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This chapter elaborates on the perspectives of financial development of countries of Central Asia and China through cooperation with Russia. The authors determine financial resources for the development of the countries of Central Asia and China and figure out possible scenarios for attracting additional financial resources and conclude that financial resources have a decisive role in socioeconomic development. It is substantiated that the increase and expansion of cooperation with Russia are the preferable scenario for attracting additional financial resources. The authors recommend expanding cooperation with Russia within the implementation of the selected optimal scenario are given.

We investigate whether active involvement of private equity firms in their portfolio companies during the holding period of a later-stage private equity investment is related to increased levels in operating performance of these companies. Our analysis of unique survey data on 267 European buyouts and secondary performance data on 29 portfolio companies using partial least squares structural equation modeling indicates that private equity firms, that is, their board representatives, can increase operating performance not only by monitoring the behavior of top managers of portfolio companies, but also by becoming involved in strategic decisions and supporting top managers through the provision of strategic resources. Strategic resources, in particular expertise and networks, provided by private equity firm representatives in the form of financial and strategic involvement are associated with increases in the financial performance and competitive prospects of portfolio companies. Operational involvement, however, is not related to changes in operating performance. In addition to empirical insights into the different types of involvement and their effects, this chapter contributes to the buyout literature by providing support for the suggested broadening of the theoretical discussion beyond the dominant perspective of agency theory through developing and testing a complementary resource-based view of involvement. This allows taking into account not only the monitoring, but also the more entrepreneurial supporting element of involvement by private equity firms.

The purpose of this study is to investigate whether financial resource allocation decisions for corporate social responsibility (CSR) depends on slack resources and free cash flow.

The study's sample consists of 202 company-year observations from 51 financial institutions over the period 2015–2019. The authors collected CSR data from CSR review reports published by the Central Bank (Bangladesh Bank). The financial and governance data are collected from corporate annual reports and year-end review reports published by the Dhaka Stock Exchange. This study uses both the random-effect and generalized estimating equation models to test the hypotheses.

The authors establish two key findings consistent with the predictions of slack resource theory and free cash flow theory. First, the authors find a significant and positive relationship between slack resources and CSR expenditure. This result also supports the traditional thinking about corporate giving – that doing well enables doing good. Second, the author show that increases in free cash flow are associated with increases in CSR expenditure. This indicates the presence of agency problems between managers and shareholders regarding CSR expenditure.

This study is the first to show the positive impacts of slack resources and free cash flow on CSR expenditure in an emerging economy characterized by both capital constraints and high salience of CSR expenditure. The study has important implications for regulators, advocacy groups, shareholders and analysts in emerging economies that share similar contextual characteristics.

This paper aims to examine how modern small-medium enterprises (SMEs) operating in the tourism industry perceive and define corporate performance, and how they measure and monitor businesses’ achievements. Actual performance measurement activities are expected to show how (and if) companies manage the key factors that drive value creation and value erosion processes. Are effective performance measurement activities aligned with main theoretical prescriptions?

Theory and previous empirical research on SMEs’ performance is instrumentally used to identify those key factors that are supposed to drive small/medium hotels’ business performance; building on a resource-based view (RBV) framework, which provides the theoretical perspective to link resources, capabilities and actions to firm performance, a model based on the financial, the operational and the organisational dimension of firm’s success is developed through the selection of a set of consistent financial and non-financial indicators. The balanced performance measurement model is then tested via a field research study based on a semi-structured questionnaire sent to 540 selected SMEs active in the tourism sector.

The results suggest that small-medium Italian hotels, typically family firms managed by owners, tend to adopt a balanced system of performance measurement that keeps track of the financial and non-financial dimensions of hotel’s performance; customer orientation proves to be an extremely important leading indicator of non-financial corporate performance. Amongst traditional financial indicators, net profits, profitability ratios such as return on investment and return on sales, revenues for available room, occupancy rate and some cost efficiency ratios are found to be relevant, whereas extensive use is made of non-financial metrics such as customer satisfaction, number of complaints, number of new and repeat customers, employee competencies and staff abilities. Furthermore, some interesting results about frequency of measurement and purpose of measurement are also presented.

Data used in this study do not allow for a comprehensive analysis of the correlation between hotel performance and a specific measurement model implemented. Further future research that is meant to be developed will focus on the issue of addressing the nexus between firm performance and resource and capability used as strategic factors and monitored with an effective performance measurement system. The sample can also be expanded to carry out comparative analysis.

The results shed some further light on performance measurement activities actually implemented by Italian hotels. The evidence gives a contribution to understanding the relationship between critical resources and capabilities that need to be developed and effectively managed to reach superior business performance. Furthermore, the study highlights the need to design and implement a customised performance measurement model, which accounts for firm-specific resources and capabilities and sector-specific features for the hotel to properly manage those strategical success factors that can deliver sustained competitive advantage to the firm.

This research paper contributes to performance measurement literature, by suggesting that the development and the implementation of a simplified but structured and complete performance measurement system, designed on the specific needs and features of SMEs, seems to be a sensible way to improve resources and capabilities utilisation and to obtain a holistic understanding of the achievements of these organisations.

Achieving the goals of the sustainable development strategy and Egypt’s vision 2030 depends mainly on the existence of sources of funds. And since Egypt faces a great challenge in obtaining finance, then analyzing the drivers of financial development is a vital issue and there is a persistent need to shed light on the key obstacles for it. Thus, this paper aims to empirically assess the impact of natural resources, foreign direct investment (FDI) net inflows, education and clean energy sources on financial development in Egypt using the data of the 1971–2014 period.

The paper uses auto-regressive distributed lag and Toda-Yamomoto approaches to fulfill the purpose.

Empirical results signify that all variables except natural endowments stimulate financial development which can suggest the presence of the natural resources curse in Egypt. Moreover, the feedback effect between financial development and FDI is recognized. Clean energy sources cause financial development and natural endowments. Financial development causes natural endowments and FDI leads to the deployment of more clean energy resources.

Several crucial policy implications are suggested based upon these results as improving the quality and quantity of education and encouraging both domestic and foreign investors by providing several incentives. Moreover, the government has to enhance green finance through financing solar energy projects and other environmentally friendly projects.

It is the first research for Egypt that explores natural resource-financial development nexus using time series analysis according to our information, and two important variables are included in the model which is clean energy sources and FDI. Then, although several studies examined the impact of financial development on clean energy no empirical study before assessed the impact of clean energy on financial development.

Previous studies have produced inconsistent findings regarding the effects of resource constraints on corporate illegal behavior. This study aims to explore how entrepreneurial firms can overcome the difficulties generated by resource constraints.

Drawing on insights from general strain theory and focusing on listed entrepreneurial firms, this study proposes that failure to obtain enough resources through listing generates strain in the managers of listed entrepreneurial firms, driving them to resort to corporate financial fraud as a solution. Nevertheless, such relationships between resource constraints and the likelihood of corporate financial fraud can be weakened by innovation capability, because innovation capability can generate more confidence in their managers and relieve their strains, thereby dissuading them from engaging in corporate financial fraud.

According to our empirical results, both financial and human resource constraints are positively related to the likelihood of corporate financial fraud in listed entrepreneurial firms, but such effects can be mitigated by innovation capability.

This study provides practical implications for both regulators and managers by indicating that although entrepreneurial firms with resource constraints are more likely to commit financial fraud, innovation capability could be a strategic approach to enhance managers’ confidence and relieve the strain.

Our study contributes to the literature by enriching our understanding of the consequences of resource constraints in entrepreneurial firms and highlighting the strategic importance of innovation capability in mitigating such effects.

This study investigates a mediational model between legitimated elements, financial resource mobilisation and subsequent early firm growth among New Technology-Based Firms (NTBFs) using conformity and control perspectives of legitimacy.

To test the hypotheses, a longitudinal database of 303 NTBFs from Sweden, Finland and France is used. The ordinary least square regression analysis method is applied, and the proposed mediation relationships are studied by employing the four-step approach developed by Baron and Kenny (1986).

This study finds that based on the conformity principle, two out of three legitimated elements (business plan and incubator relationship, but not start-up experience) have an impact on financial resource mobilisation, which in turn, is associated with early growth in NTBFs based on the control principle. Thus, financial resource mobilisation positively mediates the relationships among the two legitimated elements and early growth in NTBFs.

This study has several limitations, which also generate promising pathways for future research. Future research should study the relationship between the three legitimacy elements and financial resource mobilisation and early growth across a wider range of firms and settings. The questionnaire was also based on a single point in time and could not capture the evolving nature of the legitimacy elements and fundraising. Hence, future research can examine the multidimensionality of these processes; longitudinal qualitative studies can be a complement, allowing for a better understanding of the impact of legitimacy on NTBFs.

The findings offer implications for managers of NTBFs because developing legitimacy is critical to NTBFs early growth and development. The findings indicate that NTBFs' founders must systematically develop business plans and that incubators help enhance legitimacy through a signalling.

It is believed that the study meaningfully contributes to the collective understanding of the role of legitimacy in driving the development of NTBFs. Given the importance of NTBFs in our economies, coupled with the lack of attention given to the role of mobilisation of external resources in explaining NTBF early growth, it is believed that the study is both timely and important.

The findings meaningfully contribute to the collective understanding of NTBF growth. While there are studies that have examined the antecedents of growth and finance separately, this study proposes a novel mediational model that integrates both and tests it empirically.

Strategic transformations are likely necessary for all organizations at some point in their existence, but the role of external stakeholders in committing resources to support transformations has been largely overlooked. This paper aims to begin to fill this gap by developing a theoretical model detailing which factors increase the likelihood that financial stakeholders will commit resources to strategic transformation.

Neo-institutional and stakeholder theories are applied to the strategic transformation phenomenon to develop six propositions regarding financial stakeholders’ resource commitment to strategic transformation.

Moral legitimacy, pragmatic legitimacy and unfamiliarity with the firm directly affect the likelihood that financial stakeholders will commit resources to strategic transformation. Cognitive legitimacy or familiarity amplifies the positive effect of pragmatic legitimacy on resource commitment, and pragmatic legitimacy lessens the negative effect of unfamiliarity with the firm on resource commitment.

This paper lays out a clear conceptual model of the antecedents of financial stakeholders’ resource commitment to strategic transformation, aiding practitioners in securing critical stakeholder support and filling an important gap in strategic transformation/stakeholder literature.

This study aims to explore the role of resource investment in resolving the bank size paradox, in which there is a direct positive impact on financial performance but also the potential for increased business diversification, which thus poses the risk of a negative impact on financial performance.

This study assessed secondary data on 108 commercial banks in Indonesia using specific document types, including financial reports and banking directory reports published by the financial regulatory authority. The data thus obtained were analysed via covariance-based structural equation modelling.

In the context of the Indonesian banking industry, the results showed that firm size (or bank size) had positive effects on both diversification strategy and financial performance. Meanwhile, diversification strategy had a direct negative impact on financial performance but an indirect positive effect on financial performance when mediated by resource investment.

While this study empirically demonstrated the existence of the bank size paradox, the results confirmed that it could be reduced through the strategic role of resource investment, which minimises the negative impacts of diversification strategies on financial performance.

The paper aims to rethink empirical models and theory used in explaining banks and financial institutions (FIs) and to enhance the process of theory construction. This is a provisional response to Colander et al. (2009) and Gendron and Smith-Lacroix’s (2013) call for a new approach to developing theory for finance and FIs.

An embryonic “behavioural theory of the financial firm” (BTFF) is outlined based on field research about banks and FI firms and relevant literature. The paper explores “conceptual connections” between BTFF and traditional finance theory ideas of financial intermediation. It does not seek to “integrate” finance theory and alternative theory in “meta theory” and has a more modest aim to improve theory content through “connections”.

The “conceptual connections” provide a means to develop ideas proposed by Scholtens and van Wensveen (2003). They are part of a “house with windows” intended to provide systematic means to “take data from the outside world” whilst continuously recognising “the complexities of the context” (Keasey and Hudson, 2007) to both challenge and build the core ideas of FT.

The BTFF is a means to create “conversations” between academics, practitioners and regulators to aid theory construction. This can overcome the limitations of such an embryonic theory.

The ideas developed create new opportunities to develop finance theory, propose changes in banks and FIs and suggest changes in the focus of regulation.

Regulators can use the expanded conceptual framework to encourage theory development and to enhance accountability of banks and FIs to citizens.