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Book part
Publication date: 19 April 2017

Katalin Szemeredi

This paper provides a primer on European multinational business groups (BGs) and their subsidiaries. Firms in these BGs appear to have higher sales performance than firms in…

Abstract

This paper provides a primer on European multinational business groups (BGs) and their subsidiaries. Firms in these BGs appear to have higher sales performance than firms in domestic groups (15% higher). This leads us to investigate which elements increase the likelihood that a group will transition towards multinational status. BGs’ characteristics matter for foreign acquisition: groups becoming multinational are usually larger, have a more hierarchical structure with respect to the number of layers in a group, and are more diverse in terms of sectors. Groups tend to expand into bordering countries or countries providing particular advantages, such as a large internal market. The first acquisition is a corporate-level decision that appears to be made by the group’s controlling firm and is often a diversification into a different industry.

Article
Publication date: 11 March 2014

Gianpaolo Iazzolino, Domenico Laise and Giuseppe Migliano

This study proposes a comparison between Value Added Intellectual Coefficient (VAIC) and one of the most important performance evaluation methods, the Economic Value Added (EVA)

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Abstract

Purpose

This study proposes a comparison between Value Added Intellectual Coefficient (VAIC) and one of the most important performance evaluation methods, the Economic Value Added (EVA), starting from a re-interpretation of the VAIC.

Design/methodology/approach

The empirical data were gathered from AMADEUS Bureau van Dijk and consist of 2,596 companies operating in Northern Italy, from six different economic sectors, observed for the year 2011. A correlation analysis was carried out in order to highlight whether there is a relationship between the two concepts of VAIC and EVA.

Findings

Results show that EVA and VAIC have no significant relationships; as a matter of fact, EVA is based on financial theory, whereas VAIC is focalised on the assessment of Intellectual Capital Efficiency (ICE).

Practical implications

Managers could be misled due to the fact that they often make decisions by taking into account only financial indicators such as EBIT, EVA, etc. Although methods like EVA have improved modern accounting systems, they do not take into account information linked to ICE. Therefore, these two perspectives can be useful in a context in which firms' performances are measured through multi-criteria methodologies (i.e. Balanced scorecard).

Originality/value

The proposal describes the differences between VAIC and EVA considering these two concepts as not contrasting. In fact, in order to better measure firms' performances, it could be useful to consider VAIC and EVA as an integrated vision in order to develop multi-criteria evaluation systems, rather than consider them separately.

Details

Measuring Business Excellence, vol. 18 no. 1
Type: Research Article
ISSN: 1368-3047

Keywords

Article
Publication date: 2 October 2018

Niccolò Innocenti and Vincenzo Zampi

The purpose of this paper is to capture the role of internal and external characteristics in favouring the growth of innovative start-ups at an early stage of their life.

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Abstract

Purpose

The purpose of this paper is to capture the role of internal and external characteristics in favouring the growth of innovative start-ups at an early stage of their life.

Design/methodology/approach

The empirical approach of this paper is based on an econometric analysis applied to all Italian innovative start-ups with four and five years of life. Growth is analysed after four and five years from the constitution, depending on internal investments in research and development (R&D), in tangible assets and on characteristics external to the firm (110 Italian provinces) related to industrial variety, specialisation, public investments in R&D, etc.

Findings

The results achieved in this study reveal the importance of internal R&D investment even though there is missing evidence on the relevance of general and government specific R&D investment in the area. Other interesting results concern the importance of the firm’s involvement in the technological specialisation of the area and the need for general variety in technological diversification in the area to favour the growth of start-ups.

Practical implications

The results imply that entrepreneurs should evaluate carefully their strategic choices in terms of the location of the start-up and the investment in R&D as these could be important factors for the firm’s growth.

Originality/value

This paper is an original attempt to measure the importance of both internal and external characteristics for the growth of start-ups. Moreover, the analysis covers the overall population of a new interesting category of firm, the innovative start-up.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 25 no. 2
Type: Research Article
ISSN: 1355-2554

Keywords

Open Access
Article
Publication date: 31 December 2011

Shaif Jarallah and Yoshio Kanazaki

This research surveys the recent surge of empirical studies on transfer pricing manipulation by multinational enterprises (MNEs), tax-motivated transfer pricing, particularly from…

Abstract

This research surveys the recent surge of empirical studies on transfer pricing manipulation by multinational enterprises (MNEs), tax-motivated transfer pricing, particularly from the year 1990 to present. The review tackles transfer pricing income shifting behavior of MNEs from three different perspectives: taxation relationship with profitability, intrafirm trade, and foreign direct investment (FDI). There have been significant developments and contributions in this field, despite many limitations, mainly concerning the availability of micro-data in general, (specifically intrafirm trade data which allows capturing much of the heterogeneity which is dangling within inter-sectors), and the tax measurement issue. Yet, this area of study is still developing and promises more achievements.

Details

Journal of International Logistics and Trade, vol. 9 no. 2
Type: Research Article
ISSN: 1738-2122

Keywords

Book part
Publication date: 10 December 2018

Karl Aschenbrücker and Tobias Kretschmer

The authors examine how firms can achieve organizational ambidexterity, that is, how they can successfully engage in concurrent exploitation of existing competencies and…

Abstract

The authors examine how firms can achieve organizational ambidexterity, that is, how they can successfully engage in concurrent exploitation of existing competencies and exploration of new competencies in their search for new products. Existing research has identified three enablers to manage these fundamentally different activities: temporal separation, structural separation, and the creation of context. Studying the strategic orientation, organization design, and performance of a unique sample of mid-sized German manufacturing firms, the authors find that the controlled interplay of decentralized decision making and formalized processes and goals is another effective means to manage the challenges of pursuing an innovation strategy balancing both exploitative and exploratory activities. The findings of this study suggest that this balanced control constitutes a fourth enabler of ambidexterity.

Open Access
Article
Publication date: 7 October 2021

Rosalia Santulli, Carmen Gallucci, Mariateresa Torchia and Andrea Calabrò

Drawing on upper echelons theory (UET) and arguments from behavioral theory of the firm, this paper aims to contribute to the debate on family involvement-performance…

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Abstract

Purpose

Drawing on upper echelons theory (UET) and arguments from behavioral theory of the firm, this paper aims to contribute to the debate on family involvement-performance relationship, by considering the mediating role of the propensity towards merger and acquisition (M&A) and the moderating role of performance feedback.

Design/methodology/approach

The hypotheses are tested by applying a moderated mediation analysis on a sample of 111 German family firms. First, a mediation model is run to verify the mediation role of the propensity towards M&A; then, to evaluate the magnitude of the mediation at different values of the moderator (performance feedback), conditional indirect effects are tested using normal-theory standard errors and bootstrapping procedure.

Findings

The main findings suggest that a higher percentage of family members sitting in TMT is related to better performance and that this effect is mediated by the propensity towards M&A. Furthermore, findings also show that a higher percentage of family managers is positively related to the propensity towards M&A and, in turn, exerts a positive effect of firm performance, especially when performance feedback is negative.

Practical implications

The paper suggests to family firms' managers that when performance feedback is negative, a riskier behavior, such as M&A, could represent a way to improve firm performance.

Originality/value

The paper provides a full application of UET to the context of family firms, offers the point of view of TMT, instead of that of ownership, to study the propensity towards M&A in family firms and goes beyond the rational view to explain family managers' risk-taking behaviors.

Details

Journal of Small Business and Enterprise Development, vol. 29 no. 2
Type: Research Article
ISSN: 1462-6004

Keywords

Article
Publication date: 10 August 2015

Sheraz Ahmed

Earlier studies have found that the country characteristics play important role in measuring the corporate transparency. The purpose of this paper is to examine whether the…

Abstract

Purpose

Earlier studies have found that the country characteristics play important role in measuring the corporate transparency. The purpose of this paper is to examine whether the firm-level determinants play an important role in corporate transparency measured as the quality of disclosed earnings across transitional Europe and what role an overall transparency measured by the Corruption Perception Index plays in it. This paper further tests if the market reacts similarly to discretionary and non-discretionary components of earnings across different groups of countries with respect to transparency.

Design/methodology/approach

The financial and ownership data of listed companies in ten European countries is obtained from Amadeus. The transparency ratings are obtained from Transparency International. The sample consists of a panel of 2001 listed companies and modified Jones model of Dechow et al. (1995) is used to measure the quality of earnings.

Findings

This paper shows that the firm-level determinants (except firm size) of the quality of earnings are different among different groups made on the basis of transparency ratings. However, the determinants of the quality of earnings are not different within each group. The ownership structure of companies plays important role in determining the quality of earnings in most transparent countries whereas financial factors play significant role in least transparent countries. The markets respond positively to earnings quality in most transparent group of countries.

Research limitations/implications

The results of this study provide interesting basis for future research on economic and social integration of Europe. Although the policy makers are trying to integrate the countries through common Laws and decrees but examining the firm-level factors such as size, growth and ownership are still important. The regulators should address the issue of corporate transparency in Europe by looking at the importance of these factors with respect to overall transparency.

Originality/value

This study extends the knowledge, not only for academicians and investors but for policy makers as well. This study re-emphasizes the role of country-level transparency and firm-level determinants of the corporate transparency within Europe.

Details

Journal of Accounting in Emerging Economies, vol. 5 no. 3
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 12 August 2014

Elena Shakina and Mariya Molodchik

– This study aims to investigate the factors that support or obstruct market value creation through intangible capital.

Abstract

Purpose

This study aims to investigate the factors that support or obstruct market value creation through intangible capital.

Design/methodology/approach

The paper explores the impact of intangibles and exogenous shocks on corporate attractiveness for investors measured by market value added. Specifically, the relationship between intangible-driven outperformance of companies, measured by economic value added (EVA) and a number of intangible drivers on macro-, meso- and micro-levels is analyzed. It is supposed that the process of value creation is not only confined to companies’ performances. The empirical research was conducted on > 900 public companies from Europe and the USA during the period of 2005-2009.

Findings

The study establishes that investment attractiveness is affected by intangibles. It is found that a company’s experience, size and innovative focus facilitate value creation. An unexpected result was revealed concerning countries’ education level, which appears to be an obstructive condition for intangible-driven value creation.

Research limitations/implications

The study reveals the significance of industry belonging for intangible-driven value creation. Nevertheless, it does not discover the particular characteristics of industry that influence corporate attractiveness for investors. These issues could be addressed in future research.

Practical implications

The findings established in this study extend the understanding of the phenomenon of intangible capital and enable the improvement of investment decision-making.

Originality/value

The study emphasizes the holistic framework of market value creation by analyzing a number of strategic crucial factors in line with EVA.

Details

Measuring Business Excellence, vol. 18 no. 3
Type: Research Article
ISSN: 1368-3047

Keywords

Article
Publication date: 26 July 2021

Bennet Schierstedt and Maarten Corten

This study aims to examine the relationship between family firm characteristics and audit fees. It also examines the extent to which the family name is considered a red flag…

Abstract

Purpose

This study aims to examine the relationship between family firm characteristics and audit fees. It also examines the extent to which the family name is considered a red flag during the risk assessment of these firm characteristics.

Design/methodology/approach

Using an external panel data set that includes 1,252 firm-year observations of 204 private German firms with a time series from 2010–2016, regression analyses were conducted to test the hypotheses.

Findings

This study’s results indicate that family involvement in management and the supervisory board are negatively related to audit fees, suggesting less demand and supply of audit effort due to lower Type I agency conflicts. Family ownership is found to be positively associated with audit fees due to higher Type II agency conflicts. Moreover, the negative effect of family involvement in management on audit fees becomes weaker if the firm name contains the family name, indicating that it is considered a red flag by auditors during their risk assessment.

Originality/value

Prior studies that examined audit fees in family firms mainly compared family firms to non-family firms. However, auditors are not likely to look at firms in a dichotomous way during their risk assessment, especially as there are numerous definitions of family firms. Instead, they will assess the underlying characteristics regarding management, ownership and governance, although a firm name containing the family name may influence this assessment. This study contributes to the literature by accounting for the heterogeneity of family firms and examining how auditors will assess this heterogeneity.

Details

Managerial Auditing Journal, vol. 36 no. 5
Type: Research Article
ISSN: 0268-6902

Keywords

Article
Publication date: 6 February 2017

Gianluca Ginesti, Giuseppe Sannino and Carlo Drago

This study aims to determine the impact of information-sharing disseminated through the firms’ board connections on the readability of the management discussion and analysis…

Abstract

Purpose

This study aims to determine the impact of information-sharing disseminated through the firms’ board connections on the readability of the management discussion and analysis (MD&A).

Design/methodology/approach

The investigation conducted in this study is performed by using a regression analysis. The readability of the MD&A is measured by the Flesch reading ease. The level of information-sharing is determined by the degree centrality index. The sample is composed of 83 Italian-listed firms that comprise over 4,000 directors for the period 2008-2012.

Findings

The main results of this study show a significant relationship between the degree centrality and MD&A readability, suggesting that board connections play a crucial role in improving the quality of external reporting.

Research limitations/implications

This study uses a limited sample size. Further, we do not isolate the possible effect of other reporting incentives that may affect the readability of external reporting.

Practical implications

This study argues that for a non-English-speaking country such as Italy, information-sharing is a vehicle for improving the quality of external reporting and the competitiveness of firms in international capital markets.

Originality/value

This research offers an original contribution to the existent literature by highlighting the role of the firms’ board connections in determining the level of the corporate disclosure readability. This implies the opportunity for future research to take into account the firms’ board connections when they analyze related phenomena.

Details

Corporate Governance: The International Journal of Business in Society, vol. 17 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

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