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Article
Publication date: 1 June 2023

Kuldeep Singh

This paper examine whether social performance moderates the linkage between financial risk and financial performance in microfinance institutions (MFIs). The study focuses on the…

Abstract

Purpose

This paper examine whether social performance moderates the linkage between financial risk and financial performance in microfinance institutions (MFIs). The study focuses on the financial self-sufficiency and long-term sustainability of MFIs.

Design/methodology/approach

The empirical study uses unbalanced panel data of 2,694 worldwide MFIs from 2009 to 2019. In the first step, the study inspects the impact of social performance and risk on financial performance, proxied as return on assets and operational self-sufficiency. In the second stage, moderated hierarchical regression is applied to test whether social performance moderates the relationship between risk and financial performance. Lastly, the study confirms the significant moderation effects with slope tests.

Findings

The study detects robust evidence that financial risk is negatively related to financial performance. Though social performance exhibits a weak positive link with financial performance in silos, the evidence of its moderating effects on risk is mixed and significant. Social performance indicators, such as the borrower retention rate and female representation, positively moderate the relationship between financial risk and financial performance. The study documents that social performance impacts financial performance and operational self-sufficiency through risk moderation. Thus, social performance fosters the sustainability of these institutions over the long haul.

Research limitations/implications

The study is relevant to academics and theorists to consider the stakeholder approach in microfinancing. In the context of stakeholder theory, the study advances the specific social responsiveness process, namely stakeholder engagement.

Practical implications

The evidence that socially sensitive operations can curtail the adverse effects of credit risks on financial performance signify the required attention to social performance. For MFI managers and practitioners, the findings justify the business case for social performance. Stakeholder engagement, under the auspices of social responsiveness, acts as a risk-mitigation mechanism to eventually foster financial performance and self-sufficiency.

Social implications

The study motivates MFIs to do more for their stakeholders and society by highlighting the benefits of social performance.

Originality/value

The study reaffirms that social performance remains at the epicenter of the MFIs' mission and is an essential risk mitigation mechanism. The study adds to the extant literature on stakeholder engagement and its effects on MFIs.

Details

International Journal of Bank Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0265-2323

Keywords

Article
Publication date: 10 August 2021

Abir Hichri and Moez Ltifi

The study is based on a hybrid model composed of accounting and business data and is amongst the first to test the impact of corporate social responsibility (CSR) performance on…

1733

Abstract

Purpose

The study is based on a hybrid model composed of accounting and business data and is amongst the first to test the impact of corporate social responsibility (CSR) performance on the financial performance of the company, as well as the impact of financial performance on CSR performance. The bidirectional logic chosen by the study is rarely adopted in the global context and has never been tested in the Swedish context. Moreover, the purpose of this paper is to test the mediating effect of customer loyalty on the company’s CSR performance-financial performance relationship to assess this effect over the long term. This design has been neglected in previous studies.

Design/methodology/approach

Data was collected from a sample of 110 Swedish companies during the period 2009–2019. This study collects the data from the Thomson Reuters Eikon database. A multiple regression analysis was performed to test the hypotheses.

Findings

The results confirmed the bidirectional relationship between CSR performance and company financial performance. This means that CSR performance positively influences the company’s financial performance. Similarly, financial performance positively influences the company’s CSR performance. Moreover, customer loyalty has a positive and significant mediating effect on the company’s CSR performance-financial performance relationship.

Originality/value

This study adds several inputs. The first contribution of the research is to test a hybrid model composed of accounting and commercial data. This model is amongst the first to test the impact of CSR performance on the financial performance of the company and the impact of financial performance on CSR performance. The second contribution is the bidirectional logic chosen by the study which is rarely adopted in the global context and has never been tested in the Swedish context. The third contribution is to test the mediating effect of customer loyalty on the company’s CSR performance-financial performance relationship to assess this effect over the long term. This design has been neglected in previous studies. The fourth contribution is the choice of the field of investigation for the reliability of the data used and the generalisation of the results obtained.

Details

Corporate Governance: The International Journal of Business in Society, vol. 21 no. 7
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 21 June 2023

Stephen Oduro and Alessandro De Nisco

Informed by the resource-based view of the firm, dynamic capabilities theory and contingency theory, this study examines the impact of Industry 4.0 (IR4.0) technologies adoption…

Abstract

Purpose

Informed by the resource-based view of the firm, dynamic capabilities theory and contingency theory, this study examines the impact of Industry 4.0 (IR4.0) technologies adoption on firm performance (FP) while accounting for the mediating role of innovation ambidexterity (IA) and moderating roles of contextual and methodological factors that drive the performance gains of the phenomenon.

Design/methodology/approach

A random-effect model in comprehensive meta-analysis (CMA) is used to synthesize 113 studies in 115 independent samples with 192,188 observations.

Findings

This analysis demonstrates that IR4.0 digital technologies are directly related to financial and non-financial performance, disclosing that the performance effect on non-financial is the largest. Moreover, there is a complementary partial mediation role of the impacts of IR4.0 on FP by IA. Furthermore, this focal relationship is moderated by boundary-spanning conditions: contextual factors – firm size, business type, economic development, industry sector and methodological factors – proxy of FP, sample size and study type.

Practical implications

The results imply that IR4.0 produces financial and non-financial benefits by enabling firms to develop dynamic capabilities like innovation ambidexterity, which informs managers and practitioners that unless IR4.0 technologies and IA strategies are combined together to generate superior FP, IR4.0, in and of itself, would produce a less positive impact on FP than the combined impact of IR4.0 and IA. Therefore, managers should focus on converting IR4.0 resources to dynamic capabilities like IA by leveraging open innovation strategies or building IR4.0-based coordination mechanisms by creating cross-unit business synergies.

Originality/value

To the best of the authors' knowledge, per the literature review, this is the first meta-analysis structural equation modeling study on the interplay between IR4.0, innovation ambidexterity and firm performance.

Details

European Journal of Innovation Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1460-1060

Keywords

Article
Publication date: 4 January 2021

Thanh Tung Do and Ngoc Khuong Mai

This study aims to systematically review empirical research on the relationship between organizational learning (OL) and firm performance (FP) to evaluate how far the field has…

1079

Abstract

Purpose

This study aims to systematically review empirical research on the relationship between organizational learning (OL) and firm performance (FP) to evaluate how far the field has come.

Design/methodology/approach

This study follows a systematic, transparent and replicable approach suggested by Vom Brocke et al. (2009) to conduct a systematic review. A total of 52 empirical studies published over the years 1999–2019 was retrieved and analyzed.

Findings

Three key themes related to the OL–FP relationship have emerged from the review. First, research on OL and FP has been quantitatively conducted in a variety of countries and sectors. Second, dimensions of OL foster both financial and non-financial performance of firms through their combinations and interactions. Third, the relationship between OL and FP is mediated by organizational innovation.

Research limitations/implications

The literature search returned only quantitative studies on OL and FP, which was accepted within the scope of this review. Future studies are encouraged to systematically examine case studies and qualitative research on OL and FP.

Practical implications

This review demonstrates that FP can be improved through different dimensions of OL. Based on our findings, managers wanting to enhance the performance of their firms can analyze the demand for OL and develop those OL dimensions.

Originality/value

This is among the first systematic literature reviews on OL and FP. The findings of this study also contribute to the previously scattered understanding of OL and FP.

Details

International Journal of Productivity and Performance Management, vol. 71 no. 4
Type: Research Article
ISSN: 1741-0401

Keywords

Book part
Publication date: 22 October 2019

Gabriel Sam Ahinful and Venancio Tauringana

The chapter investigates the relationship between environmental management practices (EMPs) and financial performance (FP).

Abstract

Purpose

The chapter investigates the relationship between environmental management practices (EMPs) and financial performance (FP).

Design/Methodology/Approach

The study is based on a sample of 187 SMEs and uses data on six EMPs (energy, water, waste, material, emissions, and biodiversity) collected through a self-administered questionnaire from owner-managers of SMEs. Ordinary least squares regression is employed to model the hypothesized paths.

Findings

The results suggest a positive and significant relationship between EMPs (energy, water, and material) and FP. There is also a significant positive relationship between an aggregate EMP measure and FP. However, other EMPs (waste, emissions, and biodiversity) are not significantly associated with FP. Overall, these results provide empirical support to the mostly normative suggestion that the conflicting results on the environmental management and financial performance relationship are partly due to the EMP measure used.

Research Limitations/Implications

The study is based on cross-sectional data, and therefore, it is impossible to determine any changes over time. Longitudinal studies could help confirm the relationship between EMP and FP over a longer period. From a policy perspective, this results mean that the Ghanaian EPA must monitor more closely for violations of laws and regulations relating to waste, emissions, and biodiversity since SMEs do not have incentives to manage these impacts without commensurate return.

Originality/Value

The study contributes by documenting evidence of the relationship between multiple measures of EMP and FP. This unlike most existing studies has enabled us to report evidence of how each EMP measure affects FP differently and where win–win opportunities are for SMEs. Thus, the win–win opportunities are associated with some EMP measures but not all.

Details

Environmental Reporting and Management in Africa
Type: Book
ISBN: 978-1-78973-373-0

Keywords

Article
Publication date: 2 August 2013

Kuo-An Tseng, Yu-Wen Lan, Hao-Chun Lu and Pin-Yu Chen

The purpose of this paper is to explore the mediating effect of business strategy (BS) on intellectual capital (IC) and financial performance (FP). The impact of financial crisis…

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Abstract

Purpose

The purpose of this paper is to explore the mediating effect of business strategy (BS) on intellectual capital (IC) and financial performance (FP). The impact of financial crisis is also a major topic of this research.

Design/methodology/approach

This study applies BS as mediator to explore the relationships between IC, BS, and FP. Partial least squares is employed to test the reliability and validity of measurements and the significance of path coefficients, and therefore to examine the hypotheses.

Findings

IC has significant impacts on BS and FP in all samples, as well as in those years before and after the financial crisis. BS has a partial significant mediating effect between IC and FP. BS has significant effects on FP in all samples and pre-financial crisis, but has not in post-financial crisis.

Research limitations/implications

IC has significant impacts on BS and FP. Moreover, the relationships of IC, BS, and FP are different during pre- and post-financial crisis. The direct effect of IC on FP is confirmed and consistent, and the indirect effect of IC on FP by BS is dependent upon the environment status.

Practical implications

Enterprises should pay attention to IC, BS, and the related changes in environment status. These help enterprises develop appropriate strategies, maintain competitive advantage, and upgrade FP.

Originality/value

This study applies BS as mediator, and explores the relationships between IC, BS, and FP. The impact of financial crisis is also discussed. The results may serve as the criteria for strategic performance management.

Details

Management Decision, vol. 51 no. 7
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 13 September 2021

Catarina Martins, Clara Bento Vaz and Jorge Manuel Afonso Alves

Portugal has been experiencing a continuous growth in tourism activity, with hospitality industry as one of the main tourism sectors. Therefore, the assessment of hotel companies’…

Abstract

Purpose

Portugal has been experiencing a continuous growth in tourism activity, with hospitality industry as one of the main tourism sectors. Therefore, the assessment of hotel companies’ performance is very important to assist decision processes. The purpose of this paper is to assess the financial performance (FP) of 570 hotel companies operating hotel units in Portugal in 2017. To explore the question of brand affiliation, a comparison was made between hotel companies with similar stars rating and market orientation. In addition, this paper intends to fill a gap in literature studying the Portuguese reality on the subject of brand affiliation.

Design/methodology/approach

The present study uses a methodology based on data envelopment analysis (DEA) to assess the overall performance for each company, which further decomposed into the within-group performance and the technological gap. The performance of the hotel company is assessed through the aggregation of multiple financial indicators using the composite indicator (CI) derived from the DEA model. A bivariate analysis based on the Tobit regression to test the robustness of brand effect on FP of hotel companies (HC) was also included.

Findings

The empirical results show that branded companies, on average, have significantly better overall FP than non-branded companies. On the one hand, the brand effect tends to improve the within-group FP of HCs and the brand presents a statistically significant positive effect on the FP. On the other hand, the best practices are observed in both branded and non-branded companies.

Practical implications

The results of this study illustrate that, globally, the better FP of the branded companies is because of their individual relative companies’ performance and a better model of operation given by the brand effect. Brand affiliation will generally allow for a better FP and essentially a better profitability for invested equity, a higher return on sales and a higher value added per employee.

Originality/value

The study provides important theoretical and practical contributions that can assist the strategic decision of the HCs in choosing to operate independently or to adopt brand affiliation. Also, it is innovative because the FP of branded and non-branded HCs is measured not using a set of individual financial ratios but through a single CI that aggregates those financial ratios, using a DEA model.

Details

International Journal of Contemporary Hospitality Management, vol. 33 no. 10
Type: Research Article
ISSN: 0959-6119

Keywords

Article
Publication date: 6 May 2014

Eduardo Ortas, José M. Moneva and Igor Álvarez

This paper aims to investigate the link between a sustainable supply chain and companies’ financial performance (FP) and provide empirical evidence about the relationship between…

7741

Abstract

Purpose

This paper aims to investigate the link between a sustainable supply chain and companies’ financial performance (FP) and provide empirical evidence about the relationship between these two constructs. This link is an important, but still unclear, subject.

Design/methodology/approach

Multivariate measures of sustainable supply chain performance and companies’ FP are used for Granger causality tests on a large, diverse sample of 3,900 companies in a time frame of eight years (2004-2011).

Findings

Results indicate general bidirectional causality between sustainable supply chain performance and companies’ margins and revenue. However, the link between firms’ profitability and sustainable supply chain performance is unidirectional. In addition, the recent financial crisis altered this link between the studied constructs. Finally, a wide diversity in relationship patterns between sustainable supply chain performance and companies’ FP emerges when the full sample is divided into different geographical regions and economic sectors as specified by the Global Industry Classification Standard system.

Practical implications

This research makes recommendations for improving several processes, such as stakeholder evaluation of the sustainable supply chain performance of companies worldwide and manager testing of environmental policy outcomes.

Originality/value

Building on the mostly qualitative literature on sustainable supply chain performance and companies’ FP, this research provides quantitative evidence of the gaps between these constructs. This research contributes to the discussions of supply chain management, environmental practices and the drivers of companies’ environmental and financial success.

Article
Publication date: 14 June 2022

Achraf Haddad

The purpose of this research is to compare the board quality's (BQ) impacts on the financial performance (FP) of conventional and Islamic banks (IBs) after the Subprime financial

Abstract

Purpose

The purpose of this research is to compare the board quality's (BQ) impacts on the financial performance (FP) of conventional and Islamic banks (IBs) after the Subprime financial crisis. The main reason is to help financial stakeholders choose the best performing and most appropriate bank type with its engagement based on the BQ index.

Design/methodology/approach

Based on the existing gap in previous researches and by using the GLS method (Generalized Least Squares method), the author compared the BQ's impacts on the FP of conventional and IBs. Settings of the FP and BQ were collected from 30 countries located on 4 continents. Two equal samples were tested; each of them is composed of 112 banks. The author concentrated only on the banks that have published regularly the banks' annual reports over the period 2010–2018.

Findings

Cylindrical panel results revealed that in conventional banks (CBs), the BQ has negatively affected banks' FP, while in IBs the BQ's impacts on the banks’' FP is ambiguous. Nevertheless, the positive impacts are more significant on the IBs' FP than the negative impacts on the IBs' FP.

Practical implications

The main practical contribution is the identification and distinction between the impacts of board determinants' quality on the shareholders' profits in the case of conventional and IBs. Hence, conventional or IBs which have a bad BQ will generate less FP and will be classified as a lender of bankruptcy danger for the bank customer. Besides, whatever the bank type, in a financial stable period, good BQ positively influences FP and provides a good impression to stakeholders. Otherwise, FP indicates that the banks suffer from the weaknesses of the board quality determinants.

Originality/value

Returning to the finance and banking governance literature, the author's article provides the first conditional and demonstrative analysis that detailed a logical comparative process to analyze the correlation between the board determinants' quality and the financial performance of conventional and IBs. However, previous research has always discussed the main role of the board as an internal governance mechanism on the FP separately in each bank type.

Article
Publication date: 14 May 2021

Ebenezer Afum, Yaw Agyabeng-Mensah, Innocent Senyo Kwasi Acquah, Charles Baah, Essel Dacosta, Clifford Sekyere Owusu and Joseph Amponsah Owusu

This study examines the mediation effects of time-based competitiveness, cost-based competitiveness and customer performance between logistics outsourcing and financial performance

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Abstract

Purpose

This study examines the mediation effects of time-based competitiveness, cost-based competitiveness and customer performance between logistics outsourcing and financial performance.

Design/methodology/approach

The study relied on a questionnaire as the primary data collection instrument and further employed partial least squares structural equation modelling technique to test all formulated hypotheses.

Findings

The results demonstrate that logistics outsourcing has a significant positive impact on time-based competitiveness, cost-based competitiveness, customer performance and financial performance. Time-based competitiveness and cost-based competitiveness were both found to have a significant positive impact on financial performance; however, customer performance had no significant impact on financial performance. The mediation analysis further indicates that while both time-based competitiveness and cost-based competitiveness play mediation effects between logistics outsourcing and financial performance, customer performance plays no mediation effect between logistics outsourcing and financial performance.

Research limitations/implications

The sampled firms for this study came from a single emerging country; hence, the results cannot be generalized or imported to reflect the results that may be obtained from other emerging geographical settings.

Practical implications

The results provide sufficient evidence for managers to turn their attention to logistics outsourcing, as a transformative business initiative, to gain time-based and cost-based competitiveness so as to improve financial performance.

Originality/value

The study provides significant insight and makes an additional contribution to literature in the area of logistics outsourcing, especially by collecting data from an emerging country. Modelling time-based competitiveness, cost-based competitiveness and customer performance as mediating variables between logistics outsourcing and financial performance make this work relatively different from other studies.

Details

The International Journal of Logistics Management, vol. 32 no. 3
Type: Research Article
ISSN: 0957-4093

Keywords

1 – 10 of over 1000