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Article
Publication date: 1 March 2016

Manon Deslandes, Anne Fortin and Suzanne Landry

The objective of this study is to explain family firm payout decisions based on socioemotional wealth (SEW) considerations.

Abstract

Purpose

The objective of this study is to explain family firm payout decisions based on socioemotional wealth (SEW) considerations.

Design/methodology/approach

A sample of publicly listed Canadian companies is examined for the period from 2003 to 2008. Distinguishing family firms from nonfamily firms, a Probit regression is used to analyze the likelihood of making a payout. For payout firms, regressions are used to analyze the relationship between payout level (dividends and share repurchases) and payout mix and family firms.

Findings

Results indicate that family firms are more likely to make a payout than nonfamily firms. Among payout firms, the level of payout among payout firms is lower for family firms than for nonfamily firms and their portion of payout in the form of dividends is higher. Lone founder family firms have a lower likelihood of making payouts than other family firms. However, among payout firms, they pay out more than other family firms and have a smaller percentage of their total payout in dividends than other family firms.

Research limitations/implications

Results are impacted by the definition of what constitutes a family firm. Family ownership was used as a proxy for the underlying SEW considerations. Future research could involve interviews with family firm representatives to investigate the relative importance of SEW considerations in their payout decisions.

Originality/value

In providing an alternative theoretical framing of family firms’ payout policies, the study suggests that payout differences between family and nonfamily firms may be driven in part by SEW considerations.

Details

Journal of Family Business Management, vol. 6 no. 1
Type: Research Article
ISSN: 2043-6238

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Article
Publication date: 18 March 2016

Danny Pimentel Claro and Ramon Barbosa Rosa

The purpose of this paper is to identify factors influencing firm adoption of internet banking services (IBS). While previous literature has primarily focused on the…

Abstract

Purpose

The purpose of this paper is to identify factors influencing firm adoption of internet banking services (IBS). While previous literature has primarily focused on the individual consumers’ adoption, we aim to shed light on the adoption of online banking by firms. We investigate the propensity and speed of IBS adoption and offer recommendations to providers of IBS and firm users.

Design/methodology/approach

To attain the above purpose a conceptual model was based on research about IBS adoption in the firm context that derives primarily from technology acceptance model and diffusion of innovation. We use data from 5,002 firms located in 239 counties, encompassing 52.1% of firms users of IBS of a financial service provider and 47.9% of non-user firms. All sampled firms received an offer to adopt IBS from the financial service provider. Such unique data set was analyzed using logistic regression to assess propensity and a survival analysis model to assess IBS adoption speed.

Findings

Results revealed that firms, with high propensity to adopt IBS, operate with a diverse management board, are large and young, and compete with a large number of firm users. The survival model showed that the diverse composition of management board also speeds up IBS adoption.

Practical implications

Several implications are drawn from our findings. For instance, managers in firms adopting IBS should invest in recruiting and retaining a diverse set of board members (e.g. internal and external with full decision power), which allows for thorough assessment of pros and cons of any relevant decision to be made. We also highlight implications for managers in financial service providers (e.g. Bank) that offer IBS to automate the relationship with customer firms. Managers should consider our study as a template for the selection criteria of firms that are likely to accept the IBS offer.

Originality/value

This is one of few empirical studies to investigate the adoption of IBS in a firm context. Previous studies focused on the individual consumer adoption of IBS. We show that adopting diverse set of board management, growing in size, young firms and facing the competitive environment positively influence firm´s propensity to adopt IBS. We also analyze the time spent by firms from the IBS offering to the adoption, which shows that management decision context play a key role in adoption speed. Our research contributions add to the scarce ongoing discussion about firm´s adoption of IBS.

Details

Marketing Intelligence & Planning, vol. 34 no. 3
Type: Research Article
ISSN: 0263-4503

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Article
Publication date: 28 October 2021

Ruijie Jin, Xiaoxian Jiang and Ao Shen

This study aims to examine the effect of independent directors on the corporate social responsibility (CSR) gap – a misalignment between internal and external CSR. More…

Abstract

Purpose

This study aims to examine the effect of independent directors on the corporate social responsibility (CSR) gap – a misalignment between internal and external CSR. More specifically, the authors investigate how two types of independent directors (i.e. politically connected and foreign) affect a firm’s CSR gap in China.

Design/methodology/approach

The authors use the fixed-effects regression model to analyze the panel dataset, which is conducted by a sample of Chinese publicly listed firms from 2008 to 2015.

Findings

The findings indicate that, on average, firms undertake more external than internal CSR actions. Importantly, the authors find that firms having politically connected independent directors on boards have a wider gap between their internal and external CSR. In contrast, firms having foreign independent directors on boards have a narrower gap between their internal and external CSR.

Practical implications

This study provides insights into the role of independent directors in increasing or decreasing the gap between a firm’s internal and external CSR actions, which offers important implications for policymakers and investors.

Originality/value

This study extends the literature on the causes of the CSR gap and deepens the theoretical understanding of the governance role of independent directors in China.

Details

Chinese Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-614X

Keywords

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Article
Publication date: 18 October 2021

Umair Bin Yousaf, Irfan Ullah, Man Wang, Li Junyan and Ajid Ur Rehman

This study aims to examine the relationship between board capital and firm performance in the Chinese tourism industry.

Abstract

Purpose

This study aims to examine the relationship between board capital and firm performance in the Chinese tourism industry.

Design/methodology/approach

The study’s sample includes firms from the Chinese hotel, air transportation/travel and catering industries. This study explores the governance environment in tourism industries. This study estimates three dimensions of the board, including education, expertise and directors interlock. These dimensions are further grouped as human capital (i.e. education and expertise), social capital (interlocks) and board capital (sum of social and human capital). Ordinary least square regressions with multiple robustness tests are used to investigate the effect of board capital on firm value in Chinese listed tourism firms during 2005–2018.

Findings

This study finds that board capital positively impacts firm performance in its dimensions of human and social capital. This study also highlights the two important ownership contexts, namely, institutional investors and state-ownership, that shape the board capital-firm performance association in the Chinese tourism industry.

Practical implications

The findings suggest that board capital plays a significant role in corporate decisions. The results illustrate that higher board capital improves both governance mechanisms and resource provision roles of the board, resulting in higher firm value. The results further offer implications for managers and shareholders of tourism firms when electing directors as shareholders’ representatives.

Originality/value

The study has two important contributions. First, it extends the prior literature of firm value by considering the board’s human and social dimensions in the tourism sector. Second, contrary to prior research on board, this study takes three facets of board capital, education, expertise and interlocks that improve governance mechanisms and bring new resources in the shape of skills, knowledge and expertise.

Details

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

Keywords

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Article
Publication date: 11 October 2021

Waleed M. Al-ahdal and Hafiza Aishah Hashim

The purpose of this paper is to analyse the influence of audit committee characteristics and external audit quality on the performance of non-financial public limited…

Abstract

Purpose

The purpose of this paper is to analyse the influence of audit committee characteristics and external audit quality on the performance of non-financial public limited companies listed on the National Stock Exchange 100.

Design/methodology/approach

One-way random effect panel data regression was applied to 74 non-financial firms in the Nifty 100 from 2014 until 2019. The overall audit committee index and external audit index were built based on the new Indian Companies Act, 2013 and on a review of the literature to capture the impact of the new Act on firm financial performance.

Findings

The outcome of the study revealed that there is lack of evidence to show that audit committee characteristics improve the performance of top Indian non-financial listed firms. However, external audit quality was found to have a significant positive impact on the financial performance of firms as measured by Tobin’s Q, while firm size and leverage were found to have a significant impact on the financial performance of firms as measured by return on assets and return on equity.

Practical implications

This paper will be greatly beneficial for financial practitioners and policymakers because it provides practical suggestions and recommendations about the types of external audit that are indispensable for the overall effectiveness and performance of firms. The study findings may also aid strategic policy formulation and execution for better corporate governance practices for the purpose of profit and wealth maximisation.

Originality/value

To the best of the authors’ knowledge, to date, no previous research has evaluated the effects of audit committee features and external audit quality on the financial performance of firms in India after the implementation of the new Companies Act, 2013. Hence, this study fills this void in the present literature by examining the overall features of the audit committee and external audit and their impact on firm performance in the setting of India.

Details

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

Keywords

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Article
Publication date: 11 October 2021

Caiting Dong, Xiang Li and Xinzhi Chang

Based on the strategy and new institutional economic literature, this study aims to explore how different levels of supplier concentration (SC) will be characterized by…

Abstract

Purpose

Based on the strategy and new institutional economic literature, this study aims to explore how different levels of supplier concentration (SC) will be characterized by differences in switching cost and coordinated adaptation in an ecosystem, thereby shaping its research and development (R&D) intensity, innovation performance and innovation efficiency.

Design/methodology/approach

This study adopted a set of panel data of Chinese listed firms in the Growth Enterprise Board and their top five suppliers from 2012 to 2016. A Tobit model is used to test the hypotheses.

Findings

The study finds that SC has an inverted U-shape effect on R&D intensity. This finding implies that firms are more likely to invest in R&D when SC is intermediate level. While it has a U-shape relationship between SC and innovation output, both lower SC and higher SC are more efficient in innovation because of their advantage in low switching cost and better coordinative adaptability, respectively.

Originality/value

The study complements the innovation ecosystem literature by using SC to represent the structure of the interdependence between firms and suppliers in an ecosystem, then examining the correlation between SC and firms’ innovation investment and output, respectively. Second, combining strategy and new institutional economic literature, the non-linear effects of SC on firms’ innovation are found.

Details

Chinese Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-614X

Keywords

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Article
Publication date: 26 October 2021

Adrija Majumdar and Pranav Singh

There is ambiguity regarding whether coronavirus disease 2019 (COVID-19) is a boon or bane for the IT services industry. On the one hand, it has created opportunities…

Abstract

Purpose

There is ambiguity regarding whether coronavirus disease 2019 (COVID-19) is a boon or bane for the IT services industry. On the one hand, it has created opportunities, especially with the growth of collaborative technologies. On the other hand, many firms have reduced their IT budgets owing to the ongoing recession. This study explores how IT firms have assessed the risk of the pandemic in the early days and informed capital market participants. In addition, it examines the impact of such online disclosures on information asymmetry.

Design/methodology/approach

The authors analysed annual reports of publicly listed firms in the USA filed on the Securities and Exchange Commission website in 2020 and examined whether the disclosure scenario of technology firms was different from that of the other industries. Moreover, the risk sentiment of COVID-19-related disclosures was assessed by employing text analytics. Information asymmetry was measured using the bid–ask spread.

Findings

Overall, it was found that IT services firms were less likely to discuss the COVID-19 pandemic in their annual reports. Interestingly, it was observed that technology firms that chose to communicate about the pandemic had a lower incidence of words related to risks. Furthermore, communicating about COVID-19 in annual reports calms investors and improves the information asymmetry situation about the firm. Variation in the severity of the pandemic and the responses of state governments was controlled for by employing state-fixed effects in the empirical models.

Originality/value

The authors inform the literature on corporate disclosures and technology and highlight the importance of effectively communicating about the pandemic.

Details

Industrial Management & Data Systems, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0263-5577

Keywords

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Article
Publication date: 11 October 2021

Waseem Khan, Trilok Pratap Singh and Mohammed Jamshed

The purpose of this paper is to analyze the characteristics of agribusiness firms in India, China and Pakistan, as well as the challenges they face in doing business.

Abstract

Purpose

The purpose of this paper is to analyze the characteristics of agribusiness firms in India, China and Pakistan, as well as the challenges they face in doing business.

Design/methodology/approach

This study is based on the World Bank’s Enterprises Survey (WBES) data. The survey was carried out through a questionnaire survey from the owner and top managers of 716, 247 and 174 agribusiness from India, Pakistan and China, respectively. This enterprises survey has comprised the information regarding the wide range of firms’ characteristics and 16 parameters of business obstacles. Simple statistical tools such as chi-square and analysis of variance have been used to analyze the data.

Findings

Chi-square test shows the statistically significance difference in firms’ characteristics across agribusiness firms of India, China and Pakistan. Chinese firms are better in terms of having an international quality certification, own websites and getting credit. In Pakistan, access to land for agribusiness is an obstacle while for India and China, it is easy to acquire land for agribusiness purposes. In Pakistan, tax rate and political stability is a moderate obstacle while in India and China, it is a minor obstacle in agribusiness. Labor regulation does not perceive any considerable obstacle in doing business in India and Pakistan.

Practical implications

This study provides an understanding of differences in the agribusiness environment in emerging economies such as India, Pakistan and China based on WBES data. This study can be helpful for agribusiness managers and government policymakers for promoting agriculture-based entrepreneurship.

Originality/value

It is the first attempt to compare the profile of agribusiness firms in growing Asian economies such as India, Pakistan and China, as well as perceived business hurdles, using a comprehensive enterprises survey data of World Bank.

Details

Journal of Enterprising Communities: People and Places in the Global Economy, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-6204

Keywords

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Article
Publication date: 11 October 2021

MyoJung Cho and Salma Ibrahim

This study aims to examine whether chief executive officer (CEO) pay-performance sensitivity to shareholder wealth is related to the use of non-financial performance…

Abstract

Purpose

This study aims to examine whether chief executive officer (CEO) pay-performance sensitivity to shareholder wealth is related to the use of non-financial performance measures in incentive contracts.

Design/methodology/approach

Using hand-collected performance measure data in a sample of S&P 500 firms across the period 1994–2010, this study investigates the sensitivity of CEO bonus and cash pay to shareholder wealth of firms that use non-financial performance (NFPM) measures of varying types and contractual weights in their bonus contracts along with financial measures (NFPM firms) in comparison to that of firms using financial measures only (FPM firms).

Findings

This study finds evidence that the pay-performance sensitivity is stronger in NFPM firms than in FPM firms. These results are driven by the use of CEO individual goals and operational efficiency. Furthermore, when using environmental, social and governance factors, the pay-performance sensitivity is stronger in terms of accounting performance only. This study also finds that using NFPM enhances pay-performance sensitivity more as their contractual weights increase and as financial risk increases.

Practical implications

These findings are important to stakeholders, and especially regulators in understanding incentive effects of alternative performance measures. This study also sheds light on what types of non-financial measures are better in helping firms align CEOs’ incentives to shareholders’ interests.

Originality/value

This study contributes to prior research on benefits of non-financial information within the context of executive compensation. This study presents original results about the effects of contractual weights of non-financial measures and financial risk on CEO pay-performance sensitivity. This study also presents new insights regarding how different types of non-financial measures affect CEO pay-performance sensitivity.

Details

Journal of Financial Reporting and Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1985-2517

Keywords

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Article
Publication date: 22 October 2021

Abdulbaset Ab Klish, Moade Fawzi Shaker Shubita and Junjie Wu

Global interest in adopting the International Financial Reporting Standards (IFRS) has risen rapidly; however, the Middle Eastern and North African (MENA) countries have…

Abstract

Purpose

Global interest in adopting the International Financial Reporting Standards (IFRS) has risen rapidly; however, the Middle Eastern and North African (MENA) countries have reacted differently towards the international diffusion. The purpose of this study is to examine the impact of the IFRS adoption/rejection decision on the quality of MENA region firms' financial reporting.

Design/methodology/approach

The quality of accounting is examined through five metrics models to measure earnings smoothing, managing earnings towards a target and timely loss recognition. The research sample consists of nine countries over a period of ten years (2006–2015), resulting in 3,040 firm-year observations in the main phase, and 2,580 firm-year observations in the additional analysis.

Findings

The findings reveal that the overall sample of IFRS adopters in the MENA region has benefited from the adoption of IFRS, as the results show that there is a reduction in earnings management for IFRS adopters in comparison to local standards adopters. The sub-sample analyses also reveal that firms that adopted IFRS, in both the rentier (oil-dependent states) and non-rentier states, have a higher financial reporting quality than non-IFRS adopters. However, the magnitude of the financial reporting quality was higher for IFRS adopters in rentier states.

Research limitations/implications

Similarly to previous research in this field, this study adopts a strict sample selection approach. Such an approach may limit the sample size, although the researchers have taken every possible step to ensure the use of an adequate sample size. The researchers acknowledge the strict period of ten years, despite having stated its rationale and importance of a more extended period to the quest of the paper.

Practical implications

This research provides valuable input by evaluating the current status of MENA region firms' financial reporting quality, based on their followed accounting regime. The implications of this paper result in better-informed decisions for investors as the information contents of the annual reports enhance comparisons that facilitate the further flow of investments. This research also provides significant insight into the International Accounting Standards Board (IASB). The findings of this study will assist the IASB in understanding the MENA region by measuring the consequences of the countries' decisions on the quality of firms' financial reporting.

Originality/value

The findings of this study contribute to the literature by revealing that countries with medium levels of governance quality have benefited the most from the IFRS adoption, while IFRS adopters in countries with stronger governance quality demonstrate lower financial reporting quality.

Details

Journal of Applied Accounting Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0967-5426

Keywords

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