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This chapter presents a data envelopment analysis (DEA) based relative financial strength (RFS) indicator using accounting data that is predictive of stock market performance of public firms. Such an indicator is indispensable in the fundamental analysis of firms for stock portfolio selections. This methodology requires optimally configuring inputs and outputs for the DEA model such that the strength indicator is maximally correlated with observed stock returns. This optimized RFS indicator providing the maximum predictive strength of stock returns is determined by factors such as asset utilization, leverage, profitability, and growth rates, in addition to the well-known factor, book-to-market ratio. Computational evidence is provided using more than 800 firms covering all major sectors of the U.S. stock market. Using quarterly financial data, we employ the RFS indicator to devise portfolios that yield superior financial performance relative to using portfolios of sector-based funds.

The purpose of this paper is to assess the Kinder, Lydenberg, Domini & Co. (KLD) dimensions by distinguishing between corporate social responsibility (CSR) strengths and concerns and examine their individual effects on firm financial performance. Additionally, the study distinguishes between US domestic firms and multinational enterprises (MNEs) to provide additional insights and explore if any differences exist.

Data from the KLD and Compustat databases are analyzed for a sample of 562 US firms, of which 359 are multinational corporations, and 203 operate solely in the USA. A path analysis was used to examine the effect of CSR strengths and concerns on firm financial performance.

The findings show that increases in CSR strengths as well reductions in CSR concerns are positively linked to firm financial performance. The results also suggest that addressing concerns would be more beneficial to MNEs as opposed to US domestic firms.

First, it should be noted that this study is cross-sectional, thus limiting confirmation of causality. Future studies can confirm causality by conducting longitudinal analysis. Also, some country-specific regulations require firms to make certain CSR-related information publicly available. Future studies can focus on countries that have such regulations and make comparisons with countries that allow firms to decide for themselves whether or not to make CSR-related activities publicly available.

When measuring CSR, previous studies have combined the CSR strengths and concerns latent variables of the KLD database. This can potentially be a problem because CSR strengths and concerns are not meant to measure the same issues. By separating them into two distinct latent variables, the authors can better understand their individual effects on firm performance.

This study aims to empirically analyze the effect of firm financial strengths (liquidity, leverage, and cost of goods sold) and firm characteristics (utilization, tangibility and company size) towards firm financial performance and study the differences of these effects before and after firms going public.

The analysis is based on 159 firms listed on the Stock Exchange of Thailand (SET) during the transition periods of interest from one year before each firm became a listed firm and up to five years after becoming a listed firm (data collection from 2002 to 2019). Fuzzy set qualitative comparative analysis (fsQCA) is applied for the analysis.

The empirical evidence shows that the firms have to maintain different levels of determinants during different years of operation. Before becoming listed firms, the firms' size plays a significant role in determining the firms' financial performance. Different characteristics are required, according to the size of the firms. One year after becoming listed firms, a low level of production and operating expenses in relation to sales and low leverage are the two important factors for superior financial performance. Then, 2–5 years after becoming listed firms and after a steady state is reached, two more factors, good liquidity and high tangibility, are shown to be significant for good financial performance of the firms.

Unlike prior studies, this study explains the causal relationships or combinations of determinants of financial strengths and firm characteristics, before and after going public toward good financial performance of firms, which cannot be identified by analyzing the calendar-year performance.

The capital markets witness phenomenal shifts of corporate control. With the shift of world economy into a global one, there has been a rapid increase in the volume of acquisitions. The previous studies shed light on the motives behind acquisition and impact of acquisition on both bidding and target firms. The purpose of this study is to bridge a gap in literature by exploring the factors affecting the acquisition ability (AA) of the firms. The study has analyzed the role of financial strength, corporate governance and regulatory influence on AA of acquiring firm.

Cross-sectional data has been analyzed with respect to Pakistan stock exchange for a period of 2004-2017 by using logit regression.

Analysis indicates that firm-specific variables are important determinants in firm’s decision to acquire. Chief Executive Officer duality and presence of institutional shareholders on the board contribute to this important phenomenon in the life of the acquiring firms. Bidding firm’s financial strength is also another important consideration while going for corporate control transfer transactions. The empirical results indicate the better AA for firms characterized by minimum capacity usage, lower level of intangible assets, lower debt levels and lower advertising expenses. However, the regulatory factor has no significant role in firms’ AA. The findings of the study are helpful for managers, regulators and policymakers.

Analyzing the role of financial strength, corporate governance and regulatory influence on AA of acquiring firm is a rare study, especially in an emerging country such as Pakistan.

This study uses a descriptive casual design and survey random sampling from 115 observations from five-star, four-star and three-star hotels due to the fact that they provide employee staff feeding or complimentary service. The Pearson correlation and multiple regression were used to test the direct and mediating effects for linear relationships between income tax and financial performance. Tax on adjusted net income has a significant effect on net income and non-significant effect on return on asset (ROA). This means that the level of income tax paid by the hotels after reintegration of non-deductible charges including complimentary staff feeding and other allowances reduced their assets and turnover in general thus slowing reinvestment. The findings reveal that firm liquidity had a significant effect on ROA. This indicates that the income tax pay-out decreases hotels’ cash flow resulting on loan diversification leverage. Shareholders are therefore forgoing their shares for reinvestment in different businesses other than hotels. The findings also reveal a significant effect of firms’ age on income tax on hotels’ financial performance. Simply paying income taxes is not lowered by the hotels’ age thus endorsing the concept of paying tax when income is available and vice versa when there is no income. Since Rwanda promotes investment and doing business for the private sector, the tax base increases the tax collection amount instead of collecting a small amount on a few number of tax paying hotels. This commends the tax administration review and frequently harmonised the tax procedures to hospitality sector and is the key development of their financial performance, which had been used by the hotels of the developed countries like the USA and Europe. This will improve Rwanda’s competitiveness in hotel induction and sustain hospitality business investment with tax base for government. It was pragmatic that hotels may directly deduct all related expenses before income tax calculation while others assimilate them into other similar expenditures. There is no formal way for accounting these hotel expenses, whereas the category of staffs benefitting are mainly junior staffs who, in turn, are low-wage holders. This does not leave space for hotel owners to take out incentives therefore leaving out hotels’ darkness in their earnings returns and staff welfare. This chapter presented the directorial policy, philosophy and practices in tourism or hospitality (hotel) sector in Africa. It has become relevant for harmonisation of financial performance while including all life cycle practices of hotels like staff feeding or complimentary service. This chapter is classified as an empirical study.

The purpose of this paper is to investigate the direct and indirect links between environmental, social and governance (ESG) practices and financial performance using the mediate role of green innovation.

To test the current study hypotheses, the authors applied linear regressions with a panel data using the Thomson Reuters ASSET4 and Bloomberg database from a sample of 115 UK and 90 Germany companies selected from the ESG index over the period 2005–2019.

The results show that the strengths ESG increase the firm value and the weaknesses decrease it. In addition, the authors find that green innovation fully mediates the relationship between ESG practices and financial performance in UK and Germany.

The findings provide interesting implications to academics practitioners and regulators who are interested in discovering ESG score, financial performance and green innovation. The results also provide insights to regulators and the board of directors on future growth opportunities for the company and the country.

This study is unique in examining the mediation effect of green innovation on the relationship between ESG practices and financial performance.

The purpose of this paper is to empirically examine the relationship between firms' inventory accumulation and financial structure. It further investigates the impact of geographical locations on firms' inventory investment decision after controlling for firms' financial structure.

This paper uses a large panel of over 1,400 Chinese listed firms that issued.

Firms' financial structure, as reflected in the availability of internal and external capital, has significant impact on firms' inventory decisions. In addition, it is found that firms headquartered in major economic development areas (EDA) tend to have slower inventory growth than firms located in rural areas. Moreover, the results reveal that locating in major EDA facilitates firms' stockpiling of inventories through easy access to external capital.

This study not only contributes to the studies on the interactions between firms' location and their financing and investment policy, but also improves our understanding about emerging markets such as China.

This study aims to examine the unexpected portion of the pension discount rate to determine if the pension discount rate is being used to manage earnings for both financially healthy and financially unhealthy firms as categorized based upon their Altman z-score for bankruptcy.

Regression analysis is conducted with the unexpected portion of the pension discount rate as the dependent variable and various metrics indicating potential firm strengths and weaknesses as the independent variables.

This study finds evidence that suggests managers for both groups of firms are using their choice of discount rate to manage bottom-line earnings. These findings highlight the patterns of various firm choice differences found between the two groups and the magnitude of the differences between the groups.

Three streams of literature are considered in this research: earnings management, defined pension plans and z-score bankruptcy. This study extends prior research by examining the unexpected portion of the pension discount rate based on the z-score determination of whether a firm is considered financially healthy or financially unhealthy. Our findings highlight the impact of various firm choice differences found between the two groups of firms.

The purpose of this paper is to identify the key antecedents and consequences of bank reputation and whether their relative importance varies across countries.

The sample consists of 900 bank customers, representative of the national populations in the UK (500) and Spain (400), two of the countries in which the weight of the financial system on the gross domestic product is much bigger than that of other European countries. The research hypotheses were tested by conducting a multi-group analysis with covariance-based structural equation modelling.

In contrast with previous studies, it was discovered that the most important cognitive antecedent of banks’ reputation is reliability/financial strength. This study reinforces the prominence of satisfaction as a key emotional aspect of reputation. Differences between the UK and Spain were found in the impact of employer branding and corporate social responsibility. The positive effect of bank reputation on consumer behaviour (loyalty and word of mouth) and the existence of cross-country differences as regards loyalty were also confirmed.

This is a systematic cross-country analysis of corporate reputation which includes not only cognitive antecedents but also emotional determinants that have been repeatedly ignored. This paper sheds light on whether the antecedents and consequences of corporate reputation vary across countries. The choice of the banking sector provides a unique opportunity to observe the determinants and outcomes of corporate reputation following an unstable time in the banking sector.

Access to a strategic planning software package provided a state‐based small business training provider with an opportunity to develop an innovative training/assistance program in financial management for small business. The program aimed to have accountants use the software to provide small business managers with financial management information specific to their firms, in a cost‐effective manner. It was hoped that in so doing, accountants would build the provision of such information into the services normally provided to small business, and the small business managers would recognize the value of such information and begin to use it in the management of their firms. Reports on an evaluation of the program which indicated that the program innovation was an effective means of encouraging and enabling both accountants and small business managers to undertake and utilize financial analysis in the management of small firms.