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Open Access
Article
Publication date: 13 December 2023

Oli Ahad Thakur, Matemilola Bolaji Tunde, Bany-Ariffin Amin Noordin, Md. Kausar Alam and Muhammad Agung Prabowo

This study empirically investigates the relationship between goodwill assets and capital structure (i.e. debt ratio) of firms and the moderating effect of financial market

Abstract

Purpose

This study empirically investigates the relationship between goodwill assets and capital structure (i.e. debt ratio) of firms and the moderating effect of financial market development on the relationship between goodwill assets and capital structure.

Design/methodology/approach

This research applied a quantitative method. The article collects large samples of listed firms from 23 developing and nine developed countries and applied the panel data techniques. This research used firm-level data from the DataStream database for both developed and developing countries. The study uses 4,912 firm-level data from 23 developing countries and 4,303 firm-level data from nine developed countries.

Findings

The findings reveal a significant positive relationship between goodwill assets and capital structure in developing countries, but goodwill assets have a significant negative relationship with capital structure in developed countries. Moreover, financial market development positively moderates the relationship between goodwill assets and the capital structure of firms in developing countries. The results inform firm managers that goodwill assets serve as additional collateral to secure debt financing. Moreover, policymakers should formulate a debt market policy that recognizes goodwill assets as additional collateral for the purpose of obtaining debt capital.

Research limitations/implications

The study has several implications. First, goodwill assets are identified as a factor of capital structure in this study. Fixed assets have been identified as one of the drivers of capital structure in previous research, although goodwill assets are seldom included. Second, this article shows that along with demand-side determinants, supply-side determinants also play an important role in terms of the firms' choice about the capital structure. Therefore, firms should take both the demand-side and supply-side factors into consideration when sourcing for external financing (i.e. debt capital).

Originality/value

The study considered goodwill as a component of capital structure. The study analysis includes a large sample of enterprises, including 4,912 big firms from 23 developing countries and 4,303 large firms from nine industrialized or developed countries, which adds to the current capital structure information. Furthermore, a large sample size increases the results' robustness and generalizability.

Details

Journal of Economics, Finance and Administrative Science, vol. 29 no. 57
Type: Research Article
ISSN: 2077-1886

Keywords

Open Access
Article
Publication date: 22 May 2023

Rafael Curras-Perez, Alejandro Alvarado-Herrera and Jorge Vera-Martínez

This work proposes a framework that attempts to explain the connection between the dimensions of consumer perceived corporate social responsibility (social, environmental…

4096

Abstract

Purpose

This work proposes a framework that attempts to explain the connection between the dimensions of consumer perceived corporate social responsibility (social, environmental, economic), firm trustworthiness and firm reputation, using market level of development as a moderating factor.

Design/methodology/approach

Mexico and Spain were selected as the emerging and developed markets; a cross-cultural study with 1173 consumers (521 from Mexico and 652 from Spain) was undertaken. In each country, participants evaluated one of two well-known companies (one making consumer products and one providing retail services). The hypotheses were tested through SEM.

Findings

The results showed that, in the emerging market, perceived environmental actions did not influence consumers' perceptions and, in the developed market, perceived social actions had no effect.

Originality/value

The study identifies two mechanisms through which consumers' perceptions of a company's CSR influence company reputation, offering evidence that the level of development of a country can have a moderating effect on how the mechanisms operate.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 35 no. 11
Type: Research Article
ISSN: 1355-5855

Keywords

Open Access
Article
Publication date: 10 November 2020

Evrim Hilal Kahya, Hüseyin Yiğit Ersen, Cumhur Ekinci, Oktay Taş and Koray D. Simsek

The paper aims to identify the differences between developed and developing country firms with respect to firm-specific and country-level determinants of their capital structure…

4519

Abstract

Purpose

The paper aims to identify the differences between developed and developing country firms with respect to firm-specific and country-level determinants of their capital structure. For this purpose, all constituent firms in one of the oldest Islamic equity indices, Dow Jones Islamic Market World Index (DJIM), are considered and the Muslim-majority status of each firm's domicile country is recognized.

Design/methodology/approach

The study employs Hausman–Taylor random effects regression with endogenous covariates to explain the debt ratios of firms in DJIM by separating them into developed and developing country subsamples in an unbalanced panel data setting. Developing country subsample is further split into two based on the Muslim-majority status of each firm's domicile country.

Findings

Consistent with the previous literature, this study finds that firm-specific characteristics are the main determinants of their capital structure. Additionally, the paper shows that country-level characteristics have an impact on the debt ratio, however, the types of factors vary across developed and developing countries. Debt ratios in developing country firms are lower than those in developed country firms, largely due to the significantly smaller leverage ratios of firms in Muslim-majority countries. Although the debt ratios of DJIM firms are higher in “non-Muslim” countries, the set of firm-level capital structure determinants are not statistically explained by operating in a “Muslim” country. The study also documents that, before the global financial crisis of 2008, companies in developing countries have gradually become less leveraged worldwide.

Originality/value

This paper provides a new perspective into the differences between developed and developing country firms' capital structures by focusing on a relatively homogeneous data set restricted by leverage screening rules of an Islamic equity index and recognizing the Muslim-majority status of each firm's domicile country.

Details

Journal of Capital Markets Studies, vol. 4 no. 2
Type: Research Article
ISSN: 2514-4774

Keywords

Open Access
Article
Publication date: 16 February 2021

Agneta Sundström, Akmal S. Hyder and Ehsanul Huda Chowdhury

The aim of this study is to develop and evaluate a market-oriented business model (MOBM) and analyze how it contributes to internationalization of SMEs' disruptive innovation.

3410

Abstract

Purpose

The aim of this study is to develop and evaluate a market-oriented business model (MOBM) and analyze how it contributes to internationalization of SMEs' disruptive innovation.

Design/methodology/approach

Based on market orientation literature, an MOBM is developed and assessed through collaboration among companies, researchers and networking partners. For the evaluation of the model, qualitative data was collected through workshops, interviews and participatory observations at four case SMEs. Methodologically, the implementation of the MOBM consists of a systematic knowledge development process by following four work packages to support the companies' market-oriented internationalization.

Findings

The results show that SMEs face internal barriers to developing innovativeness that hinder them from creating effective disruptive innovation for the international buyer chain. The study finds that SMEs need to work with an MOBM for developing market intelligence within the organization and seek external support for entering the international market.

Practical implications

The methodological strength allows application, evaluation and modification of the MOBM in close collaboration with the SMEs that directly benefit from its implementation. Modifying the principles of market orientation by practical application, SMEs can apply the MOBM to analyze their internationalization capacity for high-tech disruptive innovations.

Originality/value

This article contributes to new thinking by introducing market orientation to SMEs' internationalization of disruptive innovation. The study highlights the less researched field of disruptive innovation by developing the MOBM to deal with SMEs' internationalization.

Details

Marketing Intelligence & Planning, vol. 39 no. 5
Type: Research Article
ISSN: 0263-4503

Keywords

Open Access
Article
Publication date: 20 August 2020

Agneta Sundström, Akmal S. Hyder and Ehsanul Huda Chowdhury

The purpose of the study is to identify and analyze critical mediating and moderating market intelligence challenges faced by the SMEs when implementing corporate social…

4712

Abstract

Purpose

The purpose of the study is to identify and analyze critical mediating and moderating market intelligence challenges faced by the SMEs when implementing corporate social responsibility (CSR) based on an applied market-oriented business model (MOBM).

Design/methodology/approach

Focusing on developing CSR-integrated market intelligence, this study uses an action research method by analyzing four case studies. Data is collected through interviews, interactive and knowledge-sharing meetings and on-site observations. The study is part of a larger European Union project using the developed MOBM to follow the four companies' CSR implementation and learning process over a 14-month period. The action research includes seven meetings; between these, the researchers introduced the SMEs to different business focus areas, where CSR is a vital part of the MOBM.

Findings

This study shows that the SMEs are too technology-focused and have little initial idea of how to integrate CSR advantages for market intelligence into their internationalization. The MOBM model offers insights and knowledge on the strength and weakness of the internal organization to meet challenges in internationalization.

Originality/value

Via case study and action research, this study spotlights the challenges that SMEs face in the CSR implementation process and how they deal with those challenges to develop market intelligence competence internally. Instead of following a traditional research approach, the current study applies a CSR-based method where the SMEs go through a knowledge development process that originated from a theoretically designed MOBM.

Details

Baltic Journal of Management, vol. 15 no. 5
Type: Research Article
ISSN: 1746-5265

Keywords

Open Access
Article
Publication date: 10 May 2018

Daniel Stefan Hain and Roman Jurowetzki

The purpose of this paper is to shed light on the changing pattern and characteristics of international financial flows in the emerging entrepreneurial ecosystems of Sub-Saharan…

4513

Abstract

Purpose

The purpose of this paper is to shed light on the changing pattern and characteristics of international financial flows in the emerging entrepreneurial ecosystems of Sub-Saharan Africa (SSA), provide a novel taxonomy to classify and analyze them, and discuss how such investments contribute to competence building and sustainable development.

Design/methodology/approach

In an exploratory study, the authors analyze the characteristics of international venture capital investors and the start-ups receiving funding in Kenya and map their interaction. The authors proceed by developing a novel taxonomy, classifying investors according to their main rationales (for-profit-for-impact), and start-ups according to the locus of needs and markets addressed by the start-up (local-global) and the locus of the start-ups capacity and knowledge (local-global).

Findings

The authors observe a new type of mainly western investors who support innovative ideas in SSA by identifying and investing in domestically developed technical innovations with the potential to address global market needs. The authors find such innovations to be mainly developed at the intersect of global and local knowledge.

Originality/value

The authors shed light on the – up to now – under-researched emerging phenomenon of international high-tech investments in SSA, and develop a novel taxonomy of technology investments in low-income countries, guiding further research on the conditions, impact, practical, and policy implications of this new form of finance flows.

Details

Journal of Small Business and Enterprise Development, vol. 25 no. 3
Type: Research Article
ISSN: 1462-6004

Keywords

Open Access
Article
Publication date: 7 March 2023

Hammad Bin Azam Hashmi, Ward Ooms, Cosmina L. Voinea and Marjolein C.J. Caniëls

This paper aims to elucidate the relationship between entrepreneurial orientation, reverse innovation and international performance of emerging economy multinational enterprises…

1286

Abstract

Purpose

This paper aims to elucidate the relationship between entrepreneurial orientation, reverse innovation and international performance of emerging economy multinational enterprises (EMNEs).

Design/methodology/approach

The authors analyze archival data of Chinese limited companies between 2010 and 2016, including 11,230 firm-year observations about 1708 firms. In order to test the study’s mediation hypotheses, the authors apply an ordinary least square (OLS) regression.

Findings

The authors find evidence that the entrepreneurial orientation of EMNEs has a positive effect on reverse innovations. Furthermore, the authors find positive effects of reverse innovation on the international performance of EMNEs. This pattern of results suggests that the relationship between entrepreneurial orientation and international performance is partially mediated by reverse innovation.

Practical implications

The study’s findings help managers in EMNEs to promote reverse innovation by building and using their entrepreneurial orientation. It also helps them to set out and gauge the chances of success of their internationalization strategies. The findings also hold relevance for firms in developed economies as well, as they may understand which emerging economy competitors stand to threaten their positions.

Originality/value

The strategic role of reverse innovations – i.e. clean slate, super value and technologically advanced products originating from emerging markets – has generated considerable research attention. It is clear that reverse innovations impact the international performance of EMNEs. Yet how entrepreneurial orientation influences international performance is still underexplored. Thus, the current study clarifies the mechanism by examining and testing the mediating role of reverse innovation among the entrepreneurial orientation–international performance link.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Open Access
Article
Publication date: 31 December 2018

Katerina Makri, Karolos-Konstantinos Papadas and Bodo B. Schlegelmilch

The purpose of this paper is to represent the first empirical attempt to explore global-local consumer identities as drivers of global digital brand usage. Specifically, this…

7591

Abstract

Purpose

The purpose of this paper is to represent the first empirical attempt to explore global-local consumer identities as drivers of global digital brand usage. Specifically, this study considers a unique category of digital products, social networking sites (SNS), and develops a set of hypotheses to assess the mechanism through which location-based identities influence the actual usage of global SNS (Facebook and Instagram). Moreover, cross-country variations are investigated under the lens of developed vs developing countries.

Design/methodology/approach

Cross-country surveys in a developed (Austria) and a developing country (Thailand) were conducted. Data collected from 425 young adults were analyzed using SEM techniques in order to test a set of hypotheses.

Findings

Results show that in Thailand, users with a global identity enjoy participating in global SNS more than their counterparts in Austria. In addition, consumers with a local identity in Thailand demonstrate less pleasure when participating in global SNS than their counterparts in Austria, and consequently are less inclined to use global SNS.

Practical implications

Findings provide digital marketers with useful insights into important strategic decisions regarding the selection and potential adaptation of global digital brands according to the country context.

Originality/value

This research is the first to extend the location-based identity research in the context of global digital brands, explain how global-local identities predict SNS usage through an engagement mechanism and investigate cross-country variations of this mechanism.

Details

International Marketing Review, vol. 36 no. 5
Type: Research Article
ISSN: 0265-1335

Keywords

Open Access
Article
Publication date: 10 March 2023

Huda Khan, Ahmad Arslan, Lauri Haapanen, Peter Rodgers and Shlomo Yedidia Tarba

Applying both the dynamic capability and configuration theoretical perspectives, the paper showcases the role of network configuration and dynamics of hybrid offerings in both…

Abstract

Purpose

Applying both the dynamic capability and configuration theoretical perspectives, the paper showcases the role of network configuration and dynamics of hybrid offerings in both developed and emerging markets by high-tech firms.

Design/methodology/approach

The current paper uses an exploratory qualitative research methodology based on in-depth case studies of three Finnish high-tech firms operating in the medical technology industry globally.

Findings

The findings from the study showed that dynamic capabilities such as sensing and customer engagement along with internal coordination and adaptation capabilities are critical to the success of hybrid market offerings. Moreover, dynamic capabilities were found to be influential in those emerging and advanced international markets where case firms were less familiar with market dynamics. Moreover, the configuration of these capabilities within functional units and coordination of marketing and R&D activities can be effective for creating hybrid offerings in international markets. Ultimately, this was found to be the case even though target market selection for hybrid offerings was influenced by the level of convergence and fragmentation of the market.

Originality/value

Applying the configuration theory, this is one of the first studies to specifically analyze the differences in organizational network configuration changes in relation to hybrid market offerings in both developed economies and emerging economies. The findings contribute to hybrid market offering literature by pointing out that not only internal capabilities are important for enacting hybrid offerings, but the roles of ecosystems and knowledge centers are also extremely important to develop hybrid offerings. This paper also highlights the criticality of under-studied dynamic capabilities such as market sensing and customer engagement in the context of hybrid offerings in international markets. This showcases the wider role of ecosystems in enabling technology firms to develop hybrid offerings.

Details

International Marketing Review, vol. 40 no. 4
Type: Research Article
ISSN: 0265-1335

Keywords

Open Access
Article
Publication date: 16 June 2022

Fatma Mathlouthi and Slah Bahloul

This paper aims at examining the co-movement dependent regime and causality relationships between conventional and Islamic returns for emerging, frontier and developed markets

Abstract

Purpose

This paper aims at examining the co-movement dependent regime and causality relationships between conventional and Islamic returns for emerging, frontier and developed markets from November 2008 to August 2020.

Design/methodology/approach

First, the authors used the Markov-switching autoregression (MS–AR) model to capture the regime-switching behavior in the stock market returns. Second, the authors applied the Markov-switching regression and vector autoregression (MS-VAR) models in order to study, respectively, the co-movement and causality relationship between returns of conventional and Islamic indexes across market states.

Findings

Results show the presence of two different regimes for the three studied markets, namely, stability and crisis periods. Also, the authors found evidence of a co-movement relationship between the conventional and Islamic indexes for the three studied markets whatever the regime. For the Granger causality, it is proved only for emerging and developed markets and only during the stability regime. Finally, the authors conclude that Islamic indexes can act as diversifiers, or safe-haven assets are not strongly supported.

Originality/value

This paper is the first study that examines the co-movement and the causal relationship between conventional and Islamic indexes not only across different financial markets' regimes but also during the COVID-19 period. The findings may help investors in making educated decisions about whether or not to add Islamic indexes to their portfolios especially during the recent outbreak.

Details

Journal of Capital Markets Studies, vol. 6 no. 2
Type: Research Article
ISSN: 2514-4774

Keywords

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