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1 – 10 of 88Simona Arduini, Martina Manzo and Tommaso Beck
This study aims to analyze how sustainability, through an efficient knowledge management (KM) system, can serve as a driving force with respect to corporate culture and…
Abstract
Purpose
This study aims to analyze how sustainability, through an efficient knowledge management (KM) system, can serve as a driving force with respect to corporate culture and reputation. The research questions that guided this study are mainly the following: Are KM and sustainability related? Can culture strengthen the link between KM and sustainability? Can the link between KM and sustainability be affected by reputation?
Design/methodology/approach
The methodological approach adopted corresponds to qualitative research of analysis on the reference literature in the international field, also supported by empirical analysis.
Findings
In this study, the authors show that there is no explicit correlation between sustainability and KM. This relationship, in fact, is not underlined in nonfinancial reporting because it is absent or because it is not considered relevant. Too often sustainability is reduced to a mere relational and reputational tool, ignoring the fact it must be considered a consequence and not the main goal to improve companies’ culture.
Research limitations/implications
The sample studied by the authors refers to the top 40 companies listed on the Italian market, not allowing to generalize the findings across the international context.
Practical implications
The practical implications that could result from making explicit the relationship between sustainability and KM are multiple: the substantial benefits of the reputational aspect, an increase in the economic value related to sustainability; to ensure the going concern of the company and implement its ability to produce and share value in the long term.
Social implications
The social benefits of a stronger relationship between sustainability and KM are related to the possibility to improve the wealth of all the stakeholders.
Originality/value
This paper analyzes the links between sustainability and KM to understand the influence of these factors on corporate culture and reputation.
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Mirza Muhammad Naseer and Tanveer Bagh
Corporate social responsibility (CSR) promotes society, reduces risk, and encourages ethical business practices. Due to its relevance, we study how CSR influences firms'…
Abstract
Corporate social responsibility (CSR) promotes society, reduces risk, and encourages ethical business practices. Due to its relevance, we study how CSR influences firms' sustainable development. We analyze data from 427 New York Stock Exchange (NYSE)-listed firms from 2008 to 2022. The Refinitiv environmental and social score is used to measure CSR, whereas for firms' sustainable development we rely on corporate sustainable growth rate (SGR) and market-based metrics. The analysis employs various econometric techniques, including ordinary least square, fixed effect regression, two-stage least square, generalized method of moment, and simultaneous quantile regression. The results indicate that CSR has a positive and significant effect on firms' sustainable development across all models. This relationship supports the notion that socially responsible business can contribute to long-term financial sustainability in line with “stakeholder theory”, indicating that companies should accommodate the concerns of various stakeholders, including society and the environment, to achieve sustainable development. We evaluate how the conditional distributions of SGR and firms’ value are affected by CSR, categorizing them into high, moderate, and low regimes. The quantile regression estimates indicate that the effect of CSR is more pronounced at upper quantiles, followed by moderate and low regimes. These findings underscore the importance of considering CSR in assessing the SGR and enterprises market value. We also confirm that our results are robust under range of different econometrics' methods. Finally, we enlighten current literature, and our research has useful policy implications for management and investors.
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Phasin Wanidwaranan and Santi Termprasertsakul
This study examines herd behavior in the cryptocurrency market at the aggregate level and the determinants of herd behavior, such as asymmetric market returns, the coronavirus…
Abstract
Purpose
This study examines herd behavior in the cryptocurrency market at the aggregate level and the determinants of herd behavior, such as asymmetric market returns, the coronavirus disease 2019 (COVID-19) pandemic, 2021 cryptocurrency's bear market and the network effect.
Design/methodology/approach
The authors applied the Google Search Volume Index (GSVI) as a proxy for the network effect. Since investors who are interested in a particular issue have a common interest, they tend to perform searches using the same keywords in Google and are on the same network. The authors also investigated the daily returns of cryptocurrencies, which are in the top 100 market capitalizations from 2017 to 2022. The authors also examine the association between return dispersion and portfolio return based on aggregate market herding model and employ interactions between herding determinants such as, market direction, market trend, COVID-19 and network effect.
Findings
The empirical results indicate that herding behavior in the cryptocurrency market is significantly captured when the market returns of cryptocurrency tend to decline and when the network effect of investors tends to expand (e.g. such as during the COVID-19 pandemic or 2021 Bitcoin crash). However, the results confirm anti-herd behavior in cryptocurrency during the COVID-19 pandemic or 2021 Bitcoin crash, regardless of the network effect.
Practical implications
These findings help investors in the cryptocurrency market make more rational decisions based on their determinants since cryptocurrency is an alternative investment for investors' asset allocation. As imitating trades lead to return comovement, herd behavior in the cryptocurrency has a direct impact on the effectiveness of portfolio diversification. Hence, market participants or investors should consider herd behavior and its underlying factors to fully maximize the benefits of asset allocation, especially during the period of market uncertainty.
Originality/value
Most previous studies have focused on herd behavior in the stock market. Although some researchers have recently begun studying herd behavior in the cryptocurrency market, the empirical results are inconclusive due to an incorrectly specified model or unclear determinants.
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Mohammad Rifat Rahman, Md. Mufidur Rahman, Athkia Subat and Tanzika Imam Tarin
This study empirically aims to examine the relationship between Bangladesh’s pharmaceutical industry growth and macroeconomic indicators such as the inflation rate, gross domestic…
Abstract
Purpose
This study empirically aims to examine the relationship between Bangladesh’s pharmaceutical industry growth and macroeconomic indicators such as the inflation rate, gross domestic product (GDP) growth, foreign direct investment (FDI) inflows, exchange rate and export growth through the long- and short-run relationship.
Design/methodology/approach
Using the time series data from 1986 to 2020, this study was developed based on the autoregressive distributed lag (ARDL) framework for co-integration. In contrast, the Toda–Yamamoto Granger Causality approach was also used for finding the direction of causality.
Findings
This study used the ARDL bounds test, which found strong co-integration among the variables, indicating a long-term relationship between them. In the long run, inflation, exchange rate and export growth significantly positively influence the pharmaceutical industry’s growth. Surprisingly, an FDI inflow has a negative impact. In the short term, the exchange rate and GDP growth were found to influence the growth of the pharmaceutical industry positively. Bidirectional causality between the growth of the pharmaceutical industry and the exchange rate was also identified using the Granger causality approach.
Research limitations/implications
This paper emphasizes developing the policy as well as making concrete decisions regarding the development of the pharmaceutical industry and economic development in Bangladesh. The results also highlight the necessity for strategic macroeconomic management to support this sector’s long-term development and global competitiveness.
Originality/value
To the best of the authors’ knowledge, this paper is conducted to identify the short- and long-run relationship of pharmaceutical industry development with the economic indicators and progress, where no study has been found on this dimension.
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Mehmet Chakkol, Mark Johnson, Antonios Karatzas, Georgios Papadopoulos and Nikolaos Korfiatis
President Trump's tenure was accompanied by a series of protectionist measures that intended to reinvigorate US-based production and make manufacturing supply chains more “local”…
Abstract
Purpose
President Trump's tenure was accompanied by a series of protectionist measures that intended to reinvigorate US-based production and make manufacturing supply chains more “local”. Amidst these increasing institutional pressures to localise, and the business uncertainty that ensued, this study investigates the extent to which manufacturers reconfigured their supply bases.
Design/methodology/approach
Bloomberg's Supply Chain Function (SPLC) is used to manually extract data about the direct suppliers of 30 of the largest American manufacturers in terms of market capitalisation. Overall, the raw data comprise 20,100 quantified buyer–supplier relationships that span seven years (2014–2020). The supply base dimensions of spatial complexity, spend concentration and buyer dependence are operationalised by applying appropriate aggregation functions on the raw data. The final dataset is a firm-year panel that is analysed using a random effect (RE) modelling approach and the conditional means of the three dimensions are plotted over time.
Findings
Over the studied timeframe, American manufacturers progressively reduced the spatial complexity of their supply bases and concentrated their purchase spend to fewer suppliers. Contrary to the aims of governmental policies, American manufacturers increased their dependence on foreign suppliers and reduced their dependence on local ones.
Originality/value
The research provides insights into the dynamics of manufacturing supply chains as they adapt to shifting institutional demands.
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Tapas Kumar Sethy and Naliniprava Tripathy
This study aims to explore the impact of systematic liquidity risk on the averaged cross-sectional equity return of the Indian equity market. It also examines the effects of…
Abstract
Purpose
This study aims to explore the impact of systematic liquidity risk on the averaged cross-sectional equity return of the Indian equity market. It also examines the effects of illiquidity and decomposed illiquidity on the conditional volatility of the equity market.
Design/methodology/approach
The present study employs the Liquidity Adjusted Capital Asset Pricing Model (LCAPM) for pricing systematic liquidity risk using the Fama & MacBeth cross-sectional regression model in the Indian stock market from January 1, 2012, to March 31, 2021. Further, the study employed an exponential generalized autoregressive conditional heteroscedastic (1,1) model to observe the impact of decomposed illiquidity on the equity market’s conditional volatility. The study also uses the Ordinary Least Square (OLS) model to illuminate the return-volatility-liquidity relationship.
Findings
The study’s findings indicate that the commonality between individual security liquidity and aggregate liquidity is positive, and the covariance of individual security liquidity and the market return negatively affects the expected return. The study’s outcome specifies that illiquidity time series analysis exhibits the asymmetric effect of directional change in return on illiquidity. Further, the study indicates a significant impact of illiquidity and decomposed illiquidity on conditional volatility. This suggests an asymmetric effect of illiquidity shocks on conditional volatility in the Indian stock market.
Originality/value
This study is one of the few studies that used the World Uncertainty Index (WUI) to measure liquidity and market risks as specified in the LCAPM. Further, the findings of the reverse impact of illiquidity and decomposed higher and lower illiquidity on conditional volatility confirm the presence of price informativeness and its immediate effects on illiquidity in the Indian stock market. The study strengthens earlier studies and offers new insights into stock market liquidity to clarify the association between liquidity and stock return for effective policy and strategy formulation that can benefit investors.
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This study examines the impacts of the Ethiopian developmental state model on the competition, efficiency and profitability of banks.
Abstract
Purpose
This study examines the impacts of the Ethiopian developmental state model on the competition, efficiency and profitability of banks.
Design/methodology/approach
The competition, efficiency and profitability of the Ethiopian bank are measured using Panzar Rose, data envelopment analysis and financial ratio. Fixed-effect panel regression methods are applied to test the direction and strength of association between the Ethiopian developmental state model and the competition, efficiency and profitability of the country's banks while controlling bank-specific market structure and macroeconomic factors.
Findings
The Ethiopian developmental state model embeds the state-directed financial system, which affects the banking industry using a range of credit allocation instruments. Of which, directed credit schemes, interest rate control and the lack of financial freedom reduce the competition and efficiency of banks. The National Bank of Ethiopia (NBE) advances to the government and the sale of Treasury bills to a captive market enhances banking competition while negatively affecting banking efficiency. Interest rate control and the lack of financial freedom lower banking profitability. Unexpectedly, directed credit schemes improve banking profitability.
Research limitations/implications
As with any study, this one has limitations. The intra-period comparison of efficiency is based on balanced data. Future studies can use methods that can measure the efficiency of banks using unbalanced data. The computation of the yearly H-statistic is constrained by the small sample size. The use of high-frequency data for measuring competition can provide us with better insights into banking competition in Ethiopia. Furthermore, there are a number of methods for measuring banking competition, efficiency and profitability with different assumptions. Approaching the subject of this study by applying different methods will offer different insights.
Practical implications
The contributions of this study to practice are at two levels. First, at the policy level, it enhances our understanding of the impacts of developmental state model policies, as implemented in Ethiopia, on the banking industry and therefore provides suggestions to policymakers to reform the sector's policies. Second, it offers input to the management of banks regarding the factors that impact the industry.
Originality/value
The banking industry is often studied in the context of financial liberalisation. The originality of this study lies in investigating how the competition, efficiency and profitability of banks are affected when operating in the context of significant state interventions in the industry.
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Raul Gomez-Martinez and María Luisa Medrano-Garcia
Corporate diversity encompasses the different talents, knowledge, cultures, experiences and values of its employees. This diversity is reflected in multiple characteristics, such…
Abstract
Purpose
Corporate diversity encompasses the different talents, knowledge, cultures, experiences and values of its employees. This diversity is reflected in multiple characteristics, such as race, age, gender, social class, religion, sexual orientation, ethnicity, culture and disability. The objective of this study is to identify if diversity is a value driver.
Design/methodology/approach
We take the diversity score from the Diversity Leaders Index 2023 published by Financial Times (FT) and Statista; this will be our independent variable in linear regression models whose objective variables are relevant fundamental indicators of the Euro Stoxx 50 companies. It is, therefore, a cross-sectional sample with financial data taken as of the current date. We have 37 Euro Stoxx 50 components included in the diversity ranking.
Findings
The results indicate that diversity is not a value driver for trading volume, for its revenue, or for systematic risk measured by the beta parameter. However, it is observed, in a confidence interval of 90%, that the most diverse companies are larger (according to their market capitalization). In addition, the most diverse companies are more profitable [return on assets (ROA)] and valued by the market [price to earnings ratio (PER)] in a confidence interval of 95%.
Originality/value
These results indicate that companies should promote corporate diversity as a management strategy, as it is observed that more diverse companies are more profitable and valued by the market. This study provides a quantitative vision in the context of homogeneous companies such as the Euro Stoxx 50 Index on the aspects in which diversity is a value driver.
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Sarah Herwald, Simone Voigt and André Uhde
Academic research has intensively analyzed the relationship between market concentration or market power and banking stability but provides ambiguous results, which are summarized…
Abstract
Purpose
Academic research has intensively analyzed the relationship between market concentration or market power and banking stability but provides ambiguous results, which are summarized under the concentration-stability/fragility view. We provide empirical evidence that the mixed results are due to the difficulty of identifying reliable variables to measure concentration and market power.
Design/methodology/approach
Using data from 3,943 banks operating in the European Union (EU)-15 between 2013 and 2020, we employ linear regression models on panel data. Banking market concentration is measured by the Herfindahl–Hirschman Index (HHI), and market power is estimated by the product-specific Lerner Indices for the loan and deposit market, respectively.
Findings
Our analysis reveals a significantly stability-decreasing impact of market concentration (HHI) and a significantly stability-increasing effect of market power (Lerner Indices). In addition, we provide evidence for a weak (or even absent) empirical relationship between the (non)structural measures, challenging the validity of the structure-conduct-performance (SCP) paradigm. Our baseline findings remain robust, especially when controlling for a likely reverse causality.
Originality/value
Our results suggest that the HHI may reflect other factors beyond market power that influence banking stability. Thus, banking supervisors and competition authorities should investigate market concentration and market power simultaneously while considering their joint impact on banking stability.
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