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The purpose of this paper is to determine if there is a link between corporate shareholder value creation and economic growth. The first objective of this paper is to determine which specific shareholder value measurement best explains shareholder value creation for a particular industry. The next objective of the study is to establish, for each of nine different categories of firms examined, a set of value drivers that are unique and significant in expressing shareholder value for that particular category of firms. Lastly, the relationship between shareholder value creation and economic growth is tested.

To quantify and measure value creation, the paper investigates the various value creation measurements that are being applied. The next step is to ascertain whether various industries have different value creation measures that best explain value creation for the respective industries. Then, the value drivers of these specific value creation measures can be determined and their relationship with economic growth tested.

The results of this study indicate that each industry does have a specific shareholder value creation measurement that best explains shareholder value creation for that industry; for example, for five of the nine categories (industries) that were analyzed, market value added was found to be the best shareholder value creation measurement, but for capital-intensive firms and manufacturing firms, the Qratio is the best measure, while for the food and beverage industry, the market to book ratio was found to be a better measure of shareholder value creation than other measures tested. It was further found that an increase in corporate shareholder value creation is to the detriment of economic growth.

The contribution of the present study is its determination of a unique shareholder value creation measurement for particular industries. In addition, a specific set of variables per industry that create shareholder value is identified. Lastly, the important link between shareholder value creation and economic growth is exposed.

Shifting focus from innovation quantity to innovation quality becomes a priority in innovation study, business and policy. This paper aims to figure out whether and how knowledge recombination (recombinant exploration/recombinant exploitation) affects firms' innovation quality (technological value/economic value) and how these relationships are moderated by environmental turbulence (technological turbulence/market turbulence) in the context of open innovation.

A panel data set is built on 373 Chinese pharmaceutical firms' patents and new product data from 1997 to 2020. And a negative binomial regression model is applied to test the hypotheses.

The analyses indicate that (1) recombinant exploration favors technological value but hinders economic value, while (2) recombinant exploitation benefits both. Regarding environmental turbulence's moderating effects, (3) technological turbulence has opposite moderating effects on the impacts of recombinant exploration versus exploitation on technological value, whereas (4) market turbulence benefits the impacts of both on economic value.

This research provides the answer to practitioners' question that “How to improve innovation quality?” That is “Think from a recombination logic, clarify your internal value preference and the external turbulence.”

From an emerging perspective of innovation, this research expands the innovation quality research to a recombination logic. A multi-dimensional research framework is developed to clarify the complex relationships between knowledge recombination and innovation quality. Finally, two moderators, technological versus market turbulence, formulate more targeted implications for firms' innovation management in open innovation.

Sustainability is essential to the ongoing operations of banks, though it is much less clear how Islamic corporate governance (ICG) promotes economic sustainability (ES) and thereby prevents bankruptcy. To explore the unexplored, this study aims to examine the efficacy of ICG in preventing bankruptcy and enhancing the ES of Islamic banks operating in Pakistan.

The current study measures ES through Altman's Z-score to analyze the level of the industry's stability and consequently examines the effect of ICG on the ES of Islamic banks in Pakistan for the post-financial-crises period. Using the country-level data, this study utilized a fixed-effect model and two-stage least squares (2SLS) techniques on balanced panel data spanning from 2009 to 2020 to provide empirical evidence.

The empirical results unveiled that board size and meetings have a significant positive influence on the ES while managerial ownership demonstrated an unfavorable effect on ES. Interestingly, the insignificant effect of women directors became significant with the inclusion of controlled variables. Overall, the findings indicate that ICG is an efficient tool for promoting ES in Islamic banks and preventing them from the negative effects of emerging crises.

The findings provide concrete insights for policymakers, regulators and other concerned stakeholders to execute a sturdy corporate governance system that not only oversees the economic, social and ethical aspects but also provides measures to alleviate the impacts of potential risks like the COVID-19 pandemic.

Examining the role of ICG in alleviating bankruptcy risk is an informative and useful endeavor for all social actors.

To the best of the authors’ knowledge, this study is one of the first efforts to provide evidence-based insights on the role of ICG in preventing bankruptcy and offers a potential research direction for ES.

This paper verifies whether popular Internet information from Internet forum and search engine exhibit useful content for forecasting the volatility in Chinese stock market.

First, the authors’ study commences with several HAR-RV-type models, then the study amplifies them respectively with the posting volume and search frequency to construct HAR-IF-type and HAR-BD-type models. Second, from in-sample and out-of-sample analysis, the authors empirically investigate the interpretive ability, forecasting performance (statistic and economic). Third, various robustness checks are utilized to reconfirm the authors’ findings, including alternative forecast window, alternative evaluation method and alternative stock market. Finally, the authors further discuss the forecasting performance in different forecast horizons (h = 5, 10 and 20) and asymmetric effect of information from Internet forum.

From in-sample perspective, the authors discover that posting volume exhibits better analytical ability for Chinese stock volatility than search frequency. Out-of-sample results indicate that forecasting models with posting volume could achieve a superior forecasting performance and increased economic value than competing models.

These findings can help investors and decision-makers obtain higher forecasting accuracy and economic gains.

This study enriches the existing research findings about the volatility forecasting of stock market from two dimensions. First, the authors thoroughly investigate whether the Internet information could enhance the efficiency and accuracy of the volatility forecasting concerning with the Chinese stock market. Second, the authors find a novel evidence that the information from Internet forum is more superior to search frequency in volatility forecasting of stock market. Third, they find that this study not only compares the predictability of the posting volume and search frequency simply, but it also divides the posting volume into “good” and “bad” segments to clarify its asymmetric effect respectively.

This study aims to verify whether posting volume and search frequency contain predictive content for estimating the volatility in Chinese stock market.

The forecasting model with posting volume can achieve a superior forecasting performance and increases economic value than competing models.

The results are robust in alternative forecast window, alternative evaluation method and alternative market index.

The posting volume still can help to forecast future volatility for mid- and long-term forecast horizons. Additionally, the role of posting volume in forecasting Chinese stock volatility is asymmetric.

The aim of the study is to systematically map the articles published in the area of organic food value chain. Many articles have been published in various domains of organic food value chain, but no significant study has been found related to the systematic mapping of literature.

This study relies on secondary data. Articles from Scopus and Google Scholar databases between January 1, 1990, and July 10, 2021, have been considered. On the basis of inclusion criteria, 56 articles have been analysed in this systematic mapping study.

This study describes the geographical coverage, the methodologies used, sector/industry-specific context of the articles and scope the for future research. Five clusters were identified through co-occurrence analysis: (1) “organic agriculture and sustainable value chain” (2) “organic farming and food value chain,” (3) “organic value chain and sustainable development,” (4) “organic value chain and environmental impact” and (5) organic value chain and profitability.

The study considers only articles published in Scopus and Google Scholar with some specific keywords related to the value chain and organic food industry. Future studies are encouraged by considering a wide range of keywords with a larger data set.

To the best of the author's knowledge, this study is the first to have a systematic mapping of literature on the organic food value chain.

The primary objective of this research is to conceptualize the integration of enterprise risk management (ERM) as a mechanism to enhance the connection between corporate sustainability (CS) reporting and financial performance. This study suggests that future researchers should validate the proposed conceptualization by conducting a comprehensive content analysis of sustainability reports of Malaysian oil and gas companies. This analysis will allow for the collection of pertinent data regarding CS reporting and ERM implementation. The present study takes a comprehensive approach by integrating legitimacy, stakeholder, and resource-based view (RBV) theories, proposing a robust conceptual design that emphasizes the role of ERM in the connection between CS reporting and firm performance. Drawing on theoretical foundations, this study proposes that CS reporting will have a direct effect on financial performance. Moreover, the integration of ERM serves to strengthen the nexus between CS reporting and financial performance. This study offers valuable insights for stakeholders in the oil and gas sector by providing strategic guidance to enhance financial performance not only through CS reporting but also by implementing ERM. Moreover, the framework proposed in this study is expected to bring tangible and intangible benefits to corporations, including reducing information asymmetry, improving the quality of disclosure, and creating value within the field of CS. The proposed conceptual framework holds great significance as it enhances the applicability of legitimacy, stakeholder, and RBV theories, while also creating value for stakeholders through CS reporting and the adoption of risk management practices to enhance financial performance.

After completion of the case study, the students will be able to understand the calculation of cost of individual sources of funds and cost of capital, examine various tools such as economic value added and cash value added analyses which help determining whether a company has added value to its shareholders or not and explore the application of Benford’s law and the Beneish M-score in detecting manipulation of numbers in financial statements.

Nimmy Jacob, a newly recruited research analyst with an equity research firm, was entrusted with tracking the “auto ancillary industry”, specifically “Minda Corporation Ltd” (MIL). MIL was a leading diversified auto components manufacturing companies in India. The company’s share price meteorically rose during February 2021–2022 (Figure 1). The company’s turnover over the past few years had grown at a compounded annual growth rate of 15% during the three preceding years. The company had in the recent past bought a 15% stake in another competitor, Pricol Ltd, for a consideration of INR 400 crores and previously had used joint ventures and acquisitions to scale up its operations. Jacob, apart from the conventional financial analysis, had to ascertain whether all the strategic decisions were adding value to the shareholders’ investments by exploring the various tools available for the same and also calculate the minimum expected rate of return for MIL. Jacob was apprehensive about the financial statements, although the numbers for the company were good. Jacob was skeptical about a high-growth company having the incentive to manipulate its earnings. Manipulations could be in the form of abnormal increase in accruals, inconsistency in expenses and high days of receivables. Therefore, Jacobs used certain analytics/statistical tools to detect any manipulation of numbers in the financial statements of the company and to ascertain apt findings about the company.

This case study is intended for discussion in corporate finance, financial reporting and analysis and financial analytics at Master of Business Administration/undergraduate level.

Teaching notes are available for educators only.

CSS1: Accounting and finance

This study explores reasons for and against secondhand luxury (SHL) fashion adoption among young consumers in an emerging nation, India. As a trend, SHL has witnessed tremendous growth in the past few years, but scholarly interest remains scant.

Drawing from an interpretivist paradigm, this study uses an exploratory qualitative approach with 26 semi-structured interviews with SHL buyers, analyzed using NVivo software.

The findings shed significant light on value drivers and find support for status value, uniqueness value, quality value and monetary value, while adding the role of emotional value in reasons for SHL adoption. The results reveal an interesting trait of Indian consumers: price, fashion and celebrity association outweigh sustainability concerns, where an attitude–behavior gap is observed. Also, the findings add depth to risk perceptions as a major reason against SHL adoption.

While most existing studies have only focused on the motivational drivers, this study offers in-depth insights into the growing SHL literature by drawing attention to the enablers and equally important inhibitors by applying the novel Behavioral Reasoning Theory. It also intends to enhance practitioner knowledge in understanding a culturally diverse market and developing strategies relevant to a new set of consumers. The study calls for SHL retailers to sensitize young consumers in India about the sustainability aspect of SHL consumption, which is currently less appreciated.

Due to the limitations of conventional urban planning, it is essential to develop novel techniques of urban futruing. This paper aimed to use the scenario technique to create four plausible narratives of the future of Isfahan. Also, the authors described the problems of city foresight in the Global South.

This paper chronicles the Schwartzian steps taken to build explorative scenarios of Isfahan City in Iran in 2040. After using a STEEPV (Social, Technological, Environmental, Economic, Political, Value) analysis, the authors prioritized the collected variables by combining influence diagrams, the iceberg metaphor and an expert-based survey. Once the key uncertainties were derived, four scenarios were developed and discussed.

Through thematic analysis of the official visions of Isfahan’s future and the juxtaposition of these narratives with insight yielded in the scenario-development process, the paper concludes that the Northernness of the prevailing urban imaginaries, uncritical mimetic benchmarking, depoliticization of urban futures and the decorative reductionistic visions colonize urban futures in Isfahan/Iran. Critical/deconstructive city foresight and application of discomfort/ignorance criteria in the generation of scenarios can improve the rigor and quality of city foresight in the Global South.

The application of city foresight in the Global South has been limited. The paper is a step toward bridging this gap and providing some recommendations on how city foresight in the Global South might differ from its counterparts in the Global North.

In this paper, the editors argue that management accounting research should seek to expand to examine the broader ecosystem of information sources that influence organizational performance. The editors introduce the concept of the management accounting ecosystem as a means of linking discrete management accounting research topics to the broader environment in which organizations operate. By doing this, a stronger connection can be established between management accounting research and management accounting practice. The goal is to encourage more cross-disciplinary research that provides a better understanding of the ecosystem in which management accounting practitioners operate. The editors encourage researchers to submit studies to “Advances in Management Accounting” that evaluate the effectiveness of new management accounting information sources and the techniques used to analyze them in the broader ecosystem to enhance the effectiveness of management accounting practices. By exploring the wider information sources within the management accounting ecosystem, future management accounting research can become more innovative and better address the decision-making needs of organizational members.