Types Of Firm Performance Research Articles

기업가적 지향성이 기업성과에 미치는 영향

This study empirically investigates the impact of entrepreneurial orientation (EO) on firm performance and the moderating effect of perceived corporate venturing. By employing the SUR (Seemingly Unrelated Regression) model, this research simultaneously analyzes the relationships between various types of firm performance, including the perceived entrepreneurial performance and the actual financial performance. The 2022 Entrepreneurship Survey data by the Korean Entrepreneurship Foundation was used to analyze 3,119 companies. The results show a positive relationship between EO and various firm performance measures. In addition, the authors find that organization’s perception on corporate venturing positively moderates the relationship between EO and firm performance. Sub-sample analyses further investigate potential variations in results based on company type (e.g., large-sized, medium-sized, small-sized firms) and industry growth stage (e.g., introduction phase, growth phase, maturity & decline phase). The findings of this study can be useful to guide managers in making informed decisions and implementing entrepreneurial strategies.

Antecedents and performance implications of stakeholder understanding in green product innovation

When developing green product innovations, firms are often confronted with a complex system of interdependent stakeholders and their interests. This study focuses on the holistic understanding of stakeholder interests and introduces the organizational capability of stakeholder understanding, defined as the degree to which a firm understands its stakeholder system. In particular, this study empirically examined the antecedents and consequences of stakeholder understanding in a green product innovation context. Through a two-stage survey approach, data were collected from 181 innovation professionals working in United States based manufacturing firms. Using hierarchical regression analysis, hypotheses about antecedents and consequences of stakeholder understanding are tested. Results show that stakeholder understanding is higher in firms with high innovation orientation, and lower in environments with high complexity. Results also show that stakeholder understanding has positive effects on three types of firm performance: green performance, market performance, and firm innovativeness. In addition, results of piecewise linear regression reveal that only for firms that exceed the median level of green orientation there is a positive relationship between green orientation and stakeholder understanding. The study's implications are that stakeholder understanding is a relevant capability for firms that aim to develop better and greener product innovations. To obtain stakeholder understanding, firms should strive for innovation and excel in green orientation, because only for truly green firms, green orientation helps to develop stakeholder understanding.

The influence of top management team gender diversity on firm performance during stable periods and economic crises: An instrumental variable analysis

Does a greater representation of women in top management teams (TMTs) contribute to higher firm performance? Although several studies have investigated this question, they have failed to sufficiently account for endogeneity. We address the endogeneity problem by using an instrumental variable (IV) design to estimate the causal effect of women’s representation in TMTs on firm performance. We use a shift-share or Bartik-type instrument, which is well-established in economics but has received little attention in management and leadership research. We analyze the effect of TMT gender diversity on four types of firm performance: profitability, market-based performance, liquidity, and growth. Our sample is based on firms in the S&P 1,500, which we observe over 24 years (1997–2020). Our findings indicate that TMT gender diversity positively affects the profitability, liquidity, and growth of firms but does not impact market-based performance. We also analyze whether the effect of TMT gender diversity was stronger during two economic crises, namely the 2008/2009 financial crisis and the COVID-19 pandemic, but our instrumental variable analysis provides no evidence for such an interaction effect. Our results are robust to multiple alternative specifications. This study contributes to research on strategic leadership, specifically regarding the effect of women leaders, as well as the crisis leadership literature.

Executive Compensation Complexity and Firm Performance

How does the complexity of executive compensation contracts affect firm performance? With unknown consequences, the compensation complexity of executives has been rising. We define and measure executive compensation complexity and relate it to accounting, market, and ESG (i.e., environmental, social, and governance) metrics of firm performance. CEO compensation complexity negatively affects all three types of firm performance. We explore theoretical explanations for this relationship and find that cognitively complex CEOs can better deal with complex contracts. The negative complexity effects disappear if firms use only financial goals. Complexity is more harmful in unstable and munificent industries. Complexity also mitigates the negative effect of CEO tenure on long-term performance. In addition, firm performance suffers if the top management team members have heterogeneously complex contracts. Robustness checks support these findings. We conclude that the trend of adding more metrics to executive compensation contracts is not a generally preferable solution to the new and more intense agency problems that firms encounter.

The impact of buyer-supplier communication on performance: A contingency and configuration approach

Although communication plays a fundamental role in the collaboration between buyers and suppliers, existing studies have not combined the communication media and content dimensions to analyze the complex communication phenomenon, therefore cannot answer “what to say” and “how to say” between buyers and suppliers to improve performance. This study combines these two dimensions to identify four communication activities between buyers and suppliers, lean media operational communication, lean media plan communication, rich media task communication, and rich media vision communication. We empirically examined the impacts of communication activities and communication patterns on operational and financial performance based on a sample comprising 200 Chinese manufacturers. Using the contingency approach, we found that lean media operational communication and rich media task communication enhance delivery performance, and rich media vision communication decreases delivery performance. Lean media plan communication and rich media task communication promote flexibility performance. Four types of communication indirectly increase financial performance via operational performance. Using the configuration method, we found that different communication patterns perform differently in terms of three types of firm performance. This research pioneers to combine the media and content perspectives to explore communication activities. The combination of contingency and configuration approaches provides a comprehensive angle in investigating communication-performance relationships.

Institutional force and firm performance: Do employee green involvement and flexibility‐oriented culture matter?

AbstractDespite the increasing awareness in perceived institutional force, whether and how it affects firm performance has not been confirmed. According to stakeholder theory, this article explores how perceived institutional force influences different types of firm performance via employee green involvement, as well as the moderating role of flexibility‐oriented culture. We collect two round data from 317 Chinese manufacturers to examine the hypotheses. The findings manifest that both perceived business and social force promote employee green involvement. Employee green involvement partially mediates the effect of perceived business force on financial performance, while fully mediates the effect of perceived business force on environmental performance. Additionally, employee green involvement partially mediates the effects of perceived social force on financial and environmental performance. Our research also indicates that flexibility‐oriented culture positively moderates the impacts of perceived business and social force on employee green involvement. This research enriches the institutional force literature by verifying how and under what conditions it impacts firm performance.

Friends or foes? A systematic literature review and meta‐analysis of the relationship between eco‐innovation and firm performance

AbstractEco‐innovation has gained currency as an effective means of addressing corporate environmental impacts. Yet the literature is inconclusive as to how different types of eco‐innovation influence different types of firm performance. This is problematic, as practitioners and policymakers will not embrace eco‐innovation unless there is clear evidence that through its implementation companies can achieve returns, not only on their environmental performance but also on their economic, social and operational performance. This paper aims to improve our understanding of this relationship by conducting a meta‐analysis and drawing on a much broader sample than previous meta‐analytic efforts in this field. The paper analyses 569 effects based on 160 studies and more than 124,000 firms ( ). Our results provide solid evidence of the positive impact eco‐innovation has on all types of firm performance but also highlight types of eco‐innovation that do not contribute to this relationship and the role moderators play in explaining discrepancies found in the literature.

Variable executive remuneration and company performance: Insights from the Johannesburg Stock Exchange, South Africa

Orientation: Agency theory predicts that agency relationships are subject to the principal-agent problem. Other theories also suggest that executives may tend to maximise sales revenues, or expand their spans of influence through growth, at the expense of the net value of the firm or its profitability. Research purpose: The purpose of this study is to test which forms of company performance are associated with higher executive variable pay ratios or determine the proportion of variable director remuneration to total remuneration. Motivation for the study: The extent to which variable remuneration is associated with different types of firm performance is unclear. Research design, approach and method: This study applies a simple panel regression model to test the extent to which the variable ratio of total director remuneration contributes differently to increases in firm revenue, total assets, return on assets, or measures of Tobin’s Q. These relationships are tested for listed companies on South Africa’s Johannesburg Stock Exchange, South Africa, for the years 2011–2014. Main findings: Variable remuneration is found to be negatively and strongly related to total revenue and negatively and weakly related to total assets (the gross measures of performance). In contrast, variable remuneration is weakly and positively related to Tobin’s Q, a measure which better reflects the interests of shareholders than gross measures. Practical/managerial implications: Firms in this context should seek to strengthen the linkages between variable remuneration and forms of performance that reflect the interests of stakeholders. Contribution/value-add: In the wake of global and local governance failures, this study suggests that the use of the variable component of executive remuneration might be helpful in aligning stakeholder interests. Further research might seek to better understand the causal mechanisms that underlie these findings.

Environmental Regulation, Environmental Commitment, Sustainability Exploration/Exploitation Innovation, and Firm Sustainable Development

The links among firms’ environmental regulation, innovation process, and sustainable development has been analyzed, but a research gap still remains in terms of environmental commitment and different types of sustainable innovation in firms’ sustainability. Through collecting a dataset of 380 valid respondents from Chinese manufacturing firms, this paper incorporates evironmental regulation, environmental commitment, sustainability exploration innovation, sustainability exploitation innovation, environmental performance, and business performance into a multiple mediating effect model. Our key emperical findings are as follows: (1) Environmental regulation not only cannot affect environmental performance and business performance, but also cannot affect the two types of firm performance through sustainability exploration innovation or sustainability exploitation innovation; (2) The relationship between environmental regulation, environmental performance (or business performance) is subsequently mediated by both environmental commitment and sustainability exploitation innovation; (3) Environmental regulation does not affect environmental performance (or business performance) through environmental commitment and sustainability exploration innovation. These results do, however, support the Porter Hypothesis in terms of revealing a new multiple mediating effect path dominated by environmental commitment and sustainability exploitation innovation. Our findings can provide a better understanding of how environmental commitment and sustainability exploitation innovation play a key effect in helping firms relieve the pressure from environmental regulation, and thus improve their environmental management while keeping their competitive edge.

Determinants of Vietnamese Listed Firm Performance: Competition, Wage, CEO, Firm Size, Age, and International Trade

This study investigates the relationship between firms’ competition, wage, CEOs’ characteristics, and firm performance (measured by net income per employee, return on assets (ROA) and return on equity (ROE)) of Vietnam’s 693 listed firms in 2015 using both the ordinary-least-square (OLS) and quantile regression methods. Triangulating the results coming from the analysis of three different measures of firm performance, this study consistently confirms that the sex of CEOs and chairman turns out to be insignificant in explaining firm performance and there is a negative association between capital intensity and firm performance. For financial firms, the age of a firm and average wage per employee are negatively associated with all types of firm performance. The quantile regression method shows that the age of a firm is negatively correlated with its net income per employee for small firms, while it is insignificant for medium-sized firms. Meanwhile, firm size is positively associated with firm performance. These results indicate Vietnam’s business activities are still concentrating on low labor cost, labor intensive, and low-tech production, thus, policies that promote innovation and high-tech applications should be encouraged.

When more is less

PurposeThe purpose of this paper is to analyze the role of a specific mechanism for cross-functional integration (CFI) in the relationship between product innovation and firm performance. It takes a contingency perspective, accounting for how these relationships vary depending on the degree of organizational knowledge complexity.Design/methodology/approachHypotheses are tested via regression analysis with interaction effects in a sample of 105 wineries from Spain, using both objective and subjective firm performance data.FindingsThe results obtained confirm the existence of significant triple interaction effect of CFI, knowledge complexity and product innovation on firm performance. CFI has a negative moderating effect on the relationship between product innovation and performance and this effect varies according to the degree of organizational knowledge complexity.Research limitations/implicationsThis paper looks at variables that have been hitherto studied at the project or product level, at the firm level, in an attempt to untangle the relationship between innovation, CFI, knowledge complexity and firm performance. Study’s main limitations lie in the use of a cross-functional design and its focus on a single industry.Practical implicationsFirms dealing with complex organizational knowledge could use this CFI mechanism in the development of new products when their size and resources do not allow the creation of more formal temporal structures, such as cross-functional teams. However, unless the winery has to deal with a high degree of knowledge complexity, involving the oenologist in several functional areas for the purpose of coordination, may detract resources from product innovation effort and lead to a poorer performance.Originality/valueThis study showcases a mechanism of CFI not explored in previous research, but used in practice at many firms, i.e. the cross-pollination of ideas across different functional areas through the participation of the responsible for the product development, and tests its role in the relationship between product innovation and different types of firm performance.

Green entrepreneurial orientation for enhancing firm performance: A dynamic capability perspective

Despite much attention has been focused on the importance of green entrepreneurial orientation, its impacts on environmental and financial performance remains unclear. Drawing on dynamic capability theory, we hypothesized that green entrepreneurial orientation has positive influences on two types of firm performance. The relationship between green entrepreneurial orientation and firm performance is moderated by green technology dynamism and knowledge transfer and integration. We tested the research hypotheses using data from 264 Chinese firms. The results indicate that green entrepreneurial orientation has positive influences on both environmental and financial performance. In addition, green technology dynamism only negatively moderates the relationship between green entrepreneurial orientation and environmental performance, while knowledge transfer and integration positively moderates the relationships between green entrepreneurial orientation and environmental and financial performance. This study enhances our understanding on green entrepreneurial orientation, described as a dynamic capability, can exploit new ideas and encourage innovativeness, show a propensity to catch potential opportunities, and take risks in transforming the social economy into the social-ecological economy. This study provides suggestions for firms to achieve competitive advantages under conditions of uncertainty and for effective knowledge transfer and integration.

Advertising spending, firm performance, and the moderating impact of CSR

This article investigates the potential of corporate social responsibility (CSR) to influence the link between advertising spending and firm performance. Drawing upon the literature of CSR, we hypothesize that CSR positively moderates the relationship between advertising spending and firm performance. We focus on two types of firm performance: sales and firm value. Using two samples from both the hotel and restaurant industries, we found that firms with higher levels of CSR enjoy higher returns on advertising spending than firms with lower levels of CSR. We discuss the theoretical and managerial implications of these findings and provide direction for future research.

What one thinks determines one's actions: the importance of employees’ perception in implementing HR systems

Although a number of studies have focused on the mediating relationship between HR systems and performance at both a firm‐level analysis and a cross‐level analysis, only a few have examined the importance of employees’ perception in implementing HR systems. Using a massive database that included 6709 employees in 245 manufacturing firms in South Korea, this study examines the relationship between HR systems and two types of firm performance – financial performance and employee job satisfaction – through regression analyses and hierarchical linear modeling. In addition, the study investigates the mediating effect of the employees’ positive perception of HR systems. The results indicate that HR systems had an influence on the performance of firms and that the employees’ positive perception of HR systems had a mediating effect on the HR–performance relationship in both a firm‐level and a cross‐level analysis.

UNRAVELLING THE INTEGRATION MECHANISMS IN OPEN INNOVATION PROJECTS: THE CASE OF INTERORGANIZATIONAL NETWORKS

The way firms innovate has notably changed in recent years. A clear example is the manufacturing sector which has been experiencing a new revolution in production and innovation. Linked to this industrial shift, manufacturing firms have been adopting more open and collaborative practices to innovate. This phenomenon, known as Open Innovation (OI), is helping firms to acquire and explore knowledge from external sources (inbound process) and to exploit knowledge via the commercialisation of ideas and technology (outbound process). Even though numerous researchers have studied the adoption of OI and its relation to numerous strategic and organisational results, very few studies have focused on investigating the positive influence of diverse OI approaches and practices on multiple dimensions of firm performance from different angles. These drawbacks hinder the diffusion of OI practices and raise the question of whether it is convenient for any firm in any industry to adopt or not to adopt OI. Thus, this thesis helps to fill this gap by examining the extent to which OI practices are adopted by firms and other actors in unexplored mature manufacturing industries and by understanding the unidentified roles that these practices play in relation to different dimensions of firm and industrial performance. This thesis brings together different methodologies and data to investigate OI practices with a novel multi-perspective approach. Hence, OI practices are framed within the industrial context of manufacturing firms in Italy and Sweden, several actors in the food industry, small and medium-sized enterprises (SMEs) from the Italian foundry industry, and also within worldwide SMEs designing and producing supercars. More specifically, using data from 247 European manufacturing firms collected through a tailored OI survey, this thesis supports the relevance of internal context characteristics such as firm size and provides evidence of the relation between configurations of OI models and innovation performance. Through two case studies in the food industry, this thesis demonstrates novel forms of OI practices that can be characterised and adopted by different innovation actors within and around this mature industry. Likewise, drawing from 30 rigorous case studies of small and medium-sized foundries, this research for the first time illuminates the relation between the aggregations of some innovation practices (specifically internal R&D and inbound OI) with a contemporarily relevant dimension of environmental and industrial performance such as energy efficiency.Although foregrounding the practical implications of adopting OI practices, this project also investigates and attempts to contrast some of the theoretical perspectives used when researching OI in mature manufacturing industries. This thesis concludes with an integrative study of the main aspects of the research project to demonstrate the advantages of using a multi-perspective approach to study OI. This last study, originally inspired from two case studies of small carmakers, involved collecting data from 48 small and medium-sized manufacturers of supercars with a survey designed to evaluate OI influence on several types of firm performance. Collectively, the results from this thesis confirm the validity of OI in new research contexts and reveal a combined influence of specific innovation practices on innovativeness, but also on the dimensions of industrial, environmental, and social performance. This thesis contributes to theory and practice by empirically showing that even though OI and the results of practicing it are highly context dependent, adopting OI practices can definitely have a positive influence in the overall performance of firms in mature manufacturing industries, including SMEs and other small actors.

Who should be the respondent? Comparing predictive powers between managers' and employees' responses in measuring high-performance work systems practices

This study first examines the association between the effectiveness of high-performance work systems (HPWS) and two types of firm performance (the financial performance and productivity of a firm) in Korea and then compares the relative predictive power between employee responses and manager responses. The results indicate that the effectiveness of HPWS has a statistically significant positive effect on firm performance and that employee perception of the effectiveness of human resource (HR) practices explains more variance in the financial performance and productivity of firms than does managers' corresponding perception. This study highlights the importance of a firm's employees as a source of HR information.

Open Innovation - A Gold Mine or Fool’s Gold for Young Firms?

Executives often cite innovation as the critical capability necessary for their company’s growth and success. Open innovation has been heralded as an important approach for the acceleration of the innovation process, especially for large, established firms. The impact of open innovation practices of young firms, whose resources and capabilities differ significantly from those of more mature firms, has been left nearly unexplored. In addition, the quantitative analysis of the effects of open innovation on firm performance is scarce. While size comparisons are important, age-specific factors are potentially more influential on the outcomes of open innovation activities. Thus, this research seeks to compare different open innovation activities of young verses established firms, and explore their effects on innovation and financial performance. The analysis of survey-based data from 1,202 UK firms across multiple sectors shows that established firms engage more strongly in inbound activities while young firms are significantly more active in knowledge and technology transfer (outbound activities). However, these preferences are not always fruitful as only selected open innovation activities are beneficial for young and established firms. Different open innovation activities are relevant for different types of performance. This research contributes to theory and practice by questioning the generalizability of the open innovation concept and highlighting activity and age-specific factors that trigger the variability in the effect of open innovation activities on different types of firm performance.

Stocks and flows underlying organizations’ knowledge management capability: Synergistic versus contingent complementarities over time

What are the components of a knowledge management (KM) capability and how do they impact firm performance? Based on prior research, we modeled a firm's KM capability in terms of its accumulations of stock – in the areas of human resources, technology infrastructures, and strategic templates – and regulation of flow, via institutionalization and internal and external learning processes. We then considered the extent to which these components complement one another in their impact on two types of firm performance – efficiency, based return on assets, and value creation, assessed as Tobin's q (the ratio of the capital market value of the firm to the replacement value of its assets). We posited differential types of stock-flow complementarities across these two performance outcomes over time – stable, positive effects on firm efficiency, synergistic complementarity, and initially positive, but subsequently negative effects on value creation, contingent complementarity. Data gathered from 218 Korean firms supported this premise. Implications for practice in the evolving fields of organizational capability and complementarities were explored.

Linking firm performance to the Malcolm Baldrige National Quality Award implementation effort using multiattribute utility theory

Executives are searching for ways to deliver consistent improvements in productivity and profitability while addressing economic realities. One initiative that has been discovered by many organizations is the integration a quality process into their or ganization that is based on the Malcolm Baldrige National Quality Award (MBNQA). Many studies have been done showing that award winning companies tend to out perform peers and competitors, yet many managers are reluctant to under take the large initiative required to work toward the award. This reluctance may stem from the belief that the reported benefits are not those that are important for managers to justify the effort. The purpose of this research is to begin an exploratory study that examines the expectations of company managers, executives, and other professionals regarding the types of firm performance and returns that would be needed to justify undertaking the MBNQA process. The results showed that while financial performance of the firm is the strongest justification managers consider, and that while their expectations for improved financial performance are some what high, the financial returns are certainly not out of the realm of normal expectations for returns from other projects.