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1 – 10 of over 10000
Article
Publication date: 16 March 2018

Weiwei Wang and Kenneth Zheng

The purpose of this paper is to investigate the association between unemployment insurance (UI) benefits and firms’ future performance as well as the association between UI…

Abstract

Purpose

The purpose of this paper is to investigate the association between unemployment insurance (UI) benefits and firms’ future performance as well as the association between UI benefits and volatility of firms’ future performance.

Design/methodology/approach

Quantitative analyses are used to perform empirical testing, and the variables in this study have been selected from previous literature. Empirical data consists of UI benefits data published from 2003 to 2012 on the US Department of Labor website, accounting data from Compustat, and stock return data from CRSP.

Findings

Unemployment benefits are positively associated with firms’ future earnings and cash flows. Also, unemployment benefits are negatively associated with volatility of firms’ future earnings and cash flows. Finally, the positive association between unemployment benefits and firms’ future performance is more pronounced for firms with larger changes in labor force, and the negative association between unemployment benefits and volatility of firms’ future performance is more pronounced for firms with higher labor force volatility and capital structure volatility.

Research limitations/implications

To the extent that other correlated omitted variables exist, the readers are asked to interpret the findings in this paper with caution.

Originality/value

This study contributes to prior literature on labor economics, finance, and accounting. The findings may be of interest to academic researchers and policy makers.

Details

International Journal of Managerial Finance, vol. 14 no. 3
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 5 April 2022

Nemiraja Jadiyappa and Raveesh Krishnankutty

This study aims to examine the impact of green operation (measured using the energy intensity of its operations) on the value of corporate firms in stock markets. The authors also…

Abstract

Purpose

This study aims to examine the impact of green operation (measured using the energy intensity of its operations) on the value of corporate firms in stock markets. The authors also examine the channel of such an impact and its implication on a firm's financing choices.

Design/methodology/approach

The authors conduct various univariate and multivariate regression analyses on a panel of all non-financial Indian firms listed on the National Stock Exchange from 2010 through 2018. The authors use the sensitivity of investments to the cash flows model to test the financial constraints hypothesis.

Findings

The authors’ analysis shows a positive relationship between energy efficiency (firms that consume a lesser amount of energy per unit of sale) and the value of firms in the stock market. The authors empirically attribute this greater valuation to the lesser volatility of stock returns, measured by the standard deviation of daily stock returns. Finally, the authors observe that investments in energy-efficient firms are less sensitive to their internal cash flows.

Practical implications

The results suggest that less green firms face greater constraints in accessing finance from external sources and, therefore, depend more on internal than external capital to finance their investments. Hence, managers of such firms can ease their financing pressures by making their operations greener.

Originality/value

In this study, the authors examine the implications of green operations on the financing choices of firms. This aspect of going green is important because managers will have enough incentives to invest in green technologies as that would increase their access to external finance and, hence, decrease their financial constraints.

Details

International Journal of Managerial Finance, vol. 18 no. 4
Type: Research Article
ISSN: 1743-9132

Keywords

Article
Publication date: 19 February 2019

John L. Campbell, Landon M. Mauler and Spencer R. Pierce

This paper provides a review of research on financial derivatives, with an emphasis on and comprehensive coverage of research published in 15 top accounting journals from 1996 to…

Abstract

This paper provides a review of research on financial derivatives, with an emphasis on and comprehensive coverage of research published in 15 top accounting journals from 1996 to 2017. We begin with some brief institutional details about derivatives and then summarize studies explaining when and why firms use derivatives. We then discuss the evolution of the accounting rules related to derivatives (and associated disclosure requirements) and studies that examine changes in these requirements over the years. Next, we review the literature that examines the consequences of firms’ derivative use to various capital market participants (i.e., managers, analysts, investors, boards of directors, etc.), with an emphasis on the role that the accounting and disclosure rules play in such consequences. Finally, we discuss the importance of industry affiliation on firms’ derivative use and the role that industry affiliation plays in derivatives research. Overall, our review suggests that, perhaps due to their inherent complexity and data limitations, derivatives are relatively understudied in accounting, and we highlight several areas where future research is needed.

Details

Journal of Accounting Literature, vol. 42 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 6 February 2020

Lien Duong, John Evans and Thu Phuong Truong

This paper aims to investigate the impact of Australian Chief Financial Officers (CFOs) as board insiders on firm performance and earnings quality with reference to agency theory…

Abstract

Purpose

This paper aims to investigate the impact of Australian Chief Financial Officers (CFOs) as board insiders on firm performance and earnings quality with reference to agency theory and theory of friendly board.

Design/methodology/approach

The ordinary least square, two-stage least-squares and propensity score matching regressions are performed with various proxies for firm performance and accruals quality.

Findings

Firms with CFOs as board insiders experience significantly lower firm performance and earnings quality. In firms with powerful CEOs, the negative impact of CFO board membership on earnings quality is further magnified. Additionally, the negative impact of CFO board membership on firm values and earnings quality is only present in firms with bigger boards or firms with less outside directors. The findings are consistent with the agency perspective and in sharp contrast to the US market.

Originality/value

This is the first Australian study to examine the impact of CFO board membership on firm performance and earnings quality. The findings suggest that the monitoring of executives is best done by a small or independent board and that the insider board membership should be optimised.

Details

Accounting Research Journal, vol. 33 no. 2
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 21 December 2022

Dina Abdelzaher, Jose De la Torre and Skylar Rolf

In today’s ever-increasing context of volatile, uncertain, complex and ambiguous market conditions, the shifts of countries’ protectionist policies toward inward Foreign Direct…

Abstract

Purpose

In today’s ever-increasing context of volatile, uncertain, complex and ambiguous market conditions, the shifts of countries’ protectionist policies toward inward Foreign Direct Investment (FDI), and an increased gap between headquarters’ (HQ) and subsidiaries’ perspectives on what makes business sense, it has become apparent that challenges toward foreign expansion are becoming more severe and require a multidimensional dynamic approach. The authors draw from orchestration theory, dynamic capabilities literature and previous literature on dimensions of internationalization [specifically, density, geographic distance and degree of diversity of the multinational corporation (MNC) subsidiary network] to argue that firms must enhance their orchestration capability. In doing so, this study aims to highlight the nuances of orchestrating a three-dimensional (3D) conceptualization of MNCs’ international configurations.

Design/methodology/approach

The authors analyzed the patterns of configurations that are adopted by MNCs. This sample was made up of the international configuration of 78 Fortune 500 MNCs consisting of 3,318 foreign subsidiaries. Furthermore, the authors examined the impact of different configurations of the 3Ds on firm performance using ordinary least squares regression analysis.

Findings

While the research did indicate that the sample MNCs adopted the sample configurations of the three internationalization dimensions more frequently than others, the authors found that orchestrating MNCs with an international configuration characterized by high density, low geographic distance and low internetwork scope diversity had a positive impact on firm performance.

Practical implications

While international expansion is often motivated by financial performance or market/resource gains, it is also impacted by the firm’s dynamic capability profile. Thus, as MNCs seek to continue to expand globally, they must assess and, if needed, develop their management team’s orchestration capability, which includes effectively determining how the addition or removal of a subsidiary will impact the density, geographic distance and diversity dynamics of the MNC’s international configuration. Finally, the management team needs to be able to devise plans to respond to the potential challenges associated with each of these dimensions.

Originality/value

The contribution of this study includes bringing a dynamic capabilities lens to the extant international business literature examining the multinationality and performance relationship by highlighting the importance of an MNC’s process orchestrating capability that is needed for firms to effectively manage increasingly complex subsidiary networks. It also conceptually explains and empirically supports that some configurations are likely to yield higher returns than others, which can act as a guide for firms as they are seeking to expand in more geographically distant as well as diverse sectors. Furthermore, this study highlights the need for a multidimensional simultaneous approach to the examination of internationalization to performance relationship. Finally, it highlights the tradeoffs that MNCs must address across the orchestration of the three internationalization dimensions using a dynamic capabilities theoretical lens that acknowledges the differences in perspective that exist between HQs and subsidiaries.

Details

Review of International Business and Strategy, vol. 33 no. 1
Type: Research Article
ISSN: 2059-6014

Keywords

Article
Publication date: 4 July 2023

Sangyong Han and Hyejeong Mun

This study investigates the relationship between outside directors, managerial compensation, and firm performance in the Korean insurance industry.

Abstract

Purpose

This study investigates the relationship between outside directors, managerial compensation, and firm performance in the Korean insurance industry.

Design/methodology/approach

The authors employ a simultaneous equation framework by using three-stage least squares (3SLS) to address the endogeneity problems that could result from the joint determination of outside directors, firm performance, and executive compensation in Korean insurance companies.

Findings

The authors find that the ratio of outside directors on the board is negatively associated with insurance firm's value and financial profitability. In addition, this study's evidence shows that greater representation on the board by outside directors leads to a higher level of executive pay. In particular, the authors provide evidence that variable compensation scheme and outside directors who have backgrounds in the legal profession and former high-ranking government officials drive this study's main results.

Originality/value

This study adds to the literature by first demonstrating the interaction effects between outside directors, firm performance, and executive compensation in the Korean insurance industry. Unlike previous studies that typically focus on US companies, the authors study the Korean insurance sector that is an emerging power in the global insurance market, ranking seventh in terms of total premium volume, and show that the Korean insurance firm's outside directors system does not work in the manner that it is intended to function.

Details

Managerial Finance, vol. 49 no. 12
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 13 January 2020

Aruoriwo Marian Chijoke-Mgbame, Chijoke Oscar Mgbame, Simisola Akintoye and Paschal Ohalehi

This study aims to investigate the impact of corporate social responsibility disclosure (CSRD) on firm performance and the moderating role of corporate governance on the CSRD–firm…

2203

Abstract

Purpose

This study aims to investigate the impact of corporate social responsibility disclosure (CSRD) on firm performance and the moderating role of corporate governance on the CSRD–firm performance relationship of listed companies in Nigeria.

Design/methodology/approach

The paper uses a panel data set comprising 841 firm-year observations for the period covering 2007-2016. Fixed effect regression analysis was used to examine the relationship between CSRD and firm performance, and the moderating role of corporate governance in the CSRD–firm performance relationship.

Findings

The results of the study show that there are positive performance implications for firms that engage in CSRD. Although this study finds no effect of board size on the CSRD–firm performance relationship, it provides a strong evidence of a positive effect of board independence on the CSR–firm performance relationship.

Practical implications

The study contributes to the understanding of CSRD–firm performance relationship by providing evidence of the moderating role of corporate governance. It is, therefore, recommended that a stronger regulation be put in place for CSR engagement and the disclosure of same in Nigeria as well as robust measures for the enforcement of corporate governance mechanisms because there are economic benefits to be derived.

Originality/value

The findings contribute to the literature by providing up-to-date and original insights on the CSRD–firm performance relationship within a developing country context. It also uses an uncommon method of measuring CSRD, taking into account the institutional biases that may arise from other methods used in studies on developed countries.

Details

Corporate Governance: The International Journal of Business in Society, vol. 20 no. 2
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 9 October 2017

Jacqueline Garner, Taek-yul Kim and Won Yong Kim

The purpose of this paper is to present a literature review of research on board size, structure, and independence. The paper also reviews research on director voting, and…

2777

Abstract

Purpose

The purpose of this paper is to present a literature review of research on board size, structure, and independence. The paper also reviews research on director voting, and discusses recent work on “busy” directors and board diversity.

Design/methodology/approach

The authors limited the review to a focused set of research areas.

Findings

The authors summarize the research on boards of directors and note that research on this important topic should continue.

Originality/value

This review is intended to summarize the literature on boards of directors.

Details

Managerial Finance, vol. 43 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 4 July 2018

Xuechang Zhu, Qigang Yuan and Wei Zhang

The purpose of this paper is to examine the effect of inventory leanness on productivity. In particular, the authors explore the moderating role of environmental complexity and…

1279

Abstract

Purpose

The purpose of this paper is to examine the effect of inventory leanness on productivity. In particular, the authors explore the moderating role of environmental complexity and the mediating role of risk taking.

Design/methodology/approach

In the mediated moderation analysis of the relationship among inventory leanness, risk taking, environmental complexity and productivity, the authors adopt the instrumental variable method to test the hypotheses based on data collected from 1,709 Chinese listed manufacturing firms.

Findings

The results show that there is an inverted U-shaped relationship between inventory leanness and productivity. The authors then demonstrate the role of risk taking in mediating this relationship. Furthermore, the authors find that environmental complexity not only negatively moderates the relationship between inventory leanness and productivity, but also negatively moderates the relationship between risk taking and productivity.

Practical implications

Managers should not be excessively pursuing inventory leanness improvements, so as not to damage the ability to increase productivity.

Originality/value

This paper may be the first study to empirically demonstrate the moderating effect of environmental complexity and the mediating effect of risk taking on the inverted U-shaped relationship between inventory leanness and productivity.

Details

Journal of Manufacturing Technology Management, vol. 29 no. 7
Type: Research Article
ISSN: 1741-038X

Keywords

Article
Publication date: 8 December 2021

Anne Jeny and Rucsandra Moldovan

The knowledge- and Internet-based economy demands a reexamination of the accounting treatment for intangibles and a thorough understanding of the empirical evidence on this topic.

Abstract

Purpose

The knowledge- and Internet-based economy demands a reexamination of the accounting treatment for intangibles and a thorough understanding of the empirical evidence on this topic.

Design/methodology/approach

The study reviews the literature on research and development (R&D), a specific internally developed intangible asset, using meta-analysis techniques that allow to highlight the areas of consensus and disagreement in quantitative empirical results. The literature the authors review addresses four main research questions on (1) the determinants of the decision to capitalize R&D, (2) stock market-based outcomes of capitalizing R&D, (3) firm-based outcomes related to expensing R&D and (4) stock market-based outcomes of expensing R&D.

Findings

The authors find higher value relevance of capitalized compared with expensed R&D. There is, however, little robust evidence on the determinants of the capitalization decision and the characteristics of capitalizers.

Originality/value

The authors conclude by highlighting future research that can allow accounting academics to contribute to standard setting.

Details

Journal of Accounting Literature, vol. 44 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

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