Variation In Firm Performance Research Articles

Green Core Competencies, Green Process Innovation, and Firm Performance: The Moderating Role of Sustainability Consciousness, a Mixed Method Study on Golf Hotels

Sustainability of biological, social, and economic systems is crucial for protecting our common future and preserving the balance between nature and humans. Environmental concerns should be adopted by all units of society and sustainability awareness should be adapted to all processes through optimum technologies both in daily life and in business management. The basic objective of this article is to determine the effects of green core competencies, green process innovation, and firm performance variables on each other and to examine the moderating role of sustainability consciousness on these effects. A survey and semi-structured interview forms were preferred as data collection methods. In the analysis of the survey data, AMOS was adopted to test the hypothetical model and the Hayes Process macro was employed to determine the moderating effect. The data of interview forms were analyzed with the bag of words model. The research results show that green core competencies positively affect green process innovation and green process innovation positively affects firm performance. In addition, the moderating effect of the attitudinal and behavioral dimensions of sustainability awareness on the impact of green process innovation on firm performance is supported, while the moderating effect of the sustainability knowingness dimension is not supported.

IMPACT OF LEADERSHIP STYLES ON PERFORMANCE IN SMALL AND MEDIUM-SIZED ENTERPRISES IN MANIPUR

This quantitative study examined the impact of leadership styles on the performance of small and medium enterprises (SMEs) in Manipur, India. Transformational, transactional, and passive avoidant leadership were measured as independent variables. Firm performance consisted of sales growth, return on investment (ROI), and growth in the number of employees over the past year. A sample of 197 SME leaders participated in the survey. Correlation and regression analyses tested the relationship between leadership styles and aspects of SME performance. Results demonstrated that transformational leadership had robust, significant positive associations with all three performance measures. Transactional leadership also positively predicted sales growth and ROI. In contrast, passive avoidant leadership could have been more inconsequential or mildly detrimental for SMEs. Together, the leadership styles accounted for 19-24% of variation in firm performance. The findings highlight the crucial role of engaged leadership approaches centred on inspiration, rewards, and modelling integrity for enabling Manipuri SMEs to thrive. Practical implications suggest integrating transformational leadership principles into local entrepreneurship training programs.

To diversify or not? The link between global sourcing of ICT goods and firm performance

ABSTRACT We analyse variation in firm performance as a function of the international diversification of ICT imports by firms. Drawing on administrative data from 2010 and 2014 on nearly 4000 German manufacturing firms, we find that firms with ICT sourcing that is diversified across multiple countries perform better than similar, less-diversified firms. This finding holds true for two performance metrics (value added and gross operational surplus) as well as for two indicators of diversification. Our paper thus contributes to deliberations on Europe's digital sovereignty.

“Firm performance” measurement in strategic management: some notes on our performance

Purpose Firm performance remains at the heart of strategic management. In the quest to refine the field’s contribution, Venkatraman and Ramanujam (1986) argued that reliance upon single measures of firm performance is risky and firm performance should be treated as a multidimensional construct. Subsequently, researchers have examined trends in firm performance measurement ever since. Over a decade since the last examination of this issue, this study aims to add to the ongoing conversation. Design/methodology/approach The authors investigated 1,972 research papers published in five premier management journals for the years 2015–2019 to determine if multidimensional measurement of firm performance has improved. Findings The findings suggest that approximately two-thirds of papers that measure firm performance are published using only a single measure of firm performance, and approximately three-fourths do not measure firm performance across multiple dimensions. Originality/value This study contributes to the literature by emphasizing the necessity to consider the dimensionality of firm performance, use multiple measures and consistently ground firm performance variables with theory – especially control variables – to keep firm performance as the focus of the strategy field. Evidence and implications are discussed and recommendations for researchers and reviewers are provided.

The influence of internal factors on micro and small enterprises performance: evidence from Tanzanian agri-food processors

Abstract Building upon resource-based view (RBV) theory, this cross-sectional study employed binary logistic regression to examine the influence of firm-level factors on the performance of 435 Tanzanian micro and small agri-food processing firms. The results of the study show that intangible resources, age (enterprise, manager), and management practices (target setting, working capital management, and performance monitoring) have a significant influence on firm performance. Firm size, tangible resources, and managers’ education level were not significant predictors of firm performance. The findings confirmed the RBV argument that intangible resources contribute more to the variation in firm performance compared to tangible resources. This study adds to the limited research on the combined effect of firm-specific characteristics, firm resources, managerial characteristics, and selected management practices on the performance of micro and small firms in emerging economies. The findings will help managers to identify success factors that are significant for better performance and will support policymakers to design strategies that can effectively contribute to the development of micro and small enterprises in the agri-food subsector.

Influence of Goal Setting and Branch Network of Asset on the Performance of Pharmaceutical Firms in Nigeria

Goal Setting is vital to the survival and sustainable performance of any organization in the face of the increasingly dynamic business environment. This study investigated the influence of goal setting and branch network of asset on the performance of pharmaceutical firms in Nigeria. A total of 55 copies of the questionnaire were administered to employees of Divine Essential Formulations Limited, out of which fifty-three (53) were retrieved and analyzed. Descriptive and inferential statistics multiple regression through Structural Equation Modelling (SMART PLS) were used for the analyses. The results show significant relationships between strategic planning and the firm's performance variables. The results also indicate that goal setting has significant effects on branch network of the firm at (?= 0.782, R2=0.611, t- statistics=8.970>1.96, P-value =0.000 <0.05). Also, the findings revealed that environmental scanning has considerable influence on a firm's market share at (?= 0.840, R2=0.706, t- statistics=23.685>1.96, P-value =0.000 <0.05). The results also indicate that strategy formulation has significant effects on a firm's profitability at (?= 0.811, R2=0.658, t- statistics=13.297>1.96, P-value =0.000 <0.05). It is therefore recommended that Divine Essential Formulations Limited management should regularly update its mission statement, sustain clear lines of authority, regularly appraisal the quality of its internal operations in line with the current happenings in the business environment, and update its key performance indicators to track the success of strategic initiatives and provides adequate financial resources needed forthe firm’sstrategy formulation, implementation, and evaluation.

Corporate lobbying and firm performance variability

This paper is the first to provide empirical evidence that higher lobbying expenditures are associated with higher operational performance variability. Using data from S&P1500 firms over the 2000–2020 period, our estimates indicate a positive relationship between lobbying expenditures and the variability of return on asset and return on equity. Addressing the endogeneity concerns by applying a control function approach, we find results consistent with the view that the management of lobbying firms takes riskier investment decisions.

The CEO effect and performance variation over time

While CEO effect scholars agree that variation in firm performance tends to persist over time and that CEOs’ performance contribution should be gauged against a changing context, recent CEO effect studies addressing these issues have made extreme but opposite claims concerning the magnitude of the CEO effect. We show why recent findings that indicate a much larger CEO effect are spurious. We also argue and empirically demonstrate that a multilevel model that includes autocorrelation can properly gauge CEOs’ performance contribution against a changing context while simultaneously avoiding confounding. Our empirical result shows that the opposite claim positing that the CEO effect is nearly indistinguishable from chance is likewise unwarranted. These findings have implications for CEO effect studies and other studies that use longitudinal firm performance data.

Board structure, firm performance variability and national culture

PurposeThe purpose of the study is to examine the relation between board structure and firm performance variability in an international setting. The authors further explore the effect of national culture in shaping such relations.Design/methodology/approachThe authors’ international sample contains 4,911 firms across 49 countries over the 2002–2017 period. The authors use national culture values on individualism and power distance developed by Hofstede (1980, 2001, 2011). The authors focus on within-firm, over-time variability of firm performance and estimate multivariate linear regressions with fixed effects. The authors address the endogeneity concern using the instrumental variable approach, and the authors’ results are robust to alternative measures of variables and different subsamples.FindingsThe authors find that firms with larger board size, greater board independence and less powerful CEOs have less variable performance. Individualism has a magnifying effect while power distance has a mitigating effect in shaping such relations.Originality/valueTo the best of the authors’ knowledge, this study is among the first to answer the call of Adams, Hermalin and Weisbach (2010) for research on corporate boards in an international setting. It is also one of the few studies which examine the variability of firm performance, while the majority of existing literature focuses on the level of firm performance. Most importantly, to the best of the authors’ knowledge, this study is the first to explore the role of national culture in shaping boardroom interactions that affect the decision-making process of corporate boards, which, in turn, affects firm performance variability.

How do firms in Sub‐Saharan Africa benefit from global value chains?

AbstractSub‐Saharan Africa has increased its presence in GVCs but remains the least integrated area in the world. In this paper, we go a step further in the related literature and descend to firm‐level data. Thus, we identify the determinants and effects of GVC participation of manufacturing firms in the region. We use indicators of the extensive and intensive margins of participation and of backward and forward integration. We find that good infrastructure, quality of institutions and security to prevent crime are conducive to participation. In contrast, lack of access to finance, the existence of an informal sector or high trade costs discourage participation. Finally, participation in GVCs has positive effects on firm performance variables (innovation, productivity, wages and employment).

Investment and Firm Performance Variability

Purpose - The study analyzed 90 online firms worldwise and observed them for ten years to investigate their investments and firm performance variabilities. This study attemped to verify the existence of agency problems in online firms. Through this, the paper intends to expand the scope of research in the fields of investment and firm value both empirically and in theory. This study also attempted to supplement the insufficient logic of previous studies by analyzing the relationship between investment and profitability.
 Design/methodology - In this study, the investment is subdivided into over-, under-, and neutral investments, and an empirical analysis of the firm performance was conducted. As investment generally has long-term effects, the impact of a firm's investment on future firm performance and variabilities in firm performance was considered over the short-and medium-term period.
 Findings - It was found that there was a negative relationship between firms with an overinvestment and future firm performance. Underinvestment has no clear statistically significant results on firm performance. This implies that overinvestment causes more reduction in future firm performance than underinvestment. It was also found that underinvestment and overinvestment significantly increased the variability of firm performance. A positive significance was found between under- and over- investment with a variability of 3 years and overinvestment with a variability of 4 years in the future. A negative relationship was found between neutral investment propensity and future performance variabilities. Neutral investment has less effect on the future performance variability of a firm than a firm’s overinvestment and underinvestment. For online firms, underinvestment and overinvestment have a greater effect on the firm's future performance variability than neutral investment.
 Originality/value - The agency theory predicts that information asymmetry and adverse selection problems exacerbate conflicts of interest among stakeholders, thus firm performance. The study contributed to accumulating research on online firms that are currently underexplored by analyzing the investment behavior of major firms in the online industry.

Understanding the dynamics of capital structure, corporate governance, and corporate social responsibility in high- and low-leveraged US and Chinese firms.

Corporate social responsibility turned into a global sensation from the inception of the twenty-first century in the corporate world and grabbed immense engrossment from all stakeholders in their decision-making process. Capital structure and corporate governance practices are the well-mellowed facets of corporate finance literature. In this study, the moderating role of corporate social responsibility (CSR) between corporate governance and leverage of the US and Chinese listed firms has been established, with a further extension of analyzing the moderating role of CSR between corporate governance and leverage in high vs low leveraged firms and high CSR vs low CSR firms as the novelty of this study and has never been examined in both economies and globally. The data of 1989 Chinese-listed firms from 28 sectors of the economy and 6640 US-listed firms from 27 sectors of the economy has been taken from 2001 to 2019 and analyzed through fixed effect regression and system generalized method of moment (GMM). Results of the study reveal that CSR and corporate governance are negatively associated with the leverage of both Chinese and US firms. Moreover, the moderating role of CSR has established between corporate governance and leverage negative relationship. The moderating role of CSR in the relationship of leverage and corporate governance is established only in low-leveraged firms whereas it is insignificant in high-leveraged firms. System GMM confirms the signs and significance of the regression results; that is why regression results are robust and reliable, and there is no endogeneity problem in our model. The study also gives an insight for future research on high- and low-leveraged firms and firms with more CSR score than less CSR score with other dimensions such as firm performance and firm value variables.

The Impact of Tourism Management on Firm Performance: Chiang Mai Tourism Industry Perspective

Due to the important of tourism industry, the entrepreneurs in tourism supply chain should concern about information sharing in order to increase service quality and the firm performance. However, there is limited study focusing on the impact of information sharing factor toward firm performance especially in tourism sector. This research aims to examined the consistency of structural equation modelling of an impact of information sharing on firm performance for tourism industry. Questionnaires were distributed to 280 participants in tourism industry in Chiang Mai, Thailand. Data were analysed by the analysis of CFA and SEM via LISREL 8.54. The structural equation modelling in information sharing and the performance of tourism industry in Chiang Mai were consistent with empirical data (χ²/df = 2.10, GFI = 0.88, AGFI = 0.98, RMSEA = 0.03, PCLOSE = 0.98, NFI = 0.98, IFI = 0.99 and CFI = 0.97). The SEM results presents that information sharing factor is positively relationship with tourism supply chain, service quality and firm performance variables. Also, Service quality is significant positive impact on Firm performance through information sharing at 0.01. Therefore, tourism supply chain and service quality with considering on information sharing can lead to the increasing of the firm performance.

Antecedents and effects of green supply chain management (GSCM) practices

PurposeDuring the previous two decades, “Green Supply Chain Management” (GSCM) has been gaining the attention of researchers and practitioners from various fields (e.g. operations, logistics and supply chain management). Its significance is constantly growing, and various studies are conducted in order to capture its overall organizational contribution. The present study attempts to bring together various organizational aspects that have never been collectively investigated before in the relevant literature. Under that rationale, a robust conceptual framework is developed and empirically tested. This framework includes 17 factors that are classified in three dimensions: (1) drivers of GSCM practices, (2) GSCM practices and (3) firm performance (GSCM outcomes).Design/methodology/approachThe examination of the proposed conceptual framework was performed using a newly developed structured questionnaire that was distributed to a sample of Greek manufacturing organizations. Supply Chain managers and Chief Executive Officers (CEOs) were used as key respondents, due to their knowledge and experience. After the completion of the three-month research period (last quarter of 2019), 292 useable questionnaires were returned. The empirical data were analyzed using the “Structural Equation Modeling” technique. The study is empirical (based on primary data), explanatory (examines cause and effect relationships), deductive (tests research hypotheses) and quantitative (includes the analysis of quantitative data collected with the use of a structured questionnaire).FindingsEmpirical results point out that internal environmental management, green innovative practices and environmental proactivity are GSCM practices with the most significant impact on firm performance. Moreover, the mediating role of GSCM practices in the relationship between GSCM drivers and firm performance is also highlighted. Finally, it was found that GSCM practices can explain 35% of the variance in firm performance and the drivers of GSCM practices can explain 78% of the variance of these practices.Originality/valueThe proposed three-dimensional conceptual framework of this empirical study and its underlining rationale has rarely been adopted in the relevant literature. Moreover, the study investigates which GSCM practices have an impact on firm performance, thus offering value to practitioners of the field. Also, it is one of the few similar studies that have been conducted on a European country.

재고최소화와 기업성과 간의 관계에 대한 실증분석

Purpose - Over the past two decades, many Korean steel companies have actively introduced lean practices into operations for competitive improvement. Taking this point into account, this study investigates the relationship between lean practices and firm performance in Korean Steel Companies.
 Design/Methodology/Approach - We employ the empirical leanness indcator (ELI) suggested by Eroglu and Hofer (2011) to measure the firm’s inventory leanness; this reflects how effectively a firm applies the lean practices, and we use the return on sale (ROS) and return on asset (ROA) as the firm performance variables. In order to analyze the impact of inventory leanness on firm performance, we investigate the relationship between the ELI and both ROS and ROA with regression. We conduct the analysis using 55 Korean steel companies for the period 2009-2019.
 Findings - First, ELI has a positive effect on ROS and ROA. Second, there is a positive relationship between firm size and firm performance. Third, the moderating effects of firm size on the relationship ELI and ROS (ROA) are insignificant.
 Research Implications - The main result of this study implies that the efforts of Korean steel companies to apply lean operations were fruitful in terms of firm performance. In addition, we propose that managers in the steel industry need to actively introduce lean approach for operational improvement.

Variance decomposition analysis: What is it and how to perform it – A complete guide for B2B researchers

Variance decomposition analysis allows partitioning the total variance in an outcome variable, e.g., firm performance, into several components. Such partitioning allows identifying groups of factors (e.g., firm-, industry-, and country-specific) that explain a significant portion of the variation in firm performance, thus helping researchers, managers, and policymakers better understand the sources of competitive advantage. The present study aims to inform scholars, particularly those in business-to-business (B2B) marketing, about the benefits of utilizing variance decomposition analysis and draw scholarly attention to the relevant statistical techniques needed to produce accurate estimates. We specifically point to multilevel modeling techniques due to their significant advantages over other approaches to decompose the variance in a given outcome variable. We provide a detailed step-by-step guide as well as the related Stata codes on conducting variance decomposition analysis with multilevel modeling techniques. Using a 10-year (2009–2018) dataset comprising 7281 distinct European B2B firms operating in 348 industries and 29 countries, we empirically examine the relative importance of firm, industry, country, year, and residual effects in driving firm performance for B2B firms. Our analysis shows that firm-specific factors have the highest relative importance for B2B firms' performance, followed by home country and industry effects.

Does striking a balance pay off? Implications of innovative ambidexterity for SMEs during COVID-19 crisis

PurposeExploration and exploitation have long been documented as prominent approaches to business management and organizational adaptation to external environment. Maintaining balance between these activities is a key to survival and prosperity. However, there is little direct evidence of the effect of such combined usage of both approaches on firm performance in times of crisis, especially within small- and medium-sized enterprises (SMEs). The purpose of this paper is to reveal the role of balanced ambidexterity in shaping firm performance during COVID-19 recession.Design/methodology/approachBased on a survey of 333 Russian SMEs, the authors test the proposed theoretical framework linking innovative ambidexterity to firm performance level and variability taking into account technological uncertainty.FindingsThe results show that innovative ambidexterity tends to increase level and decrease variability of performance outcomes, whereas technological uncertainty acts as a positive contingency for this impact.Originality/valueThe results provide an improved understanding of ambidexterity and organizational literatures by clarifying the contingent nature of the ambidexterity–firm performance relationship during COVID-19 recession.

Investigation of the Mediating Effect of Strategic Posture on the Relationship between Environmental Conditions and Firm Performance on the Logistics Sector

The effects of environmental conditions on firm performance are investigated in this study. Within the scope of the research, the relationships between the strategic posture and the performance of logistics companies in varying environmental conditions were examined. During this study, the interaction between variables was also investigated by predicting the presence of the mediating effect of strategic posture. In this context, a research model and related research hypotheses were developed. The created research model was comprised of the three-dimension of environmental conditions developed by Dess and Beard (1984), six dimensions of strategic stance developed by Venkatraman (1989), and firm performance variables. A survey related to the research was conducted with 264 people working in managerial positions in 218 logistics companies operating within the scope of the research to test the hypotheses in the research model. The analysis of the obtained data was performed by the Structural Equation Modeling (SEM) method utilizing the SPSS and AMOS software program. According to the analysis results, it was determined that the strategic posture variable has a full mediating effect between environmental conditions and firm performance. As a result, by enabling logistics companies to realize their strategic posture features, information was provided to guide them on how to improve their performance in changing environmental conditions.

The “CEO in context” technique revisited: A replication and extension of Hambrick and Quigley (2014)

AbstractResearch SummaryHambrick and Quigley's (2014) “CEO in context” (CiC) technique leads to a much larger CEO effect than traditional ANOVA or multilevel modeling. We replicate H&Q's study, apply their CiC technique to a much more comprehensive U.S. sample, and assess the sensitivity of the model findings to variations in method and data. We generally confirm H&Q's finding of a high CEO effect, but find a smaller industry effect and a larger firm effect in our much larger sample. Applying the CiC technique with adjusted R2s has only a moderate impact on year, industry, and firm effects, but markedly reduces the CEO effect. We also document that CiC model findings are sensitive to sample characteristics, namely firm size and CEO tenure.Managerial SummaryHambrick and Quigley (2014) introduced a new method to analyze the influence of CEOs on firm performance. The study's empirical analysis focused on large U.S. firms. We replicate the original study and extend it to a much larger, comprehensive sample of U.S. firms that is composed of 33,996 firm‐year observations, compared to 4,866 firm‐years in the original study. Controlling for the number of variables used in the estimations, the model attributes about a third of the total variance of firm performance (ROA) to the CEO. Further analyses show that the model findings differ for firms of different size and CEO tenure; the larger the firms and the longer the CEO tenures, the smaller tends to be the percentage of variance explained by the CEO.

Improper Uses of Stock Price Variables in Empirical Research: A Review Article

This review article shows how empirical studies are often inappropriate in using stock price data to be related to firm financial performance and other relevant variables. The analyses of the articles about stock price as a sample show that there is improper use of data on the stock price. Most of them use prices which are closing prices of annual financial statements, when financial statements information is not known to investors because the financial statements have not been published as of that date. All of the article samples used stock prices in absolute terms that are not relative to the movement of the stock price index. This indicates that the results of the previous studies in the articles fail to prove that stock price movements are really influenced by changes in the firm's financial performance and not because the stock market is bullish or bearish. It is recommended that future studies about the firm financial performance and the relation to stock price, consistent with the efficient market hypothesis (EMH) that the stock price should use the stock price after the publication of financial statements when all information about the firm is reflected in firm stock price. Consistent with the capital asset pricing model (CAPM) and arbitrage pricing theory (APT), the stock price should use the stock price relative to its stock market index to prove that the movement of the stock price is affected by the change in the firm financial performance.