Search results for: firm economies

Authors: Ilias A. Makris

Abstract:

In this work, we attempt to analyse the contribution of innovative activities to firm performance and growth. We examine economic data from some of the economies that were heavily affected by current economic crisis: the countries of southern Europe (Portugal, Italy, Greece, and Spain) and Ireland. Following literature, an appropriate econometric model is developed and several indicators are tested in order to disclose possible relation with innovative activity. Findings confirm the crucial effect of innovative process in economic activity, in firm and country level.

Keywords: Eurozone periphery, firm performance, innovative activity, R&D

Procedia PDF Downloads 456

Authors: Sy, Melecio Jr

Abstract:

The decision to adopt vertical integration (VI) is firm-specific, but there is a common practice among businesses in an industry to maximize the massive potential benefits of VI. This study aims to determine VI adoption in the restaurant industry in Davao City. Using a two-step sampling process, the study used a validated survey questionnaire among 264 restaurant owners and managers randomly selected and geographically classified. It is a quantitative study where the data were subjected to a structural equation model (SEM). The results revealed that VI is present but limited to procurement, production, restaurant services, and online marketing. Raw materials were outsourced while delivery to customers through third-party delivery services. VI slowly increased over ten years except for online marketing, which has grown significantly in a few years. The endogenous and exogenous variables were correlated and established the linear regression model. The SEM's best fit model revealed that strategic motives (SMOT) and market factors (MFAC) influenced VI adoption while MFAC is the best predictor. Favorable market factors may lead restaurants to adopt VI. It is, thus, recommended for restaurants to institutionalize strategic management, quantify the impact of double marginalization in future studies as a reason for VI and conduct this study during the new normal to see the influence of business efficiencies and firm economies on VI adoption.

Keywords: business efficiencies, business management, davao city, firm economies, market factors, philippines, strategic motives, structural equation model, supply chain, vertical integration adoption

Procedia PDF Downloads 42

Authors: A. Binnui, O. Kalinowska-Beszczynska, G. Shaw

Abstract:

It is postulated that innovative deployment of entrepreneurial activities leads to firm's growth. This paper draws upon the key predictions of the core theories on entrepreneurship and innovation to formulate a conceptual framework which can be used to depict the casual chain of events from which entrepreneurs can manage more innovatively and ultimately deliver higher growth which benefits of the regional and national economies. It examines the key firm-based factors extracted from the theories, namely the characteristics of entrepreneurial hi-tech firms, characteristics of innovating firms, and firm growth dynamics that lead to enhanced economic growth. The framework postulates that the key determinants extracted such as entrepreneurial demographics, firm characteristic, skills and competencies, research and development, product/service characteristics, market development, financial of the firm and internationalization might lead to the survival and long term development of high-technology startups.

Keywords: innovative entrepreneurial activities, entrepreneuship, determinants, growth, hi-technology start-upws

Procedia PDF Downloads 109

Authors: B. Urban

Abstract:

International entrepreneurship represents the process of discovering and creatively exploiting opportunities that exist outside a firm’s national borders in order to obtain a competitive advantage. Firms in emerging economies are increasingly looking towards internationalisation since they are faced with rising competition in their domestic markets and attracted to opportunities in foreign markets. This article investigates international entrepreneurship by examining how the influence of entrepreneurial intensity and capabilities at the firm level influence performance, while at the same time considering environmental influences on this relationship. Based on past theoretical and empirical findings, hypotheses are formulated and then tested using correlational and regression analysis. Generally, the results support the hypotheses where both entrepreneurial intensity and capabilities are positively related to internationalisation and firm performance, while weak evidence is found for environmental hostility as a moderating influence. Several recommendations are made in light of the findings, where it is suggested that firms foster higher levels of innovativeness, risk-taking and proactiveness while developing human, social and technology related capabilities in order to enhance their performance and increase their levels of internationalisation.

Keywords: international entrepreneurship, entrepreneurial intensity, capabilities, firm performance, exporting, South Africa

Procedia PDF Downloads 371

Authors: Kwadwo Yeboah

Abstract:

Background and Aims: The adoption of International Accounting Standards (IAS) is considered to be one of the most significant developments in the accounting profession. The adoption of IAS aims to improve financial reporting quality by ensuring that financial information is transparent and comparable across borders. However, there is a lack of research on the impact of IAS on financial reporting quality in emerging economies. This study aims to fill this gap by evaluating the impact of IAS on financial reporting quality in emerging economies. Methods: This study uses a sample of firms from emerging economies that have adopted IAS. The sample includes firms from different sectors and industries. The financial reporting quality of these firms is measured using financial ratios, such as earnings quality, financial leverage, and liquidity. The data is analyzed using a regression model that controls for firm-specific factors, such as size and profitability. Results: The results show that the adoption of IAS has a positive impact on financial reporting quality in emerging economies. Specifically, firms that adopt IAS exhibit higher earnings quality and lower financial leverage compared to firms that do not adopt IAS. Additionally, the adoption of IAS has a positive impact on liquidity, suggesting that firms that adopt IAS have better access to financing. Conclusions: The findings of this study suggest that the adoption of IAS has a positive impact on financial reporting quality in emerging economies. The results indicate that IAS adoption can improve transparency and comparability of financial information, which can enhance the ability of investors to make informed investment decisions. The study contributes to the literature by providing evidence of the impact of IAS adoption in emerging economies. The findings of this study have implications for policymakers and regulators in emerging economies, as they can use this evidence to support the adoption of IAS and improve financial reporting quality in their respective countries.

Keywords: accounting, international, standards, finance

Procedia PDF Downloads 42

Authors: Joanna Konstantinou

Abstract:

The study is about the challenges faced by entrepreneurs in a crisis context and in turbulent economies. The scope is to determine which factors, if any, are related to the success of a new business venture, such as innovation, access to funding and capital, enhanced digital skills, employment relations and organizational culture as well as a company’s strategic orientation towards international markets. The crisis context has been recorded to have affected the number of SMEs in the Greek economy, the number of people employed as well as the volume of the output produced. Although not all SMEs have been equally impacted by the crisis, which has been identified to affect certain sectors more than others, and although research is not exhaustive in that end, employment relations and patterns, firm’s age, and innovation practices in relation to employees’ learning curve seem to have a positive correlation with the successful survival and resilience of the firm. The aim is to identify important factors that can contribute positively to the success of a startup business, and that will allow businesses to acquire resilience and survive economic adversities, and it will focus on businesses of the Greek economy, the country with the longer lasting economic crisis and the findings will be lessons to learn for other economies.

Keywords: entrepreneurship, innovation, crisis, challenges

Procedia PDF Downloads 202

Authors: José Carlos Rodríguez, Mario Gómez

Abstract:

The aim of this paper is to get insight on the nature of university-industry technology transfer (UITT) and technology transfer offices (TTOs) activity at universities in the case of emerging economies. In relation to the process of transferring knowledge/technology in the case of emerging economies, knowledge/technology transfer in these economies are more reactive than in developed economies due to differences in maturity of technologies. It is assumed in this paper that knowledge/technology transfer is a complex phenomenon, and thus the paper contributes to get insight on the nature of UITT and TTOs creation in the case of emerging economies by using a system dynamics model of knowledge/technology transfer in these countries. The paper recognizes the differences between industrialized countries and emerging economies on these phenomena.

Keywords: university-industry technology transfer, technology transfer offices, technology transfer models, emerging economies

Procedia PDF Downloads 210

Authors: Olakunle Felix Adekunle

Abstract:

Innovation has become the key to firm success, and entrepreneurial leadership displayed by the top management team fundamentally drives innovation in firms. This paper discusses findings from an empirical study of factors influencing the success of firms operating in developing economies in an industry where science drives the pace of change. We find that success of firms in such industries depends on thriving innovation activity that in turn is primarily driven by effective entrepreneurial leadership of the top management team. The paper presents the dimensions of entrepreneurial leadership and its linkage to innovation and firm success in the form of testable propositions. Finally, a preliminary theory of firm success in industries where science drives the pace of change is also inducted from this empirical study and presented.

Keywords: leadership, innovation, firms, economic, efficiency, industry, resources

Procedia PDF Downloads 285

Authors: Mohammed Nishat, Ahmad Ghazali

Abstract:

This study empirically inspects the corporate governance and firm performance, and attempts to analyze the corporate governance and control related variables which are hypothesized to have effect on firm’s performance. Current study attempts to assess the mechanism and efficiency of corporate governance to achieve high level performance for the listed firms on the Karachi Stock Exchange (KSE) for the period 2005 to 2008. To evaluate the firm performance level this study investigate the firm performance using three measures; Return on assets (ROA), Return on Equity (ROE) and Tobin’s Q. To check the link between firm performances with the corporate governance three categories of corporate governance variables are tested which includes governance, ownership and control related variables. Fixed effect regression model is used to examine the relation among governance and corporate performance for 267 KSE listed Pakistani firms. The result shows that governance related variables like block shareholding by individuals have positive impact on firm performance. When chief executive officer is also the board chairperson then it is observed that performance of firm is adversely affected. Also negative relationship is found between share held by insiders and performance of firm. Leverage has negative influence on the firm performance and size of firm is positively related with performance of the firm.

Keywords: corporate governance, agency cost, KSE, ROA, Tobin’s Q

Procedia PDF Downloads 368

Authors: Syed Hassan Amjad

Abstract:

In today’s competitive environment, in order for a company to exist, it must continually improve its Performance by reducing cost, improving quality and productivity, and easy access to market.The purpose of this thesis is to check the firm financial growth and performance and which type of factors affect the firm financial performance. This paper examines the key determinants of firm financial performance. We will differentiate between financial and non financial drivers of the firm financial performance. For the measurement of the firm financial performance there are many ways but all the measure had been taken in aggregation, such as debt, tax rate, operating expenses, earning per share and economic conditions. This study has also been done in developed countries but these researches show that foreign companies face many difficulties inimproving the firm financial performance. In findings we found that marketing expenditures and international diversification had a positive impact on firm valuation. In research also found that a firm's ownership composition, particularly the level of equity ownership by Domestic Financial Institutions and Dispersed Public Shareholders, and the leverage of the firm, tax rate and economic conditions were important factors affecting its financial performance.

Keywords: debt, tax rate, firm financial performance, operating expenses, dividend per share, economic conditions

Procedia PDF Downloads 308

Authors: Suleiman Ahmed Badayi

Abstract:

Corporate governance literature is very wide and involves several empirical studies conducted on the relationship between board structure, composition and firm performance. The separation of ownership and control in organizations were aimed at reducing the losses suffered by the investors in the event of financial scandals. This paper reviewed the theoretical and empirical literature on the relationship between board composition and its impact on firm performance. The findings from the studies provide different results while some are of the view that board structure is related to firm performance, many empirical studies indicates no relationship. However, others found a U-shape relationship between firm performance and board structure. Therefore, this study argued that board structure is not much significant to determine the financial performance of a firm.

Keywords: board structure, composition, firm performance, corporate governance

Procedia PDF Downloads 525

Authors: Lucian J. Pitt

Abstract:

The primary purpose of this study is to understand the differences in the relationship between working capital management efficiency, working capital investment decisions and working capital finance decisions and the profitability of firms within the context of two African developing economies, Kenya and Nigeria. The study finds that there is a significant difference in the relationship between the firm’s profitability and the working capital variables which suggests different challenges for working capital management in each of these countries.

Keywords: working capital management, working capital investment, working capital finance, profitability, cash conversion cycle

Procedia PDF Downloads 323

Authors: Yan Wang, Yuan George Shan

Abstract:

This study examines whether earnings management reduces firm performance and how other comprehensive income (OCI) disclosure and strong corporate governance restrain earnings management. Using a data set comprising 6,260 firm-year observations from listed companies on the Shanghai and Shenzhen Stock Exchanges during 2009–2015, the results indicate that OCI disclosure generally improves firm performance, but earnings management lowers firm performance. The study also finds that OCI disclosure and corporate governance are complementary in restraining earnings manipulation and promote firm performance. The implications of the findings are relevant policy-makers and regulators in assisting them evaluate the consequences of convergence of Chinese Accounting Standards with the International Financial Reporting Standards.

Keywords: other comprehensive income, corporate governance, earnings management, firm performance, China

Procedia PDF Downloads 166

Authors: Pei-Gi Shu, Yin-Hua Yeh, Chao-Ting Chen

Abstract:

Using a dataset consisting of 7,120 firm-year observations from the Taiwan stock market over the 2007-2011 sample period, we find a significantly negative relationship between board external connectedness and firm diversification. We propose a learningeffect hypothesis indicating that an externally connected board member’s experiences in other companies directly affect his recommendations regarding the underlying firm’s diversification. The partial correlation between diversification and the performance of firms with externally connected board members is used as a proxy for the learning effect. The empirical results show that the learning effect is asymmetrically embedded in firm diversification, with negative experiences having a greater effect on firm diversification than positive experiences. Externally connected board members are associated with reduced diversification in one firm after they learn that diversification is detrimental to value in other companies. Moreover, the diversification of a firm due to board external connectedness is moderated by the controlling owner’s interest alignment and entrenchment.

Keywords: board, external, connectedness, diversification

Procedia PDF Downloads 430

Authors: Umut Erksan Senalp

Abstract:

The aim of this study is to examine the link between firm level productivity heterogeneity and firm’s decision to export. Thus, we test the self selection hypothesis which suggests only more productive firms self select themselves to export markets. We analyze UK manufacturing sector by using firm-level data for the period 2003-2011. Although our preliminary results suggest that exporters outperform non-exporters when we pool all manufacturing industries, when we examine each industry individually, we find that self-selection hypothesis does not hold for each industries.

Keywords: total factor productivity, firm heterogeneity, international trade, decision to export

Procedia PDF Downloads 329

Authors: Gebrehiwot H., Giorgis Bahita

Abstract:

Firms in Africa experience less financial market in comparison to other emerging and developed countries, thus lagging behind the rest of the world in terms of innovation and growth. Though there are different factors to be considered, underdeveloped financial systems take the lion's share in hindering firm innovation and growth in Africa. Insufficient capacity to innovate is one of the problems facing African businesses. Moreover, a critical challenge faced by firms in Africa is access to finance and the inability of financially constrained firms to grow. Only little is known about how different sources of finance affect firm innovation and growth in Africa, specifically the formal and informal finance effect on firm innovation and growth. This study's aim is to address this gap by using formal and informal finance for working capital and fixed capital and its role in firm innovation and firm growth using firm-level data from the World Bank enterprise survey 2006-2019 with a total of 5661 sample firms from 14 countries based on available data on the selected variables. Additionally, this study examines factors for accessing credit from a formal financial institution. The logit model is used to examine the effect of finance on a firm’s innovation and factors to access formal finance, while the Ordinary List Square (OLS) regression mode is used to investigate the effect of finance on firm growth. 2SLS instrumental variables are used to address the possible endogeneity problem in firm growth and finance-innovation relationships. A result from the logistic regression indicates that both formal and informal finance used for working capital and investment in fixed capital was found to have a significant positive association with product and process innovation. In the case of finance and growth, finding show that positive association of both formal and informal financing to working capital and new investment in fixed capital though the informal has positive relations to firm growth as measured by sale growth but no significant association as measured by employment growth. Formal finance shows more magnitude of effect on innovation and growth when firms use formal finance to finance investment in fixed capital, while informal finance show less compared to formal finance and this confirms previous studies as informal is mainly used for working capital in underdeveloped economies like Africa. The factors that determine credit access: Age, firm size, managerial experience, exporting, gender, and foreign ownership are found to have significant determinant factors in accessing credit from formal and informal sources among the selected sample countries.

Keywords: formal finance, informal finance, innovation, growth

Procedia PDF Downloads 45

Authors: Sazzad Hossain Talukder

Abstract:

Survival in the competitive international market with unforeseen environmental contingencies has always been a concern of the firms that led to adopting different strategies to deal with different situations. Language strategy is considered to enhance the international performance of a firm by organizing language diversity and fostering communications within and outside the firm. Yet there is a lack of theoretical attention or model development on the role of language strategy on firm international survival. From resource dependence perspective, the adoption of language strategy and its relationship with firm survival are determined by the firm´s capability to prevent dependency concentration and/or increase relative power on the external environment. However, the impact of language strategy on firm survival is complex and multifaceted as the strategy influence firm performance indirectly through communication, coordination, learning and value creation. The evidence of various types of language strategies and different forms of firm survival also bring in complexities to understand the effects of a language strategy on the international survival of a firm. Based on language literatures and resource dependence logic, certain propositions are developed to conceptualize the relationship between language strategy and firm international survival in this conceptual paper. For the purpose of this paper, a conceptual model is proposed to examine how different kinds of language strategy foster reduction of resource dependency that lead to firm international survival in respond to local responsiveness and global integration. In this proposed model, it is theorized that language strategy has a positive relationship with the international survival of the firm, as the strategy is likely to reduce external resource dependency and increase the ability to continue independent operations both in short and long term.

Keywords: language strategy, language diversity, firm international survival, resource dependence logic

Procedia PDF Downloads 237

Authors: Saad Bin Nasir

Abstract:

This research will examine the impact of corporate governance on firm performance in family and non-family owned firms in Pakistan. For the purpose of this research, corporate governance mechanisms which included are board size, board composition, leadership structure, board meetings are taken as independent variable and firm performance taken as dependent variable and it will be measured with return on asset and return on equity. Firm size and firm’s age will be taken as control variables. Secondary data will collect from audited annul reports of companies and panel data regression model will applied, to check the impact of corporate governance on firm performance.

Keywords: board size, board composition, Leadership Structure, board meetings, firm performance, family and non-family owned firms

Procedia PDF Downloads 344

Authors: Bakr Ali Al-Gamrh, Ku Nor Izah B. Ku Ismail

Abstract:

We investigate the relationship between corporate governance, leverage, risk, and firm performance. We use a firm level panel that spans the period 2008 to 2012 of all listed firms on Abu Dhabi Stock Exchange and Dubai Financial Market. After constructing an index of corporate governance strength, we find a negative effect of corporate governance on firm performance. We, however, discover that corporate governance strength indirectly improves the negative influence of leverage on firm performance in normal times. On the contrary, the results completely reversed when there is a black swan event. Corporate governance strength plays a significantly negative role in moderating the relationship between leverage and firm performance during the financial crisis. We also reveal that corporate governance strength increases firms’ risk and deteriorates performance during crisis. Results provide evidence that corporate governance indirectly plays a completely different role in different time periods.

Keywords: corporate governance, firm performance, risk, leverage, the UAE

Procedia PDF Downloads 501

Authors: Mohammed Nishat, Ahmad Ghazali

Abstract:

This study empirically examines the corporate governance and firm performance, and tries to evaluate the governance, ownership and control related variables which are hypothesized to affect on firms performance. This study tries to evaluate the effectiveness of corporate governance mechanism to achieve high level performance among companies listed on the Karachi Stock Exchange (KSE) over the period from 2005 to 2008. To measure the firm performance level this research uses three measures of performance; Return on assets (ROA), Return on Equity (ROE) and Tobin’s Q. To link the performance of firms with the corporate governance three categories of corporate governance variables are tested which includes governance, ownership and control related variables. Fixed effect regression model is used to test the link between corporate governance and firm performance for 267 KSE listed Pakistani firms. The result shows that corporate governance variables such as percentage block holding by individuals have positive impact on firm performance. When CEO is also the chairperson of board then it is found that firm performance is adversely affected. Also negative relationship is found between share held by insiders and performance of firm. Leverage has negative impact on the performance of the firm and firm size is positively related with the firms performance.

Keywords: corporate governance, performance, agency cost, Karachi stock market

Procedia PDF Downloads 315

Authors: Abhinav Kumar Rajverma, Arun Kumar Misra, Abhijeet Chandra

Abstract:

Family involvement in business is universal across countries, with varying characteristics. Firms of developed economies have diffused ownership structure; however, that of emerging markets have concentrated ownership structure, having resemblance with that of family firms. Optimization of dividend payout and leverage are very crucial for firm’s valuation. This paper studies dividend paying behavior of National Stock Exchange listed Indian firms from financial year 2007 to 2016. The final sample consists of 422 firms and of these more than 49% (207) are family firms. Results reveal that family firms pay lower dividend and are more leveraged compared to non-family firms. This unique data set helps to understand dividend behavior and capital structure of sample firms over a long-time period and across varying family ownership concentration. Using panel regression models, this paper examines factors affecting dividend payout and capital structure and establishes a link between the two using Two-stage Least Squares regression model. Profitability shows a positive impact on dividend and negative impact on leverage, confirming signaling and pecking order theory. Further, findings support bankruptcy theory as firm size has a positive relation with dividend and leverage and volatility shows a negative relation with both dividend and leverage. Findings are also consistent with agency theory, family ownership concentration has negative relation with both dividend payments and leverage. Further, the impact of family ownership control confirms the similar finding. The study further reveals that firms with high family ownership concentration (family control) do have an impact on determining the level of private benefits. Institutional ownership is not significant for dividend payments. However, it shows significant negative relation with leverage for both family and non-family firms. Dividend payout and leverage show mixed association with each other. This paper provides evidence of how varying level of family ownership concentration and ownership control influences the dividend policy and capital structure of firms in an emerging market like India and it can have significant contribution towards understanding and formulating corporate dividend policy decisions and capital structure for emerging economies, where majority of firms exhibit behavior of family firm.

Keywords: dividend, family firms, leverage, ownership structure

Procedia PDF Downloads 241

Authors: Idris Adamu Alhaji, Wan Fauziahbt Wan Yusoff

Abstract:

This study was conducted to identify the relationship between Corporate Governance attributes and Firm Performance, various studies, had been carried out mostly in developed countries, in order to identify the relationship between corporate governance attributes and firm performance. Since, the value creation of corporate governance can be measured through the firm performance, corporate governance act as a mechanism to align management's goals with the stakeholders especially to increase firm performance. Despite extensive study of corporate governance there is still an inconsistence relationship between corporate governance attributes and firm performance. Therefore, the aim of this paper is to identify the relationship between corporate governance attributes and firm performance. Five corporate governance element were used as independent variables which include: Independent director, board size, audit committee, leadership structure and board meeting. Meanwhile, the dependent variables are two firm performance measurements; return on equity (ROE) and earning per share (EPS). This study uses quantitative approaches whereby data were gathered from secondary source data were collected from Annual Reports of the companies, online journals etc. This study revealed that, there is a significant relationship between corporate governance attributes and firm performance. Therefore, the results show that good corporate governance practice influence firm performance. Finally, it's hoped that this study provides current corporate governance scenario in Malaysia that can be used to enhance the development of corporate governance of the country.

Keywords: corporate governance, return on equity, earning per share, financial performance

Procedia PDF Downloads 421

Authors: Doddy T. P. Enggarsyah, Soebowo Musa

Abstract:

Covid-19 pandemic has changed business environments and has spread economic contagion rapidly, as the stringent lockdowns and social distancing, which were initially intended to cut off the spread, have instead cut off the flow of economies. With no existing experience or playbook to deal with such a crisis, the prolonged pandemic can lead to bankruptcies, despite the fact that there are cases of companies that are not only able to survive but also to increase sales and create more jobs amid the economic crisis. This quantitative research study clarifies conflicting findings on organizational inertia whether it is a better strategy to implement during a disruptive environment. 316 respondents who worked in diverse firms operating in various industry types in Indonesia have completed the survey with a response rate of 63.2%. Further, this study clarifies the roles and relationships between organizational inertia, organizational creativity, organizational agility, and organizational resilience that potentially have determinants factors on firm performance in a disruptive environment. The findings of the study confirm that the organizational inertia of the firm will set up strong protection on the organization's fundamental orientation, which eventually will confine organizations to build adequate creative and adaptability responses—such fundamental orientation built from path dependency along with past success and prolonged firm performance. Organizational inertia acts like a control mechanism to ensure the adequacy of the given responses. The term adequate is important, as being overly creative during a disruptive environment may have a contradictory result since it can burden the firm performance. During a disruptive environment, organizations will limit creativity by focusing more on creativity that supports the resilience and new technology adoption will be limited since the cost of learning and implementation are perceived as greater than the potential gains. The optimal path towards firm performance is gained through organizational resilience, as in a disruptive environment, the survival of the organization takes precedence over firm performance.

Keywords: disruptive environment, organizational agility, organizational creativity, organizational inertia, organizational resilience

Procedia PDF Downloads 76

Authors: Chen Jun

Abstract:

This study investigates the impact of family involvement, a pivotal factor shaping the management structure of family firms, on the firm’s innovation outputs. The independent variable focuses on the percentage number of family members serving as directors, supervisors and senior management. Our hypothesis suggests that family involvement tends to make management more conservative, thereby increasing the likelihood of impeding innovation investments and resulting in adverse effects on innovation output. Our findings reveal that Chinese family firms with high family involvement exhibit poorer innovation outputs compared to those with lower family involvement. Subsample analyses indicate that this negative influence of family involvement on innovation output is strengthened as the firm faces higher industry competition and a low marketization context. The findings of our paper contribute to the literature on family involvement by empirically illustrating how family involvement hinders innovation efforts and performance in Chinese family firms.

Keywords: family firm, family involvement, firm innovation, Chinese family firm

Procedia PDF Downloads 24

Authors: Mutaju Marobhe, Pastory Dickson

Abstract:

This study explores the role of Foreign Direct Investment (FDI) in stimulating economic growth of emerging economies. FDIs have been associated with higher economic growth rates in developed countries due to the presence of conducive business conditions e.g. advanced financial markets which may accelerate the rate at which FDI boosts economic growth. So this study sets out to evaluate this macroeconomic phenomenon in emerging economies using the case study of Southern Africa Development Community (SADC) countries. The study uses Ease of Doing Business Index as a variable that moderates the relationship between FDI and economic growth. Panel data ranging from 2010 to 2019 from all SADC members are used and due to the unbalanced nature of the data, fixed effects regression analysis with moderation effect is used to assess this phenomenon. The conclusions and recommendations generated by this study will enable emerging economies to depict how they can be able to significantly improve FDI’s role in accelerating economic growth similarly to developed economies.

Keywords: ease of doing business, economic growth, emerging economies, foreign direct investment

Procedia PDF Downloads 116

Authors: Malki Nadia Fatima Zahra, Kellal Cheimaa, Brahimi Houria

Abstract:

Aim of the study is to show the role of total Quality Management on firm performance; the research relied on the views of sample managers working in the Marinel pharmaceutical company. The research aims to achieve many objectives, including increasing awareness of the concepts of Total Quality Management on Firm Performance, especially in the manufacturing firm, providing a future vision of the possibility of success, and the actual application of the Principles of Total Quality Management in the manufacturing company. The research adopted a default model was built after a review and analysis of the literature review in the context of one hypothesis main points at the origin of a group of sub-hypotheses. The research presented a set of conclusions, and the most important of these conclusions was there is a relationship between the Principles of TQM and Firm Performance.

Keywords: total quality management, TQM dimension, firm performance, strategies

Procedia PDF Downloads 25

Authors: Rancy Chepchirchir Kosgey, John Olukuru

Abstract:

This study examines the impact of introduction of futures trading on the spot price volatility in the commodity market. The paper considers the United States of America, South Africa and Ethiopian economies. Three commodities i.e. coffee, maize and wheat from New York Merchantile Exchange, South African Futures Exchange and Ethiopian Commodity Exchange are analyzed. ARCH LM test is used to check for heteroskedasticity and GARCH and EGARCH are used to check for the behavior of volatility between the pre- and post-futures periods. For all the three economies, the results indicate presence of the ARCH effect in the log returns. For conditional and unconditional variances; spot price volatility for coffee has decreased after futures trading in all the economies and the EGARCH has also shown reduction in persistence of volatility in the post-futures period in the three economies; while that of maize has reduced for the Ethiopian economy while there has been an increase in both the US and South African economies. For wheat, the conditional variance has been found to rise in the post-futures period in all the three economies.

Keywords: derivatives, futures exchange, agricultural commodities, spot price volatility

Procedia PDF Downloads 402

Authors: Ömer Akkaya, Muammer Zerenler

Abstract:

Ethics is important for all shareholders and stakeholders that a firm has in its environment. Whether a firm behaves ethically or unethically has a significant influence on consumers’ decision making and buying process. This research tries to explain business ethics from consumers’ perspective. The survey includes several questions to explain how consumers react if they know a firm behave unethically or ethically. What are consumers’ expectations regarding the ethical behavior of firm? Do consumer reward or punish the firms considering the ethics? Does it really important for consumers firms behaving ethical?

Keywords: business ethics, consumer behavior, ethics, social responsibility

Procedia PDF Downloads 309

Authors: Elhem Zaatir, Taher Hamza

Abstract:

Several governments seek to implement gender parity on boards, but the results of doing so are not clear and could harm corporations and economies. The present paper aims to investigate the relationship between women’s presence on boards and firms’ performance in the context of the French listed firms during the quota period. A dynamic panel generalized method of moment estimation is applied to control the endogenous effect of board structure and reverse the causality impact of the financial performance. Our results show that the impact of gender diversity manifests in conflicting directions, positively affecting accounting performance and negatively influencing market performance. These results suggest that female directors create economic value, but the market discounts their impact. Apparently, they are subject to a biased evaluation by the market, which undervalues their presence on boards. Added to that, our results confirm a twofold nature of female representation in the French market. The effect of female directorship on firm performance varies with the affiliation of the directors. In other words, the positive impact of gender diversity on return on assets primarily originates from the positive effect of non-family-affiliated women directors on market performance rather than on the effect of family-affiliated women directors on ROA. Finally, according to our results, women’s demographic attributes namely the level of education and multiple directorships strongly and positively impact firm performance as measured by return on assets (ROA). Obviously, women directors seem to be appointed to the business case rather than as token directors.

Keywords: corporate governance, board of directors, women, gender diversity, demographic attributes, firm performance

Procedia PDF Downloads 96

Authors: Reza Yaghoubi, Stuart Locke, Jenny Gibb

Abstract:

This study investigates sources of value in mergers and acquisitions. While much emphasis is put on operating synergies from acquisitions the evidence provided in this study shows that the difference between the WACCs of the combined firm and the merging firms may have a significant role on the value effect of mergers. These findings suggest that changes in the capital structure of the combined firm, compared to capital structures of the acquirer and the target, play a key role in determining the value of an acquisition. Moreover, findings of this study suggest that reducing the cost of capital of the combined firm, compared to the merging firms, is value creating even in the absence of operating synergies. Furthermore, this study shows that the component of value associated with the difference between the WACCs of the combined firm and the acquirer is mainly determined by leverage of the acquiring firm and the method of payment. While cash payment is value creating, high leverage of the acquirer prior to an acquisition can destroy value by raising the cost of capital of the firm. This is especially important to managers when they are planning an acquisition.

Keywords: acquisitions, mergers, synergy, value, WACC

Procedia PDF Downloads 234