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Article
Publication date: 6 April 2020

Alexios Makropoulos, Charlie Weir and Xin Zhang

This paper has two purposes. First, it evaluates the extent to which different failure processes are present in failed UK SMEs, by considering non-financial metrics…

Abstract

Purpose

This paper has two purposes. First, it evaluates the extent to which different failure processes are present in failed UK SMEs, by considering non-financial metrics including director characteristics, in addition to the financial ones. Second, it analyses the determinants of the transition to failure in relation to the different failure processes that have been identified.

Design/methodology/approach

The study is based on a sample of failed UK SMEs. The data covers financial ratios, board characteristics, the macroeconomic environment, sectoral details and regional information. First, failure processes are identified using a combination of factor analysis and cluster analysis. Second, the determinants of firms' transition to failure for the whole sample and in the individual failure clusters are analysed using panel data analysis.

Findings

Four different firm failure processes were identified. Director characteristics differ between firm failure processes. We find evidence that director characteristics including director age and board gender structure, affect the transition to failure of UK SMEs. We also find that different factors affect the different failure processes.

Originality/value

The paper is the first to analyse the reasons for failure of UK SMEs in the firm failure process context by considering non-financial metrics such as the characteristics of the firms' directors. In addition the paper also identifies a number of different determinants that affect the various failure processes. This finding is important because it suggests that policies designed to reduce the incidence of firm failure should take account of the different failure processes.

Details

Journal of Small Business and Enterprise Development, vol. 27 no. 3
Type: Research Article
ISSN: 1462-6004

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Article
Publication date: 26 April 2013

Lin Xiu

This study aims to examine the gender pay gap in organizational leadership positions in China. The author seeks to analyse how much of the gap is explained by differences…

Abstract

Purpose

This study aims to examine the gender pay gap in organizational leadership positions in China. The author seeks to analyse how much of the gap is explained by differences in individual characteristics and how much is explained by firm characteristics.

Design/methodology/approach

This study estimates pay functions based on a unique data set from a survey of private firms and top managers in Liuzhou, Guangxi, China.

Findings

Female managers receive much lower pay than male managers in China. A larger portion of the gender earnings gap can be attributed to firm‐level characteristics than individual characteristics. Female managers tend to have fewer firm‐level characteristics that are associated with higher pay, and when they do, they tend to receive a smaller pay premium for those characteristics. This is especially the case for the firm size variable where female managers are less likely to be employed in higher paying large firms, and when they are, they receive a smaller firm‐size premium.

Research limitations/implications

This study uses a sample of small and medium‐sized enterprises (SMEs) in China. As such, the gender pay gap in larger firms or firms in large cities (e.g. Beijing or Shanghai) may not be represented by the findings of this study.

Practical implications

This study offers insights on how women executives are paid after they cross the “glass ceiling” and enter the managerial ranks in China. Female executives should be aware of the effects of firm characteristics on gender differences in compensation.

Originality/value

This study adds to the limited empirical literature on the gender pay gap among top executives using a matched establishment‐manager data set in China.

Details

Evidence-based HRM: a Global Forum for Empirical Scholarship, vol. 1 no. 1
Type: Research Article
ISSN: 2049-3983

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Article
Publication date: 1 March 2006

Philip Gharghori, Howard Chan and Robert Faff

Daniel and Titman (1997) contend that the Fama‐French three‐factor model’s ability to explain cross‐sectional variation in expected returns is a result of characteristics

Abstract

Daniel and Titman (1997) contend that the Fama‐French three‐factor model’s ability to explain cross‐sectional variation in expected returns is a result of characteristics that firms have in common rather than any risk‐based explanation. The primary aim of the current paper is to provide out‐of‐sample tests of the characteristics versus risk factor argument. The main focus of our tests is to examine the intercept terms in Fama‐French regressions, wherein test portfolios are formed by a three‐way sorting procedure on book‐to‐market, size and factor loadings. Our main test focuses on ‘characteristic‐balanced’ portfolio returns of high minus low factor loading portfolios, for different size and book‐to‐market groups. The Fama‐French model predicts that these regression intercepts should be zero while the characteristics model predicts that they should be negative. Generally, despite the short sample period employed, our findings support a risk‐factor interpretation as opposed to a characteristics interpretation. This is particularly so for the HML loading‐based test portfolios. More specifically, we find that: the majority of test portfolios tend to reveal higher returns for higher loadings (while controlling for book‐to‐market and size characteristics); the majority of the Fama‐French regression intercepts are statistically insignificant; for the characteristic‐balanced portfolios, very few of the Fama‐French regression intercepts are significant.

Details

Pacific Accounting Review, vol. 18 no. 1
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 3 October 2016

Mohammad Tariqul Islam Khan, Siow-Hooi Tan and Lee-Lee Chong

The purpose of this paper is to test the competing explanations of stated preferences for firm characteristics, optimism and overconfidence for trading activities in a…

Abstract

Purpose

The purpose of this paper is to test the competing explanations of stated preferences for firm characteristics, optimism and overconfidence for trading activities in a single framework.

Design/methodology/approach

A survey methodology is followed to collect the data among retail investors in Malaysia using simple random sampling.

Findings

The findings show simultaneous identification of stated preferences for firm characteristics, optimism and overconfidence as determinants of trading activities. Preferences for firm’s profitability characteristics, management and product-related attributes and risky characteristics are likely to decrease investors’ trading activities. On the other hand, preferences for firm’s liquidity and trading volume characteristics with relative financial-domain optimism, personal investment optimism and better-than-average aspect of overconfidence are likely to increase investors’ trading activities.

Practical implications

This finding implies that investors should be careful not only in assessing firm’s characteristics but also need to understand the effects of optimism and overconfidence in trading decisions.

Originality/value

The study considers various aspects of optimism and overconfidence, and the stated preferences for firm characteristics, unlike one aspect of these behavioral biases and indirect observation of preferences for firm characteristics. Furthermore, the study considers trading frequency, annual portfolio turnover and trading intention, whereas earlier studies considered only one or two of these trading decisions.

Details

International Journal of Bank Marketing, vol. 34 no. 7
Type: Research Article
ISSN: 0265-2323

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Article
Publication date: 1 April 2006

Camelo‐Ordaz Carmen, Fernández‐Alles María de la Luz and Martínez‐Fierro Salustiano

This work has three main objectives – to analyse whether the strategic vision of the top management team (TMT) directly affects firms' innovation performance; to shed some…

Abstract

Purpose

This work has three main objectives – to analyse whether the strategic vision of the top management team (TMT) directly affects firms' innovation performance; to shed some light on which of the intrinsic characteristics of work teams proposed in the literature influence innovation; and to analyse the joint effect that the TMT's vision and the work team's characteristics may exert on innovation performance.

Design/methodology/approach

The sample for this study was chosen from the Dun & Bradstreet database. The population consists of firms with more than 50 employees belonging to the three sectors of the Spanish economy with the largest number of registered patents according to statistics from the Spanish Office of Patents and Brands (960 firms).

Findings

The results indicate that the TMT's strategic vision alone does not explain companies' innovation performance. Innovation also requires the existence of diverse, cohesive, and autonomous work teams whose members engage in fluent informal communication.

Research limitations/implications

The empirical evidence demonstrates the complexity of the innovation performance that has to be encouraged by the TMT, but also supported by the existence of teams with specific characteristics.

Practical implications

These results offer relevant implications for R&D managers about the way teams should be formed to increase innovation. The paper derives some conclusions about the key characteristics of work teams that, in combination with the view of the TMT, can affect innovation in firms.

Originality/value

The majority of earlier studies have analysed theoretically the effect of both variables – the strategic vision of the TMT and the intrinsic characteristics of teams – on innovation, but separately. This paper analyses the joint effects that the intrinsic characteristics of work teams have on innovation, which resolve some contradictions regarding the way some variables affect innovation of the firm. Finally the results offer empirical evidence on how Spanish firms obtain innovation performances.

Details

European Journal of Innovation Management, vol. 9 no. 2
Type: Research Article
ISSN: 1460-1060

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Article
Publication date: 1 February 2016

Mohammad Tariqul Islam Khan, Siow-Hooi Tan and Lee-Lee Chong

– This paper aims to study gender differences in preferences for firm characteristics across various groups of investors in Malaysia.

Abstract

Purpose

This paper aims to study gender differences in preferences for firm characteristics across various groups of investors in Malaysia.

Design/methodology/approach

Self-declared preferences are elicited through a survey of 520 investors comprising retail, financial professionals and institutional investors in the Malaysian stock market. Non-parametric (Mann-Whitney and Kruskal-Wallis) tests are computed to achieve the stated objective.

Findings

Results reveal that female investors display higher preferences for the liquidity of a firm, dividend payments, trading volume of a firm, stock price and firm’s age than male investors across investor’s groups.

Research limitations/implications

Findings imply that the gender gap in investing behaviour can be partly attributed to gender differences in preferences for firm characteristics.

Practical/implications

The findings suggest that the gender gap can be mitigated by giving more priority to the choices of female investors with respect to firm characteristics. In turn, this may reduce a part of the gender gap in investing. Moreover, the findings would assist companies to understand and know how their shareholder’s preferences vary with respect to gender and investor’s groups.

Originality/value

This paper provides evidence concerning the gender gap in investor’s self-declared preferences for firm characteristics across retail, financial professionals and institutional investors in Malaysia, which complements previous studies that used equity holdings data and only two groups of investors.

Details

Qualitative Research in Financial Markets, vol. 8 no. 1
Type: Research Article
ISSN: 1755-4179

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Article
Publication date: 13 March 2020

Philippos Karipidis, Polymeros Chrysochou and Ioanna Karypidou

The purpose of this study is to explore how food-exporting firms assess the importance of relationship characteristics of the supply chain that impact their performance as…

Abstract

Purpose

The purpose of this study is to explore how food-exporting firms assess the importance of relationship characteristics of the supply chain that impact their performance as well as how it relates to export performance indicators.

Design/methodology/approach

An online survey was administered across 83 food firms in Greece, assessing the importance of relationship characteristics of the supply chain by using the best–worst scaling technique.

Findings

The most important characteristics relate to the quality of the primary material and the procurement costs and producer prices; these are considered more important by export-oriented food firms compared to non–export-oriented food firms. Characteristics that relate to the relationship between members of the agri-food supply chain and the interorganizational business systems and governance mechanisms are also considered of average importance. Characteristics related to the adoption of differentiation strategies are considered least important.

Practical implications

Producers should emphasize the quality and prices of their product as well as establish collaborations with food firms. Food firms need to emphasize interorganizational business systems and governance mechanisms that reduce procurement costs, instead of trying to reduce producer prices. Public authorities should engage stakeholders of the agri-food supply chain in relationships that will enable food firms to deliver on their quality and price demands.

Originality/value

Primary production and collaborations of it with food firms have not been studied in regards to what extent they relate to food firms' export performance.

Details

British Food Journal, vol. 122 no. 4
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 28 January 2020

Dhouha Bouaziz, Bassem Salhi and Anis Jarboui

The purpose of this paper is to investigate the impact of chief executive officer (CEO) characteristics on the earnings management examined by the discretionary accruals.

Abstract

Purpose

The purpose of this paper is to investigate the impact of chief executive officer (CEO) characteristics on the earnings management examined by the discretionary accruals.

Design/methodology/approach

The sample includes 151 French firms listed on the CAC ALL shares index from 2006 to 2015. The paper uses the feasible generalized least square regression technique to test the relationship between CEO characteristics and earnings management.

Findings

Using discretionary accruals as a proxy for earnings management, the results obtained from the three models (Jones modified 1995; Kothari et al., 2005; Raman and Shahrur, 2008) indicated that there is a positive and significant relationship between CEO duality, CEO nationality and the quality of financial communication. However, no significant relationship was found between CEO board member, CEO turnover and earnings management.

Originality/value

A literature review finds that fewer studies have investigated the relationship between earnings management practices and personal CEO characteristics in the French context. Furthermore, no study yet has examined the influence of CEO nationality and CEO age on earnings management practices. This study provides empirical data about the impact of CEO’s characteristics on earnings management and how these different characteristics can facilitate the transition to manipulate and influence the quality of financial communication.

Details

Journal of Financial Reporting and Accounting, vol. 18 no. 1
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 27 July 2020

Nancy Chun Feng

Using a sample of US nonprofit organizations, where the identity of the auditor in charge of the audit is revealed, I investigate whether individual auditor characteristics

Abstract

Purpose

Using a sample of US nonprofit organizations, where the identity of the auditor in charge of the audit is revealed, I investigate whether individual auditor characteristics (gender, engagement size and tenure) are associated with audit quality.

Design/methodology/approach

To investigate how individual audit partner characteristics affect audit quality, I follow Petrovits et al. (2011) and Fitzgerald et al. (2018) who investigate client characteristics and partner tenure as determinants of ICDs in nonprofits. I add three characteristics of the auditor in charge – gender, engagement size and tenure – to their models. In additional analyses, I use subsamples partitioned by client risk and audit firm size, and find that individual auditor characteristics generally play a more significant role in the issuance of ICDs and QAOs for riskier clients than for less risky clients.

Findings

My results show that female auditors are more likely to report internal control deficiencies and issue qualified audit opinions (QAOs) to nonprofits. I also find that auditors with more Single Audit engagements within the same year are less likely to report ICDs. In addition, auditor tenure is negatively associated with the likelihood of issuing an ICD report, suggesting that auditors become complacent as the length of the auditor–client relationship lengthens or, alternatively, that they are better able to assist their clients in correcting ICDs and in maintaining stronger internal control environments as they gain client-specific knowledge over time. Additional analysis suggests tenure and engagement load results are sensitive to the sample specification employed.

Research limitations/implications

One caveat of this study is that self-selection bias may be present when a client chooses an audit firm, the audit firm selects a client, and the audit firm assigns a partner to the engagement. Future study with more advanced econometric models is needed to mitigate self-selection bias. Another limitation is that my sample consists of nonprofit organizations and may not be generalizable to for-profit firms. Another caveat of this study is that the tenure variable is truncated compared to prior literature (e.g. Fitzgerald et al., 2018). Also given the rarity of audit quality measures in the nonprofit setting, internal control deficiencies and qualified opinions are used as proxies for audit quality because they reflect both the quality of audit work and the quality of organizations' internal control and financial reporting. Future studies with data including additional audit quality measures could shed more light on the topic.

Originality/value

This study contributes to the literature in several ways. First, this study offers a more comprehensive examination on the impact that a broader set of individual auditor characteristics on audit quality in the nonprofit setting, compared to Fitzgerald et al.'s (2018) study. Second, the findings should be of interest to policymakers who recently mandated engagement partner disclosures from US audit firms (PCAOB, 2015b). Finally, another distinctive feature of this study is that I examine the impact of individual auditor characteristics on audit quality in a setting where Big 4 audit firms are not dominant.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 32 no. 4
Type: Research Article
ISSN: 1096-3367

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Article
Publication date: 28 October 2013

ThuyUyen H. Nguyen and Teresa S. Waring

The aim of this paper is to use an innovation decision process to examine CRM technology adoption in small to medium-sized enterprises and its intrinsic link to the nature…

Abstract

Purpose

The aim of this paper is to use an innovation decision process to examine CRM technology adoption in small to medium-sized enterprises and its intrinsic link to the nature of the organisation and the individuals within it.

Design/methodology/approach

A survey was administered to SMEs in Southern California to measure the organisational characteristics, specifically management characteristics, employee characteristics, IT resources and firm characteristics. The perception of CRM, decision to adopt CRM, and extent of CRM implementation were also measured. Previously validated instruments were used where required. The data were analysed using multivariate and logistic regression.

Findings

The results indicate that management's innovativeness affects the firm's perception of CRM systems, but age, education and gender do not. The decision to implement a CRM system is influenced by management's perception of CRM, employee involvement, the firm's size, its perceived market position, but not the industry sector. However, the number and types of CRM features implemented are affected by management's perception of CRM, employee involvement, the firm's size, the industry sector, but not its perceived market position.

Research limitations/implications

This study is specific to Southern California and the sample size is relatively small, although sufficient for this analysis. The study should be replicated in more diverse geographic settings with a larger sample.

Practical implications

The study provides evidence of the need for management to be supportive of innovation and technology, to evaluate the available resources (IT knowledge, skills, infrastructure) within the organisation, to recognise the importance of employees' contributions, and to be aware of the features appropriate to their company's size and industry sector before undertaking CRM technology adoption.

Originality/value

The findings from this study extend the understanding of CRM adoption in SMEs and help in building a greater understanding of the factors associated with such adoption. It will be of great value to owners/managers in SMEs who are considering adopting CRM.

Details

Journal of Small Business and Enterprise Development, vol. 20 no. 4
Type: Research Article
ISSN: 1462-6004

Keywords

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