Search results

This paper aims to empirically investigate the evidence of the transmission of monetary policy impulses to firm profitability via manufacturing firms’ short-term and long-term corporate financing decisions.

This study decomposes the receptiveness of firm profitability to monetary policy shock under circumstances of financial flexibility. Additionally, the study extends its scope to undertake a sector-wise analysis of manufacturing firms from 2008 to 2020. Generalized methods of moments (GMM) and quantile regression models are employed.

The profitability of firms in the chemical, food and machinery sector are positively impacted by short-term financing, whereas the metal sector is positively impacted. But during the tight monetary policy, short-term financing does not appear to be a significant parameter while explaining the firms’ profitability. Secondly, the profitability of firms in the consumer goods and metal sector is positively impacted by long-term financing. Therefore, debt financing of assets could be more appropriate to maximize profitability in these sectors.

Analyzing the transmission of monetary policy impulses to firm profitability by clustering firms with financial flexibility across six key manufacturing sectors makes the study unique.

This paper aims to investigate whether being sustainable is also profitable for agri-food companies in the short-term.

The study analysed the impacts of sustainability multiple issues on one-year lagged return on assets, developing a longitudinal analysis focused on best and worst companies' samples for a timeframe of ten years. Notably, we performed OLS regressions on unbalanced panels data collecting overall 1,760 annual observations from 318 companies. Moreover, we examined the moderating effects of slack resources on the relationship between sustainability and the short-term firms' profitability.

The results show that the best sustainable companies usually improve future profitability. Conversely, the worst ones should prioritize efforts in specific initiatives (i.e. responsible products, eco-innovation, management and governance commitment to sustainability), which positively affect their profitability and compensate possible short-term financial losses due to CSR strategy execution and sustainable production/supply chain management. Finally, the study found mixed results regarding the moderating effects of slack resources on the scrutinized relationships.

The paper highlights the key environmental, social and governance aspects to be addressed for consolidating and enhancing the virtuous relationship between non-financial and financial performance, distinguishing between best and worst sustainability performers.

This study is among the first that decomposed sustainability in multiple micro aspects (i.e. sustainable strategy, products and processes) investigating the effects of each of them on the short-term agri-food firms' profitability.

The purpose of this research is to examine Micro-, small- and medium-sized enterprises (MSMEs). Which have limited access to financial resources from financial intermediaries. Thus, resource allocation is a primary concern for them.

This research studies the determinants of cash conversion cycle components and cash flow of MSMEs operating in Ecuador. This study examined a robust sample of 19,680 firms from 2000 to 2020, using the two-step generalized methods of moments to control for endogeneity and multicollinearity of independent variables issues.

The sample was divided into working capital intensive and fixed capital intensive firms. It was found that in every segment (micro-, small- and medium-sized), the majority of firms are working capital intensive and their average return is higher. This implies that small business owners assign the majority of their resources to current assets, which thus far have enabled them to achieve higher profitability.

Research investigated Ecuadorian MSMEs in a dollarized developing environment. Scrutinizing working capital intensive vs fixed capital intensive.

This paper aims to investigate possible interdependencies affecting short-term profitability between internal and process business aspects which can play a critical role in sustainability operationalisation.

The authors adopted the panel data approach to perform a partial least square structural modelling equation analysis on a sample of 391 Organisation for Economic Co-operation and Development (OECD) non-financial-listed companies, considering a timeframe of five years.

Corporate sustainability is a result of interplays between managerial commitment, strategy, slack resources’ exploitation, innovation, the sustainable management of internal production and procurement processes that managers can catalyse to foster short-term firms’ profitability.

The study is focused on internal process business determinants of sustainability, and the analysis is limited to a short-term timeframe and on non-financial OECD-listed companies.

Managers searching for trade-offs between financial and non-financial performances should enhance their commitment towards sustainability by defining appropriate strategies suitable to employ mainly slack resources derived from core business activities enabling innovation processes, which, in turn, are able to foster sustainability of internal production and procurement processes.

The execution of sustainability is a complex process that needs to be investigated using a holistic approach net of endogeneity biases to better appreciate those interrelationships within multiple drivers determining the firm sustainable growth.

This study examined the relation between performance plan adoption and profitability. It posits that the nature of this relation varies with the ownership structure of the firm, arguing that following performance plan adoption, profitability will increase in owner‐controlled firms. Results based on data from a usable sample of 70 US firms support this contention with respect to owner‐controlled firms but not manager‐controlled firms.

The paper aims to examine how Indian non-financial service sector companies’ financial performance is influenced by their corporate social responsibility (CSR) expenditures. The paper also analyses whether family ownership has a moderating role in the CSR expenditure–financial performance association.

The study includes 288 non-financial service sector companies listed in India with 3,456 firm-year observations. Panel data regression analysis using data for 12 years, starting from 2010 to 2021, is carried out.

The study reveals a positive influence of CSR spending on financial performance measures (Tobin’s Q and return on assets). Mandatory CSR policies also influence the company’s performance. Additionally, family ownership has a positive moderating effect on CSR expenditure–financial performance (Tobin’s Q).

The study gives insights to the managers on how CSR expenditures can be used to maximise their benefits by supporting social causes, particularly in the case of firms with ownership structures where family involvement is there.

The prior studies analysing family ownership effect on the CSR–financial performance relationship are fewer, and in a country like India, where corporate philanthropy is a part of the family business culture, there is a need to understand how CSR spending influences firm performance.

This study examines the efficacy of compensation in encouraging corporate executives to promote corporate social responsibility (CSR). In particular, it closely examines the effect of a golden parachute (GP) on an executive's behavior toward CSR.

This study uses longitudinal data on 1,301 US firms for the period from 1993 to 2013. The data comes from Compustat, MSCI ESG STATS, RiskMetrics and ExecuComp.

We find an inverse association between current and long-term compensations and GP on firms' CSR. However, a test on the moderating effect discloses that a GP and long-term compensation jointly and positively increase the firms' CSR performance. This increase supports the idea that executives with a GP seek to maximize their long-term wealth by approving CSR projects that add value. The results also show that female executives are more likely to promote CSR than their male counterparts, and older executives are less willing to engage in CSR projects.

Adding a GP contractual clause to the executive compensation package could encourage greater engagement in CSR projects. The CEO with a GP will ensure that the firm engages in only value-enhancing CSR projects; this should align the interest of the society (greater firm engagement in CSR) with the interest of the firm (value maximization).

This study contributes to the literature by examining the moderating effect of a GP on the association between CSR and executive compensation.

The aim of this study is to examine the relations among organizational ethical climate, goal interdependence (cooperative vs competitive goals), and organizational and professional commitment among auditors in Asia.

The authors conducted a field survey of 293 auditors employed in two offices of an international accounting firm: one in Hong Kong and one in Singapore.

Structural equation analyses indicate that instrumental ethical climates that focus on the pursuit of self‐interest and firm profitability promote more competitive and less cooperative goals among auditors. Benevolent/cosmopolitan (public interest) climates appear to enhance cooperative goals among employees. Cooperative goals in turn were associated with increased affective and normative organizational and professional commitments. Competitive environments significantly reduced affective and normative organizational commitment as well as affective professional commitment. Compared with their Hong Kong counterparts, Singaporean auditors perceived the ethical climate in their firm to be more positive or supportive of ethical values, and also felt the work environment in the firm was more cooperative and less competitive. In addition, the Singaporean auditors exhibited somewhat higher levels of emotional attachment to both their firm and the public accounting profession.

No prior accounting study has examined the influence of cooperative/competitive goals on work outcomes in a public accounting setting, or the role of ethical climates as potential antecedents of such goals. The results of the current study indicate that the development of cooperative and competitive goals is significantly related to the perceived ethical climate in public accounting firms, and that such goals may have significant effects on employee commitment not only to their organization but also to their profession. The significant differences between auditors in Hong Kong and Singapore have not previously been documented, and raise questions for future research.

The present study examines the initial working capital policy (WCP) and its evolution for newly established manufacturing firms.

Using panel data of 162 firms over a period of 10 years, the study analyses the persistence-cum-convergence in WCP over the subsequent years through descriptive analysis and difference of means test. Further, the prevalence of ß – convergence, and σ-convergence has been examined using standard least squares regression, dynamic panel analysis and the Wald test.

The results indicate that sample firms continue to follow the initial WCP in the subsequent years with a gradual convergence in the WCP. Alternatively, the firms with aggressive (conservative) WCP at the time of incorporation will continue following it. Further, the firms with aggressive initial WCP have witnessed higher growth than those with conservative initial WCP.

Findings will assist managers and practitioners to understand the dynamics of WCP over the life cycle of the firm and select appropriate WCP as certain policies lead to certain growth paths.

Though working capital management has been recognized as a critical managerial decision, limited research is available on its evolution, especially for newly established manufacturing companies in an emerging economy. Current research attempts to fill this gap and provide valuable insights for the effective management of liquidity.

Drawing on risk mitigation theory, this study aims to examine the link between corporate social responsibility (CSR) disclosure and the cost of debt financing (CDF). In particular, this paper seeks to determine whether firms with higher CSR disclosure scores have a lower CDF.

This paper uses a panel data analysis of non-financial Ghanaian firms listed on the Ghana Stock Exchange from 2006 to 2019. The CSR index constructed from firms’ annual reports and sustainability reports is used as a proxy for the extent of CSR information disclosures by Ghanaian companies.

The empirical results demonstrate that CDF is positively related to CSR disclosure scores. Besides, the results show that the levels of long-term debt increase with CSR disclosure in a highly risky industry. However, the finding does not meet the lenders’ expectations in terms of CSR attracting favourable debt financing sources.

The research is based only on the quantity of the CSR information disclosed by Ghanaian companies and does not account for the quality of the CSR disclosures. The empirical model omits some control variables such as the age of the firm and external business conditions. The results should not be generalized, as the sample was based on three listed industries in Ghana for 2006–2019.

This study extends the scope of previous studies by examining the importance of CSR disclosures in financing decisions. More precisely, it focuses on the relatively little explored relationship between the extent of CSR disclosures and access to debt financing. Moreover, this study focuses on the rather interesting empirical setting of Ghana, which is characterized by its low level of CSR awareness. Achieving a better understanding of the effects of CSR information is useful for corporate managers desiring to meet lenders’ expectations and attract debt financing sources.