Bank Enterprise Survey (conducted in China in 2012; the sample comprises 2,700 firms from diverse China’s industries) was analyzed with advanced path modeling techniques. All statistical analyses were conducted using R (version 4.0.2) and SPSS 29. The R packages lavaan and semTools were utilized for implementing Structural Equation Model (SEM) techniques. How female ownership influences diversification strategies was investigated with the mediation effect of business environment barriers and the moderation effect of international certifications. It is revealed that female entrepreneurs are more likely to pursue international diversification due to heightened perceptions of business environment barriers. Perceived regulatory barriers are positively related to product

Distraction by unexpected sounds: comparing response repetition and response switching.

Numerous studies using oddball tasks have shown that unexpected sounds presented in a predictable or repeated sequence (deviant vs. standard sounds) capture attention and negatively impact ongoing behavioral performance. Here, we examine an aspect of this effect that has gone relatively unnoticed: the impact of deviant sounds is stronger for response repetitions than for response switches. Our approach was two-fold. First, we carried out a simulation to estimate the likelihood that stimuli sequences used in past work may not have used balanced proportions of response repetition and switch trials. More specifically, we sought to determine whether the larger distraction effect for response repetitions may have reflected a rarer, and thereby more surprising, occurrence of such trials. To do so, we simulated 10,000 stimuli sets for a 2-AFC task with a proportion of deviant trial of 0.1 or 0.16. Second, we carried out a 2-AFC oddball task in which participants judged the duration of a tone (short vs. long). We carefully controlled the sequence of stimuli to ensure to balance the proportions of response repetitions and response switches across the standard and deviant conditions. The results of the stimuli simulation showed that, contrary to our concerns, response switches were more likely than response repetitions when left uncontrolled for. This suggests that the larger distraction found for response repetition in past work may in fact have been underestimated. In the tone duration judgment task, the results showed a large impact of the response type on distraction as measured by response times: Deviants sounds significantly delayed response repetitions but notably accelerated switches. These findings suggest that deviant sound hinder response repetition and encourage or bias the cognitive system towards a change of responses. We discuss these findings in relation to the adaptive nature of the involuntary detection of unexpected stimuli and in relation to the notion of partial repetition costs. We argue that results are in line with the binding account as well as with the signaling theory.

Effectiveness of sustainability communication on stakeholder engagement: A multi‐method qualitative assessment of sustainable development

AbstractThe present era is witnessing a growing importance of sustainability communication. There is a need to understand stakeholders' perspectives regarding sustainability communication by different corporates. Additionally, it is also important to understand the positive (happiness and surprise) and negative (anger, fear, and sadness) aspects that affect the effectiveness of sustainability communication. The present research used a multi‐method multi‐study qualitative approach. In Study 1, the perspectives of 29 mid‐level managers and 16 top‐level senior managers involved in the sustainability domain in their organizations from India were captured via qualitative semi‐structured interviews. In Study 2, sustainability reports of 50 leading companies involved in sustainability activities were analyzed using textual analysis, emotional analysis, and topic modeling. Results indicate that corporate sustainability communications can have varying impacts on the stakeholders. The results of the qualitative analysis showed positive impact of sustainability communications on employee engagement, employee involvement, transformational and inclusive leadership and training and development opportunities. Positive emotions, like happiness or surprise, indicate positive brand image and engagement related to sustainability activities. Negative emotions like fear, anger, and sadness, show stakeholders' concern regarding the environmental damages. Thus, organizations need to target the positive aspects in their sustainability communication for improved results and must avoid the negative aspects while planning to develop effective sustainability communication. Subsequently, the present study contributes to the existing literature by proposing a conceptual framework based on signaling theory and stakeholder theory. This study fills the gap in terms of examining the stakeholders' and end‐users' perspectives regarding sustainability communication, the major emotional aspects that are revealed from the sustainability reports and an overall view on individual's pro‐environmental behavior.

Validation of an ultrahigh contrast divided subtracted inversion recovery technique using a standard T1 phantom.

The divided subtracted inversion recovery (dSIR) is a high T1 contrast technique that shows changes in white matter in patients with traumatic brain injury and hypoxic injury. The changes can be explained by small differences in T1; however, to date, there has been no independent validation of the technique using a standard reference. The present study develops the theory of the dSIR signal and performs validation using the NIST/ISMRM T1 phantom. Non-idealities are explored, including the influence of noise bias and finite repetition time (TR), which leads to the introduction of an optimally efficient TR for inversion recovery acquisitions. Results show excellent agreement with theoretical calculations.

Managing Conflicting Stakeholder Interests: A Co-Branding Perspective for How Managers Can Mitigate Negative Shareholder Responses to Cause-Related Marketing

ABSTRACT Research suggests that most brand stakeholders react favorably to cause-related marketing (CRM), and CRM positively impacts the brand. However, a divergence of interests can create tension in the principal – agent relationship, as the owners may feel that managers are investing in CRM at the expense of maximizing profits. Along these lines, recent research suggests that shareholders negatively respond to CRM, which reduces shareholder value. Thus, there are concerns about whether expenses incurred via CRM partnerships create value for all stakeholders. Therefore, because CRM can benefit nonprofits and many of the firm’s stakeholders, the authors utilize agency theory and signaling theory to explore co-branding and competitive signals that mitigate the negative impact on shareholder value. The results provide insights into how nonprofit and brand managers can navigate CRM partnerships by designing campaigns that send signals designed to alleviate investor concerns and reduce shareholder disapproval yet still garner support from other stakeholders.

Environmental Social Governance and Financial Performance: A Symbiotic Relationship in Indian Manufacturing

Studying Environmental, Social, and Governance (ESG) aspects and firm performance is crucial for globally understanding how sustainable practices drive long-term profitability and competitiveness in diverse markets. The research gap lies in the need to empirically test the influence of ESG disclosure on corporate performance through the lens of institutional theory and signaling theory. The study aimed to examine the time-variant impact of ESG on the financial performance (FFP) of Indian manufacturing firms from 2019 to 2022. For the study’s analysis, we utilized a variant of structural equation modelling called the ‘cross-lagged panel model’. The cross-lagged panel analysis measured the association of aggregate ESG and its dimensions with FFP. Our findings suggested that the investment in the aggregate ESG commitment increased the firms’ financial performance among our sample companies. Regarding the individual aspects of ESG, the environmental and societal obligations of the firms had a positive impact on the firms’ earnings, whereas the governance aspect harms the FFP. This study provides beneficial recommendations to policymakers, investors, and portfolio managers based on the analysis.

Effect of Capital Deductions on the Financial Performance of Listed Companies at the Nairobi Securities Exchange in Kenya

Purpose: Shareholders’ wealth maximization is a priority objective of every corporate entity. The issue of corporate tax planning and firm value is gaining relevance following the recent financial crises which resulted in the increasing collapse of global and local companies. The purpose of this study was to investigate the effect of capital deductions on the financial performance of companies listed at the Nairobi Securities Exchange (NSE) in Kenya. The study was anchored on signaling theory. Methodology: The study adopted both explanatory and longitudinal research. Secondary data for the study for the period between 2013-2022 was extracted from annual financial statements of 57 listed firms targeted for analysis. The data for the study was analyzed through descriptive and inferential statistics using statistical techniques including Pearson correlation coefficient and regression analysis. All the analyses were done using the STATA version 13.0 Pearson correlation results revealed a significant association between study variables and financial performance. Multiple Linear regression model was used to analyze relationships and the effect of the study variables. Results: The study findings established that capital deductions (β = 0.844, p-value = 0.000, <0.05) have a positive and significant effect on financial performance. The study contributes to knowledge by revealing new insights that tax planning has a significant effect on financial performance of listed firms in Kenya. Specifically, it was established that capital deductions have a significant effect on financial performance of listed firms. Conclusion: The study concludes that a holistic approach to tax planning and an optimal mix of tax planning strategies are important determinants and have a positive contributory effect on firm performance. The study recommends that companies’ management should strive to have an in-depth understanding of tax laws to take advantage of every opportunity that will reduce their tax liability thereby increasing their returns and value. The future researchers should explore the effect of Indirect tax incentives on financial performance.

Does Environmental, Social and Governance Disclosure Practices Promote Customer Brand Perception? The Moderating Effect of Customers’ Sustainability Responsiveness

Environmental, social and governance (ESG) aspects have garnered considerable attention in corporate management on a global scale in recent times. As a result, researchers have paid notable attention to this subject. Though numerous studies have already explored various aspects of ESG in the context of emerging economies like Bangladesh, there is limited evidence on whether ESG practices promote customer brand perception (CBP). This study measures the impact of ESG on CBP deploying structural equation modeling in an emerging economy by analyzing the responses of 450 samples in accordance with the philosophies of triple bottom line theory and signaling theory. The results indicate that sustainability responsiveness, social and environmental disclosure practices, and CBP are positively impacted. Customers’ enhanced level of sustainability responsiveness strengthens the influence of governance disclosures in choosing a brand, while weakens the impact of environmental and social disclosures. However, the study concludes there is no significant effect of governance disclosures on CBP. The findings also reveal that social issues have the strongest impact on CBP among the ESG parameters. As sustainability concerns increase, customers either demand more sustainability performance from brands or their impression of the brands declines correspondingly. The study outlines a customer’s viewpoint on the requirements of ESG and sustainability concerns, which will contribute organizations to adopt appropriate ESG strategies and address sustainability challenges to win over customers and strengthen their brand image.

From gender policies and practices to organisational performance of sport governing bodies

ABSTRACT Research question Gender policies reflect identity-conscious human resource management structures that aim to reduce unfair treatment based on gender. Drawing on signalling theory and the categorisation-elaboration model, the literature suggests that the relationship between gender policies and organisational performance is moderated by several factors (gender practices, organisational culture, decision-making quality), which have not yet been empirically studied. The purpose of this study is to investigate the presence of gender policies in sport governing bodies (SGBs) and examine their relationship with organisational performance. Research methods An online questionnaire was sent to representatives of German SGBs (n = 202). Structural equation modelling was used to examine the relationships between gender policies, gender practices (i.e. board gender diversity), organisational culture, decision-making quality, and organisational performance. Results and findings Gender policies are rarely present in German SGBs, and can only shape the organisational culture when they are connected to daily routines (in contrast to the simple presence of a written statement). Gender policies and practices are positively associated with decision-making quality and organisational performance. Implications The findings contribute to the literature by shedding light on the theoretical mechanisms (i.e. organisational culture, decision-making quality) through which group diversity affects organisational performance. Sport managers should connect gender policies to the daily work instead of simply including them in good governance guidelines, especially because they also benefit the organisation in terms of better performance. Politicians should consider mandatory regulations to make gender policies more effective.

VALUE OF THE COMPANY : THE MEDIATING RETURN ON EQUITY

The grand theory in this research was built by combining Signal Theory, Stakeholder Theory, and Agency Theory as a conceptual basis for hypothesis development. Signal Theory highlights how information companies convey, such as implementing Good Corporate Governance (GCG), can influence investor confidence and investment decisions. This study aims to analyze the impact of CSR and GCG on company value (Tobin's Q), mediated by financial performance, with a focus on Islamic Social Responsibility (ISR), Independent Board of Commissioners (IBC), and Institutional Ownership (IO). They are using a quantitative method. The data is derived from the annual financial reports of 39 banking companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2021. The purposive sampling technique was chosen to ensure that the sample used was relevant and could provide valid data to test the relationship between the variables studied and answer the research hypothesis comprehensively. Secondary data was collected from www.idx.co.id, and path analysis was employed as the analytical method. The findings reveal that CSR, ISR, IBC, and IO positively and directly influence company value (Tobin's Q). These results underscore the critical role of CSR and GCG in shaping a company's financial performance and market value.