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Open Access
Article
Publication date: 29 August 2023

Abdulai Agbaje Salami and Ahmad Bukola Uthman

This study empirically tests the use of loan loss provisions (LLPs) for earnings and capital smoothing when emphasis is laid on banks' riskiness and adoption of the International…

Abstract

Purpose

This study empirically tests the use of loan loss provisions (LLPs) for earnings and capital smoothing when emphasis is laid on banks' riskiness and adoption of the International Financial Reporting Standards (IFRSs) in Nigeria.

Design/methodology/approach

Annual bank-level data are hand-extracted between 2007 and 2017 from annual reports of a sample 16 deposit money banks (DMBs), and analysed using appropriate panel regression models subsequent to a number of diagnostic tests including heteroscedasticity, autocorrelation and cross-sectional dependence. The use of both reported LLPs (TLLP) and discretionary LLPs (DLLP) for earnings and capital management is tested to advance the practice in the literature.

Findings

Generally, the study finds that Nigerian DMBs manage capital via LLPs, while mixed results are obtained for earnings smoothing. However, during IFRS, Nigerian DMBs' management of capital is identifiable with TLLP, while smoothing of earnings is peculiar to DLLP. Additionally, evidence of the improvement in loan loss reporting quality expected during IFRS for riskier Nigerian DMBs, could not be attained. This is corroborated by the study's findings of the use of both TLLP and DLLP for earnings and capital management during IFRS by DMBs in solvency crisis against the only use of TLLP to manage capital found for the entire period.

Practical implications

The evidential capital and earnings lopsidedness may subject Nigerian DMBs' going-concern to a lot of questions.

Originality/value

The study sets a foremost record in the empirical test of managerial opportunistic behaviour embedded in earnings and capital concurrently while accounting for loan losses by all categories of Nigerian DMBs in terms of riskiness, following accounting regime change.

Details

Asian Journal of Economics and Banking, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2615-9821

Keywords

Open Access
Article
Publication date: 29 February 2024

Frank Nana Kweku Otoo

Optimal application and commitment toward financial management practices enhance organization performance. This study aims to assess the influence of financial management…

Abstract

Purpose

Optimal application and commitment toward financial management practices enhance organization performance. This study aims to assess the influence of financial management practices on organizational performance of small- and medium-scale enterprises.

Design/methodology/approach

Data were collected from 45 small-sized and 72 medium-sized firms. Data supported the hypothesized relationships. Construct reliability and validity were established through confirmatory factor analysis. The conceptual model and hypotheses were evaluated by using structural equation modeling.

Findings

The results indicate that working capital significantly influenced organizational performance. Capital budget management significantly influenced organizational performance. A non-significant influence of asset management on organizational performance was observed.

Research limitations/implications

The generalizability of the findings will be constrained due to the research’s SMEs focus and cross-sectional data.

Practical implications

The study’s findings will serve as valuable pointers for stakeholders and decision-makers of SMEs in the development of well-articulated and proactive financial management systems to ensure competitiveness, sustainability, viability and financial competences.

Originality/value

The study adds to the corpus of literature by evidencing empirically that financial management practices significantly influenced SMEs’ performance.

Details

Vilakshan - XIMB Journal of Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0973-1954

Keywords

Article
Publication date: 27 April 2022

Saarce Elsye Hatane, Jennie Winoto, Josua Tarigan and Ferry Jie

This study examines the effect of working capital management and board diversity on firm profitability and firm value for a sample of Indonesian firms listed in the LQ45 index…

1400

Abstract

Purpose

This study examines the effect of working capital management and board diversity on firm profitability and firm value for a sample of Indonesian firms listed in the LQ45 index. The interaction of board diversity components with working capital management adds a comprehensive discussion to enhancing working capital management efficiency.

Design/methodology/approach

This study engages a panel multiple regression method. Data from a sample of LQ45 companies from 2010 to 2016 are analysed using a fixed and a common effect model. Board diversity is further analysed in interaction variables, whether it holds the moderating role in the relationship of working capital and firm performances. This study operates return on capital employed (ROCE) as the proxy of profitability performance and EVA-Spread for the firm's value performance. The simultaneous effect test is used for the robustness test.

Findings

The results indicate that working capital management and board diversity have no significant impact towards profitability. However, they significantly positively impact firm value, meaning that the market is attracted by effective working capital management and board diversity. However, the interaction variable analysis shows that gender diversity and education level diversity weaken the impact of working capital management towards firm value.

Research limitations/implications

This study is not limited to one industry; therefore, future studies may focus on one industry and detect the pattern of working capital components in the particular industry. This study focuses on quantitative numbers to explain board diversity's interaction in working capital management to maximise shareholders' wealth. Future studies may consider a qualitative discussion to describe the quality of women's presence on the board, education level and educational background of board members.

Originality/value

Unlike most studies in which authors relate working capital and board diversity to firm performances separately, this study combines both components and analyses whether board diversity can act as a moderator effect. As part of corporate governance, it is expected that board diversity can enhance working capital management efficiency.

Details

Journal of Accounting in Emerging Economies, vol. 13 no. 2
Type: Research Article
ISSN: 2042-1168

Keywords

Article
Publication date: 6 October 2023

Yunqi Chen, Liqing Zhou and Yichu Wang

The purpose of this study is to explore the knowledge network-based intellectual capital of corporate universities and its co-evolution process with knowledge management…

Abstract

Purpose

The purpose of this study is to explore the knowledge network-based intellectual capital of corporate universities and its co-evolution process with knowledge management activities.

Design/methodology/approach

An exploratory and multiple case study was conducted, investigating three Chinese corporate universities. Grounded theory was used for data analysis.

Findings

This paper finds that the intellectual capital of corporate universities comprises teacher network capital, knowledge process capital and knowledge ba. The steering wheel model is established through the synergistic interaction and promotion among these three types of intellectual capital. The interaction between intellectual capital and the knowledge network within corporate universities constructs the intellectual capital network, which plays the roles of coordinator, knowledge gatekeeper and innovation bridge. The intellectual capital of corporate universities is characterized by sequential inertia. Moreover, the intellectual capital and intellectual capital network are aligned with knowledge management activities at each stage of corporate university development, interacting and following the principles of ladder evolution.

Originality/value

A significant contribution of this paper lies in applying the concept of intellectual capital within the fourth-stage ecosystem to a broader range of knowledge networks. By exploring the dynamics and network of intellectual capital in corporate universities, especially the role of intellectual capital networks and the synergy between intellectual capital and knowledge management activities, this study enriches the existing research on knowledge management and intellectual capital of corporate universities. Furthermore, it advances the development of knowledge management promotion in corporate universities from a new perspective of intellectual capital.

Details

Journal of Intellectual Capital, vol. 24 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 24 July 2023

Stephan Kudyba and Agnel D Cruz

Digital transformations of business processes are on the rise and the result is a need for a better understanding of how the elements of intellectual capital (IC) play a role in…

Abstract

Purpose

Digital transformations of business processes are on the rise and the result is a need for a better understanding of how the elements of intellectual capital (IC) play a role in achieving successful digital project outcomes. New structural capital in the form of digital technologies must be identified and understood. Evolving skills of human capital in assimilating digital elements must also be considered, while collaboration within the development process involving relational capital provides a critical integration among these IC elements. This study illustrates the importance of identifying and managing the integration of IC components within an agile project management framework that are essential to achieving success for a digital initiative. More specifically, this study describes the process by which a multinational technology-based products company successfully developed a dynamic decision support platform utilizing an agile approach to guide a project management team to better manage the company's operations.

Design/methodology/approach

This study focuses on a case analysis approach of a multinational commercial and consumer products company. The paper presents existing research on the evolving state of project management for digital initiatives and focuses on agile methods. This study then delves into the case analysis that illustrates how IC played an integral role in the company successfully developing effective decision support involving an interactive dashboard using agile Project Management (PM), which enabled the project management team to better manage resources.

Findings

An examination at the case level illustrates that effective management and integration of IC has positive effects on project outcomes. While a balanced approach is evident as a requirement, the unique characteristics of the agile project management approach entails greater emphasis on select elements to adapt to a more dynamic development process.

Originality/value

This work depicts the complexities in providing analytic-based decision support in an agile/flexible project management scenario. This work adds to existing research by illustrating elements within IC categories and the elements' interdependencies that play an essential role in achieving success in this more flexible project environment.

Details

Journal of Intellectual Capital, vol. 24 no. 6
Type: Research Article
ISSN: 1469-1930

Keywords

Open Access
Article
Publication date: 8 December 2022

Paavo Ritala, Aino Kianto, Mika Vanhala and Henri Hussinki

Firms need to constantly renew themselves to keep up with the pace of competition and proactively establish innovations to the markets. This requires capabilities in learning and…

3045

Abstract

Purpose

Firms need to constantly renew themselves to keep up with the pace of competition and proactively establish innovations to the markets. This requires capabilities in learning and renewing of the firm’s knowledge base, conceptualized as renewal capital of the firm. On the other hand, firms that acquire high levels of competitiveness by renewing their knowledge base also need to protect that knowledge from unwanted spillovers. This study aims to examine how renewal capital affects incremental and radical innovation performance of the firm, moderated by the firm’s protection of its strategic knowledge.

Design/methodology/approach

The study is based on a multi-industry survey study with a time-lagged data set, with independent variables collected in the first wave, followed by a second wave four years later for the dependent variables. The authors test the hypotheses using partial least squares structural equation modeling.

Findings

The authors find that firms’ renewal capital is positively associated with the level of incremental and radical innovation. Furthermore, the authors find that knowledge protection negatively moderates the relationship between renewal capital and incremental innovation performance of the firm. In case of radical innovation performance, similar moderating effect is not statistically supported.

Originality/value

With a time-lagged research design, this study study reveals the interdependent roles of renewal capital and knowledge protection for firm’s innovation performance, and provides insights of when (and when not) it would be beneficial for a firm to seek renewal and protective oriented approaches.

Details

Journal of Knowledge Management, vol. 27 no. 11
Type: Research Article
ISSN: 1367-3270

Keywords

Book part
Publication date: 26 March 2024

Elwira Gross-Gołacka

Purpose: This study examines the key role of diversity management in supporting intellectual capital in organisations. Intellectual capital, which includes the knowledge, skills…

Abstract

Purpose: This study examines the key role of diversity management in supporting intellectual capital in organisations. Intellectual capital, which includes the knowledge, skills and innovative potential of employees, is recognised as a valuable resource that drives organisational success. By embracing diversity and managing it effectively, organisations can unleash the full potential of their intellectual capital and achieve a lot of benefits.

Methodology: The study is based on primary data. The research method used to achieve the objective and answer the research questions is a critical analysis of the literature on the subject, as well as an analysis of the qualitative research conducted by the author on the topic of building intellectual capital of enterprises in Poland conducted in 2019. The study used a dataset of 1,067 enterprises operating in Poland (with at least 10 employees).

Findings: It should be noted that this study underscores the crucial role of diversity management in enhancing intellectual capital within organisations. By embracing diversity and fostering an inclusive environment, organisations can tap into collective intelligence, creativity, and problem-solving capabilities of a diverse workforce. The benefits extend beyond organisational performance, encompassing innovation, employee engagement, and customer satisfaction.

Significance: The study highlights that it is imperative for organisations to implement effective diversity management strategies and continuously evaluate their progress to unlock the full potential of their intellectual capital and drive sustainable success in a rapidly evolving global landscape.

Details

The Framework for Resilient Industry: A Holistic Approach for Developing Economies
Type: Book
ISBN: 978-1-83753-735-8

Keywords

Article
Publication date: 25 April 2022

Zhouyang Gu, Fanchen Meng and Siyuan Wang

Recent years have seen a substantial increase in academic interest in social capital and innovation. Nonetheless, the bibliometric and visualization study on this subject is…

Abstract

Purpose

Recent years have seen a substantial increase in academic interest in social capital and innovation. Nonetheless, the bibliometric and visualization study on this subject is inadequate. This study aims to analyse the leading trends in literature that have connected social capital with innovation over the past few decades.

Design/methodology/approach

This study attempts to provide an overview utilizing various bibliometric techniques combined with assorted themes and data extracted from the Scopus database. Results based on 716 documents reveal not only the principal modern trends but also the evolution of these scientific production developments.

Findings

Results based on 716 Scopus indexed documents reveal the trends and trajectories as well as specific topics, journals and countries of social capital and innovation research Furthermore, this study offers an overview of trends and trajectories, as well as a visual and schematic framework for further research on this subject.

Originality/value

Since there is lack of analyses the bibliographic data on social capital-related innovation, so this study is a unique contribution to the literature as complement. This may benefit researchers in identifying current trends and prospective study areas, as well as assisting future authors in conducting more efficient studies.

Details

Journal of Intellectual Capital, vol. 24 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

Article
Publication date: 27 November 2023

Muhammad Edo Suryawan Siregar, Suherman Suherman, Titis Fatarina Mahfirah, Berto Usman, Gentiga Muhammad Zairin and Herni Kurniawati

This study aims to investigate how the presence of female executives on the board affects a company’s capital structure decisions. The critical mass of female executives on the…

Abstract

Purpose

This study aims to investigate how the presence of female executives on the board affects a company’s capital structure decisions. The critical mass of female executives on the board was also considered to observe their impact on capital structure.

Design/methodology/approach

Samples were taken from nonfinancial sector companies listed on the Indonesia Stock Exchange between 2012 and 2021 (3,707 firm-year observations). Capital structure was measured using four approaches, namely, debt-to-total asset ratio (DAR), debt-to-equity ratio (DER), short-term debt-to-total assets (STD) and long-term debt-to-total assets (LTD). The data were analyzed using panel data regression analysis, including a fixed effects model with clustered standard errors.

Findings

The presence of female executives on the board is significantly negatively related to capital structure as measured by DER and STD. The critical mass of women provided no evidence of a relationship with a firm’s capital structure. Robustness checks were performed, and the results were consistent with those in the main analysis.

Research limitations/implications

Female executives can be appointed to management boards when determining a strategy to achieve the capital structure desired by a company.

Originality/value

This study increases the diversity of research in corporate governance by synthesizing various indicators from female executives into a single study to determine their relationships with companies’ capital structures. In addition, this study stands out by incorporating four distinct indicators for assessing capital structure and diverging from the norm observed in many other studies, many of which rely on just two indicators: DAR and DER. Moreover, it strongly emphasizes the unique economic, legal, social and cultural landscapes of developing countries like Indonesia in comparison to their developed counterparts, particularly Western nations.

Details

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

Keywords

Article
Publication date: 22 September 2023

Bambang Tjahjadi, Noorlailie Soewarno, Tsanya El Karima and Annisa Ayu Putri Sutarsa

This study aims to determine whether socially friendly business strategy impacts social sustainability performance and, if so, whether social management process and spiritual…

Abstract

Purpose

This study aims to determine whether socially friendly business strategy impacts social sustainability performance and, if so, whether social management process and spiritual capital act as mediators and moderators of the relationship.

Design/methodology/approach

This study uses a comprehensive research framework consisting of the mediation and moderation relationship among four constructs, namely, socially friendly business strategy, social management process, spiritual capital and social sustainability performance. A total of 433 owners/managers of micro, small and medium-sized firms (MSMEs) in the Indonesian province of East Java took part in this study, and the data were gathered using a survey method. The resource-based view, stakeholder theory and partial least squares structural equation modelling are all used in this study to evaluate and explain the hypotheses.

Findings

The results show that both socially friendly business strategy and social management process positively affect social sustainability performance. Further analysis reveals that spiritual capital moderates the effect of socially friendly business strategy on social sustainability performance. Second, social management process mediates the influence of socially friendly business strategy on social sustainability performance in part.

Research limitations/implications

The current study has limitations. First, it restricts the scope of its sample to MSMEs in Indonesia’s East Java Province. As a result, it also restricts its generalizability, and care must be used if the findings are applied to other types of organizations and geographic areas. Second, some survey participants needed help to complete the online questionnaire. As a result, collecting the data were less successful than anticipated. This study has significant implications for the development of the stakeholder theory, particularly in elucidating the mechanisms by which socially responsible corporate strategies, social management practices and performance in terms of social sustainability are affected.

Practical implications

The findings provide a comprehensive guidance for owners/managers in reorienting their business strategy, managing the social management process and building their spiritual capital to achieve social sustainability performance. It provides materials for researchers and students who are interested in studying the subject matter.

Social implications

MSMEs have a significant role in society. The welfare of society will therefore increase if social sustainability performance is successful. The overall model of social sustainability performance improvements and its antecedents are presented in this study.

Originality/value

To the best of the authors’ knowledge, this study is among the first attempts to explore the general model of improving social sustainability performance using four constructs that are rarely used in previous studies. It also uses a new data set and research setting in Indonesia as one of the emerging countries.

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