Types Of Firms Research Articles

Valuation Implications of Mandatory CSR Expenditure in India

We examine the value‐relevance of corporate social responsibility (CSR) expenditure utilizing the Indian setting of mandatory CSR spending regulation which commenced in 2014. India is the only country where regulators mandate both CSR reporting and spending. Our interest is in two types of firms that meet the minimum specified thresholds: firms that voluntarily made CSR expenditures pre‐regulation (voluntary spenders) and firms that did not (forced spenders). This separation in revealed preference allows researchers and investors to observe, at least on average, a firm's true CSR strategy type (proactive/leader versus reactive/follower) through their pre‐regulation expenditure strategy. This unique quasi‐experimental setting allows us to investigate whether CSR spending is positively associated with shareholders’ value, both when spending was voluntary pre‐regulation (for voluntary spenders) and after it became mandatory post‐regulation (for voluntary and forced spenders). We find that for voluntary spenders, the markets assess CSR expenditure as valuation‐enhancing pre‐regulation, but post‐regulation the valuation benefits are significantly weakened. The market's assessment is that a forced spender's (imposed) CSR expenditure is, on average, less valuable than that of voluntary spenders, consistent with such spending being viewed as a form of corporate taxation. Further, we find that shortfalls from the required spending amount are penalized by the market for voluntary spenders but rewarded for forced spenders. We also find that advertising appears to play an important communication role both pre‐ and post‐regulation. We view the results as being consistent with the notion that mandated expenditures are viewed differently than those made voluntarily.

Populist resentments and identities and their repercussions on firms and regions. The example of East Thuringia

Abstract Right-wing populism and related geographies of discontent have become central subjects in the recent debate on regional inequalities. The present contribution seeks to complement existing, predominantly synoptic approaches by looking at specific economic practices of local actors. We argue that exclusionary regional political identities are transferred to firms and shape corporate practices. Using 65 semi-structured interviews with representatives from firms in East Thuringia, we analyze these processes and how they affect recruitment, customer-relations and local business networks in different types of firms. Furthermore, we show that these practices can have a negative impact on the business location and thus contribute to the consolidation of existing regional inequalities.

PROTOCOL: Effects of interventions to improve access to financial services for micro-, small- and medium-sized enterprises in low- and middle-income countries: An evidence and gap map.

PROTOCOL: Effects of interventions to improve access to financial services for micro-, small- and medium-sized enterprises in low- and middle-income countries: An evidence and gap map.

Long-term performance of technology acquisitions: The role of acquisition program diversity, innovation, and alliance portfolio size – Evidence from the pharmaceutical industry

This study investigates whether serial acquisitions enhance shareholder value in the context of technology acquisitions. We analyze how acquisition program diversity – defined as differences between multiple targets' firm types – affects long-term acquisition performance and examine how this relationship is contingent on strategic resources. By testing data regarding 312 technology acquisitions by 147 public pharmaceutical companies from 2002 to 2021, we find that the effect of acquisition program diversity on shareholder value follows an inverted U-shaped curve moderated by the acquirers' innovation level and alliance portfolio size. Our findings indicate that the performance of technology acquisitions depends on the acquiring firms’ diversification degree regarding the industry value chain and internal and external resources relevant to corporate development strategies.

Supply chain risk and resilience in startups, SMEs, and large enterprises: a systematic review and directions for research

PurposeThis systematic literature review analyzes the academic literature to understand SC risk and resilience across different organizational sizes and industries. The academic literature has well discussed the causes of supply chain (SC) risk events, the impact of SC disruptions, and associated plans for SC resilience. However, the literature remains fragmented on the role of two fundamental elements in achieving SC resilience: the firm's size and the firm's industry as firms' contingent factors. Therefore, it is important to investigate and highlight SC resilience differences by size and industry type to establish more resilient firms.Design/methodology/approachBuilding upon the contingent resource-based view of the firm, the authors posit that organizational factors such as size and industry sector have important roles in developing organizational resilience capabilities. This systematic literature review and analysis is based on the structural and systematic analysis of high-ranked peer-reviewed journal papers from January 2000 to June 2021 collected through three global scientific databases (i.e. ProQuest, ScienceDirect, and Google Scholar) using relevant keywords.FindingsThis systematic literature review of 230 high-quality articles shows that SC risk events can be categorized into demand, supply, organizational, operational, environmental, and network/control risk events. This study suggests that the SC resilience plans developed by startups, small and mdium-sized enterprises (SMEs), and large organizations are not necessarily the same as those of large enterprises. While collaboration and networking and risk management are the most crucial resilience capabilities for all firms, applying lean and quality management principles and utilizing information technology are more crucial for SMEs. For large firms, knowledge management and contingency planning are more important.Originality/valueThis study provides a comprehensive review of the literature on SC resilience plans across different organizational sizes and industries, offering new insights into the nature and dynamics of startups', SMEs', and large enterprises' SC resilience in different industries. The study highlights the need for further investigation of SC risk and resilience for startups, SMEs, and different industries on a more detailed level using empirical data. This study’s findings have important implications for researchers and practitioners and guide the development of effective SC resilience strategies for different types of firms.

German Firms in International Trade: Evidence from Recent Microdata

Abstract In this paper, we zoom in on the firm level of German merchandise foreign trade, using a novel data base with information on the export and import value by firm, country, product and year for the period 2011–2019. Problems arising from the consolidated reporting of taxable entities and the reporting thresholds present in intra-EU trade have been largely eliminated through redistributions conducted by DESTATIS. Using the data, we examine how global German firms are by looking at the joint distribution of the number of products they trade and the number of countries they trade with. Moreover, we examine the importance of firms mainly engaged in trade intermediation, as opposed to production. Most importantly, we provide a rich description of heterogeneity among German firms by decomposing their trade relationships into intensive margins (value of trade) and extensive margins (number of firms, products and countries). We describe the distributions for each margin, distinguishing intra-EU and extra-EU trade as well as different firm types (producers, wholesalers, retailers). Finally, we reveal strong positive correlations between and within importing and exporting margins, supporting the presence of firm-level complementarities implied by recent theory.

Can public environmental concern inhibit the market entry of polluting firms: Micro evidence from China

When constructing a multigovernance environment system, it is important to systematically study the impact of the public’s environmental concern on the behavior of polluting firms. In relation to the market entry of polluting firms, this paper explores whether public concern for the environment can effectively reduce the likelihood of such firms entering the market to achieve control of pollution emissions at the source. Benchmark analysis shows that an increase in public environmental concern can inhibit the market entry of polluting firms in the region. Heterogeneity analysis shows that public environmental concerns exert a stronger effect on preventing the market entry of nonstate-owned firms and firms in developed regions than on other firm types. Mechanism analysis shows that improving the severity of environmental regulations, encouraging firms to make greater investments in environmental protection, and inducing firms to pursue additional environmental R&D innovation are effective mechanisms by which public environmental concern restrains the market entry of polluting firms in the region. Expansion analysis demonstrates that public concern about the environment can lessen the pollution emission intensity of new firms and promote certain new firms to carry out boundary layout. This research offers a scientific basis and policy reference that can serve to guide the public in actively participating in environmental governance.

Financing Constraints, Other People’s Money Strategy, and Enterprise Innovation

ABSTRACT Innovation is the driving force of social and economic development, and there is a certain consensus that financing constraints inhibit enterprise innovation. However, the role of Other People’s Money strategy in the link between financing constraints and enterprise innovation is largely ignored. Using the sample of A-share non-financial listed companies from 2008 to 2017, this study first examines the relationship between financing constraints and enterprise innovation and then investigates the role of Other People’s Money strategy in this link. In addition, we explore how the impact of Other People’s Money strategy varies with firm type (state-owned enterprise [SOE] vs. non-SOE) and with the level of regional financial marketization. We find that (1) financing constraints inhibit enterprise innovation, (2) Other People’s Money strategy can mitigate the negative effect of financing constraints on enterprise innovation, and (3) the mitigation role of Other People’s Money strategy is more significant in non-SOEs and in areas with low financial marketization level. The findings of this paper shed new light on the literature of financing constraints, innovation, and Other People’s Money strategy.

Territorial assets and SMEs competitiveness: the case of prefecture of Thessaloniki, Greece

ABSTRACT This study examines the impact of territorial assets on firms’ competitiveness in the Prefecture of Thessaloniki. Questionnaires were handed out to 1311 small- and medium-sized firms located in the area. The research instrument included 27 territorial assets where respondents evaluated the performance of Thessaloniki in these factors. The analysis used Confirmatory Factor Analysis (CFA) and Structural Equation Modelling (SEM) techniques and included two parts according to the type of firms. The first concerned Commercial firms and the second Industrial Firms. The models for Service firms were not valid; hence, there were excluded. The results indicated that territorial assets are connected with firms’ competitiveness since in both models all-structural relationships were statistically significant. Territorial assets have a different impact according to the sector. For commercial firms, Agglomeration, Labour and Cost influence positively their competitiveness. In contrast, industrial firms’ competitiveness is associated with Connection and Institution. Overall, it seems that Thessaloniki has more of a commercial character rather than an industrial one. Furthermore, firms’ competitiveness in the area is aligned with sustainability. In particular, the commercial and industrial sectors operate relatively providing fertile ground for the development of business practices that also met the needs of the community.

Mixed Market Structure and R &D: A Differential Game Approach

We consider a dynamic model of an industry consisting of a few large firms, which can manipulate the market outcome, and a mass of small enterprises, each of which has a negligible impact on the market. The production costs of the respective firms depend on the stock of knowledge capital, which accumulates over time through research and development (R &D) investment made by large firms. The model is a variant of the differential game of voluntary provision of public goods, but in contrast to previous studies, we focus on the interaction between market competition and dynamic game outcomes. We derive both open-loop and Markov-perfect Nash equilibria. There exists a unique open-loop Nash equilibrium. By contrast, depending on the parameters of the model, there can be two linear Markov-perfect Nash equilibria. We also examine the short- and long-run effects of a change in the number of large firms. An increase in the number of large firms unambiguously harms both types of firms in the short run but may benefit them in the long run. In the open-loop Nash equilibrium, the relationship between the number of large firms and the steady-state stock of knowledge capital is inverted-U shaped. Concerning the Markov-perfect Nash equilibria, the effect of increased competition from large firms depends on the specific feedback strategy chosen in equilibrium.

Incentivizing green technology innovation to confront sustainable development

Sustainable development relies to some extent on the ability of key industries to transition towards production based on green technologies. The shift to green technology can occur through incremental innovation or disruptive innovation. Moreover, market forces will not usually promote a shift to green products without government intervention. We assume a market where incumbents and new entrants, characterized as low and high-cost producers, respectively, manufacture a product. They receive subsidies from the government for choosing a type of green technology innovation, which, in turn, affects their production costs. Two types of incentives are considered: subsidizing technology innovation or the product itself. The theoretical model and numerical simulations developed herein indicate that both types of firms choose incremental innovation when subsidizing the product. However, when subsidizing green innovation, new entrants are the first to choose disruptive innovation. Interestingly, incumbents will follow only if the subsidy is high enough. Our results suggest that new entrants, disadvantaged by their higher costs, use the subsidy to catch up with incumbents. Therefore, they embrace disruptive innovation to potentially change the market's structure in their favor. We discuss the policy implications of these results for advancing sustainable development.

Capital misallocation in Chinese industrial firms

AbstractThis paper investigates the impact of volatility in profitability shock, capital price distortion and adjustment costs on capital misallocation among Chinese industrial firms. We estimate a dynamic model pertaining firms' investment decision, incorporating institutional differences between state and private firms, so the model can reproduce salient features observed from Chinese firms. Our analysis shows: (i) capital price distortion is more severe among state firms than private ones; (ii) adjusting capital is more costly for state than private firms; (iii) volatility in profitability shock is a major source that causes capital misallocation for both types of firms.

Incumbent entry modes and entry timing in sustainable niches: The plant-based protein transition in the United States, Netherlands, and United Kingdom

While literature on sustainability transitions has generally portrayed incumbent firms as reluctant to engage in sustainable niches and primarily employing strategies that aim to limit niche growth, practice offers many examples that contradict this. In this paper, we mobilize insights from organizational literature, and particularly the concept of entry modes and entry timing from the international business and strategy literature, to investigate incumbent firms’ engagement in sustainable niches through the introduction of new products, collaborative efforts with new entrants, the introduction of new brands, mergers & acquisitions, and investments. We focus on entry modes of incumbent firms, including food firms, meat processors, retailers, and food service firms, in meat substitute markets in the United States (US), the Netherlands (NL), and the United Kingdom (UK). We identify distinct entry mode patterns for the four firm types and that the entry modes of different types of incumbent firms vary in their timing and commitment towards the plant-based meat substitute niche. Contrary to the general consensus stemming from previous literature on incumbent engagement in transitions, our case shows that incumbents proactively engaged with niche products incentivized by economic opportunities stemming from changing consumption patterns, which preceded any regulatory action.

Financial performance prediction model based on firms’ internal capability determinants: evidence from listed firms in Thailand during the transition period of going public

This study attempts to develop a financial performance prediction model, which explores the relationship between the internal capability determinants and the financial performance of public firms both before and after the firms participated in the Stock Exchange of Thailand (SET). The regression and logistic regression methods are employed in this model based on two internal capability determinants, namely firm financial strengths and firm characteristics. The evaluation is based on 111 listed firms that entered the SET between 2003 and 2014, inclusively. Decision makers can make use of the developed model to predict their firms’ financial performance in relative groups (high, medium and low performance groups) during the transition years when they become public. Unlike prior studies, this study includes the effect of time by considering the relative transition years (compared to the year that the firms join the stock market), which are not the calendar years. As a result, the true timing effect on the firm performance before and after going public can be discovered. The empirical evidence shows that the firms have to maintain different levels of determinants during different years of operation to yield a better financial performance. In addition, they can use the results of the prediction to prepare the most effective investment plan with the strategy of when and how much should be invested for each relative type of firms in order to upgrade its financial performance in relative to other firms in the marke Financial performance prediction model based on firms’ internal capability determinants: evidence from listed firms in Thailand during the transition period of going publicAll authorsNavee Chiadamrong & Tanakrit Wattanawarangkoonhttps://doi.org/10.1080/23311916.2023.2216860Published online:25 May 2023Display full size

Family vs non family networks: Chile, Mexico and Peru

ObjetivoAnalisar redes de diretores de empresas familiares e não familiares no Chile, México e Peru.MetodologiaA análise das redes sociais permitiu analisar a posição das empresas familiares na estrutura das redes a nível local e transnacional.ResultadosAs empresas familiares têm um nível mais elevado de ligações cruzadas com outras empresas, especialmente as empresas familiares. Além disso, é mais provável que as empresas familiares ocupem posições intermediárias nas estruturas das redes nacionais. Por último, têm também mais referências cruzadas com outras empresas nacionais e em regiões geográficas próximas, pelo que criam redes transnacionais.OriginalidadeEncontramos evidências que sustentam os três pilares da literatura sobre familiaridade interorganizacional (Lester e Cannella 2006). As empresas familiares fazem parte de uma rede nacional e internacional mais do que outros tipos de empresas através do interconexões de cargos nos conselhos de administração.

Incidence and Performance of Spinouts and Incumbent New Establishments: Role of Selection and Redeployability within Parent Firms.

Using matched employer-employee data from 30 U.S. states covering a wide range of industries, we compare spinouts with new establishments formed by incumbents (INEs). We propose a selection-based framework comprising idea selection by parents to internally implement ideas as INEs, entrepreneurial selection by founders to form spinouts, and exit selection to close ventures. Consistent with parents choosing better ideas in the idea selection stage, we find that INEs perform relatively better than spinouts, and more so with larger parents. Regarding the entrepreneurial selection stage, we find evidence consistent with resource requirements being a greater entry barrier to spinouts. Parents' resource redeployment opportunities are associated with lower relative survival of INEs, consistent with their being subject to greater selection pressures in the exit selection stage. Spinouts, or new ventures started by employees leaving a parent firm, have received special attention because spinouts tend to outperform other types of new firms. This superior performance is typically attributed to the better knowledge and higher-quality ideas developed by founders at the parent firms. However, parent firms can also select and implement such ideas internally, particularly if they are good quality ideas. We compare spinouts with new establishments formed within parent firms and find that consistent with such a process of selection, the latter outperform spinouts, more so in the case of larger parents. Interestingly, new establishments of parent firms tend to close at a greater rate than spinouts, consistent with parent firms being able to redeploy resources elsewhere within their firms.

MARKET-ORIENTED REFORMS AND FIRMS’ INNOVATION: EVIDENCE FROM CHINA

Based on a micro dataset of Chinese manufacturing firms, we examined the effect of market-oriented reforms on innovation of Chinese manufacturing firms and its mechanisms. Results show the following. (1) The market-oriented reforms significantly improved the innovation performance of Chinese manufacturing firms. Among the various components of the market-oriented process, the development of the product markets had the greatest effect on promoting firms’ innovation. (2) Alleviating the financial constraint of firms and triggering the “competition effect” were important ways for market-oriented reforms to improve innovation performance. (3) The effect of market-oriented reforms on the innovation of various types of firms (different industry types, scale types, ownership types, regional types, exporters and non-exporters) was not the same, and significant heterogeneity was observed. This study enriches the research literature on market-oriented reforms and firms’ innovation and provides new micro evidence for understanding the effect of market-oriented reforms on firms’ innovation performance.

Tangible and intangible investments and sales growth of US firms

This article presents new insights into the evolving relation among different types of investments and the growth in sales of US nonfinancial listed firms during the 1979–2018 period. By means of quantile regressions, it is observed an increasing relevance over time of intangible investments vis-à-vis a stable or declining contribution of capital expenditure for all types of firms. However, the impact of different types of intangible investment differs depending on the kind of firm. Whereas advertising has a growing relevance on all types of firms except the top decile in growth distribution, the positive effects of research and development become increasingly concentrated in high-growth firms.

Place-making in the Mersey Dee before and after Brexit and COVID-19 disruption: A typology of companies and their engagement with their localities and key actors

The purpose of this paper is to develop a typology of firms operating in a peripheral economy. A three-way typology is presented which builds on previous studies, distinguishing between the ‘pure agglomeration’,” ‘industrial complex’ and ‘social network’ models. This typology is refined and applied to the Mersey Dee area, a cross-border region within the UK with a dispersed, segmented economy. Two case studies of firms located in the Mersey Dee are explored to test the typology and examine how these firms related to their places and to other firms and institutions, in the context of rapidly changing market conditions due to COVID-19 and Brexit. The findings confirm the typology and establish a clear contrast between firm types operating in a peripheral economy such as the Mersey Dee, providing relevant insights into the contributions they can make and how balanced regional development policies could support the heterogeneity and richness of their place-based economies. These approaches will differ from the traditional agglomeration or cluster model, typically advocated to build sustainable economic centres. Further research is recommended through comparator case studies of similar regions internationally, within the typology presented.

Human capital and domestic value added in exports: evidence from China

ABSTRACT Based on the data of Chinese manufacturing firms from 2000 to 2006, this study takes the university enrolment expansion policy implemented by the Chinese government in 1999 as a quasi-natural experiment, and uses the difference-in-difference (DID) method to identify the effect of human capital expansion on the ratio of domestic value added in exports to gross exports (DVAR) of firms. Results show that human capital expansion significantly improves the firms’ DVAR through the ‘intermediate product substitution’ channel (promoting firms to use more domestic intermediate inputs to replace imported intermediate inputs in production) and the ‘markup’ channel (promoting the increase of firms’ markup). At the same time, significant heterogeneity exists in the effects of human capital expansion on the DVAR of different types of firms. These results provide new empirical evidence from the perspective of firm DVAR for further understanding of the microeconomic effects of human capital.