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Using a meta-regression analysis, we quantitatively review the empirical literature on the relation between effective tax rate (ETR) and firm size. Accounting literature offers two competing theories on this relation: The political cost theory, suggesting a positive size-ETR relation, and the political power theory, suggesting a negative size-ETR relation. Using a unique data set of 56 studies that do not show a clear tendency towards either of the two theories, we contribute to the discussion on the size-ETR relation in three ways: First, applying meta-regression analysis on a US meta-data set, we provide evidence supporting the political cost theory. Second, our analysis reveals factors that are possible sources of variation and bias in previous empirical studies; these findings can improve future empirical and analytical models. Third, we extend our analysis to a cross-country meta-data set; this extension enables us to investigate explanations for the two competing theories in more detail. We find that Hofstede’s cultural dimensions theory, a transparency index and a corruption index explain variation in the size-ETR relation. Independent of the two theories, we also find that tax planning aspects potentially affect the size-ETR relation. To our knowledge, these explanations have not yet been investigated in our research context.

The objective of this paper is threefold. First, it aims to empirically study whether firm-specific/idiosyncratic uncertainty, macroeconomic/aggregate uncertainty and political uncertainty have an adverse influence on firms' investment decisions in Pakistan. After establishing this, it scrutinizes whether the uncertainty effects on investment are different for firms of different sizes. Finally, it investigates whether any heterogeneity exists in the uncertainty impacts across different industries.

The empirical analysis is based on an unbalanced panel data of 468 nonfinancial firms listed at the Pakistan Stock Exchange (PSX) during the period 2000–2018. Departing from the literature, the paper builds a time-varying composite volatility/uncertainty index based on the principal component analysis (PCA) by utilizing the constructed volatility series for sales, cash flows and return on assets to gauge firm-specific uncertainty for each firm included in the analysis. Likewise, the paper develops a PCA-based composite index for macroeconomic uncertainty by using the conditional variance series of consumer price index (CPI), industrial production index (IPI), the interest rate and the exchange rate obtained by estimating the (generalized) autoregressive conditional heteroscedastic, (G)ARCH, models. Finally, political uncertainty is measured by political risk components maintained by the Political Risk Services Group. The empirical framework of the paper augments the standard investment equation by incorporating all three types of uncertainty. Firms are grouped into small, medium and large categories based on firms' total assets and the size indicators are generated. Next, the indicators are multiplied by each uncertainty measure to quantify the differential effects of uncertainty across firm size. Firms are also differentiated by sectors to explore the sector-based asymmetries in the uncertainty effects. The “robust two-step system generalized method of moments (2SYS GMM) (dynamic panel data) estimator” is applied to estimate the empirical models.

The results provide robust and strong evidence of the detrimental influence of all three types of uncertainty on investment. Yet, it is observed that the strength of the influence considerably varies across uncertainty types. In particular, compared to firm-specific uncertainty, both macroeconomic and political uncertainties have more unfavorable effects. The analysis also reveals that the effects of all three types of uncertainty are quite different at small, medium and large firms. Specifically, it is observed that although the investment of all firms is influenced adversely by magnified uncertainty, the adverse effects of all three kinds of uncertainty are quite stronger at small firms than medium and large firms. These findings support the phenomenon of size-based asymmetries in the effects of uncertainty on investment. The results also provide evidence that either type of uncertainty quite differently affects the investment policy of firms in different sectors.

The findings help different stakeholders to know how different types of uncertainty differently affect corporate firms' investments. Further, they suggest that firm size has a vital role in ascertaining the adverse effects of uncertainty on investment. The paper identifies to which type of uncertainty investors and policymakers should care more about and to which types of firms and industries they should concern more during volatile times. Firms should have more fixed assets and expand their size to mitigate the detrimental effects on investment of internal and external uncertainties. The government should enhance the political stability to induce firms for a higher level of investment, which, in turn, will result in higher growth of the economy.

The originality of the paper is credited to four aspects. First, unlike most previous studies that have utilized a single volatility measure, this paper constructs composite uncertainty indices based on the weights determined by the PCA. Second, it examines the effect of political uncertainty over and above the effects of idiosyncratic and aggregate (macroeconomic uncertainty) for an emerging economy. Third, and most important, it provides first-hand empirical evidence on the role of firm size in establishing the asymmetric effects of uncertainty on investment. Finally, it provides evidence on the industry-based heterogeneity in the uncertainty effects.

The purpose of this paper is to empirically examine the relationships between acquirer size and performance outcomes of the different process of acquisition in the Chinese context and the moderating effect of political connections on the size-performance relationship.

Building upon agency theory, the paper examines the relationship between acquirer size and acquisition announcement returns to find whether the acquirer size effect exists in China. Moreover, the paper investigates whether large firms can perform better in the long run arising from scale economy. Finally, the paper examines the moderating effect of political connections on the size-performance relationship. Accounting for the complexity of political connections in China, the paper uses two methods to capture political connections.

The paper finds that acquirer size plays a significant negative role on announcement returns, suggesting that the acquirer size effect also exists in China. However, acquirer size has a significant positive impact on long-term performance, indicating that large acquirers perform better in the integration process. Although no evidence shows that political connections can bring some off-setting benefits to acquirer size effect argued by Humphery-Jenner and Powell (2014), political connections, indeed, have a positive effect on mergers and acquisitions (M&As) announcement returns.

The paper contributes to the corporate characteristic, political connections and M&A performance literature. Due to agency problem and scale economy, the effect of firm size on acquisition performance varies with the stage of M&A. Political connections can bring some benefits to M&A deals.

The purpose of this paper was to test the mediating role of training duration in relationship between firm characteristics and training evaluation practices. In this paper, the authors also investigated if this mediating effect differs with respect to the size of the firm.

The authors collected data from 260 professionals of 90 call centers.

The authors found that training duration mediates the relationship between firm size and training evaluation. The authors also found that indirect effect of firm size on training evaluation through training duration differs across different levels of firm size but not across different levels of ownership.

This is a cross-sectional study that emphasized on training evaluation practices only.

The study has implication for both evaluation researchers and practitioners in terms of designing training evaluation policies and practices.

This is the first study in its nature that explains the intervening role of training duration in relationship of firm characteristics and training evaluation practices.

Applying the institution-based view and the resource-based view, this study explores how state ownership influences early internationalization of emerging market firms, how it interacts with firm size to have an impact and how the proportion of SOEs moderates this interaction effect.

Based on a sample of 717 Chinese listed firms, this study uses Poisson regression, ordinary least square regression and Heckman two-stage estimation to analyze the data.

This study finds state ownership does not influence early internationalization, state ownership and firm size jointly can have a significant impact, and the proportion of SOEs in an industry sector can moderate this interaction effect.

This study enriches our understanding of the impact of home government involvement on internationalization strategies of emerging market firms, contributes to early internationalization research by building the theoretical mechanisms about these direct and interaction effects and by providing empirical results and provides important advices to firm decision-makers and government policymakers. By examining these interaction effects, it also provides a solution to the theoretical conflict created by the two opposing effects of state ownership.

High-performance work systems (HPWSs) are linked to performance, but few studies explore creativity behaviours (CBs). The present study includes job satisfaction as a mediator, and firm size and competitive rivalry as moderators to better understand the context.

Data were collected using a sample of 310 New Zealand managers. Data analysis was a moderated mediation analysis in structural equation modelling using Mplus.

The authors find HPWSs are directly related to CBs and job satisfaction, with job satisfaction fully mediating HPWS effects. Two-way moderation effects show managers in small firms report the highest CBs with high HPWSs, and a significant moderated mediation effect is found with firm size, showing a strong positive indirect effect from HPWS, which diminishes as firm size increases.

HPWSs hold the key to providing managers with opportunities for enhancing their CBs. Exploring the distinct bundles of HPWSs in the present study provides avenues for firms to understand and expand their influence on managers.

The findings of firm size as a boundary condition provides unique insights that aid our understanding of the effectiveness of HPWSs on CBs, and how small-sized New Zealand firms might extract better advantages from HPWSs. A major contribution is testing external firm factors (size and the business environment) to understand what roles they may play on managers’ creativity.

This study examines the possible nonlinear effect of size on stakeholder and shareholder profitability in the Ghanaian insurance brokerage industry.

This study employs a panel dataset of 64 Ghanaian insurance brokerage firms spanning 2011–2015. Static [ordinary least squares (OLS), fixed effect and random effect and dynamic (two-step generalized method of moments (GMM))] estimation techniques are employed to analyze the data.

The study finds the existence of both economies and diseconomies of scale and scope theories in the Ghanaian insurance brokerage industry confirming the existence of nonlinear nexus between size and performance. This finding is consistent for both stakeholder and shareholder profit performance. Thus, the results show that size improves profitability of insurance brokerage firms, but beyond a certain threshold, the relationship turns negative as size negatively affects profitability.

The research findings have implications for both policy and research; the study recommends that Ghanaian brokerage managers should understand that not all growth is good and exercise a duty of care when applying growth strategies by monitoring size effect on performance so as not to go beyond the inflection point. Further research can be done to examine this effect in other contexts, timeframes and jurisdictions.

This research is unique in that it employs a panel dataset consisting of 96% of insurance brokerage firms in Ghana whilst employing both static and nonstatic regression models to examine the effect of size. The research analysis adopted is robust, and the findings are significant. Also, the lack of empirical studies on the operations and dealings of auxiliary institutions such as the insurance brokerage firms adds value to this research.

From the intra- and inter-regional dimensions, this paper investigates the linkage between industrial agglomeration and inventory performance, and further demonstrates the moderating role of firm size and enterprise status in the supply chain on this linkage.

Using a large panel dataset of Chinese manufacturers in the Yangtze River Delta for the period from 2008 to 2013, this study employs the method of spatial econometric analysis via a spatial Durbin model (SDM) to examine the effects of industrial agglomeration on inventory performance. Meanwhile, the moderation model is applied to examine the moderating role of two firm-level heterogeneity factors.

At its core, this research demonstrates that industrial agglomeration is associated with the positive change of inventory performance in the adjacent regions, whereas that in the host region as well as in general does not significantly increase. Additionally, both firm size and enterprise status in the supply chain can positively moderate these effects, except for the moderating role of firm size on the positive spillovers.

In view of firm heterogeneity, managers should take special care when matching their abilities of inventory management with the agglomeration effects. Firms with a high level of inventory management are suited to stay in an industrial cluster, while others would be better in the adjacent regions to enhance inventory performance.

This paper is the first to systematically analyze the effects of industrial agglomeration on inventory performance within and across clusters, and confirm that these effects are contingent upon firm size and enterprise status in the supply chain. It adds to the existing literature by highlighting the spatial spillovers from industrial clusters and enriching the antecedents of inventory leanness.

This paper jointly examines how firm size and idiosyncratic risk impact momentum returns.

Using regression analysis, the authors investigate how firm size and idiosyncratic risk impact price momentum. The authors review firm price data in 25 country markets in the Thomson Financial Datastream database from 1979 to 2009.

This study’s findings suggest price momentum is more significant among stocks with smaller size and higher idiosyncratic risk. The authors find that winner and loser portfolios have significantly smaller size and higher idiosyncratic risk than portfolios in the middle quintiles.

This study’s results are consistent with the notion that firm size matters in price momentum and mispricing is greatest for small firms because of the greater risk potential to arbitrageurs. In addition, this finding that firms with higher idiosyncratic risk have greater price momentum supports the idea that investors underreact to firm-specific information.

This work finds evidence that investors underreact to firm-specific information. As such, these findings are of particular interest for investors looking to exploit opportunities for abnormal returns through price momentum trading.

This paper jointly examines the effects of firm size and idiosyncratic risk on momentum returns. This investigation considers these effects in the global markets. This work adds to the research base by illustrating that both winner and loser portfolios have significantly smaller size and higher idiosyncratic risk than portfolios in the middle quintiles. Also unique to this study, the authors capture the time-variation of expected IdioRisk and the asymmetric effects of volatility by using an exponential general autoregressive conditional heteroskedastic (EGARCH) model to calculate conditional idiosyncratic risk.

The purpose of this research is to study the effect of organizational innovation, in terms of the introduction of both new business practices and new methods of organizing workplaces, on firm growth, along with the moderating role of the firm size in this relationship.

A panel sample of 4,125 Spanish innovative firms taken from the Technological Innovation Panel for the period 2009 to 2014 was analyzed. Two-Step System-Generalized method of moments approach and instrumental variables approach with two-stage least squares have been used.

The findings remark the positive effect of organizational innovation on firm growth in case firms introduce both new business practices and new methods of organizing workplaces. Furthermore, the empirical evidences show that the firm size has a role, although partial, in moderating negatively the effect of introducing both new business practices and new methods of organizing workplaces on firm growth.

The study adds some new theoretical insights and empirical evidences into the literature related to the inertia theory in the perspective of the population ecology, incorporating it with the effect of firm size. Furthermore, the study may represent a further part of the complex literature puzzle that links organizational innovation to firm growth, and the inclusion of the moderating role of the firm size will partially provide a deeper understanding of this link.

El objetivo de este trabajo es estudiar el efecto de la innovación organizativa, en términos de introducción de nuevas prácticas de negocio, nuevos métodos de organización del trabajo, en el crecimiento empresarial, junto con el papel moderador del tamaño de la empresa.

Se analiza un panel de 4.125 empresas innovadoras españolas pertenecientes al Panel de Innovación Tecnológica (PITEC) para el periodo 2009 - 2014. Se estimaron modelos por GMM en dos etapas y mediante modelos de mínimos cuadrados en dos etapas con variables instrumentales.

Los resultados subrayan el efecto positivo de la innovación organizativa en el crecimiento empresarial en el caso en el que la empresa introduzca nuevas prácticas de negocio y de organización del trabajo. Más aún, el tamaño de la empresa también juega un papel, aunque parcial, moderando negativamente los anteriores efectos principales.

El estudio aporta nuevos ideas teóricas y evidencia empírica a la literatura relacionada con la teoría de la inercia en la perspectiva de la ecología de las poblaciones, incorporando el efecto del tamaño de la empresa. Es más, el estudio representa un paso más en la compleja literatura que ha vinculado la innovación organizativa con el crecimiento empresarial. La incorporación del papel moderador del tamaño de la empresa puede ayudar a entender mejor esta última conexión.

Innovación organizativa, Nuevas prácticas de negocio, Nuevos métodos de organización del trabajo, Crecimiento empresarial, Tamaño empresarial, España

Revisión general

O objetivo desta pesquisa é estudar o efeito da inovação organizacional, em termos da introdução de novas práticas de negócios e novos métodos de organização em locais de trabalho, no crescimento da empresa, juntamente com o papel moderador do tamanho da empresa nessa relação.

Se analizou uma amostra de painel de 4.125 empresas inovadoras espanholas retiradas do Painel de Inovação Tecnológica (PITEC) durante o período de 2009 a 2014. Foram usadas a abordagem do Sistema GMM em duas etapas e a abordagem IV com 2SLS.

Os resultados mostram o efeito positivo da inovação organizacional sobre o crescimento da empresa, no caso das empresas introduzirem novas práticas de negócios e novos métodos de organização nos locais de trabalho. Além disso, as evidências empíricas mostram que o tamanho da empresa tem um papel, ainda que parcial, de moderar negativamente o efeito de introduzir novas práticas de negócios e novos métodos de organização dos locais de trabalho no crescimento das empresas.

O estudo acrescenta alguns novos conhecimentos teóricos e evidências empíricas à literatura relacionada à teoria da inércia na perspectiva da ecologia populacional, incorporando-a ao efeito do tamanho da empresa. Além disso, o estudo pode representar mais uma parte do complexo quebra-cabeça da literatura que liga a inovação organizacional ao crescimento da empresa e a inclusão do papel moderador do tamanho da empresa que fornecerá, em parte, uma compreensão mais profunda desse elo.

Inovação organizacional, Novas práticas de negócios, Novos métodos de organização de locais de trabalho, Crescimento da empresa, Tamanho da empresa, Espanha

Revisão geral