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1 – 10 of 45Di Ke, Ximeng Jia, Yuanyuan Li and Peipei Wang
Taking a dynamic endogenous perspective, this study aims to examine neglected endogeneity issues in the relationship between corporate social responsibility (CSR) and brand value…
Abstract
Purpose
Taking a dynamic endogenous perspective, this study aims to examine neglected endogeneity issues in the relationship between corporate social responsibility (CSR) and brand value and the relationship’s moderation by corporate governance.
Design/methodology/approach
The study uses the three-stage least squares (3SLS) method on 990 samples of the 110 most valuable listed companies published by the World Brand Lab for 2013–2021 to empirically test the two-way interactive endogenous relationship between CSR and brand value.
Findings
The findings reveal that increasing investment in CSR increases brand value in the current period, which prompts companies to reduce investment in social responsibility, resulting in a decline in future brand value. Concerning the moderating effect of corporate governance variables, the size of the board of directors and the board’s proportion of independent directors positively regulate the relationship between CSR and brand value. By contrast, the proportion of executive shareholdings has a negative impact.
Originality/value
This study’s findings complement previous studies on endogeneity in the relationship between CSR and brand value, and enrich the literature on corporate governance, CSR and brand value as a whole. In addition, the study uses the 3SLS method, which avoids endogeneity problems and eliminates the one-sidedness of the subjective selection of instrumental variables.
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Amarjit Gill, Parminder Kang and Afshin Amiraslany
This study aims to test the relationship between information technology investment (IT_INVEST) and working capital management (WCM) efficiency.
Abstract
Purpose
This study aims to test the relationship between information technology investment (IT_INVEST) and working capital management (WCM) efficiency.
Design/methodology/approach
This study utilized a survey research design to collect data from micro, small and medium enterprises (MSMEs) owners in India.
Findings
Empirical results show that perceived IT_INVEST plays a role in improving WCM efficiency by decreasing the inventory holding period and reducing the cash conversion cycle (CCC) in India. A three-stage least square model (3SLS) shows that IT_INVEST decreases CCC directly and indirectly through the inventory holding period, accounts receivable period and accounts payable period. The empirical analysis also shows that IT_INVEST decreases the inventory holding period and CCC by 16.80% and 26.40%, respectively, for the examined firms.
Research limitations/implications
If MSMEs' owners perceive a higher level of IT_INVEST, then the owners perceive a higher WCM efficiency and vice versa.
Originality/value
This study contributes to the literature on the relationship between IT_INVEST and WCM efficiency. This study may encourage further studies of IT investment and WCM efficiency using data from other industries and countries. MSME owners may find empirical results beneficial to improve WCM efficiency. Moreover, financial management consultants may find results helpful to provide consulting services.
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Kwadjo Appiagyei and Augustine Donkor
This study examines the effect of the environmental sensitivity of firms on the relationship between integrated reporting (IR) quality and sustainability performance. Prior…
Abstract
Purpose
This study examines the effect of the environmental sensitivity of firms on the relationship between integrated reporting (IR) quality and sustainability performance. Prior research works focus on the nexus between IR quality and sustainability performance with little attention to factors that moderate this relationship.
Design/methodology/approach
Ordinary least squares (OLS) and other robust estimations are employed to analyse the data of firms on the Johannesburg Stock Exchange (JSE).
Findings
This study finds a positive association between IR quality and sustainability performance. However, the strength of this relationship is found to be weaker among environmentally sensitive firms, thereby raising concerns that such firms may be reporting less sustainability information with the mandatory implementation of IR on the JSE.
Practical implications
The findings highlight the need for regulatory bodies to consider additional sustainability disclosure requirements for firms in environmentally sensitive industries.
Social implications
The findings should make regulatory bodies aware of the possible actions of environmentally sensitive firms in relation to sustainability information within a mandatory setting of IR.
Originality/value
The study extends the existing literature on IR and sustainability performance by considering the effect of firm environmental sensitivity as a moderating factor.
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Mahnoor Sattar, Pallab Kumar Biswas and Helen Roberts
This paper aims to examine the relationship between board gender diversity and private firm performance.
Abstract
Purpose
This paper aims to examine the relationship between board gender diversity and private firm performance.
Design/methodology/approach
The authors test the association between board gender diversity and private firm performance by estimating pooled multivariate regressions using an unbalanced panel data set of 115,253 firm-year observations.
Findings
The authors find that younger, less busy and local women directors enhance private firm performance. Firms with 40% or more women directors report triple the economic benefits compared to boards with at least 20% women directors. Considering firm size, women directors significantly increase small firm profitability, and the effect is more pronounced for high-risk firms. Greater board gender diversity enhances small firm performance as the monitoring role of women directors benefits the firm even in the presence of busy men directors. Consistent with the agency theory framework, the authors find that women directors improve small firm profitability in the presence of agency costs.
Research limitations/implications
Due to the lack of availability of data about private firms, many factors are not directly observable. The analysis uses accounting-based performance measures that may be subject to managerial discretion. Nevertheless, the authors report highly significant results using cash-based performance measures that substantiate the overall findings.
Practical implications
The results of the present study point to the need for private firms to increase board gender diversity and consider women director busyness, age, nationality and firm size when making board director appointments.
Originality/value
This study adds to the scarce existent literature investigating private firms. The results contribute to the understanding of gender-diverse boards as well as the attributes of women directors that enhance private firm performance.
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This study aims to examine foreign direct investment (FDI) factors and develops a rational framework for FDI inflow in Western European countries such as France, Germany, the…
Abstract
Purpose
This study aims to examine foreign direct investment (FDI) factors and develops a rational framework for FDI inflow in Western European countries such as France, Germany, the Netherlands, Switzerland, Belgium and Austria.
Design/methodology/approach
Data for this study were collected from the World development indicators (WDI) database from 1995 to 2018. Factors such as economic growth, pollution, trade, domestic capital investment, gross value-added and the financial stability of the country that influence FDI decisions were selected through empirical literature. A framework was developed using interpretable machine learning (IML), decision trees and three-stage least squares simultaneous equation methods for FDI inflow in Western Europe.
Findings
The findings of this study show that there is a difference between the most important and trusted factors for FDI inflow. Additionally, this study shows that machine learning (ML) models can perform better than conventional linear regression models.
Research limitations/implications
This research has several limitations. Ideally, classification accuracies should be higher, and the current scope of this research is limited to examining the performance of FDI determinants within Western Europe.
Practical implications
Through this framework, the national government can understand how investors make their capital allocation decisions in their country. The framework developed in this study can help policymakers better understand the rationality of FDI inflows.
Originality/value
An IML framework has not been developed in prior studies to analyze FDI inflows. Additionally, the author demonstrates the applicability of the IML framework for estimating FDI inflows in Western Europe.
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Daniele Cerrato, Maurizio La Rocca and Todd Alessandri
The purpose of this paper is to examine the financial factors across multiple levels of analysis that influence the performance effects of the unrelated diversification strategy…
Abstract
Purpose
The purpose of this paper is to examine the financial factors across multiple levels of analysis that influence the performance effects of the unrelated diversification strategy, including institutional-, industry- and firm-levels.
Design/methodology/approach
Using a unique panel dataset of Italian firms from 1980 to 2010, the paper tests hypotheses on how industry external financial dependence and the firm's financial constraints both separately and jointly alter the performance benefits of unrelated diversification in contexts with financial market inefficiencies.
Findings
Unrelated diversification increases performance in weak financial contexts and such positive effect is enhanced by greater industry external financial dependence and greater firm financial constraints. However, as financial markets develop, the moderating effects of firm financial constraints shrink.
Practical implications
The study highlights the importance of recognizing the multiple financial contingencies that may alter the benefits of the unrelated diversification strategy, suggesting caution in its pursuit to boost firm performance.
Originality/value
The authors develop a theoretical framework that explains the performance outcomes of unrelated diversification, linking the benefits of an internal capital market (ICM) with the financial context of the firm and offering a fine-grained analysis that moves beyond the advanced/emerging economy dichotomy. Furthermore, leveraging on the unprecedented time frame of the empirical analysis, the paper highlights the crucial role of industry- and firm-level financial contingencies and demonstrates that their effects change at varying levels of development of the financial context.
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Olfa Ben Salah and Anis Jarboui
The objective of this paper is to investigate the direction of the causal relationship between dividend policy (DP) and earnings management (EM).
Abstract
Purpose
The objective of this paper is to investigate the direction of the causal relationship between dividend policy (DP) and earnings management (EM).
Design/methodology/approach
This research utilizes the panel data analysis to investigate the causal relationship between EM and DP. It provides empirical insights based on a sample of 280 French nonfinancial companies listed on the CAC All-Tradable index during the period of 2008–2015. The study initiates with a Granger causality examination on the unbalanced panel data and employs a dynamic panel approach with the generalized method of moments (GMM). It further estimates the empirical models simultaneously using the three-stage least squares (3SLS) method and the iterative triple least squares (iterative 3SLS) method.
Findings
The estimation of our various empirical models confirms the presence of a bidirectional causal relationship between DP and EM.
Practical implications
Our study highlights the prevalence of EM in the French context, particularly within DP. It underscores the need for regulatory bodies, the Ministry of Finance, external auditors and stock exchange organizers to prioritize governance mechanisms for improving the quality of financial information disclosed by companies.
Originality/value
This research is, to the best of our knowledge, the first is to extensively investigate the reciprocal causal relationship between DP and EM in France. Previous studies have not placed a significant emphasis on exploring this bidirectional link between these two variables.
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Jeeten Krishna Giri and Nachiket Thakkar
Reducing and eradicating global poverty features as a primary objective of the sustainable development goals (SDGs) for 2030. Since over half a century, the World Bank has…
Abstract
Reducing and eradicating global poverty features as a primary objective of the sustainable development goals (SDGs) for 2030. Since over half a century, the World Bank has disbursed loans amounting to billions of US dollars to assist countries to alleviate poverty. However, the path to zero poverty is often impaired with conflicts, social unrest and, most commonly, economic crisis. In this chapter, we examine the inter-linkage between various forms of economic crises, poverty and government expenditure for a set of 127 countries from 1985 to 2010. Using a simultaneous equation model, we test the direct effect of a financial crisis on the incidence of poverty and its indirect effect through the immediate decrease in government expenditure. Contrary to previous studies, our findings suggest that crises have no direct impact on poverty. We find a similar effect for currency, inflation and debt crisis. However, there is evidence that poverty increases indirectly due to a fall in government expenditure. Our results are robust for non-advanced and advanced economies and alternate estimation technique using factor analysis.
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Jean-Baptiste Coulomb, Fabrice Larceneux and Arnaud Simon
The authors analyzed annuitization preferences when retired people extract cash from their homes. Based on 2,608 viager (home reversion) transactions, the authors study the…
Abstract
Purpose
The authors analyzed annuitization preferences when retired people extract cash from their homes. Based on 2,608 viager (home reversion) transactions, the authors study the relations between annuitization, negotiation, cash extraction, age, gender and marital status.
Design/methodology/approach
A database comprising 2,608 transactions is used. The three-stage least squares (3SLS) and moderation models are implemented, with a focus on potential adverse selection issues.
Findings
The authors found that difficulties in selling a property generally result in increased annuitization. The single men's group endures gender inequality, suffering from limitations in their possibility to extract wealth and annuitize, as well as an additional price discount during negotiation. Young single men, as compared to young single women and young couples, must consent to a substantial price reduction if they prefer a high down payment and limited price reductions if they prefer annuities. Elderly single men, as compared to young single men, have less capacity to negotiate, a concern that is reinforced when they prefer annuities.
Originality/value
Among the home equity conversion products, the academic real estate literature has intensely analyzed the reverse mortgage. The viager is distinct from a mortgage in that it consists of the true sale of a property without bank involvement. This product deserves reinforced attention in an aging continental Europe. It exists in numerous countries (France, Belgium, Germany, Italy, Spain, etc.).
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