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1 – 10 of over 1000
Article
Publication date: 12 March 2024

Wei Wu, Chau Le, Yulu Shi and Fadi Alkaraan

Financial flexibility and investment efficiency are of vital importance in strategic choices at boardrooms, particularly in post-crisis recovery strategies. This study examines…

Abstract

Purpose

Financial flexibility and investment efficiency are of vital importance in strategic choices at boardrooms, particularly in post-crisis recovery strategies. This study examines the moderating effects of investment efficiency and investment scale on the relationship between financial flexibility and firm performance.

Design/methodology/approach

The authors use sample of 10,755 US-listed firms over the period 2010–2021 to examine the relationships between investment scale, investment efficiency, financial flexibility and firm performance. Particular attention is paid to overinvestment and underinvestment.

Findings

Findings of this study reveal that financial flexibility mitigates investment inefficiency through reducing overinvestment. Financial flexibility contributes to boost a firm’s accounting and market performance. Additionally, investment efficiency and investment scale have moderating effects on the relationship between financial flexibility and firm performance. However, the influence of investment efficiency is greater than the influence of investment scale. Finally, the authors find that the direct and indirect effects of financial flexibility are stronger on market performance than accounting performance, implying that market is more sensitive to corporate financial policies.

Research limitations/implications

Findings of this study have implications for scholars, decision-makers policymakers, investors and other stakeholders.

Practical implications

This study has its own limitations due to the sample selection issues, country context and the research model adopted by this study.

Originality/value

The novel contribution to the extant literature is incorporating the influence of investment scale and investment efficiency into the relationship between financial flexibility and firm performance.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 8 February 2024

Hao Ding

Common institutional ownership is a phenomenon that has extended throughout the capital markets in recent years and has a significant impact on business strategy decisions. The…

Abstract

Purpose

Common institutional ownership is a phenomenon that has extended throughout the capital markets in recent years and has a significant impact on business strategy decisions. The study intends to investigate the effect of common institutional ownership on corporate over-financialization and potential functioning mechanisms.

Design/methodology/approach

Using panel data from Chinese-listed companies over the period of 2003–2021, the authors conduct regression models which controlled year-, industry- and regional fixed effects to explore the impact of common institutional ownership on corporate over-financialization.

Findings

This study concludes that corporate over-financialization may be prevented via common institutional ownership. The mechanism test suggests that common institutional ownership inhibits corporate over-financialization by improving internal control quality and enhancing financial flexibility. Besides, heterogeneity analysis shows that the inhibiting effect of common institutional ownership on corporate over-financialization is more pronounced in stability-oriented institutional investors and high financing constraints firms.

Originality/value

This paper makes a valuable contribution to the current studies on effective strategies to prevent enterprises from becoming overly financialized by recognizing common institutional ownership. Furthermore, this paper adds to the research on common institutional ownership’s economic consequences. Finally, this study provides management implications for how to optimize corporate governance structures, curb the financialization of entities in practice and promote the development of the real economy.

Details

Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 10 June 2022

Arash Arianpoor and Seyyed Sajjad Naeimi Tajdar

This study aims to explore the relationship between firm risk, capital structure, cost of equity capital and social and environmental sustainability during the COVID-19 pandemic…

Abstract

Purpose

This study aims to explore the relationship between firm risk, capital structure, cost of equity capital and social and environmental sustainability during the COVID-19 pandemic for companies listed on Tehran Stock Exchange.

Design/methodology/approach

To this aim, the information about 190 companies in 2014–2020 was retrieved to be analyzed. The total risk and systematic risk were used as the indicators of company risk; the industry-adjusted earnings price ratio (IndEP) and GORDON were used for the cost of equity capital. To measure social sustainability and environmental sustainability, the procedure suggested by Arianpoor and Salehi (2020) was used.

Findings

Underleveraged firms have had a lower total risk during the COVID-19 pandemic, while overleveraged firms have not had a higher risk during this time. In overleveraged firms, using systematic risk has a negative impact on social sustainability during the COVID-19 pandemic. In overleveraged firms, using total risk and systematic risk has a significant negative impact on environmental sustainability in the pandemic. Besides, overleveraged firms have a lower cost of equity capital (IndEP) during COVID-19.

Originality/value

To the best of the authors’ knowledge, no similar study has so far examined the joint impact of COVID-19 and corporate risk on social and environmental sustainability and also the joint impact of COVID-19 and capital structure on the cost of equity. This study contributes to the related literature by providing corporations with insightful post-pandemic directions on capital structure decisions and social and environmental activities. Furthermore, this research and the relevant findings can help understand and develop social responsibility in Iran as a developing country.

Details

Journal of Facilities Management , vol. 22 no. 2
Type: Research Article
ISSN: 1472-5967

Keywords

Open Access
Article
Publication date: 5 January 2024

Jesper Haga and Kim Ittonen

This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created…

Abstract

Purpose

This paper examines the organizational resilience of audit firms during the early stages of COVID-19. The unexpected restrictions placed on travel and on-site working created unanticipated barriers for auditors in Hong Kong. The authors expect that auditors with greater organizational resilience can respond to unexpected situations and restore expected performance levels relatively quickly.

Design/methodology/approach

The authors utilize a sample of 1,008 companies listed on Hong Kong Stock Exchange (HKEX) with a financial year-end of December 31. The authors identify five proxies contributing to organizational resilience: auditor size, industry specialization, diversity, geographic proximity to the client and auditing a new client. The authors use audit report timeliness as this study's main dependent variable.

Findings

This study's full-sample results suggest that larger auditors, industry specialists and auditors with closer relationships to clients issued more timely audit reports during the pandemic. The analysis of a subsample of companies that initially published unaudited financial statements reveals that industry expertise and longer auditor-client relationships significantly reduced the need for year-end audit adjustments. Finally, the authors find that larger auditors were more likely to offload clients, whereas industry specialists were more likely to retain clients.

Research limitations/implications

The results of the paper suggests that audit firm characteristics associated cognitive abilities, behavioral characteristics and contextual conditions are associated with audit firm organizational resilience and, consequently, helps auditors respond unexpected changes in the audit environment.

Practical implications

The findings of the paper are informative for those involved in audit firm management or auditor hiring and retention decisions.

Originality/value

This study is the first to link organizational resilience to the performance of audit firms in a time of unexpected events. The authors connect three auditor and two auditor-client dimensions to the organizational resilience of the audit firms.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

Keywords

Article
Publication date: 3 November 2022

Devinder Kumar and Anupama Prashar

This study examines the effect of human and technological resource bundling on the financial and non-financial performance of third-party logistics (3PL) firms in India.

Abstract

Purpose

This study examines the effect of human and technological resource bundling on the financial and non-financial performance of third-party logistics (3PL) firms in India.

Design/methodology/approach

For achieving the research aim, 248 practitioners from India based 3PL firms were surveyed. The relationships between human and technology resources and firm performance were examined using structural equation modelling (SEM).

Findings

The results of empirical tests revealed that human and technological resources significantly enhance the performance of the 3PL firm. However, the firm's logistic capabilities related to track and trace, order management and final assembly do not mediate this relationship.

Originality/value

This study contributes by examining resource bundling in India's 3PL industry using empirical data and providing knowledge of the relationship between resources and business performance. It guides managers to consciously develop resource capabilities that influence firm performance.

Details

International Journal of Productivity and Performance Management, vol. 73 no. 1
Type: Research Article
ISSN: 1741-0401

Keywords

Article
Publication date: 29 March 2024

Xiaoyan Jin, Sultan Sikandar Mirza, Chengming Huang and Chengwei Zhang

In this fast-changing world, digitization has become crucial to organizations, allowing decision-makers to alter corporate processes. Companies with a higher corporate social…

Abstract

Purpose

In this fast-changing world, digitization has become crucial to organizations, allowing decision-makers to alter corporate processes. Companies with a higher corporate social responsibility (CSR) level not only help encourage employees to focus on their goals, but they also show that they take their social responsibility seriously, which is increasingly important in today’s digital economy. So, this study aims to examine the relationship between digital transformation and CSR disclosure of Chinese A-share companies. Furthermore, this research investigates the moderating impact of governance heterogeneity, including CEO power and corporate internal control (INT) mechanisms.

Design/methodology/approach

This study used fixed effect estimation with robust standard errors to examine the relationship between digital transformation and CSR disclosure and the moderating effect of governance heterogeneity among Chinese A-share companies from 2010 to 2020. The whole sample consists of 17,266 firms, including 5,038 state-owned enterprise (SOE) company records and 12,228 non-SOE records. The whole sample data is collected from the China Stock Market and Accounting Research, the Chinese Research Data Services and the WIND databases.

Findings

The regression results lead us to three conclusions after classifying the sample into non-SOE and SOE groups. First, Chinese A-share businesses with greater levels of digitalization have lower CSR disclosures. Both SOE and non-SOE are consistent with these findings. Second, increasing CEO authority creates a more centralized company decision-making structure (Breuer et al., 2022; Freire, 2019), which improves the negative association between digitalization and CSR disclosure. These conclusions, however, also apply to non-SOE. Finally, INT reinforces the association between corporate digitization and CSR disclosure, which is especially obvious in SOEs. These findings are robust to alternative HEXUN CSR disclosure index. Heterogeneity analysis shows that the negative relationship between corporate digitalization and CSR disclosures is more pronounced in bigger, highly levered and highly financialized firms.

Originality/value

Digitalization and CSR disclosure are well studied, but few have examined their interactions from a governance heterogeneity perspective in China. Practitioners and policymakers may use these insights to help business owners implement suitable digital policies for firm development from diverse business perspectives.

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 March 2023

Ismail Khan, Ikram Ullah Khan, Mohammad Jasim Uddin, Safeer Ullah Khan and Jahanzeb Marwat

Given the relative importance of the Shari’ah supervisory boards (SSBs) in Islamic banks’ (IBs’) performance, this study aims to examine the impact of SSB diversity on IBs’…

Abstract

Purpose

Given the relative importance of the Shari’ah supervisory boards (SSBs) in Islamic banks’ (IBs’) performance, this study aims to examine the impact of SSB diversity on IBs’ performance from the stakeholders’ perspective in the context of Pakistan.

Design/methodology/approach

Random-effects model and generalized method of moment are used to investigate the impact of SSB diversity on IBs’ performance across a panel data of 22 Islamic banks in Pakistan from 2005 to 2020 inclusive.

Findings

The findings of this study show that SSB size, SSB relevant educational background diversity, bank’s size and bank’s stability have a positive impact on IBs’ performance. In contrast, SSB age, nationality and cross-membership diversities have a negative impact on IBs’ performance. Moreover, SSB gender, tenure and general educational diversities have no significant impact on IBs’ performance.

Research limitations/implications

SSB diversity and IBs practices are different across different jurisdictions. This study is conducted on IBs in Pakistan because of data constraints; thus, the results of this study may not be generalizable to other countries' IBs.

Practical implications

In structuring the SSBs’ framework, the regulatory authorities and policymakers should consider mandating an ideal SSB size and hiring relevant qualified members with low cross-membership to improve IBs' performance. Thus, the structure potentially attracts Muslim stakeholders, enhances their satisfaction and improves IBs' performance.

Social implications

Having diversified members in the SSB, IBs equally benefit both individual and group stakeholders in society. Diversity in SSB members enhances IBs' performance and the social welfare of various stakeholders in society.

Originality/value

To the best of the authors' knowledge, this is the first empirical research that examines comprehensively the impact of SSB structural and demographic diversities on IBs' performance in the context of Pakistan. This paper contributes to the unique Shari’ah governance structure in the context of Pakistan. Additionally, this study may serve to assist IBs’ stakeholders in better comprehending the SSB practices of IBs in Pakistan.

Details

Journal of Islamic Accounting and Business Research, vol. 15 no. 1
Type: Research Article
ISSN: 1759-0817

Keywords

Article
Publication date: 10 August 2023

Prashant Sharma, Dinesh Kumar Sharma and Prashant Gupta

Option pricing theory enables computation of the price of an option using different variables associated with the underlying security and options contract. The purpose of this…

Abstract

Purpose

Option pricing theory enables computation of the price of an option using different variables associated with the underlying security and options contract. The purpose of this study is to assess research trends that emerged in the field of option pricing. This study reviews existing literature of the option pricing domain, both qualitatively and quantitatively, and identifies potential themes for future research.

Design/methodology/approach

This study adopts bibliometric analysis method to explore literature published in the option pricing domain. As part of bibliometric analysis, this study considers both descriptive and network analysis to assess publication trends. For descriptive analysis, the “bibliometrix” package proposed by Aria and Cuccurullo (2017) is used and for network analysis, VOS viewer (Van Eck and Waltman, 2017) and Gephi (Bastian et al., 2009) are used.

Findings

This study identifies research trends, top researchers, articles, journals and contributions from institutions and countries in the option pricing domain. It identifies four clusters that show different directions and also focuses on past studies on the same subject. It explores research gaps by performing an in-depth analysis of existing literature on option pricing and suggests the way forward for research in this area.

Originality/value

To the best of the authors’ knowledge, no previous studies have attempted to analyze the literature published in the option pricing domain. This study fulfils this research gap by conducting a comprehensive analysis of studies in the option pricing area. This study identifies quality research work published in the domain, research trends, contribution by most relevant researchers, contributions across geographies and institutions and the connections among these aspects. This study also identifies important themes and provides directions for future research.

Details

Qualitative Research in Financial Markets, vol. 16 no. 1
Type: Research Article
ISSN: 1755-4179

Keywords

Article
Publication date: 19 February 2024

Harshani Shashikala Wijerathna, Niluka Anuradha and Roshan Ajward

This study aims to explore the relationship between institutional and macroeconomic factors and corporate financial flexibility while also investigating the moderating impact of…

Abstract

Purpose

This study aims to explore the relationship between institutional and macroeconomic factors and corporate financial flexibility while also investigating the moderating impact of selected board governance mechanisms on this relationship.

Design/methodology/approach

The sample of the study comprises 174 firms listed on the Colombo Stock Exchange for a period of eight years, from 2014 to 2021. Data were collected from secondary sources, and both descriptive and inferential statistical techniques were used for analyses.

Findings

Corporate financial flexibility is notably affected by profitability as an institutional factor and by gross domestic product growth rate and banking sector development as macroeconomic factors. Furthermore, the relationship between a company’s profitability and corporate financial flexibility is found to be moderated by selected board governance mechanisms. However, these governance mechanisms do not influence the relationship between corporate financial flexibility and other institutional factors (i.e. other than profitability) and macroeconomic factors considered in this study.

Originality/value

This study adds a fresh perspective to the existing body of knowledge in the field of corporate finance by emphasizing the interaction effect of board governance mechanisms on the association between macroeconomic and institutional variables and financial flexibility of firms. The findings are expected to be useful for business decision-makers in managing their corporate financial flexibility effectively and maximizing the use of their financial resources.

Details

Journal of Asia Business Studies, vol. 18 no. 2
Type: Research Article
ISSN: 1558-7894

Keywords

Article
Publication date: 4 April 2023

Jie Sun and Hao Jiao

This study aims to explore the mediating effect of digital options on the relationship between emerging information technology investments (ITIs) and firm performance (FP). In…

Abstract

Purpose

This study aims to explore the mediating effect of digital options on the relationship between emerging information technology investments (ITIs) and firm performance (FP). In particular, it analyses the performance impacts of investments in five emerging technologies of IT or non-IT firms.

Design/methodology/approach

Secondary data are collected from Chinese A-share listed companies from 2010 to 2018. The authors propose an econometric model focusing on the impact of ITIs on a firm’s market value and profit. A propensity score matching model is applied to control endogeneity.

Findings

The ITIs’ effect on FP is found to be completely mediated by digital options, and the reach of digital options plays a more positive role in the relationship between ITIs and Tobin’s Q, whereas the richness of digital options is stronger between ITIs and return on net assets (ROE). The group study shows that the impact of process technologies such as cloud computing and the Internet of Things has a more profound impact on Tobin’s Q, and the knowledge technologies represented by artificial intelligence, blockchain and big data strongly affect ROE. In addition, the positive relationship between ITIs and FP is unrelated to IT/non-IT firms.

Research limitations/implications

First, the data are based on 219 publicly announced emerging ITIs in China and thus may not be generalizable to other cultural/national contexts. Second, there is a lack of a large sample data set of emerging ITI information in China, and the duration of this study is constrained to the relatively short rise of emerging technologies.

Practical implications

This study provides firm decision-makers with practical implications. The results imply that the effect of ITIs on FP depends on digital options, so both IT firms (e.g., Big Tech giants) and non-IT firms (e.g., incumbents) should discover how to balance firm value and profit in their management of emerging technology investment projects with digital options thinking.

Originality/value

To the best of the authors’ knowledge, this is the first empirical study to investigate the relationship between ITIs and FP from the perspective of digital options, exploring five emerging technologies and considering firm life, size, and state ownership in a sample of Chinese listed firms.

Details

Chinese Management Studies, vol. 18 no. 2
Type: Research Article
ISSN: 1750-614X

Keywords

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