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Article
Publication date: 31 May 2021

Renhuai Liu, Chao Li and Mengjun Huo

The purpose of this paper is to empirically analyze the impact of chief executive officer (CEO) turnover on strategic change and explore the mediating role of…

Abstract

Purpose

The purpose of this paper is to empirically analyze the impact of chief executive officer (CEO) turnover on strategic change and explore the mediating role of organizational slack between them, as well as the moderating role and joint moderating role of top management team (TMT) external social network, ownership nature and industry type.

Design/methodology/approach

Based on the upper echelons theory, resource allocation theory and structuration theory, this paper takes the unbalanced panel data of A-share listed companies in Shanghai and Shenzhen Stock Exchanges of China from 2001 to 2018 as the research sample, uses ordinary least squares (OLS) regression method and fixed effect model to study the relationship between CEO turnover and strategic change, and focuses on the mediating mechanism and moderating mechanism between them.

Findings

The authors find that CEO turnover is positively related to strategic change. When a CEO turns over, a new CEO will initiate strategic change. Precipitation organizational slack plays a mediating role between CEO turnover and strategic change. Non-precipitation organizational slack has no mediating effect between CEO turnover and strategic change, which is embodied as “suppressing effects.” When the non-precipitation organizational slack variable is controlled, the impact of CEO turnover on strategic change will be enhanced. TMT external social network, ownership nature and industry type all negatively moderate the relationship between CEO turnover and strategic change. TMT external social network and ownership nature have a joint moderating effect between CEO turnover and strategic change. When TMT external social network is small, CEO turnover has a positive effect on strategic change in both state-owned enterprises and non-state-owned enterprises, but the promotion effect is stronger in non-state-owned enterprises. When TMT external social network is large, the positive effect of CEO turnover on strategic change in state-owned enterprises is from strong to weak, but in the non-state-owned enterprises is from weak to strong. TMT external social network and industry type have a joint moderating effect between CEO turnover and strategic change. When TMT external social network is small, CEO turnover has a positive impact on strategic change in high-tech enterprises and non-high-tech enterprises, but the promotion effect is stronger in non-high-tech enterprises. When TMT external social network is large, the positive impact of CEO turnover on strategic change in high-tech enterprises is from strong to weak, but in the non-high-tech enterprises is from weak to strong.

Originality/value

On the basis of previous studies, this paper further expands the research scope of the mechanism of CEO turnover on strategic change, echoing the research arguments of relevant scholars. At the same time, the research results reveal the mechanism of organizational slack, TMT external social network, ownership nature and industry type in the relationship between CEO turnover and strategic change, and further deepen the application of upper echelons theory, resources allocation theory and structuration theory in China. In addition, the research conclusions of this paper also provide reference value for Chinese enterprises in carrying out strategic change, promoting enterprise transformation and improving the level of corporate governance, and help to enhance the understanding and attention of Chinese enterprises to CEO turnover, organizational slack, TMT external social network, strategic change and corporate governance under the background of high-quality economic development.

Details

China Finance Review International, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2044-1398

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Article
Publication date: 3 November 2020

Laura García-García, Macarena Gonzalo Alonso-Buenaposada, M. Elena Romero-Merino and Marcos Santamaria-Mariscal

The purpose of this paper is to analyze the relationship between the ownership structure and the investment in research and development (R&D) for a sample of listed…

Abstract

Purpose

The purpose of this paper is to analyze the relationship between the ownership structure and the investment in research and development (R&D) for a sample of listed Spanish companies.

Design/methodology/approach

Following the agency theory and the socioemotional wealth (SEW) perspective, the authors propose that R&D investment is affected by ownership structure, specifically by the identity of the controlling owner (family firms and firms with an institutional investor) and the level of contestability by other shareholders. In order to test these hypotheses, the authors build an original database identifying, at a 10% threshold, the ultimate shareholders of a sample of 96 Spanish firms listed during 2008–2018 (1,002 obs).

Findings

The results show that there is no significant relationship between the ownership concentration and the R&D investment. Only when the authors consider the nature of the main shareholder, the authors find that in family firms there is an inverted U relationship between ownership and R&D, so that at low levels of ownership, the R&D increases, while at high levels of ownership (that we compute around 54%) the R&D decreases. Also, when the main shareholder is an institutional investor, the greater its ownership, the higher the R&D investment. Finally, the authors test that, contrary to what mainstream suggests, contestability in family firms is higher when ownership in the hands of other family shareholders increases.

Originality/value

The work uses an original database to test a nonlinear relationship between ownership and R&D investment in family firms. Also, the study addresses a topic hardly ever discussed in the literature about R&D as it is the role of the contestability by other controlling shareholders.

Objetivo

El objetivo del presente trabajo es analizar la relación existente entre la estructura de propiedad y la innovación corporativa para una muestra de empresas cotizadas españolas.

Diseño/metodología/enfoque

Utilizando los planteamientos de la teoría de la agencia y de la perspectiva de la riqueza socioemocional proponemos que la I+D empresarial está relacionada con la estructura de propiedad, específicamente con la naturaleza del accionista de control (empresas familiares y empresas con un inversor institucional como principal accionista) y con el grado de contestabilidad por parte de otros accionistas significativos. A fin de testar nuestras hipótesis, construimos ad hoc una base de datos de propiedad original en la que identificamos, al umbral del 10% de propiedad, a los accionistas últimos de una muestra de 96 empresas cotizadas españolas para el periodo 2008–2018 (1.002 obs).

Resultados

Nuestros resultados muestran que no existe relación significativa entre la concentración de propiedad y la inversión en I + D. Solo cuando consideramos la naturaleza del principal accionista encontramos que en las empresas familiares la relación entre la propiedad de la familia y la innovación corporativa adopta una forma de U invertida, tal que a bajos niveles de propiedad la I + D crece, mientras que a altos niveles de propiedad (que computamos en torno al 54% de propiedad) la inversión en I + D decrece. Asimismo, en las empresas con un inversor institucional como principal accionista, cuanto mayor es la propiedad de este inversor institucional, mayor es la I + D de la empresa. Finalmente testamos que, en contra de la corriente dominante, en las empresas familiares la propiedad en manos de otras familias incrementa el grado de contestabilidad a la familia controladora respecto a su inversión en I + D.

Originalidad

El trabajo utiliza una base de datos de propiedad original para testar una relación no lineal entre concentración de propiedad e innovación corporativa en las empresas familiares. Asimismo, el estudio aborda un tema apenas analizado en la literatura de I + D como es el papel de la contestabilidad al accionista de control.

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Article
Publication date: 29 October 2020

TianLong Ma and Huiping Zhang

This study aims to disclose how the nature of corporate ownership, stock efficiency and wage level affect the optimal proportion of employee stock.

Abstract

Purpose

This study aims to disclose how the nature of corporate ownership, stock efficiency and wage level affect the optimal proportion of employee stock.

Design/methodology/approach

This paper studies three duopoly markets: two private enterprises, two state-owned enterprises (SOEs) and a private enterprise and an SOE. The competitions between the two parties are taken as a two-stage dynamic sequential game and studied through back-induction.

Findings

The results reveal that the enterprise ownership has a directly bearing on the optimal proportion of employee stock and determines whether to implement the employee stock ownership plan (ESOP) and the specific level of the plan. The optimal proportion of employee stock is positively correlated with its contribution to enterprise efficiency. There are many influencing factors on the effect of wage level on the optimal proportion of employee stock, namely, the ownership nature of ESOP implementer and efficiency difference of different nature stocks.

Social implications

The results of this study provide policy recommendations for companies preparing to implement ESOP.

Originality/value

The research findings provide policy implications for enterprises to prepare a suitable ESOP and the reform of national equities, especially the mixed-ownership reform in China.

Details

Journal of Organizational Change Management, vol. 33 no. 6
Type: Research Article
ISSN: 0953-4814

Keywords

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Article
Publication date: 15 February 2021

Nik Abdul Rahim Nik Abdul Ghani, Ahmad Dahlan Salleh, Amir Fazlim Jusoh @ Yusoff, Mat Noor Mat Zain, Salmy Edawati Yaacob, Azlin Alisa Ahmad and Muhammad Yusuf Saleem

This paper critically aims to examine the concept of beneficial ownership and its application in musharakah-based home financing.

Abstract

Purpose

This paper critically aims to examine the concept of beneficial ownership and its application in musharakah-based home financing.

Design/methodology/approach

The study applies the method of juristic interpretation in analyzing the meaning of beneficial ownership in legal documentation of musharakah-based home financing. This qualitative study uses content analysis approach that investigates the works of Islamic scholars on the concept of ownership and evaluates the concept of beneficial ownership in musharakah-based home financing from the Islamic perspective.

Findings

The result finds that beneficial ownership is considered a true ownership, as Shari’ah allows the transfer of ownership based on the offer and acceptance in a contract. Furthermore, the absence of legal registration does not mean the absence of true ownership, whereas all documentations and agreements have clearly stated rights and liabilities of each contracting parties.

Originality/value

This paper provides a fiqhi discussion of analyzing beneficial ownership in musharakah-based home financing. It shows that Shari’ah parameters are essential for the use of beneficial ownership to ensure its compliance with the Shari’ah requirements of milkiyyah (ownership).

Details

Qualitative Research in Financial Markets, vol. 13 no. 2
Type: Research Article
ISSN: 1755-4179

Keywords

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Article
Publication date: 10 June 2014

Sarra Ben Slama Zouari and Neila Boulila Taktak

This study aims to investigate empirically the relationship between ownership structure (concentration and mix) and Islamic bank performance, with a special attention to…

Abstract

Purpose

This study aims to investigate empirically the relationship between ownership structure (concentration and mix) and Islamic bank performance, with a special attention to the identity of the block investor (foreign, family, institutional and state).

Design/methodology/approach

Regression analyses are conducted to test the impact of the identity of the first shareholders and the degree of concentration on Islamic bank performance, using a panel data sample of 53 Islamic banks scattered over > 15 countries from 2005 to 2009.

Findings

Results suggest that ownership is concentrated at 49 per cent, and for 41 banks from the full sample, the ultimate owner is institutional. State investors come in second place, followed by family ultimate shareholders. Using return on assets and return on equity as performance measures, empirical evidence highlights the absence of correlation between ownership concentration and Islamic bank performance. It also reveals that the combined effort of family and state investors is beneficial to bank performance. Results also indicate that banks with institutional and foreign shareholders do not perform better. Empirical findings suggest that the financial crisis impacts negatively Islamic bank performance.

Research limitations/implications

The use of dummy variables to measure the nature of the largest owner represents the main limitation of this study. This is due to the lack of information, as the percentage of the largest capital held referring to owner category was available only for some banks.

Practical implications

This research has given a brighter insight into corporate governance and bank performance in selected Islamic banking institutions. Findings provided useful information to bank managers, investors and policy makers. Financial performance can be improved by identifying practices associated with ownership structure. So, it will have policy implications for Islamic banks as to how to improve their performance. Finally, different types of bank ownership have had different concerns about implementing corporate governance practices among Islamic banks.

Originality/value

This work is the first of its kind for Islamic banks. It extends previous research by examining whether ownership structure (concentration and mix) affects performance. It also fills the gap in the literature by providing empirical evidence on a large sample involving data from 15 countries. Finally, manual data collection on ownership structure constitutes a large part of the research for this paper.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. 7 no. 2
Type: Research Article
ISSN: 1753-8394

Keywords

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Article
Publication date: 23 April 2020

Sreejith Balasubramanian and Vinaya Shukla

Managing environmental consequences while sustaining economic development necessitate strong commitment and participation of all firms across sectors. However, the…

Abstract

Purpose

Managing environmental consequences while sustaining economic development necessitate strong commitment and participation of all firms across sectors. However, the environment-related role of foreign and local firms is unclear from previous research. With increasing trade liberalization and entry of foreign firms, this question has become particularly relevant. The purpose of this paper is to contrast the roles and contributions of foreign and local firms from an environmental sustainability perspective.

Design/methodology/approach

Using data collected through a structured survey (395 responses) and semi-structured interviews (19 numbers) from the United Arab Emirates (UAE) construction sector (research setting), the study analyses and understands the hypothesized differences between foreign and local firms on three key environmental sustainability aspects: the extent of environmental practices implementation, the strengths/influences of drivers and barriers affecting the implementation, and the environmental, cost-related, and organizational performance benefits derived.

Findings

Foreign firms were found to implement environmental practices to a greater extent, have a greater internal drive to implement these practices, and face lower barriers to implementation than local ones. Local firms though were found to be not far behind foreign ones with regards to the environmental, cost-related, and organizational performance benefits derived.

Practical implications

Findings from the study are expected to help policymakers and practitioners develop policies/interventions that ensure all firms irrespective of their nature of ownership contribute equitably to environmental sustainability.

Originality/value

This study is arguably the first comprehensive attempt to understand how various environmental sustainability aspects are perceived and performed by local and foreign firms.

Details

Benchmarking: An International Journal, vol. 27 no. 5
Type: Research Article
ISSN: 1463-5771

Keywords

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Article
Publication date: 22 September 2020

Patrick Velte and Jörn Obermann

This paper aims to analyse whether and how different types of institutional investors influence shareholder proposal initiations, say-on-pay (SOP) votes and management…

Abstract

Purpose

This paper aims to analyse whether and how different types of institutional investors influence shareholder proposal initiations, say-on-pay (SOP) votes and management compensation from a sustainability perspective.

Design/methodology/approach

Based on the principal-agent theory, the authors conduct a structured literature review and evaluate 40 empirical-quantitative studies on that topic.

Findings

The traditional assumption of homogeneity within institutional investors, which is in line with the principal–agent theory, has to be questioned. Only special types of investors (e.g. with long-term and non-financial orientations and active institutions) run an intensive monitoring strategy, and thus initiate shareholder proposals, discipline managers by higher SOP dissents and prevent excessive management compensation.

Research limitations/implications

A detailed analysis of institutional investor types is needed in future empirical analyses. In view of the current debate on climate change policy, future research could analyse in more detail the impact of institutional investor types on proxy voting, SOP and (sustainable) management compensation.

Practical implications

With regard to the increased shareholder activism and regulations on SOP and management compensation since the 2007/2008 financial crisis, firms should be aware of the monitoring role of institutional investors and should analyse their specific ownership nature (time- and content-driven and as well as range of activity).

Originality/value

To the best of authors’ knowledge, this is the first literature review with a clear focus on institutional investor range and nature, shareholder proposal initiation, SOP and management compensation (reporting) from a sustainability viewpoint. The authors explain the main variables that have been included in research, stress the limitations of this work and offer useful recommendations for future research studies.

Details

Journal of Global Responsibility, vol. 12 no. 1
Type: Research Article
ISSN: 2041-2568

Keywords

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Article
Publication date: 4 January 2018

Nufazil Altaf and Farooq Ahamad Shah

The purpose of this paper is twofold: first, to investigate the relationship between ownership concentration and firm performance and, second, to determine the moderating…

Abstract

Purpose

The purpose of this paper is twofold: first, to investigate the relationship between ownership concentration and firm performance and, second, to determine the moderating role of investor protection quality on the ownership concentration-performance relationship from a dynamic perspective.

Design/methodology/approach

The study is based on secondary financial data of 236 Indian manufacturing firms obtained from CAPITALINE database, pertaining to a period of five years. This study uses ordinary least squares, fixed effects and two-step generalized method of moments (GMM) techniques to arrive at results.

Findings

Results of the study confirm the inverted U-shaped relationship between ownership concentration and firm performance and a significant positive effect of investor protection quality on firm performance. With regard to moderating role of investor protection quality on ownership concentration–performance relationship, results show that investor protection quality would significantly moderate the ownership concentration–performance relationship.

Originality/value

The study is a pioneer in proving that an inverted U-shaped relationship exists between ownership concentration and firm performance in an emerging market in general and India in particular. This study extends the corporate governance literature by examining ownership concentration–performance relationship in a dynamic perspective and in an unexplored market.

Details

Journal of Indian Business Research, vol. 10 no. 1
Type: Research Article
ISSN: 1755-4195

Keywords

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Article
Publication date: 19 September 2019

Subhash C. Kundu, Archana Mor, Sandeep Kumar and Jahanvi Bansal

The purpose of this paper is to investigate the relationship between employees’ perceptions of diversity within management levels (i.e. senior management, middle…

Abstract

Purpose

The purpose of this paper is to investigate the relationship between employees’ perceptions of diversity within management levels (i.e. senior management, middle management and lower management levels) and perceived organizational performance. The study also examines differences in perceptions of diversity within different levels of management across nature and ownership forms of organizations.

Design/methodology/approach

Primary data were gathered from a sample of 400 employees from 162 organizations of diverse industries operating in India. Statistical techniques like analysis of variance and stepwise multiple regressions were used to analyze the data.

Findings

Employee perceptions of diversity at the senior, middle and lower management levels of organizations are weakly, most significantly and positively, and negatively related to perceived organizational performance. It has also been found that the perceptions of diversity within different levels of management differ across nature and ownership forms of the organization.

Research limitations/implications

The study relies on self-reported questionnaires as the method of data collection, which can lead to common-method bias. Hence, further studies can collect data by using multiple sources. In addition, future researchers can employ both subjective and objective measures to fetch results that are more valid.

Practical implications

To harvest the benefits of diversity, organization should foster positive perceptions among employees toward diversity.

Originality/value

The study gives new insight into why employees’ perceptions are significant in considering the possible outcomes of diversity.

Details

Journal of Advances in Management Research, vol. 17 no. 1
Type: Research Article
ISSN: 0972-7981

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Article
Publication date: 6 May 2020

Subhash C. Kundu, Archana Mor and Neha Gahlawat

The purpose of this study is to examine the relationship between business strategies (i.e. cost reduction, quality enhancement and innovation strategy) and employees'…

Abstract

Purpose

The purpose of this study is to examine the relationship between business strategies (i.e. cost reduction, quality enhancement and innovation strategy) and employees' intention to leave (ITL), through the mediating role of high-performance work system (HPWS). It also attempts to study variability in the relationship between business strategies, HPWS and employees' ITL on the basis of nature and ownership forms of the firms.

Design/methodology/approach

Primary data based on 573 respondents from 192 organizations operating in India were analysed using structural equation modelling and conditional process modelling.

Findings

This study has revealed that HPWS mediates the relationship between business strategy (specifically innovation and quality-enhancement strategy) and employees' ITL. Findings further indicate that the mediated relationships between quality enhancement and innovation strategy, HPWS and ITL do not vary across nature and ownership forms of the firms.

Practical implications

In context of dynamic business environments in developing countries, the findings provide some important insights in exploring the relevance of strategic human resource management in improving employees' behavioural intentions.

Originality/value

By applying a three dimensional business strategy system (innovation, quality and cost) and by exploring the relevance of several contextual factors, this study attempts to expand the focus of turnover research.

Details

International Journal of Productivity and Performance Management, vol. 70 no. 4
Type: Research Article
ISSN: 1741-0401

Keywords

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