Tunisian Firms Research Articles

Managerial Optimism Level, Board of Directors Efficiency and Debt Decision in Tunisian Companies

This article deals with the relationship existing between the emotional aspect and decision-making processes. More specifically, it examines the links between managerial optimism level, debt decision and board of director’s efficiency. This Stream of research argues that the CEO optimism level is affected by the Board of Directors efficiency. In this regard, an empirical study was conducted using a questionnaire as a data collection method adapted to a sample of 75 Tunisian firms. Regarding, The optimism level they have been measured by means of a questionnaire comprising several items. Our analyzes revealed the importance of CEO optimism in the debt decision. It has been found that an optimistic leader prefers more debt even in companies ruled by independent boards. On the other hand, the results’ analyzing the hypotheses 2 and 3 regarding the size of the board and the combination of CEO and Board Chair does not confirm our theoretical analysis.

Boards of directors' roles and size: what effects on exploitative and exploratory innovations Case of listed Tunisian firms

The purpose of this paper is to investigate the effect of the size and the roles of the board of directors (BD) on two types of innovation namely exploitative and exploratory innovations. These relationships have been little explored in the literature, particularly in developing economies. Using a quantitative approach, an empirical study was conducted on a sample of 51 Tunisian listed companies. It revealed that exploratory innovation is promoted by BDs service role. The results also highlight that exploitative innovation is positively related to the BD's strategy role but negatively associated with BD's control role. The findings do not show a significant effect of BD's size on the two types of innovation. This research provides insights to companies looking to improve their corporate governance practices and develop a sustainable competitive advantage based on innovation.

Political connections, collateral favours and debt access: some Tunisian evidence

The purpose of the paper is to study the effect of political connections on collateralisation and debt access. The study is carried out on a sample of Tunisian firms on the period 2007-2012. In the first step, we have taken into consideration an aggregate measure of collateral which is fixed assets. Results show that only long-term debt can be covered by fixed assets owned by connected firms. Then, in a second step, we have been studying the collateral liquidity through three components: lands, buildings and machineries and equipment. The major finding is that politically connected firms were able to gain access to debt without sufficient liquid collaterals.

Boards of directors' roles and size: what effects on exploitative and exploratory innovations Case of listed Tunisian firms

The purpose of this paper is to investigate the effect of the size and the roles of the board of directors (BD) on two types of innovation namely exploitative and exploratory innovations. These relationships have been little explored in the literature, particularly in developing economies. Using a quantitative approach, an empirical study was conducted on a sample of 51 Tunisian listed companies. It revealed that exploratory innovation is promoted by BDs service role. The results also highlight that exploitative innovation is positively related to the BD's strategy role but negatively associated with BD's control role. The findings do not show a significant effect of BD's size on the two types of innovation. This research provides insights to companies looking to improve their corporate governance practices and develop a sustainable competitive advantage based on innovation.

The interaction between accounting and real earnings management using simultaneous equation model with panel data

The aim of this paper is to examine the association between accounting-based earnings management and real activities manipulation in a weaker regulatory environment. We measure accruals-based earnings management by modified Jones model. Real earnings management is identified through sales manipulation and discretionary expenditures. The relationship between accruals-based earnings management and real earnings management is examined by using simultaneous equation systems estimated with panel data. Based on a sample of Tunisian public offering firms, our findings support not only a complementary relationship between sales manipulation and accruals-based earnings management, but also a substitutive interaction between discretionary expenditures and accruals management. Tunisian firms do not face greater scrutiny from regulators and jointly use the two alternatives of earnings management. However, when income taxation becomes the main incentive for earnings management, Tunisian firms prefer real earnings management to discretionary accrual. It implies that accounting earnings management is jointly used with some real earnings management tools and serves as substitutes for other real activities manipulations. Contrary to results of previous studies, managers can use the two earnings management alternatives as substitutes and complementary tools at the same time.

Quantitative relationship between corruption and development of the Tunisian stock market

The aim of this article is to seek especially the impact of corruption on the bond and stock market development. For the methodology/approach, the authors analyze a sample of 20 listed Tunisian firms from the Stock Exchange and Financial market, covering the period from 2006 to 2016 by using pooling cross section techniques. The results find a significant positive effect of the level of corruption on the stock market index and the logarithm of capitalization. This is consistent with the view that corruption accelerates the economic growth by speeding up transactions and allowing private companies to overcome the inefficiencies imposed by the government. Furthermore, the results find a negative association is not significant with the dependent variable of traded value as a percentage of the number of listed companies.

Threshold Effect of the Number of Bank Relationships on the Tunisian Firm Performance

The aim of this paper is to define the optimal number of bank relations and to investigate its impact on the performance of some Tunisian firms. To achieve these goals, we used a sample of 36 Tunisian listed companies over the period 2008-2015 and we performed the Panel Smooth Transition Regression (PSTR) as econometric approach. Empirical results show that the optimal number of bank relationship for Tunisian listed companies is 3.222. Findings indicate that within this optimal number, bank-firm relationships exert a positive and significant effect on the performance of the Tunisian listed companies. For macroeconomic factors, results show that the Growth rate of Gross domestic Product (GDPG) increases significantly the firm performance; however, the effect of inflation is negative but not significant.

State ownership and firm profitability in emerging markets

PurposeThe purpose of this paper is to examine the relationship between state ownership and firm profitability in developing countries by considering the endogenous nature of state ownership and firm profitability.Design/methodology/approachA simultaneous equation analysis is applied to study 232 Tunisian firms over the 2001-2013 period. This analysis is compared with OLS estimates to show its power in terms of an endogenous setting and its potential to improve estimation.FindingsUnlike the OLS estimates that show a non-significant relationship between state ownership and firm profitability, the simultaneous equation analysis reveals a non-symmetrical concave relationship. Specifically, state ownership affects positively firm profitability when it is relatively small and negatively when state ownership dominates. Specification test indicates that both state ownership and firm profitability are endogenous. Furthermore, the simultaneous model’s explanatory power exceeds that of OLS estimates and proves to be a suitable estimation technique.Practical implicationsTaking into account public firms’ categorization, the authors implicitly examine the effect of privatization and corporatization on firm profitability. The findings imply that privatization is not the only solution to the operational problems of public firms, but an internal governance system restructuring can also be favorable for these firms.Originality/valueIn addition to focusing on a new database of developing countries, the case of Tunisian firms, the main empirical analysis is conducted by considering the endogeneity issue. Thus, the findings improve understanding of the role played by state ownership and suggest that a partial state control appears to be beneficial to firm profitability.

Investigation of the Effect of Earnings Management on Stock Liquidity for the Case of the Tunisian Stock Exchange

Investigation of the Effect of Earnings Management on Stock Liquidity for the Case of the Tunisian Stock Exchange Sonia SAYARI Abstract Earnings management has often been percieved as manipulating financial statements in view of mistaking stakeholders about the firm's economic performance or influencing contractual relationships founded on accounting figures. In this study, we examine the relationship between disclosed accounting information quality and stocks liquidity. To this end, we examine a sample of 220 observations of Tunisian listed companies over the 2007-2016 period. The results indicate that there is a negative relationship between accounting information quality measured by quality of accruals and stocks liquidity. Our study aimsat examining the Tunisian context and tries to determine the effect of earnings management on stocks liquidity.The relationship between liquidity(via the ask-bid spread) and accruals was examined, usingtwo modified earnings management measurementmodels: modified model of Jones (1995)and model of Kothariet al. (2005). Considering the discretionary component of accounting accruals in the relationship between a firm's stocks liquidity and its accruals is a new controversialtopic. Using a panel data qualitative approach, the obtained results point to a positive relationship between discretionary accruals and Tunisian firms'ask-bid spread (as estimated by the two measurement models). This indicates that discretionary accruals allow Tunisian investors to optimally construct their stocksportfolios. The collected results also highlighted a negative and a significant impact of transaction size and volume on firms’ask-bid spread. Indeed, earnings management allows for increasingstocks uidity when discretionary accruals are negative and reducingtheir liquidity when these accruals are positive. This is confirmed by the two discretionary accrualsmodels. Full Text: PDF DOI: 10.15640/ijat.v6n1a5

Understanding Intentions to Switch Toward Cloud Computing at Firms' Level

This research aims to study intentions to switch toward cloud computing at firms' level. As a new way to deploy information technologies (IT) within firms, switching toward cloud computing remains a hard decision that depends on several contextual factors. While several studies have focused mainly on technological aspects, this research adopts a multidimensional perspective by combining the Technology-Organization-Environment (TOE) framework with a two-factor theory perspective. Doing so, the authors attempt to propose a research model that can be useful to deeply understand how firms perform when thinking about switching toward cloud-based solutions. A multiple-case study within five Tunisian firms has been conducted to contextualize the research model and give it more explanation power. The Tunisian context should be interesting, as cloud computing adoption is a new topic that is not sufficiently studied in developing countries, particularly in those characterized by an economy in transition. Data have been collected by semi-structured interviews and coded using the Nvivo software. The analysis of interviews content shows that the expected switching benefits and risks play a mediating role between TOE factors and intentions to switch toward cloud computing. Indeed, the authors found some different results within cases revealing the dual effects of technology, organization, and environment factors on intentions by generating different expected switching benefits and risks. In light of these results, some recommendations are proposed to decision makers in this area.

Innovation in VUCA world: evidence from Tunisian firms in a post-revolution context

Researchers have examined the positive impact of organisational entrepreneurial orientation (OEO) and managerial cognition about environmental changes (MGC) on innovation. However, volatility, uncertainty, complexity, and ambiguity (VUCA) in today's business environment has affected firms and their innovation-decision. Thus, factors which help innovation to thrive may eventually hamper its performance in such an environment. Assessing 67 Tunisian enterprises following the Jasmine revolution, we examine the VUCA context and the joint impact of organisational and managerial factors on innovation. Our results indicate that OEO and MGC both positively influence innovation performance, but their joint impact is negative. Thus, innovation will be less successful if managers and organisations are either highly or slightly innovation oriented. Consequently, a moderate level of innovativeness leads to higher organisational success in a VUCA environment. Such orientation refers to the first follower strategy, where the firm learns from a first mover's experience, then responds to the environmental changes.

Innovation in VUCA world: evidence from Tunisian firms in a post-revolution context

Researchers have examined the positive impact of organisational entrepreneurial orientation (OEO) and managerial cognition about environmental changes (MGC) on innovation. However, volatility, uncertainty, complexity, and ambiguity (VUCA) in today's business environment has affected firms and their innovation-decision. Thus, factors which help innovation to thrive may eventually hamper its performance in such an environment. Assessing 67 Tunisian enterprises following the Jasmine revolution, we examine the VUCA context and the joint impact of organisational and managerial factors on innovation. Our results indicate that OEO and MGC both positively influence innovation performance, but their joint impact is negative. Thus, innovation will be less successful if managers and organisations are either highly or slightly innovation oriented. Consequently, a moderate level of innovativeness leads to higher organisational success in a VUCA environment. Such orientation refers to the first follower strategy, where the firm learns from a first mover's experience, then responds to the environmental changes.

How Does Firm Characteristics Affect the Choices Dividend Payout? Evidence of Firms Listed in the Tunisian Stock Exchange

This article investigates the relationship between some financial criteria and dividend payout policy choices of Tunisian firms’ context. Specifically, we examine whether the determinant the firm characteristics affect the firms’ policy choices to pay dividend. Overall, this research adds to our understanding of firms’ dividend payout policy choices. It shows that the all included variables present strongest motivation to the dividends payout choice. The results also suggest that good financial performers are more likely to pay dividends more regularly. First, evidence on the relationship between the various types of financial characteristics and firms’ choice of dividend payout frequencies should be useful to investors. Second, the findings of this study provide positive effects of firm performance, total of sales, firm value, and firm growth level on the dividend payout frequencies. The analysis indicates that dividend policy is related to firm value and there is a positive association between the firm’s share pare price value and the dividend policy payout.

On the Nonlinear Relationship between Bank Financing and Firm Performance: A PSTR Model for Tunisian Companies

Despite that bank lending and firm performance relationship has been strongly explored, to date there are few studies that investigated the threshold of credit that affects firm performance. The aim of this paper is twofold. First, it seeks the optimal threshold of short-term and long-term credits that affects firm performance. Second, it investigates the impact of bank credit of firm performance. To achieve these goals, we used a sample of 36 Tunisian listed companies over the period 2008-2015 and we performed the Panel Smooth Transition Regression (PSTR) as econometric approach. Empirical results indicate that Tunisian firms require more short-term credits than long-term loans based on the optimal threshold. With regard to the impact of bank credit, findings indicate that this effect differs from short-term to long-term credit. We found that firm performance was significantly and positively correlated with short-term credit. However, long-term credit decreases significantly the performance of Tunisian companies. For macroeconomic factors, results show that GDPG increases significantly firm performance; however inflation acts negatively and significantly.

Network relationships and internationalization in Tunisian high‐tech SMEs

How do the dynamics of social and business networks influence the internationalization of small to medium‐size high‐tech businesses? This question is particularly relevant for small and medium‐size enterprises (SMEs) in developing economies, which frequently do not have access to the resources required for successful international expansion. A qualitative study of three Tunisian firms explores the role played by networks in the internationalization of high‐tech SMEs. The results show that personal, local, and international networks have a significant impact on the SMEs’ access to the resources they need for their ongoing internationalization. The results of the study lead to three propositions concerning the internationalization of SMEs and highlight their implications for practitioners.

Access to bank financing and the collateral channel: The case of Tunisian firms before and after the revolution

This article is aimed to study the impact of collateral liquidity on debt-access. Such an effect is proven with regard to the difficult economic conditions which ensued from the Tunisian revolution in 2011. The results show that the previously acquired liquid assets enhance debt access. This result is realized by a first measure through the positive relationship between inventories and short term debt and between fixed assets and long term debt. A second measure highlights the positive effect of lands, buildings, machineries and equipments and the negative effect of other fixed assets on debt-access. After the revolution, the creditors lowered their lending to firms to deal with liquidity shocks in the monetary market. Also, they became more selective through their excessive demand for liquid collateral. This result is justified by the intensive effect of real estate assets (lands and buildings) and by the regressive effect of the movable assets (machineries, equipments and other fixed assets).

Emotional intelligence and financial decision making: Are we talking about a paradigmatic shift or a change in practices?

The paper investigates the extent to which emotional intelligence has an impact on decision making mainly with regard to financial decisions and their outcomes. Its relevance lies in the fact that despite the remarkable evolution of the literature related to the determinants of financial choices, it is not comprehensively apprehended what really guides managers’ decisions.The study offers a wide support for behavioral finance and demonstrates a paradigmatic shift in exploring financial decisions. The paradigmatic evolution of financial theory has yield to an “invisible” part of the reality which in turn generates some “hidden” costs. At this level, the behavioral financial paradigm becomes relevant to shed some light on the real dynamic of financial decisions. An empirical study based on a survey on 50 Tunisian firms confirms the “partial” influence of emotional intelligence on financial decisions and the detection of a potential to be upgraded. Results show that managers who rely on their emotional intelligence can successfully, on one hand, improve firm’s funding opportunities, and on the other hand avoid overreaching the debt target ratio in such a way to maintain the financial stability of their firms.The study offers insights at two levels: First, educators are urged to integrate emotional intelligence competencies in their teaching objectives. Second, human resource management professionals are invited to reconsider hiring techniques and training methods favorably to detect and develop an emotional intelligence capital.

Mapping environmental pollution disclosures in Tunisia

The aim of this paper is to examine the mental models of actors in Tunisian firms with respect to the environmental pollution. The authors use a cognitive map to observe these mental diagrams and to visualize ways to conceptualize the environmental pollution and to understand this concept through the presentation and analysis of the cognitive maps of Tunisian firm’s actors. Each actor’s systematic exploration grid shows a balance of concepts that expresses their cognitive orientation. Thus, the authors visualize the concepts (variables) that structure the cognitive universe of the actors, which is projected in terms of influences and dependencies. This research provides some lines of thought about environmental and pollution reporting that should be explored further. The research can only help to launch a debate on corporate accountability and transparency.

La connexion politique et le financement des entreprises tunisiennes

The aim of this article is to study the effect of political connections on debt access of Tunisian firms. The study is carried out on a simple of 32 Tunisian firms on the period 2007-2012. Obtained results show that Tunisian politically connected firms have a preferential access to short term debt. This relationship has been confirmed only on pre revolution.

Commitment in corporate social responsibility and financial performance: a study in the Tunisian context

PurposeThe purpose of this study is to measure the impact of commitment in corporate social responsibility (CSR) in its various forms (CSR philanthropy/ altruism, CSR integration and CSR innovation) on the financial performance as measured by certain ratios.Design/methodology/approachThus, on the basis of a theoretically constructed questionnaire administered to 82 responsibles (general managers, human resources managers and CSR responsibles) operating in four business areas, the authors have developed the extent of the overall CSR commitment and the extent of commitment by CSR action type.FindingsThe examination of the impact of the CSR commitment on the financial performance has partially approved the social impact assumption. Indeed, only the positive effect of CSR philanthropy is demonstrated. Otherwise, for integrated and innovative actions, the low involvement in these actions in relation to philanthropic ones could explain the lack of significant association. But this result is also important, as it marks the lack of any negative effects. Even if they do not result in a better financial performance, these commitments do not bring harm to the firm. As for the strategic approach predominance on the altruistic approach, this hypothesis is checked only in the case of firms operating in the chemical sector.Research limitations/implicationsThe main limitation of the study is the limited size of the total sample and the sample by industry, so the authors expect a larger sample might be able to provide more meaningful results.Practical implicationsThen, the study suggests the importance of implementing real CSR strategies for firms that often find doubt and ambiguity when they decide to undertake social actions. However, these results do not mean that companies must refrain from driving altruistic or philanthropic activities but are encouraged to seek a social performance that suits a certain level of integration and innovation.Social implicationsThe most important of all the above is that the negative impact of social actions is not verified in any way, allowing to state that the social actions do not exert a negative effect on the financial performance. So, participation in social problems do not bring harm to the firm.Originality/valueThe originality of this work comes from: the measure of CSR commitment, and the use of a classification typology of CSR actions in terms of their interaction with the core of the firm’s business as developed by Halme (2009). In fact, based on a theoretically constructed questionnaire, the authors have developed two measures of responsible commitment (level of commitment and intensity of commitment) of some industrial Tunisian firms.