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Article
Publication date: 22 June 2012

Jie J. Zhang, Nitin Joglekar and Rohit Verma

The purpose of this study is to develop a performance measurement system of environmental sustainability in service settings and to empirically examine the relationship…

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3454

Abstract

Purpose

The purpose of this study is to develop a performance measurement system of environmental sustainability in service settings and to empirically examine the relationship between the measured environmental sustainability and operating performance.

Design/methodology/approach

This study applies exploratory factor analysis (EFA) to a six‐year panel dataset of 984 US hotels to construct a two‐factor standardized measure of environmental sustainability. The authors then conduct a stochastic frontier analysis (SFA) to investigate the relationship between the measured environmental sustainability and the operating performance frontier, considering the impact of operating structure.

Findings

Customer behavior and operational decisions are two key drivers of environmental sustainability. There is a positive link between environmental sustainability and operating performance. Operating structure has a significant impact on the operating performance. The performance frontier varies across market segment and location characteristics such as degree of urbanization and climate condition.

Practical implications

The findings indicate that service providers should actively involve customers, and manage both front‐office and back‐office operations in environmental sustainability initiatives. Operating structures that favor the alignment of multiple service supply chain partners' interests contribute positively to performance. The managers should be mindful of varying best‐in‐class performance due to operating unit characteristics such as market segment, and location characteristics.

Originality/value

This study is among the first attempts to develop a performance measurement system of environmental sustainability. The resulted standardized measure of environmental sustainability considers both the revenue and cost impacts in service operations. This research is among the first generation of papers that bring the unique characteristics of service operations, particularly service co‐production, into sustainability research.

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Article
Publication date: 18 June 2020

Weihua Liu, Xiaoyu Yan, Cheng Si, Dong Xie and Jingkun Wang

The purpose of this study is to examine the impact of the implementation of supply chain strategic collaboration (SCSC) on companies’ operating performance.

Abstract

Purpose

The purpose of this study is to examine the impact of the implementation of supply chain strategic collaboration (SCSC) on companies’ operating performance.

Design/methodology/approach

Based on 181 SCSC announcements of listed companies in China, this study analyzes changes in the operating performance of the sample companies in the 20 quarters after the announcement. The changes in different operating performance metrics for the sample firms are compared against their metrics before the announcement. This study uses a self-control model based on historical performance and uses a combination of adjustment percentage changes and adjustment level changes to measure performance changes.

Findings

SCSC helps to improve firm operating performance, although this effect is only evident after two years. Companies that collaborate on product development have better performance improvements than do companies that implement market collaboration. The operating performance of buyer companies is better than that of supplier companies. Finally, strategic collaboration in the service supply chain improves performance more than that in the manufacturing supply chain.

Practical implications

The finding that company performance varies in different situations can help managers better understand and manage SCSC.

Originality/value

This study newly uses secondary data to assess changes in companies’ operating performance brought about by the implementation of SCSC.

Details

Supply Chain Management: An International Journal, vol. 25 no. 6
Type: Research Article
ISSN: 1359-8546

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Article
Publication date: 3 February 2012

Vivek Sah and Philip Seagraves

The purpose of this paper is to consider the operating performance of real estate investment trust initial public offerings (REIT IPOs) as a measure to find additional…

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1280

Abstract

Purpose

The purpose of this paper is to consider the operating performance of real estate investment trust initial public offerings (REIT IPOs) as a measure to find additional evidence of market timing in this sector.

Design/methodology/approach

A sample of REIT IPOs is analyzed to determine the relationship between IPO clustering and several measures of REIT operating performance.

Findings

The results suggest that timing the market by marginal firms in the REIT sector would be difficult, due to the transparent nature of REITs, leading to lower level of informational asymmetry between REIT managers and investors. Consistent with results found for non‐REIT firms in industry clusters, no evidence was found of a significant difference between the operating performance of REITs which are part of an IPO cluster and those that went public outside of the identified cluster periods.

Practical implications

This study shows that REIT market is efficient and would not allow REIT managers to time the market.

Originality/value

Using stringent measures of identifying REIT IPO clusters and operating performance as a measure to gauge market timing, this study differs from previous studies and provides additional and robust evidence of transparent nature of REITs that leads to reduced information asymmetry between managers and investors. This result supports the theory that REITs are more transparent and thus less likely to be over‐invested during IPO cluster periods.

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Article
Publication date: 18 April 2018

Chia-Chi Lee and Pei-Yi Cheng

This paper aims to explore the relationship between human resource attributes and the operating performances of accounting firms by sampling data from the 2012-2013 Survey…

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2844

Abstract

Purpose

This paper aims to explore the relationship between human resource attributes and the operating performances of accounting firms by sampling data from the 2012-2013 Survey Report on Accounting Firms, as compiled by the Financial Supervisory Commission in Taiwan.

Design/methodology/approach

Multiple regression analysis is conducted to measure operating performances with various measurements, such as operating profits and business diversification. The independent variables include male to female ratio, percentage of senior executives, percentage of employees with higher education backgrounds, organizational vitality, human resource diversity, percentage of employees with certified public accountant (CPA) qualifications and human resource costs (HRCs). The control variables are the firm history, market shares and ownership structures since the inception of the firms.

Findings

The empirical results regarding the operating profits model suggest that the higher the male to female ratio, the percentage of employees with higher education backgrounds, organizational vitality, human resource diversity, percentage of employees with CPA qualifications and HRCs, the greater the operating profits. Meanwhile, the findings regarding the business diversification model indicate that the higher the male to female ratio, percentage of senior executives and human resource diversity, the greater the business diversification.

Originality/value

It is intended that the research findings can assist the management of accounting firms to understand the human resource attributes critical to operating performances, which will help to enhance the competitiveness of employees, mitigate the operating risks and improve the operating performances of the firms.

Details

Chinese Management Studies, vol. 12 no. 2
Type: Research Article
ISSN: 1750-614X

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Article
Publication date: 12 August 2021

Lara M. Alhaddad, Mark Whittington and Ali Meftah Gerged

This paper aims to examine the extent to which real earnings management (REM) is used in Jordan to meet zero or previous year's earnings, and how this impacts the…

Abstract

Purpose

This paper aims to examine the extent to which real earnings management (REM) is used in Jordan to meet zero or previous year's earnings, and how this impacts the subsequent operating performance of Jordanian firms.

Design/methodology/approach

The study used a sample of 98 Jordanian listed firms over the 2010–2018 period. To test the research hypotheses, which are formulated in accordance with both, agency theory and signalling theory, multivariate regression is performed using a pooled OLS estimation. Additionally, a two-step dynamic generalised method of moment (GMM) model has been estimated to address any concerns regarding the potential occurrence of endogeneity issues.

Findings

The results show that Jordanian firms that meet zero or last year's earnings tend to exhibit evidence of real activities manipulations. More specifically, suspect firms show unusually low abnormal discretionary expenses and unusually high abnormal production costs. Further, consistent with the signalling earnings management argument, the authors find that abnormal real-based activities intended to meet zero earnings or previous year's earnings potentially improve the subsequent operating performance of Jordanian firms. This implies that REM is not totally opportunistic, but it can be used to enhance the subsequent operating performance of Jordanian firms. Our findings are robust to alternative proxies and endogeneity concerns.

Practical implications

The findings have several implications for policymakers, regulators, audit professionals and investors in their attempts to constrain REM practices to enhance financial reporting quality in Jordan. Managing earnings by reducing discretionary expenses appeared to be the most convenient way to manipulate earnings in Jordan. It provides flexibility in terms of time and the amount of spending. The empirical evidence, therefore, reiterates the crucial necessity to refocus the efforts of internal and external auditors on limiting this type of manipulation to reduce the occurrence of REM activities and enhance the subsequent operating performance of listed firms in Jordan. Drawing on Al-Haddad and Whittington (2019), the evidence also urges regulators and standards setters to develop a more effective enforcement mechanism for corporate governance provisions in Jordan to minimise the likelihood of REM incidence.

Originality/value

This study contributes to the body of the accounting literature by providing the first empirical evidence in the Middle East region overall on the use of REM to meet zero or previous year earnings by Jordanian firms. Moreover, the study is the first to empirically examine the relationship between REM and Jordanian firms' future operating performance.

Details

Journal of Accounting in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-1168

Keywords

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Article
Publication date: 23 June 2020

Nan Hua, Arthur Huang, Marcos Medeiros and Agnes DeFranco

This study aims to examine how operator type moderates the relationship between hotel information technology (IT) expenditures and operating performance.

Abstract

Purpose

This study aims to examine how operator type moderates the relationship between hotel information technology (IT) expenditures and operating performance.

Design/methodology/approach

By adapting and extending O’Neill et al.’s (2008) and Hua et al.’s (2015) research, this study constructed an empirical model and tested proposed hypotheses, with Newey and West (1994) errors computed to accommodate potential heteroscedasticity and autocorrelation issues.

Findings

Operator type moderates the impact of hotel IT expenditures on operating performance. In particular, it appears that the operator type of franchising exerts a stronger moderating effect compared with other operator types explored.

Practical implications

This study, as the first of its kind, shows that the choice of operator type shapes how a hotel can effectively use IT expenditures to improve operating performance. This finding can be beneficial for hotel owners when making operator type decisions. In addition, operator type moderates the direct impact of IT expenditures on revenues and gross operating income. This study’s results show that franchised hotels seem to use IT expenditures more effectively compared with independently owned hotels.

Originality/value

This study contributes both theoretically and practically to understand how operator type moderates the relationship between IT expenditures and hotel performance. The research outcome provides a more holistic view that governs the relationships between IT expenditures, operator type and operating performance.

Details

International Journal of Contemporary Hospitality Management, vol. 32 no. 8
Type: Research Article
ISSN: 0959-6119

Keywords

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Article
Publication date: 7 April 2021

Yongyi Shou, Jinan Shao and Weijiao Wang

As a popular supply chain finance (SCF) strategy, reverse factoring has been widely adopted by buyer firms. However, the extant literature provides scant empirical…

Abstract

Purpose

As a popular supply chain finance (SCF) strategy, reverse factoring has been widely adopted by buyer firms. However, the extant literature provides scant empirical evidence on the performance effect of reverse factoring. The purpose of this study is to seek to narrow this gap by empirically examining the relationship between reverse factoring and operating performance and the contingency conditions of this relationship.

Design/methodology/approach

Based on a sample of 167 announcements of reverse factoring implementation made by publicly listed Chinese manufacturing firms between 2014 and 2018, this paper employs a long-term event study approach to analyze the operating performance effect of reverse factoring as well as the moderating effects of production and innovation capabilities.

Findings

The event study results indicate that reverse factoring has a positive effect on buyer firms' operating performance in terms of cost efficiency and operating margin. In addition, both production and innovation capabilities positively moderate the relationship between reverse factoring and operating margin. However, neither of them moderates the relationship between reverse factoring and cost efficiency.

Originality/value

This is the first study that empirically examines the impact of reverse factoring on operating performance based on secondary data. Furthermore, it sheds light on the SCF literature by providing insights into the contingency effects of production and innovation capabilities, which also extends our understanding of the application of extended resource-based view in SCF research.

Details

International Journal of Operations & Production Management, vol. 41 no. 4
Type: Research Article
ISSN: 0144-3577

Keywords

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Article
Publication date: 2 November 2015

Neelam Rani, Surendra S Yadav and P K Jain

The purpose of this paper is to investigate the impact of mergers and acquisitions (M & A) on corporate performance. It addresses the major question related to the…

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4555

Abstract

Purpose

The purpose of this paper is to investigate the impact of mergers and acquisitions (M & A) on corporate performance. It addresses the major question related to the long-term performance of the acquiring firm.

Design/methodology/approach

The paper uses the long-term pre- and post-merger financial data to investigate the long-term performance. It compares performance of the acquiring firms before and after M & A. The present work conducts a comprehensive ratio analysis of 14 major ratios related to profitability, efficiency, leverage and liquidity. To ascertain the sources of the better long-term post-M & A returns, the present work decomposes the measure of operating performance into its constituents in terms of Du Pont analysis.

Findings

Taking a sample of 305 M & As during the period of January 2003 to December 2008, it has been observed that there is significant improvement in the profitability of the acquiring companies involved in M & A. The results pertaining to profitability, efficiency (in terms of utilization of fixed assets), expense and liquidity ratios show that there is an improvement in performance of the acquiring firms in the post-M & A period. The analysis in terms of Du Pont shows improvement in the long-term operating profit margin of the acquiring firms. This means higher profit is generated per unit net sales by the acquiring firms after the M & A. The higher profits (profit before interest and taxes and non-operating income) are generated primarily due to the better operating margins. The improved operating cash flows are on account of the improvement in the post-M & A operating margins of the acquirers, not due to the efficient utilization of the assets turnover to generate higher sales.

Originality/value

The paper contributes to the existing literature by comparing operating performance and profitability of acquirers before and after M & A using a comprehensive set of 14 ratios for a substantially large sample.

Details

International Journal of Commerce and Management, vol. 25 no. 4
Type: Research Article
ISSN: 1056-9219

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Article
Publication date: 3 January 2017

Wael Mostafa

This paper aims to examine the association between earnings management and the value relevance of earnings (the latter is operationalized by earnings response…

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2830

Abstract

Purpose

This paper aims to examine the association between earnings management and the value relevance of earnings (the latter is operationalized by earnings response coefficient). Specifically, this study examines whether opportunistic earnings management has a negative impact on the value relevance of earnings for a sample of firms listed on the Egyptian Stock Exchange.

Design/methodology/approach

Different from prior work and due to data limitations in the Egyptian market, this paper first examines for the existence of earnings management based on the whole operating performances of the firms by testing whether firms with low/poor operating performance are more likely to choose income-increasing actions (strategies) than firms with high operating performance. After confirming that low operating performance firms manage earnings upward, the authors then assess whether this opportunistic earnings management by these low operating performance firms reduces the value relevance of earnings. This is performed by estimating a model of the relationship between stock returns and accounting earnings with a dummy variable that allows parameter shifts for earnings of low operating performance firms.

Findings

The results show that discretionary accruals are positive and significantly higher for firms with low operating performance than those for firms with high operating performance. These results indicate that low operating performance firms increase the earnings management practices by probably increasing their reported earnings opportunistically to mask their low performance. Furthermore, the results show that the earnings response coefficient is significantly smaller for earnings of low operating performance firms than that for earnings of high operating performance firms. These results suggest that earnings of firms with low operating performance (that are engaged in opportunistic earnings management strategies) have less value relevance than earnings of firms with high operating performance, i.e. the informativeness of managed earnings is lower than that of non-managed earnings.

Practical implications

Based on these results, it is plausible that the presence of opportunistic earnings management adversely affects the value relevance of accounting earnings.

Originality/value

Consistent with previous results from developed countries, this study shows that earnings management is a significant factor that affects value relevance of earnings in Egypt.

Details

Managerial Auditing Journal, vol. 32 no. 1
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 9 January 2017

Matthew McCarten and Ivan Diaz-Rainey

The purpose of this paper is to examine how the filing of a securities class action, and associated corrective actions taken by management, impact the operating performance

Abstract

Purpose

The purpose of this paper is to examine how the filing of a securities class action, and associated corrective actions taken by management, impact the operating performance of sued firms.

Design/methodology/approach

A matched sample is formed three years prior to the filing of a class action, as opposed to the traditional one year used in the literature. Match adjusted performance is analyzed from three years prior to the filing to five years after. Further the authors analyze the impact corrective actions have on operating performance.

Findings

The results show that operating underperformance happens considerably earlier than had hitherto been believed. Further, there is no evidence that the filing adversely affects performance, rather securities class actions appear to act as a turning point. The findings also indicate that firms that increase leverage post filing, experience subsequent increases in their operating performance.

Originality/value

The results show that rather than leading to a deterioration in performance, as is currently understood, the filing of a securities class actions results in improved operating performance. This improvement is, in part, associated with more optimal use of leverage by management. Overall, class actions appear to be an effective disciplinary mechanism.

Details

Managerial Finance, vol. 43 no. 1
Type: Research Article
ISSN: 0307-4358

Keywords

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