Search results
1 – 10 of 36Viktor Ström, Nima Sanandaji, Saeid Esmaeilzadeh and Mouna Esmaeilzadeh
The purpose of this paper is to investigate the potential link between Sweden’s high reliance on equity capital financing among small and medium-sized enterprises (SMEs) and its…
Abstract
Purpose
The purpose of this paper is to investigate the potential link between Sweden’s high reliance on equity capital financing among small and medium-sized enterprises (SMEs) and its recognition as the most innovative economy in Europe according to the European Innovation Scoreboard (EIS). This paper examines the idea that the high levels of trust within Swedish society can explain why private equity financing is more prevalent among Swedish SMEs.
Design/methodology/approach
To test these ideas, the authors use data from the Survey on Access to Finance for Enterprises to measure the private equity reliance of firms. The authors also use the EIS to measure the innovation capacity of nations and various aspects of SMEs’ innovation activities. Finally, societal levels of trust are measured through the World Value Survey.
Findings
First, the authors find that European countries with a higher proportion of SMEs relying on equity financing tend to be ranked as more innovative by the EIS. Second, the authors find that the correlation between a nation’s share of SMEs relying on equity financing and their level of innovation activities is marginally stronger for product innovations than for business process innovations. Third, the authors find that countries with higher levels of trust tend to have higher equity capital reliance among SMEs.
Originality/value
This study builds upon previous research on equity capital and SMEs’ innovation activity while introducing new insights into the relationship between societal trust and equity financing.
Details
Keywords
Piotr Buła, Anna Thompson and Agnieszka Anna Żak
We aimed to analyze the impact of the transition to the hybrid model of teamwork and team dynamics from the perspective of the five key challenges, i.e. communication…
Abstract
Purpose
We aimed to analyze the impact of the transition to the hybrid model of teamwork and team dynamics from the perspective of the five key challenges, i.e. communication, coordination, connection, creativity and culture.
Design/methodology/approach
To achieve the stated aim, we conducted a literature review and then an exploratory qualitative study. We split the research into phases: December 2021 to January 2022 and July to August 2022. In the first phase, we conducted computer-assisted online interviews (CAWIs) with all members of the remote team and an in-depth interview with the manager. After the transition from remote to hybrid work in February 2022, we returned to the team to conduct in-depth interviews with team leaders and the manager.
Findings
We identified key findings, i.e. managerial implications of differences across the 5 Cs (communication, coordination, connection, creativity and culture) noted in the functioning of the analyzed team as the team shifted from fully remote work to the hybrid work model.
Research limitations/implications
We concluded that if people do not spend time together and are not impregnated with the unique culture and values of a given organization, they will not feel a connection to its distinctive ethos and may choose to leave. In the longer-term, the last challenge may be the biggest single opportunity for employees post-pandemic and concurrently the single biggest challenge that organizational leadership will need to address, given that sustainable market success depends on talent.
Originality/value
The results showed that team communication, teamwork coordination, social and emotional connections among team members, nurturing of creativity, as well as of the organizational culture were of high importance to the team in the hybrid work model. Thus, we confirmed the findings of other authors. The study contributes to our understanding of the impact of the hybrid work model on teamwork and team dynamics and provides some guidance on how organizations can mitigate these, in particular through the team manager.
Details
Keywords
Existing studies suggest that negative impacts emanating from corporate fraud revelations may diffuse to other firms through lower trust and lower market participation. Extending…
Abstract
Purpose
Existing studies suggest that negative impacts emanating from corporate fraud revelations may diffuse to other firms through lower trust and lower market participation. Extending this literature stream, the authors examine whether corporate fraud revelations are associated with higher costs of raising capital through initial public offerings (IPOs) for industry peers.
Design/methodology/approach
The authors employ several analysis techniques including univariate analysis, multivariate regressions, propensity score matching methodology, and probit estimation. The sample consists of 3,015 US IPO firms for the 1996–2021 period.
Findings
By adopting US private securities class action lawsuits as a proxy for the presence of corporate fraud, the authors find that fraud revelations are associated with higher IPO underpricing, higher post-IPO stock return volatility and increased likelihood of withdrawal from the offering for industry peers. The findings are robust to alternative industry definitions and litigation proxies and to the inclusion of a battery of controls, including industry, state and year fixed effects.
Originality/value
This study presents private firms with an additional industry litigation factor to consider when assessing the marginal costs of going public.
Details
Keywords
Swechchha Subedi and Marketa Kubickova
This study explores how institutional and cultural factors influence political trust among hotel employees and its impact on support for local government actions, with…
Abstract
Purpose
This study explores how institutional and cultural factors influence political trust among hotel employees and its impact on support for local government actions, with implications for hotel leadership and regulatory compliance.
Design/methodology/approach
Employing a quantitative approach and structural equation modeling (SEM-PLS), the study integrates institutional and cultural theories of trust. Data were collected from 444 frontline hotel employees via mTurk in May 2021.
Findings
The research reveals insights into the significant role of institutional and cultural factors in shaping political trust among hotel employees. Moreover, it demonstrates a positive correlation between political trust and support for local government actions.
Research limitations/implications
This research has limitations to acknowledge. The sample size may restrict generalizability, and data from May 2021 might not capture long-term trends. Furthermore, relying solely on quantitative data may overlook individual nuances and complexities.
Practical implications
Hotel leadership can leverage these findings to prioritize building political trust among employees, leading to better support for government actions and regulatory compliance.
Social implications
Fostering trust between hotel employees and governing bodies can foster more effective collaboration, benefiting the hotel industry and the broader community.
Originality/value
This research contributes to the existing body of knowledge by presenting a novel conceptual model that integrates institutional theory and cultural theory of trust to examine the formation of political trust in the context of hotel employees. The application of this model to the hospitality industry adds to the limited research available in this area.
Details
Keywords
Samuel Mongrut, Luis Berggrun, Klender Cortez Alejandro and Martha del Pilar Rodríguez García
The study aims to examine the impact of intellectual and social capital in funding businesses.
Abstract
Purpose
The study aims to examine the impact of intellectual and social capital in funding businesses.
Design/methodology/approach
The study made use of fixed-effects panel data models with a sample of 142 countries from the five continents during the period 1998–2018.
Findings
It was found that human capital (HC), relational capital, structural capital and social capital play a role in investors’ decisions to fund a business. The study revealed that investors’ funding decisions in low human development index countries are based mainly on education, while those in high human development index countries are based mainly on the creativity component of HC and on relational, structural and social capital.
Research limitations/implications
The study needs to be replicated using firm-level data within each country. Moreover, the search for new proxies for intellectual and social capital (although the list of variables is exhaustive) both at the country and firm level, constitutes an interesting avenue for future research.
Practical implications
Countries should pay attention to intellectual and social capital to encourage business activity. In particular, low human development countries should strengthen HC, such as the school enrollment rate, with early entrepreneurial training and increase research and development investments, while high human development countries should continue to foster strategic alliances, protect intellectual property and maintain or increase the level of trust in the country.
Originality/value
The study contributes to literature by being the first to explore such a variety of intellectual and social capital variables from a country-level perspective.
Objetivo
El estudio tiene como objetivo examinar el impacto del capital intelectual y social en la financiación de las empresas.
Diseño/metodología/enfoque
Utilizamos modelos de datos de panel de efectos fijos con una muestra de 142 países de los cinco continentes durante el periodo 1998-2018.
Resultados
Encontramos que el capital humano (CH), el capital relacional, el capital estructural y el capital social juegan un papel en las decisiones de los inversionistas para financiar un negocio. Encontramos que las decisiones de financiamiento de los inversionistas en los países con bajo índice de desarrollo humano se basan principalmente en la educación, mientras que las de los países con alto índice de desarrollo humano se basan principalmente en el componente de creatividad del CH y en el capital relacional, estructural y social.
Limitaciones/implicaciones de la investigación
Sugerimos replicar el estudio utilizando datos a nivel de empresa dentro de cada país. Por otra parte, la búsqueda de nuevos indicadores de capital intelectual y social (aunque nuestra lista de variables es exhaustiva) tanto a nivel de país como de empresa, constituye una vía interesante para futuras investigaciones.
Implicaciones prácticas
Los países deben prestar atención al capital intelectual y social para fomentar la actividad empresarial. En particular, los países con bajo desarrollo humano deberían fortalecer el CH, como la tasa de matriculación escolar, con una formación empresarial temprana y aumentar las inversiones en investigación y desarrollo, mientras que los países con un alto nivel de desarrollo humano deberían seguir fomentando las alianzas estratégicas, proteger la propiedad intelectual y mantener o aumentar el nivel de confianza en el país.
Originalidad/valor
El estudio contribuye a la literatura al ser el primero en explorar tal variedad de variables de capital intelectual y social desde una perspectiva a nivel de país.
Details
Keywords
Kwok Yip Cheung and Chung Yee Lai
This study aims to investigate the impact of the audit committee chair’s trust on the quality of interactions between the external auditor and the audit committee chair in Hong…
Abstract
Purpose
This study aims to investigate the impact of the audit committee chair’s trust on the quality of interactions between the external auditor and the audit committee chair in Hong Kong.
Design/methodology/approach
The research uses a questionnaire survey to gather data from the audit committee chairs of the listed companies in Hong Kong, with a response rate of 19.2%. Partial least squares structural equation modelling is used in this study.
Findings
The results reveal that the audit committee chair’s trust in the external auditor’s competence, integrity and goodwill is an important determinant of the interaction quality. The findings also show that interaction quality during the pre-engagement stage is important to mediate the relationships between the three dimensions of trust and interaction quality during the audit performance stage.
Originality/value
This is the first study, to the best of the author’s knowledge, that examines the impact of the audit committee chair’s trust in the external auditor on the quality of their interactions. The findings provide insights for board of directors, auditors and policymakers to implement policies that enhance trust between them to improve audit quality.
Details
Keywords
Geoff Woolcott, Martin Loosemore, Robyn Keast, Ariella Meltzer and Suhair Alkilani
Construction is one of Australia’s largest employers of young people and the industry is facing a major labor shortage, with young people expected to account for much of the…
Abstract
Purpose
Construction is one of Australia’s largest employers of young people and the industry is facing a major labor shortage, with young people expected to account for much of the shortfall. Surprisingly however, there been little research into the pathways for young people into construction employment. The aim of this paper is to address this gap in research by exploring whether project-based intermediaries can support the development of disadvantaged young people’s trust in the often-problematic systems which are meant to help transition them into employment in construction.
Design/methodology/approach
Employing an in-depth case study approach, this research mobilizes theories of personalized and generalized trust to report the results of interviews with 15 sectoral leaders; focus groups with 12 young people working in construction; and interviews with 11 young people being transitioned into construction employment through a unique project-based intermediary developed by a major Australian construction company as part of its social procurement requirements.
Findings
Findings show that project-based intermediaries can play an important trust-building role in transitioning disadvantaged young people into work in construction. They do this by bridging a young person’s strong social ties (family and friendship) and weak social ties (with government and construction industry organizations), both of which can be problematic when used in isolation to seek employment in construction. By performing a crucial bridging role between a young person’s individual self-interest in acting alone to find work and their collective interest in being part of a collaborative group, the project-based intermediary creates a new form of linking social capital, enabling social procurement policies which target young people to work while also addressing wider systemic problems in Australia’s employment systems.
Originality/value
This research addresses the lack of employment research into young people in construction and the paucity of theory in social procurement research more broadly. It takes an original approach in aligning theories related to a duality of personalized trust and generalized trust seen against the duality of individual intentionality and agency (self-focused) and shared intentionality and agency (group-focused). By doing so it provides new conceptual and practical insights into the important role that construction project-based intermediaries like the one studied here can play in providing innovative cross-sector and collaborative solutions to the world’s growing youth unemployment crisis.
Details
Keywords
This study investigates the influence of social trust on the attainment of corporate environmental, social and governance (ESG) objectives.
Abstract
Purpose
This study investigates the influence of social trust on the attainment of corporate environmental, social and governance (ESG) objectives.
Design/methodology/approach
This study conducts panel regression analysis on a distinctive dataset for 2009–2017 on Chinese firms.
Findings
The analysis reveals a significant positive association between social trust and firm-level ESG practices. Moreover, the impact of social trust on shaping ESG outcomes is further amplified by factors such as economic growth, corporate governance standards and institutional quality. This relationship remains statistically positive when the authors employ alternative measures and methodologies, such as the instrumental variables, propensity score matching and difference-in-differences approaches. Notably, the results of heterogeneity tests indicate that the Trust–ESG nexus is more prominent for state-owned enterprises and firms with substantial market capitalization, superior profitability and higher leverage.
Originality/value
This study expands the comprehension of the determinants of ESG and underscores the influential role of social trust as an informal institution in enhancing a firm's ESG performance.
Details
Keywords
Omar Farooq, Imad Jabbouri and Maryem Naili
This paper attempts to document the effect of economic uncertainty on financing constraints faced by private firms.
Abstract
Purpose
This paper attempts to document the effect of economic uncertainty on financing constraints faced by private firms.
Design/methodology/approach
Ordered logistic regression is used to analyze the data of private firms from 101 developing countries. The data was provided by the World Bank's Enterprise Surveys and was gathered during the period between 2006 and 2019.
Findings
The findings show that firms headquartered in countries with high economic uncertainty face more financing constraints than firms headquartered in countries with low economic uncertainty. The authors argue that the increase in economic uncertainty allows capital providers to adjust their lending decisions by reducing the provision of capital to firms. The paper also shows that firms headquartered in countries with strong institutional infrastructure and well-functioning firms are less likely to be affected by economic uncertainty while accessing finance.
Practical implications
The findings would help managers, investors, regulators, and policymakers better understand the implication of economic policy uncertainty on the real economy. This study also sheds the light on the importance of minimizing volatility, ambiguity, and randomness in governmental decisions and policies. Regardless of the pertinence of these policies, arbitrariness surrounding their development and communication can limit their effectiveness and produce unwanted effects.
Originality/value
This paper is closely related to prior literature that documents the behavior of credit providers and investors (the supply side) during the periods of economic uncertainty. The authors differ from this strand of literature by taking the perspective of firms – the demand side.
Details