Tunisian Firms Research Articles

Bank-firm relationship and credit risk: An analysis on Tunisian firms

This paper analyses the impact of the intensity and length of bank-firm lending relationship on Tunisian banks’ credit risk over the period 2001–2012. The sample includes 494 bank-firm relationships for 383 firms. By applying probit and ordered probit models, our results indicate that firms which engage in intense relationships with banks are less likely to encounter a credit default. In addition, these firms exhibit a higher loan quality. However, no evidence has been found for the impact of the relationship length on credit risk. Further, the findings show that private banks, unlike public financial institutions, take advantage of their close lending relationships with borrowers to mitigate information asymmetry and therefore improve their loans portfolio quality.

Direct and Complementary Effects of Investment in Knowledge-Based Economy on Innovation Performance in Tunisian Firms

This paper investigates two sets of hypotheses related to the relationship between the investment in the knowledge-based economy (KBE) and innovation performance in a developing country. The first set supposes that investment in information and communication technologies (ICT), organizational innovations, and human capital, the main three pillars of KBE, has a direct effect on innovation performance of Tunisian firms. The second set tests the hypothesis of complementary effect of these pillars such that their combination constitutes a significant production system affecting the innovation performance. Using recent firm-level data, we find evidence of direct effect of investment in the KBE on firm’s innovation performance. The second set of hypotheses is partly supported. We find evidence of complementarity between ICT and human capital as well as between ICT and organizational innovations, but we do not find evidence of complementarity between human capital and organizational innovations. Moreover, we find that full complementarity between ICT, organizational innovations, and human capital does not apply to Tunisian firms.

E‐Skills and the Adoption of Cloud Computing

This paper presents preliminary results for the determinants of Cloud Computing (CC) adoption by Tunisian firms. Based on the responses to a face‐to‐face questionnaire administered to a random sample of 350 Tunisian firms, and using a Logit model, our empirical study provides four preliminary results. Firstly, the adoption of CC depends firm size and firm employees skilled in working with information and communication technologies. Secondly, we find that there is a competition effect. The more that competitors adopt this innovation, the more that the firm adopts it. Thirdly, adoption of CC is pushed by the perceived cost reducing aspect of CC technology. Our study confirms that this cost reducing aspect is important in the case of Tunisia. Fourthly, the main disadvantage of CC is its perceived complexity. CC is a new technology and there is little information on its uses and benefits; most Tunisian firms perceive it to be a complex technology. We also offer some implications for policy and managers. © 2017 Wiley Periodicals, Inc.

The Effect of Intellectual Capital Drivers on Performance and Value Creation: the Case of Tunisian Non-financial Listed Companies

The value of companies is traditionally estimated from the material wealth they hold. In the context of the knowledge economy (KE), these elements are no longer enough to estimate this value. Many authors are interested on new sources of value creation called immaterial. Nevertheless, the intangible elements, without physical or intangible substance, are difficultly taken into account by old accounting methods. The work done around our problem tries to define a model that reflects the overall performance of firms of the NE, by adding information about the intangibles to the old accounting data. The present study is looking for reliable measures of the performance of Tunisian firms which are operating in the new economy. The failure of accounting and financial data leads us to add other information. The pieces of information are related to intangible capital which is the main source of value creation for firms in the KE; however, they are ignored in traditional metrics. The results obtained, following the different operated regression, indicate the significance of the variables: “book value, BVE;” “return on equity, ROE;” and “return on assets, ROA.” However, the other ratios are insignificant. Furthermore, the explanatory power of the model is fairly low hovering around 20%. This result allows us to confirm the failure of classical accounting and financial data to translate firm performance of KE. Thus, we validated our initial hypothesis that stresses the usefulness of accounting and financial data in evaluating the performance of firms in the KE. Similarly, data on intangible capital is embodied in three aspects–structural, customer, and human–that play important roles in assessing this. The obtained results indicate that the explanatory power of the model, taking into account the intangible component, is higher than that based solely on the accounting and financial data. Indeed, adjusted R² lies in a range between 30 and 66%. This validates our second hypothesis on the role of intangibles in the chain of value creation. This study shows the important role of intangible capital information in the process of decision-making. Thus, investors and managers should give particular attention to immaterial components which allowed a better appreciation of the overall performance of Tunisian firms operating on NE. This is the contribution of our work.

Service orientation as a strategic marketing tool: the moderating effect of business sector

PurposeExtending the service business in manufacturing firms has received significant attention in recent research. As it has been acknowledged by many authors, developing a service orientation can offer additional benefit potential. However, achieving profit with a competitive strategy depends on the firm’s characteristics and equally on environmental ones. In this scope, the present paper aims to identify antecedents to service orientation and the impact of this strategy on the firm’s performance.Design/methodology/approachThe authors first conducted a qualitative research to identify the different forms used to serve clients. Then to test the hypotheses, the authors conducted a quantitative study on a sample of 130 Tunisian firms belonging to three key Tunisian industries.FindingsThe findings show that the managerial motivation, the firm’s characteristics in addition to environmental characteristics must be considered as antecedents to service orientation. The study has in fact verified the positive impact of service orientation on the firm’s performance and the fact that the business sector has a moderating effect on this relationship.Practical implicationsAt the business level, marketing managers have to commit to finding new opportunities by valorizing market survey, establishing a management mechanism and controlling their service offer system. They have to try to internally “sell this service project” before thinking of adopting a service-oriented marketing strategy. However, industrial firms must equally take into account the services’ specificities for a better management of products/services. In fact, the intangible and the heterogeneous aspect of services increase risk perception and the degree of uncertainty among clients more than in a purchasing situation of a simple product. Consequently, marketing managers have to elaborate a specific approach, decide on a list of offered services, on their method and on quality standards to finally decide on the price. At the economic level, extending the service business has potential benefit for manufacturing firms and consequently for economy. Therefore, manufacturing firms seeking to invest in the service business must be encouraged by the government’s industrial policy. It is very important to help them overcome the obstacles to service adoption by providing financial incentives. In addition, it is very important to help them use and develop the technologies needed to improve the delivery of services.Originality/valueIn spite of the significant number of studies in this respect, the strategic perspective of service orientation was not as well developed as the organizational perspective and the theoretical development of this field remains underdeveloped. The authors noticed that the empirical applications of previous studies revealed divergent results that can be sometimes contradictory, particularly when they examine the impact of service orientation on performance. Besides, in recent research, “deservitization” appears as a solution adopted by managers who are unable to generate high revenues or margins to cover the additional investment in services. Consequently and considering the lack of consensus in previous studies, the authors’ principal objective is to identify the antecedents of service orientation and to test its impact on the industrial business performance. Additionally, and from an empirical point of view, the authors notice that the majority of past research on service orientation of industrial businesses was conducted in developed countries, whereas the empirical study of the present work was conducted in an emerging country in a transitional phase: Tunisia. Finally, because previous literature has assumed homogeneity on service strategies across sectors, the authors tried to show whether the business sector matters in terms of the relationship between service orientation and the manufacturing firm’s performance.

Earnings Management, Accruals and Stock Liquidity

Earnings Management, Accruals and Stock Liquidity Sonia Sayari, Abdelwahed Omri Abstract Accounting indicators published by firms remain a privileged source of information for the financial market. However, the margin of freedom granted by accounting rules allows managers to manipulate financial statements for discretionary ends, in order to mislead stakeholders on the firm's economic conditions. Our study aims at examining the Tunisian context and tries to determine the effect of earnings management on stocks liquidity. The relationship between liquidity and accruals was examined, using the modified earnings management measurement model of Jones (1995). Our sample consists of 299 observations of Tunisian companies listed on the stock exchange during the 2000-2012period. Using a panel data qualitative approach, the obtained results point to a positive relationship between discretionary accruals and Tunisian firms' stocks (as estimated by the two measurement models). This indicates that discretionary accruals allow Tunisian investors to optimally construct their stocks portfolios. The results also highlighted a negative and a significant impact of transaction size and volume on firms’ask-bid spread. Full Text: PDF DOI: 10.15640/jfbm.v5n1a2

The absorptive capacity as a key success factor in international strategic alliances: a study of Tunisian firms

International strategic alliances (ISAs) are an engine of corporate business development in Tunisia. This research - in accordance with the knowledge-based view - seeks to identify the role of absorptive capacity as a key success factor. In a two-step process, qualitative research was first conducted to centre the research on the characteristics of the Tunisian context. This was followed by quantitative research using a SEM method with data collected from 119 Tunisian firms allied with foreign firms. Results show that alliance experience, and access to the knowledge of the ally, are the most important factors denoting absorptive capacity in this context. Companies engaged in ISAs, with much technological diversity, need to stimulate interest in research and development (R&D) to improve the abilities of their employees and keep them motivated. This leads to an internalisation of knowledge transfer which stimulates business development and leads to successful alliances in terms of effectivness and innovation.

Do Tunisian firms manage earnings to attain thresholds?

The purpose of this study is to examine the extent to which Tunisian listed firms manage their results to avoid losses and earning decreases, and to investigate the determinants of such behaviour. The factors which we selected were derived from the positive accounting theory applied to the earnings management thresholds. Based on a panel data of 375 firm-year observations during the period 2002-2014, we provide evidence that firms tend to engage in earnings management to avoid reporting losses and earnings decreases. Considering earnings management incentives, the results reveal that growth opportunities have positive effect on earnings management thresholds, suggesting that Tunisian firms manage earnings around thresholds in a signalling purpose rather than opportunistic one. We also found that firm size and taxes have negative effect, which confirm the political costs hypothesis that larger firms tend to report earnings lower than last year in order to pay lower taxes.

Do Tunisian firms manage earnings to attain thresholds?

The purpose of this study is to examine the extent to which Tunisian listed firms manage their results to avoid losses and earning decreases, and to investigate the determinants of such behaviour. The factors which we selected were derived from the positive accounting theory applied to the earnings management thresholds. Based on a panel data of 375 firm-year observations during the period 2002-2014, we provide evidence that firms tend to engage in earnings management to avoid reporting losses and earnings decreases. Considering earnings management incentives, the results reveal that growth opportunities have positive effect on earnings management thresholds, suggesting that Tunisian firms manage earnings around thresholds in a signalling purpose rather than opportunistic one. We also found that firm size and taxes have negative effect, which confirm the political costs hypothesis that larger firms tend to report earnings lower than last year in order to pay lower taxes.

The effect of cronyism on debt access: The case of Tunisian listed firms

The objective of this paper is to study the effect of cronyism on debt access. Cronyism is concretized by two factors: regulation and political connections. The study is carried out on a sample of Tunisian firms for the period between 2006-2013. First, we test the effect of regulation and political connections on debt access by proceeding with a multiple linear regression model. Results show that regulation is positively associated with the debt ratio. However political connections do not increase the debt ratio. Then, we applied a difference-in-difference model to take account of the natural experiment of the political uprising. The effect of cronyism is confirmed only before this event.

Measuring the Degree of International Harmonisation inSelected Accounting Practice: the Case of Tunisian Firms

Measuring the Degree of International Harmonisation inSelected Accounting Practice: the Case of Tunisian Firms

The impact of financial safety act and corporate governance on the level of financial disclosure

Purpose This research paper aims to identify and measure the contribution of the financial safety act (FSA) regulation in improving the level of financial disclosure of listed Tunisian firms. To answer the problems of the subject, the authors tried to hold accountable several determinants of the level of financial disclosure relating to the particular characteristics of the firm, and the adoption of the recommendations envisaged by the FSA, as likely to have an impact on the level of financial disclosure of Tunisian firms. Design/methodology/approach With a sample composed by 20 companies during the period from 2003 to 2010 (160 observations), the contribution of the FSA regulation in improving the level of financial disclosure of listed Tunisian firms was identified and measured. After that, the levels of financial disclosure before and after the FSA were compared. Findings The study results confirm the positive and significant effect of the FSA on the level of financial disclosure. This impact seems to appear through the improvement of the disclosure level during the years which follow the adoption of the new regulation. The results of this study also show that firms with a high level of financial disclosure are those which have an independent board of directors, auditor BIG and joint audit. Originality/value This paper is devoted to evaluate the impact of the FSA n°2005-96 and corporate governance on the level of financial disclosure. The empirical study relates to a sample of 20 firms listed on the Tunis Stock Exchange observed over the period 2003-2010.

Political costs and earnings management: evidence from Tunisia

PurposeThe purpose of this paper is to test the political costs hypothesis in emerging economies characterized by interventionist governments and weak protection of property rights. The paper uses executives’ political connection and state control to measure firms’ political costs.Design/methodology/approachBased on a sample of Tunisian firms, univariate and multivariate analyses are used to test whether firms’ political costs have any impact on earnings management.FindingsThe empirical analysis indicates that the executives’ political connection is not directly related to earnings management. However, the interaction between executives’ political connection and the state control affects the firm’s sensitivity to political pressure and its earnings management practices. More specifically, this study provides evidence that non-connected firms and state-controlled firms attempt to use accounting policies to decrease their earnings especially during periods of the former government when they had to face high political costs. This finding is robust to comparing means of political cost indicators between different groups. Indeed, private firms with political connection enjoy a significantly lower insurance right, tax and donations and grants compared to other firms.Research limitations/implicationsThis study provides empirical evidence for the specific application of accounting theory in emerging economies.Practical implicationsPolitical influence may be an important criterion that will be used by auditors and investors to appreciate and detect specific manipulations of accounting earnings. Similarly, regulators should be aware of the political factors effect on discretionary behavior of managers to provide appropriate rules and standards.Originality/valueThe study is a pioneer in proving that a firm’s size is not always a suitable measure of its political cost. It extends the accounting literature on the role of political economy in the application of the political costs hypothesis. This hypothesis is confirmed in emerging economies by providing new and significantly measure of firms’ political costs

Entry, exit and net job creation in Tunisia: an exploratory analysis

This paper analyzes the impact of small firms’ entry and exit dynamics on net job creation in Tunisia during 2000–2013. Our descriptive and exploratory econometric analyses exploit a database of the population of Tunisian firms; the results support the idea that small firms in a developing country, such as Tunisia, play a key role in the creation of new jobs. We also explore the role in these dynamics of a specific tax regulation, the regime forfaitaire, which has been designed to benefit only small firms. We find that small firms benefiting from this taxation scheme account for most of the job creation effects for this firm size group. This effect is persistent across sectors. However, despite their dynamism, small firms show very weak economic performance. Thus, this preliminary analysis suggests that small firms in Tunisia have a strong social impact in the form of new job creation, but a weak economic impact in terms of wealth creation. A possible interpretation of these findings and one which requires further investigation, is that small firms’ entry rates are driven mostly by necessity entrepreneurs, while the skilled workforce, which currently is largely unemployed, does not contribute to this process through the creation of innovative start-ups.

Determinants of Problem Loans: Non-performing Loans vs. Loan Quality Deterioration

<p class="1main-text">The growing literature on credit risk determinants provides results that are based on the set of bad loans present in the bank's assets especially non-performing loans. Besides this classic proxy, the present paper examines the determinants of loan quality deterioration by using a qualitative measure. Actually, we take advantage of a detailed dataset containing information on the quality of loans contracted by banks to different Tunisian firms. The study aims to detect if credit risk determinants are different through quantitative and qualitative proxies. We take into account bank-specific indicators that are likely to affect banking credit risk. Overall, the results show that cost inefficiency, bank profitability is common determinants of the credit risk level and the loan quality deterioration, that are differently influenced by bank size and capitalization.</p>

Determinants of quality management systems implementation in Tunisian firms

This research explores the impact of the firm’s internal and external attributes on its degree of implementation of quality management according to the ISO 9000 standard. This econometric study, based on the data gathered from a sample of Tunisian companies certified or in the course of certification in ISO 9001: 2000, reveals that the application of quality management depends on the organizational and environmental context of the company: a motivation rather internal than external to be certified, the application of ISO 9004 standard recommendations, the adhesion of the company to the leveling program, size, investment in new technologies of information and communication and in technologies of analysis and measurement and the importance of innovation and quality criterion for customers.

Innovation and service outsourcing: an empirical analysis based on data from Tunisian firms

Recently, outsourcing services has been an important component of the organizational strategy of service firms. However, most research studies mainly focus on analyzing the determining factors of outsourcing at the expense of its structural effects. The aim of this paper is to examine the extent to which outsourcing relationships can be a source of service innovation by using a sample of 108 Tunisian service firms. Specifically, we are interested in the domestic outsourcing of auxiliary activities. Our results support the evidence of positive effects of outsourcing service activities on the capacity of innovation. This suggests that outsourcing allows Tunisian service firms to create value, increase flexibility and improve the quality of their services.

Impact of Technological Alliances Between Asymmetrical Firms on Icts Appropriation

<p>The study evaluates the contribution of technological cooperation between asymmetrical firms to reduce the digital divide. To do this, we assess the impact of technological alliances between Euro-Mediterranean firms on ICTs appropriation by especially Tunisian firms. But it mustn’t be studied independently of strategic and demographic contexts. The article presents a quantitative study based on a survey which was conducted among a sample of 155 companies. We led logistic multinomial regressions to estimate the model and valid the hypothesis.</p>

Book-Tax Differences and the Persistence of Earnings and Accruals: Tunisian Evidence

<p>This study aims to investigate whether the persistence of earnings, accruals and cash flows are influenced by the difference between accounting and taxable income (book-tax differences; BTD). This investigation helps in two research lines. First we have expanded the literature that interprets the BTD. We used the discretionary part of the BTD to estimate managerial manipulation. Our contribution is to use a different method to estimate the BTD through the residual of a multiple regression. Secondly, we attempted to investigate whether discretionary BTD appear to serve as a useful signal of earnings persistence. We test the model with a sample of 21 listed Tunisian firms in the period from 2003 to 2012. The results illustrate the importance of BTD in indicating the persistence of earnings and accruals.</p>

Effective audit committee, audit quality and earnings management

Purpose– A steady stream of literature has examined relationships between audit committee effectiveness, audit quality and financial reporting quality. The purpose of this paper is to connect these various streams of research to provide an empirical evidence from an Arabic emergent country namely Tunisia. This study examines the role of audit committee effectiveness and audit quality on financial reporting quality particularly to mitigate the earnings management in the Tunisian companies before and after financial security law adoption.Design/methodology/approach– The study uses ordinary least squares regression model to investigate the effect of audit committee characteristics, audit quality attributes and the interaction between these two overseeing mechanisms on earnings management for a sample of 29 non-financial listed Tunisian firms during the period 2001-2009.Findings– The results document a substitute effect between the presence of Big Four auditor and effective audit committee in order to reduce the discretionary accruals before the enforcement of law no. 2005-96 dealing with the financial securities. The authors find a complementarity link between the score of audit committee’s effectiveness and auditor industry specialization’s to constrain earnings management. Finally, the findings show a complementary relation between audit committee’s effectiveness and audit tenure, after the passage of the law.Research limitations/implications– This study shows the value of considering the institutional setting in governance research. This paper is restricted to firms in the Tunisia from 2001 to 2009. Future research should investigate this issue in other settings and periods.Practical implications– This study is important to practitioner and academic literature, policy makers and professional accounting bodies as it shows that legislative reforms can enhance companies to adopt good governance practices in emerging countries. The results also give useful information to investors in examination the effect of audit committee characteristics and audit quality on earnings quality. Another interesting practical focus of this study is to assess how successful was the implementation of financial security law in improving audit transparency and support shareholder involvement in the audit process.Originality/value– The results suggested that governance regulation is a substitute for strong governance mechanisms in both the pre- and post-law periods.