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21 – 30 of over 19000Javad Feizabadi and Somayeh Alibakhshi
To address how organizations should be malleable, the purpose herein is to draw on complementarity theory to examine the interaction effect of customer integration (i.e…
Abstract
Purpose
To address how organizations should be malleable, the purpose herein is to draw on complementarity theory to examine the interaction effect of customer integration (i.e. coordination) and shared relationship governance (i.e. cooperation) on supply chain adaptability and firm's performance.
Design/methodology/approach
A survey research design is adopted to collect primary data from 177 automotive components suppliers. After assessing the measures' psychometric properties, the hypothesized relationships are evaluated using hierarchical regression analysis supplemented by structural equation modeling and complementarity test.
Findings
In the context of industrial markets, and specifically the automotive component industry, a complementary interaction effect is found between coordination and cooperation. The complementary impact was significant in affecting the supply chain adaptability and the firm's performance. Our results refine the existing supply chain integration by highlighting the complementary effect of coordination and cooperation.
Practical implications
Understanding the true interaction effect between cooperation and coordination to develop supply chain integration avoids decision-makers' misperception over or underinvesting in activities. This research also provides key insights on the complementary effect of coordination and cooperation to establish structural flexibility in the supply chain and the ability to respond to the disruptions, such as the COVID-19 pandemic.
Originality/value
Understanding the true interaction effect between cooperation and coordination to develop supply chain integration avoids decision-makers' misperception over or underinvesting in activities. The implications for theory and practice are also presented.
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Piyya Muhammad Rafi-Ul-Shan, David B. Grant, Patsy Perry and Shehzad Ahmed
Fashion supply chain (FSC) research has identified two important issues of sustainability management and risk management. However, investigation of these issues is relatively…
Abstract
Purpose
Fashion supply chain (FSC) research has identified two important issues of sustainability management and risk management. However, investigation of these issues is relatively sparse and has primarily been independent with little combinatory research, despite their important interrelationships. The purpose of this paper is to address that gap by critically reviewing extant literature to synthesise important sustainability risk issues in FSCs and proposing an empirical research agenda.
Design/methodology/approach
This paper uses a structured literature review approach and Denyer and Tranfield’s (2009) context, intervention, mechanisms and outcome (CIMO) criteria for critical analysis to enable the development of future empirical research areas.
Findings
While sustainability and risk are discussed independently in the supply chain literature, combinatory discussions are very limited, despite the interdependence of these concepts. There is little substantial research on sustainability risk in global FSCs and therefore, an empirical research agenda is proposed with the four research directions to address the gap and take forward the notion of supply chain sustainability risk management in FSCs: definition; organisation and management; influence on performance; and development of a conceptual framework.
Research limitations/implications
This paper provides a critical literature review and thus lacks empirical study.
Practical implications
This paper highlights important issues in sustainability risk management for FSCs and presents an agenda for future empirical research.
Originality/value
This paper contributes by providing a combinatory synthesis of sustainability and risk management in FSC literature and an agenda for future empirical research.
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This study aims to investigate the dynamic aspects in the capital structure decisions of firms in Indonesia, offering an extension to the existing literature on Indonesia via a…
Abstract
Purpose
This study aims to investigate the dynamic aspects in the capital structure decisions of firms in Indonesia, offering an extension to the existing literature on Indonesia via a dynamic model, including the existence of target capital structure, the influencing factors, the speed of adjustments and the supporting theories to explain the findings.
Design/methodology/approach
This study uses a dynamic partial adjustment model estimated based on a generalized method of moments.
Findings
Indonesian firms do practice target capital structure and are influenced by firm-specific factors like profitability, business risk, firm size, liquidity and share price performance due to time-varying factors. A rapid adjustment toward target leverage is detected, thus supporting the existence of the dynamic trade-off theory (TOT). The pecking order theory (POT) also has significant influence, particularly after the new reformation of financing policy, where retained earnings are also preferred as a source of financing apart from merely external financing through bank loans. There are also traces of market timing influences where firms also seem to time their equity issuance.
Research limitations/implications
Despite relatively utilizing recent data and bigger sample firms compared to the previous limited studies on Indonesia, the results of this study, however, need to be cautiously interpreted. First, the sample chosen focused on listed firms, hence may not be generalized to all Indonesian firms, listed and unlisted. Second, the study does not separate firms by sectors and their leverage positions, that is under-levered and over-levered, so as to note that financial decisions may also be affected by the sector in which the firms operate and their leverage positions. These are to be considered in future research.
Practical implications
There is strong evidence that the corporate financing behavior of Indonesian firms is governed by the POT and TOT. Both are dealing with the function of debt. The financial sector reformation does have a positive impact on the banking sector, but not the local corporate bond market. Therefore, regulators and policymakers should bear in mind that banking as well as private bond market in Indonesia must be tailored in such a way that both could act as intermediaries of debt financing, as bond market represents an important component of a diversified financial sector.
Originality/value
This study fills the gap by providing an extension to the existing literature and a deeper insight of the capital structure of Indonesian firms using a more robust dynamic model.
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Dila Puspita, Adam Kolkiewicz and Ken Seng Tan
One important study in the portfolio investment is the study of the optimal asset allocations. Markowitz is the pioneer of modern portfolio theory that analyses the performance of…
Abstract
Purpose
One important study in the portfolio investment is the study of the optimal asset allocations. Markowitz is the pioneer of modern portfolio theory that analyses the performance of portfolio based on the mean (reward) and variance (risk). Motivated by the Markowitz's mean variance model, the purpose of this paper is to propose a new portfolio optimization model that takes into consideration both processes of purification and screening, which are key to constructing a Shariah-compliant portfolio. In practice, this paper introduces a stochastic purification variable and a probabilistic screening constraint into a portfolio model.
Design/methodology/approach
First, the authors study the stochastic nature of purification variable and apply it to both investment and dividend purification. Second, recognizing that the importance of on-going screening could adversely affect the portfolio strategy, the authors impose probabilistic constraints to control the risk of compliance change. They evaluate the proposed model by formulating the screening constraints at both asset and portfolio levels, together with three different financial screening divisors that are broadly used by the international Shariah boards. The authors also conduct an extensive empirical study using a sample of Shariah-compliant public companies listed on the Indonesia Stock Exchange.
Findings
Based on the empirical example presented in this paper, the authors found that the purification variable in the proposed model is closer to the practice in the Sharia capital market in terms of the nature of the non-constant data, and this variable reduces the total income of portfolio which has not been captured in the previous literature. The authors also have successfully derived the portfolio screening constraint to mitigate the risk of the asset change to be non-compliant in the future.
Originality/value
Based on the authors’ knowledge, this is the first paper that proposed the stochastic purification and the dynamic of screening processes into the Shariah portfolio model. This paper also examines the impact of non-short-selling, purification and screening policies to the performance of Shariah portfolio.
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Mohammad Alipour, Mir Farhad Seddigh Mohammadi and Hojjatollah Derakhshan
– This paper aims to investigate the determinants of capital structure of non-financial firms in Iran.
Abstract
Purpose
This paper aims to investigate the determinants of capital structure of non-financial firms in Iran.
Design/methodology/approach
This paper reviews different conditional theories of capital structure to formulate testable propositions concerning the determinants of capital structure of Iranian companies. Pooled ordinary least squares and panel econometric techniques such as fixed effects and random effects are used to investigate the most significant factors that affect the capital structure choice of manufacturing firms listed on Tehran Stock Exchange Iran during 2003-2007.
Findings
The results of the study suggest that variables such as firm’s size, financial flexibility, asset structure, profitability, liquidity, growth, risk and state ownership affect all measures of capital structure of Iranian corporations. Short-term debt is found to represent an important financing source for corporations in Iran. The results of the present research are consistent with some capital structure theories.
Research limitations/implications
In general, the results provide evidence that the five theories discussed influence emerging markets. Due to the existence of a negative relationship between profitability and capital structure, investors must consider capital structure before making investment decisions.
Practical implications
This study has laid some groundwork to explore the determinants of capital structure of Iranian firms upon which a more detailed evaluation could be based. Furthermore, the empirical findings will help corporate managers in making optimal capital structure decisions.
Originality/value
To the authors’ knowledge, this is the first study that explores the determinants of capital structure of manufacturing firms in Iran by using the most recent data. Moreover, this paper provides a theoretical model to explain the mechanism of how the ownership structure impacts debt financing.
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Somya Arora and Yogesh Chauhan
This paper aims to explore whether financial statement readability overcomes the information disadvantage of foreign equity investors.
Abstract
Purpose
This paper aims to explore whether financial statement readability overcomes the information disadvantage of foreign equity investors.
Design/methodology/approach
A comprehensive data set of Indian firms listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for 2007–2019 has been used to evaluate the proposed research questions. This study uses the Panel data method to investigate the research question.
Findings
The results reveal that readable financial statements attract foreign investments. The readability benefits are more noticeable for firms operating in less competitive industries and having poor earnings quality.
Originality/value
This study suggests that foreign investors facing informational disadvantages prefer firms with better readability as a substitute for informational acquisition, processing and monitoring.
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Fisnik Morina, Albulena Syla and Sadri Alija
Purpose: This study analyses how investments and specific financial factors affect the financial performance of businesses in Kosovo. Exploring the relationship between…
Abstract
Purpose: This study analyses how investments and specific financial factors affect the financial performance of businesses in Kosovo. Exploring the relationship between investments and financial performance and their impact on performance volatility, performance is assessed using return on assets (ROA) and return on equity (ROE) investments.
Methodology: Quantitative methods using secondary data from audited financial statements of Kosova manufacturing and commercial enterprises cover a 3-year period (2019–2021), involving 40 enterprises with 120 observations. Statistical tests such as descriptive statistics, correlation analysis, linear regression, Hausman–Taylor regression, fixed effects, random effects, and generalised estimating equations (GEE) model are applied. The study also utilises ARCH–GARCH analysis to assess the relationship between investments and performance volatility.
Findings: Investments positively impact the financial performance of Kosova businesses and significantly reduce performance volatility. Long-term liabilities, retained earnings, and short-term liabilities also play a role in reducing asset return volatility, while cash flow from financial activities increases it. Investments, cash flows from financial activities, long-term liabilities, short-term liabilities, retained earnings, and solvency affect equity return volatility.
Practical Implications: The study sheds light on how investments and financial factors influence the financial performance and volatility of Kosova businesses. Policymakers can use these insights to create policies that foster the development of commercial and manufacturing enterprises, given their importance in Kosovo’s economy.
Significance: This research provides valuable insights for business managers to enhance investment strategies and improve financial performance. Policymakers can rely on this academic study to enhance the economic environment and promote the growth of businesses in Kosovo.
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George Blazenko and Wing Him Yeung
This paper aims to investigate two related questions on business research and development (R & D) simultaneously. First, does R & D create or resolve uncertainty…
Abstract
Purpose
This paper aims to investigate two related questions on business research and development (R & D) simultaneously. First, does R & D create or resolve uncertainty? Second, does uncertainty encourage or discourage business R & D?
Design/methodology/approach
This paper uses the three-stage least squares regression method and a system of simultaneous equations to examine the two research questions simultaneously. Instrumental variables overcome the econometric endogeneity problem.
Findings
The results are consistent with the hypothesis that R & D creates rather than resolves uncertainty. Why then do risk-averse business managers undertake R & D? This paper argues that in creating uncertainty, R & D also creates “shadow options” for supplementary business investment not envisaged by business managers in the original objective for R & D. Rather, managers unexpectedly uncover shadow options in R & D’s inherent knowledge discovery process, which encourages business R & D in the first instance. Consistent with this real options interpretation, this paper reports evidence that volatility encourages R & D.
Originality/value
This paper differs from the current literature in the sense that it investigates the two related R & D questions simultaneously rather than individually. The authors argue that the two related questions are inextricably interrelated, and investigating the two questions simultaneously would provide results that can possibly solve conflicting empirical results in the current literature. The results are also particularly useful for business managers who make decisions on whether to undertake R & D projects or not.
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The purpose of this paper is to identify and investigate firm level determinants of the firm's decision on acquisition strategy.
Abstract
Purpose
The purpose of this paper is to identify and investigate firm level determinants of the firm's decision on acquisition strategy.
Design/methodology/approach
A total of 360 firms across fast growing sectors in India, namely automobile, FMCG and pharmaceutical were selected for six years, i.e. from 2004‐2010, thus making a sample of 360 firms. Hypothesis were tested using panel logit regression and instrumental IV variable regression.
Findings
Findings suggest that earnings volatility and business group affiliation are statistically significant determinants of the firm's acquisition decision. Earnings volatility follows inverted “U” curvilinear relationship with a firm's propensity to bid for acquisition and business group affiliation is a quasi moderator, i.e. has both direct and moderating impact on earnings volatility and acquisition likelihood relationship.
Research limitations/implications
Out of several manufacturing and service sectors only three fastest growing sectors are selected. Moreover, though study has been conducted in emerging market, i.e. India. For further generalization, other emerging economies should have also been selected. However, availability of data restricts scope of study.
Practical implications
Managers can look at strategies like acquisition to reduce their volatility. However, they have to make this decision in a prudent manner as acquisition itself is a risky strategy. Moreover, managers of stand alone firms should seek to find solutions of resource scarcity.
Originality/value
Determinants mentioned above have not been investigated earlier with respect to acquisition decision especially in emerging market context.
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Rahul Roy and Santhakumar Shijin
The purpose of the study is to examine the dynamics in the troika of asset pricing, volatility, and the business cycle in the US and Japan.
Abstract
Purpose
The purpose of the study is to examine the dynamics in the troika of asset pricing, volatility, and the business cycle in the US and Japan.
Design/methodology/approach
The study uses a six-factor asset pricing model to derive the realized volatility measure for the GARCH-type models.
Findings
The comprehensive empirical investigation led to the following conclusion. First, the results infer that the market portfolio and human capital are the primary discounting factors in asset return predictability during various phases of the subprime crisis phenomenon for the US and Japan. Second, the empirical estimates neither show any significant impact of past conditional volatility on the current conditional volatility nor any significant effect of subprime crisis episodes on the current conditional volatility in the US and Japan. Third, there is no asymmetric volatility effect during the subprime crisis phenomenon in the US and Japan except the asymmetric volatility effect during the post-subprime crisis period in the US and full period in Japan. Fourth, the volatility persistence is relatively higher during the subprime crisis period in the US, whereas during the subprime crisis transition period in Japan than the rest of the phases of the subprime crisis phenomenon.
Originality/value
The study argues that the empirical investigations that employed the autoregressive method to derive the realized volatility measure for the parameter estimation of GARCH-type models may result in incurring spurious estimates. Further, the empirical results of the study show that using the six-factor asset pricing model in an intertemporal framework to derive the realized volatility measure yields better estimation results while estimating the parameters of GARCH-type models.
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