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Tobin's Q and the Importance of Focus in Firm Performance
... Nevertheless, scholars in the fields of public administration and business have yet to extensively investigate the impact of iconic ergonomic service values on the performance of firms, particularly small and medium-sized enterprises (SMEs) (Birger Wernerfelt, 1984). Then, the purpose of the research is to analyse the effect of the iconic ergonomic service values perspective, which consists of three dimensions such as iconic service marketing, ergonomic product value, and positional advantages on firm performance (Wernerfelt, 1995;Wernerfelt & Montgomery, 1988) and SMEs development (Musa & Chinniah, 2016;Singh, Garg, & Deshmukh, 2008). ...
... EISV has become a model of quick business services in the case of providing service values differently to stakeholders or groups of a community of business targeting and performance (Zailani, Jeyaraman, Vengadasan, & Premkumar, 2012). Empirically, EISV has three core dimensions, such as iconic architecture, ergonomic product value, and positional advantages for firm performance (Wernerfelt, 1995;Wernerfelt & Montgomery, 1988). The service industry firm's market orientation requires a competitive advantage and organizational performance, with customer value being a consequential factor (Zhou, Brown, & Dev, 2009). ...
... Table 1 shows the final dimension of the variables and indicators of independent and dependent variables. According to the theory of Ergo-Iconic Service Values (EISV), they consist of three core dimensions such as iconic service marketing, ergonomic product value, and firm positional advantages Wernerfelt, 1995;Wernerfelt & Montgomery, 1988;Zailani et al., 2012;Zhou et al., 2009). The present study aims to analyse the competitive advantages of small and medium-sized enterprises (SMEs) through the application of Porter's Five Diamond Advantages framework. ...
The present study seeks to examine the effects of ergo-iconic positional advantages on the competitive performance and innovation of small and medium enterprises (SMEs) in the province of West Java. By analysing these impacts, the study aims to contribute to the understanding of strategies that can enhance the competitive benefits of SMEs. The study involves three dimensions of ergo-iconic positional advantages involving iconic service marketing, ergonomic product value, and positional advantages to analyse their impact on achieving small and medium enterprises' performance in West Java Province. The group of respondents for this study consisted of 186 commercial establishments. The participants were selected using a process known as proportionate stratified random sampling. The data will be analysed using AMOS and path analysis in order to examine the study hypotheses. The results showed that iconic service marketing, ergonomic product value, and positional advantages positively and significantly affect SMEs' performance in West Java Province. The study resoundingly supports the idea that the presence of ergo-iconic positions in SMEs buildings may boost competition and innovation in SMEs goods and customer service standards.
... At present, there are oligopolies in China's food industry, such as Yili Dairy and Mengniu Dairy, so the degree of integration in this case has a negative impact on enterprise performance. Wernerfelt and Montgomery (1988) based on cross-section data of 246 listed companies in 1976, found that enterprise diversification was significantly negatively correlated with enterprise performance. ...
... A close relationship between enterprise and supplier is conducive to stabilizing enterprise supply, reducing procurement risk and cost, and thus promoting enterprise performance improvement (Blaxill and Hout, 1991).Strategic management theory believes that if the enterprise uses the short-term contracts (cooperation period is not more than one year), because the customer won't make sure if they can get the contract of the second year, they will hesitate to investment specificity assets, the specificity of the investment could improve its quality or improve the job scheduling for customers, so the enterprise will be difficult to achieve long-term earnings (Hill et al., 2014). The strategic alliance or the establishment of long-term contracts to create long-term stable relations enable enterprises to obtain the benefits of integration, but not to assume the management of upstream and downstream enterprises in the process of value adding problems (Wernerfelt and Montgomery, 1988). Lo (2010) also believes that agricultural producers can obtain more income through contract sales than spot market. ...
Although vertical coordination of supply chain is a classic topic, with the development of market economy and the increase of uncertainty, smooth and stable supply chain is of great importance on sustainable production and consumption, among which the market and government play an increasingly important role in food supply chain coordination. Taking 93 companies in Shanghai and Shenzhen A-share of food supply chain as examples, this study use "panel Tobit" model and regression to analyze the influence of concentration and government subsidies on the vertical coordination in the food supply chain, as well as the final impact on the enterprise performance. The study finds that the higher the degree of vertical integration, the worse the enterprise performance, and the closer the relationship of interorganizational governance, the better the enterprise performance. The increase of concentration and government subsidies are conducive to the improvement of the close relationship between the interorganizational governance of enterprises. Meanwhile, state-owned enterprises also play an active role in this process. Since it is difficult for enterprises to establish a close cooperative relationship with dispersed upstream agricultural producers, the government can formulate corresponding policies, such as cooperatives, to increase the concentration of agricultural suppliers. In addition, as the concentration cannot be changed in the short term, it is also important for the government to appropriately subsidize enterprises for better vertical coordination of the food supply chain.
... Chen and Lee (1995) [32]found the traditional performance measure, ROI, does not reflect a firm's underlying profit and Tobin's q ratio generates more information in reflecting a business performance than ROI. Wernerfelt and Montgomery (1988) [33]and Lang and Stulz (1994) [34]used the q ratio to examine the importance of focus and found that firms with less diversification do better than those with more diversification. Besides, Tobin's q ratio has also been used as the measures of intangible assets [35] and technological assets [36]. ...
... Chen and Lee (1995) [32]found the traditional performance measure, ROI, does not reflect a firm's underlying profit and Tobin's q ratio generates more information in reflecting a business performance than ROI. Wernerfelt and Montgomery (1988) [33]and Lang and Stulz (1994) [34]used the q ratio to examine the importance of focus and found that firms with less diversification do better than those with more diversification. Besides, Tobin's q ratio has also been used as the measures of intangible assets [35] and technological assets [36]. ...
In the evolving business landscape, utility firms are undergoing transformative digital changes. The purpose of this study is to examine the unexplored link between utility firms’ digital transformation and performance, by utilizing unique data from Chinese listed utilities. Empirical findings show a positive correlation between digital transformation and enhanced performance, with financial constraints and environmental performance as identified mechanisms. The research enriches understanding of digital transformation’s economic consequences, providing practical insights for implementation, especially for environmentally conscious firms. Considering textual analysis and sample size limitations, future studies could assess utility firms’ digital transformation across diverse economies with a more thorough evaluation of a firm’s level of digital transformation.
... Numerous studies highlight the positive and negative impact of corporate governance mechanisms on firm performance in developed markets. The following studies examine corporate governance (Wernerfelt & Montgomery, 1988;Klein, 1998;Vafeas, 1999;Bhagat & Bolton, 2008;Dalwai et al., 2015;Pillai & Malkawi, 2018;Alruwaili et al., 2023) and shed light on various themes, including board committee structure, audit committee structure, and board meeting frequency. These studies rely heavily on three measurements of firm performance: return on asset (ROA), return on equity (ROE), and Tobin's Q. 2 Several studies suggest various measurements of corporate governance such as INDEX and governance characteristics. ...
... Tobin's Q formula equals the market value of a company divided by its assets' replacement cost (SeeWernerfelt & Montgomery, 1988). This measurement is very useful in experimental studies that aim to measure firm performance but the availably of data in the GCC context is limited. ...
Research background: Despite the large volume of research which has been conducted, the association between corporate governance mechanisms and firm performance remains a controversial issue, particularly with the growth of accounting settings around the world. Purpose of the article: This study assesses the moderating role of International Financial Reporting Standards (IFRS) on the association between corporate governance mechanisms and firm performance in selected Gulf Cooperation Council (GCC) country-listed firms, namely Saudi Arabia, Qatar, Bahrain, and United Arab Emirates over the period 2016–2019. Methods: Importantly, we examine the direct and indirect influences of royal family members on long-term firm performance. We attempt to answer our research questions using robust estimation methods such as pooled OLS, fixed effect, random effect and first difference models. Findings & value added: The outcome reveals a significant and positive impact of firm size and board size on the firm performance in the pooled sample, while there is a significantly negative influence of financial leverage on firm performance. The impact of RFP on FP is seen to be negative and significant while the interaction term is found to be positive and statistically significant. This notably refers to the possibility that royal family directors could play an essential role in influencing the executive management team to fully react to provide extensive voluntary disclosure and comply with IFRS adoption. Our simultaneous quantile regression analysis displays the influence of corporate governance mechanisms on firm performance in various stages. While we observe that IFRS transformation has improved information comparability, policy makes in GCC countries should continue to foster conducive environment to support innovative business practices that help diversify their economies.
... An organization's primary function is to create value for its products and services in the minds of its consumers. Competition among organizations is standard, intending to find an edge via improved performance (Wernerfelt & Montgomery, 1988). Every business, whether for-profit or non-profit, has had to deal with the issue of performance at some point or another. ...
The goal of this study is to investigate the influence of total quality management (TQM), strategic human resource management practices (SHRMP), and the performance of plastic
products manufacturing small and medium-sized businesses (SMEs). For the data collection, the questionnaire was adopted from the published articles to gather information from SMEs in Rawalpindi, Pakistan. Only 132 of the 350 surveys sent to SME
owners and managers were returned, resulting in a response rate of 65.5%. The results demonstrated that factors including TQM and SHRMP have the ability to predict the performance of small and medium-sized businesses. Therefore, the results show that
TQM and SHRMP have a positive and significant effect on the performance of plastic product manufacturing SMEs in Rawalpindi, Pakistan. Researchers, practitioners, and policymakers working on small and medium-sized businesses will find this study valuable for seeking future direction while developing strategies for SMEs.
... As an ideal measure of firm performance should take both short-term and long-term aspects into account, Tobin's Q is a more appropriate measure than return on assets (ROA). Although ROA has been widely used in previous studies (e.g., Carpenter and Sanders, 2002;Morgan et al., 2009), its limitation in relation to neglecting a firm's potential future returns (Fama, 1970(Fama, , 1991 cannot be remedied due to the nature of this accounting-based measure (Wernerfelt and Montgomery, 1988;Bharadwaj, Bharadwaj, and Konsynski, 1999). In contrast, Tobin's Q is a market-based measure (Ross, 1976;Roll and Ross, 1980) that simultaneously accounts for both short-and long-term firm performance, which are respectively and accurately reflected by investors' estimations and anticipations (e.g., Kor and Mahoney, 2005;Jayachandran et al., 2013). ...
Prior research highlights the disruptive and detrimental effects of chief executive officer (CEO) successions that involve a change of gender, i.e., from a male CEO to a female CEO and vice versa. In contrast, we contend that the effects of CEO successions with gender change depend on the context in which they take place. Drawing on expectation states theory, we identify contexts in which each type of CEO succession with gender change can have positive effects on strategic change and subsequent firm performance, depending on whether the degree of gender parity in the context is sufficient for the new CEO to enact strategic changes. Consistent with our arguments, we report findings from Chinese and U.S. samples showing that in the presence of high environmental dynamism female-to-male CEO succession yields greater strategic change. Conversely, when environmental dynamism is low, it is male-to-female CEO succession that brings about greater strategic change. Furthermore, in the Chinese context, we found that female-to-male CEO succession in state-owned companies results in greater strategic change, whereas male-to-female CEO succession has the same effect in privately-owned settings. Moderated mediation analysis showed that the significant interaction effects on strategic change affect long-term downstream performance (i.e., Tobin's Q). We discuss implications for theory and practice related to CEO successions.
... In addition, Welbourne et al. (2007) Tobin's Q reflects investors' expectations regarding an organization's potential. It is a good proxy for a company's competitive advantage, not only because it measures the company's future expectations but also because it considers the company's value from different sources of funding, in contrast to accounting averages (Campbell & Mínguez-Vera, 2008;Montgomery & Wernerfelt, 1988). ...
With many studies on the participation of women in management positions, a systematic review of gender diversity and its impact on the financial performance of companies over the last 20 years is in demand. To this end, we conducted a literature review of 370 articles, 359 of which were empirical studies published in the most relevant journals of Finance and Business Administration. As a result of the analysis, the characteristics of the research, the main authors, the journals, the theories used, and the relationships between variables were identified. The results show that most research points to evidence of a positive relationship between female participation and financial performance under different aspects (e.g., return, risk, cost of capital, fraud, etc.). This study contributes to the academic debate on the relationship between gender diversity and firm performance. In addition to this review, we outline a theoretical framework and present future research agendas.
... Tobin's Q is a widely recognized indicator that combines market figures with balance sheet items to proxy a firm's market value and performance (Tron and Colantoni, 2021). Tobin's Q ratio is considered less susceptible to accounting practices and is regarded as a forward-looking index (Wernerfelt and Montgomery, 1988). It possesses favorable statistical properties (Hirsch and Seaks, 1993) and has been demonstrated to be reliable in the field by various authors (Tron and Colantoni, 2021). ...
Purpose
The aim of this research paper is to analyze the connection between ESG performance and financial performance within the real estate sector. By focusing on ESG ratings and pillar scores as proxies for ESG performance, the study investigates how these factors impact both profitability and market indicators.
Design/methodology/approach
With data sourced from over 680 publicly listed real estate companies, the research employs a fixed effects regression model to analyze the findings. By utilizing this method, the study can assess the impact of governance, environmental and social factors on both the accounting and market performance of real estate companies.
Findings
The outcomes of this study underscore a link between sustainability, particularly environmental aspects and financial performance. However, the study also reveals a contrasting result: governance factors are associated with adverse financial outcomes. Nevertheless, it is important to highlight the limitations as the results present a mixed picture with limited significant findings.
Practical implications
Companies should prioritize improvements in environment to boost profitability, while they should carefully consider the costs and benefits associated with enhancing their governance structure.
Originality/value
By focusing on this industry and adopting a global perspective, the study addresses a gap in the literature. The research’s innovative approach to utilizing ESG ratings and pillar scores as proxies for ESG performance enhances its originality. Furthermore, the research’s identification of the differing impacts of environmental and governance factors on financial outcomes add novel perspectives to the discourse.
... Resource discretion refers to the ability to convert slack to other uses should the need or opportunity arise (e.g., Sharfman et al., 1988). The more specific a resource is to a particular use, the less discretion management has in deploying excess amounts to alternative uses (e.g., Montgomery Wernerfelt and Montgomery, 1988)." Even though this kind of slack is constrained in its applicability, three papers did not theorize how this constraint impinges on managerial discretion (e.g., Ju & Zhao, 2009;Wang et al., 2016). ...
Slack is a prominent construct in management research, shown to be relevant for a wide range of phenomena. Yet, despite slack’s prominence and breadth of application, our review reveals a lack of clarity and consistency in the categorization, theorizing, and measurement of various types and forms of slack. This has led to differences in the characterization and treatment of seemingly identical kinds of slack, which prevents the full exploitation of the conceptual depth of the slack construct and thus the creation of robust knowledge about slack resources. Based on a review of 229 studies which explicitly theorized about slack, we identify two fundamental dimensions of the slack construct—availability and fungibility—that allow us to: (1) systematize and integrate past research about slack and its implications for organizations; (2) enrich and expand theorizing on slack by advancing a novel typology for understanding slack resourcing decisions and orchestration in organizations; and (3) reinvigorate and open new directions for future research on slack.
... Companies characterized by a TQ lower than one are referred to as overcapitalized and need to either improve their outlook or reduce the weight of the liabilities. The objective of a company is to keep a TQ of approximately 1 (Bajaj et al. 1998;Stevens 1990;Wernerfelt and Montgomery 1988). ...
Decarbonization is often misunderstood in financial studies. Furthermore, its implications for investment opportunities and growth are even less known. The study investigates the link between energy indicators and Tobin's Quotient (TQ) in listed companies globally, finding that the carbon content of energy presents a negative yet modest effect on financial performance. Furthermore, we investigated the effect carbon prices in compliance markets have on TQ for exempted and non-exempt firms, finding that Energy efficiency measures yield greater effects in the latter group. Conversely, it is also true that carbon prices marginally reduce TQ more in non-exempt firms. This implies that auction-mechanisms create burdens that companies are eager to relinquish by reducing emissions. However, reducing GHG yields positive effects on TQ only as long as it results in energy efficiency improvements.
... Tobin's Q reflects the current value of the firm based on current and future information and represents future-oriented long-run performance (Ganguli and Agrawal, 2009;Thomas and Eden, 2004). Compared with accounting measures of firm performance such as ROE and ROA, Tobin's Q is a market-based measure of firm performance, rarely subject to accounting techniques, with fewer distortions from accounting conventions, tax laws, and inventory valuation (Barney, 2007;Wernerfelt and Montgomery, 1988). ...
... When measuring a firm financial performance and different financial decision phenomena, the Tobin's Q ratio is one of the indicators used in literature. Wernerfelt [27], used Tobin's Q ratio to explain cross-sectional returns implying a proxy for risk. Mansyur [28], used Tobin's q to measure firm performance with the relative importance to measure share effect. ...
Supply chain finance is newly emerging concept and grab attend of financial sercive providers, buyers and suppliers. This study empirically examines the impact of supply chain finance solutions (SCFS), banks financial risk on financial service providers’ financial performance using panel dataset of Asian Development Bank registered countries (Pakistan, China and Bangladesh) from 2012–2021. By breaking new ground, supply chain finance solution index is developed by combining several solutions to measure its impact on financial service provider financial performance. The results show a significant impact of supply chain finance solutions on financial performance of financial service providers. Furthermore, by offering SCF solutions a bank is able to reduce its financial risk for the external parties (e.g., investors, shareholders) This research encourages financial service providers (banks) to embrace the supply chain finance solution to enhance financial performance and allows them to evaluate their supply chain finance solutions investments as a technique to mitigate financial risk.
... Tobin's Q, a metric created by Tobin, (1969), is employed to evaluate the worth of the company. Various approaches and formulas have been developed to calculate Tobin's Q, including those proposed by Wernerfelt & Montgomery, (1988), Lindenberg &Ross, (1981), andChung &Pruitt, (1994). The abbreviation BV, which stands for book value, denotes the value recorded in the books of an entity, while MV, which stands for market value, refers to the value determined by the market. ...
The Covid-19 condition that has passed has provided many important lessons and has disrupted the performance and productivity of almost all industries, including manufacturing companies. Such condition has become a challenging task for companies to find solutions to maximize company value to survive, let alone increase in these conditions. Bad like that. This research aims to confirm whether company size, board of commissioners, and Covid-19 conditions significantly affect company value. By taking data from manufacturing companies during the past two years of research during the Covid-19 period, this study uses a descriptive quantitative approach with multiple linear regression analysis techniques and modeling Covid-19 as a moderator. This study uses a purposive sampling method to select manufacturing companies on the Indonesia Stock Exchange. The research data spans two years upon 159 companies, resulting in 318 data points. The research results show that the variables of company size and board of commissioners do not significantly affect company value, but Covid-19 can significantly influence company value. Covid-19 then moderated the company size and board of commissioners variables, and it was discovered that the company size and board of commissioners variables had a significant influence on company value; this demonstrates that Covid-19 has had a devastating effect on company value.
... In order to integrate the notion of sustainability into the company's business plan, managers must quantify the relationship between ESG and corporate value, which clarifies resource allocation decisions. Some academics explicitly utilize stock prices or current market values to estimate corporate value (Wernerfelt & Montgomery, 1988). The measurement of firm size (SIZ) is the natural logarithm of total assets (ln) (Wang & Bansal, 2012). ...
The prevalence of COVID-19 offers companies the opportunity to adopt a more realistic approach to corporate social responsibility. This study examines the performance of ESG and corporate value under the COVID-19 scenario using panel data from 2018 to 2021. After collecting data from the Wind database, regression analysis was used to analyses the total ESG score, specific indicator scores and companies with various ratings. This study showed that sustainability - whether environmental (E), social (S) or governance (G) - contributes to enterprise value. It contributed to an increase in enterprise value for companies with high ratings, but had little impact on the enterprise value of companies with low ratings. In addition, the study was divided into two groups based on the duration of the pandemic to determine whether sustainability and firm value behaved differently under the influence of COVID-19. Even in the presence of COVID-19, the study found that the impact of sustainability on firm value was still favorable and significant. This study provides a detailed breakdown of ESG scores and regression analysis of individual indicators. Secondly a more detailed classification of companies was also carried out, with the study looking at companies according to different ratings, including AAA, AA, A, BBB, BB, B, CCC, CC, C.
... Second, accounting ratios are problematic in that they only reflect past firm performance and, therefore, cannot predict future results (Chenhall & Langfield-Smith, 2007;Wernerfelt & Montgomery, 1988). ...
This study addresses the problem of value relevance and accounting for goodwill positions, as the measures used in previous studies are only suitable to a limited extent for measuring the growth potentials through M&A. For this purpose, the measure of future potential (FP) is defined as a company’s expected growth from a capital market perspective, which is already priced in but has not yet been realized and separates it from the growth already realized in the income statement. The study includes 2660 acquisitions from US companies between 1998 – 2018. Goodwill (premiums) are identified as carriers of FP, and we seek to determine whether they affect long-term operating performance. Our results show that changes in FP, like goodwill, significantly negatively affect future operating performance, demonstrating the realization of growth potentials through M&A. Second, using moderation analysis, we show that the interaction between goodwill and FP predicts changes in operating performance, and the negative relationships decreased significantly when firms were able to generate more potential through the transaction. Our model is particularly suitable for acquirers who have purchased only a few FP. The controversy surrounding goodwill’s value relevance and the impairment-only approach’s discretionary nature is scrutinized.
... Like most previous studies, we used Tobin's Q as a proxy for firm value (Allayannis and Weston, 2001;Bartram et al., 2011). Tobin's Q is the ratio of the market value of equity plus the book value of assets minus the book value of equity to the book value of assets; it is considered a good proxy for firm value (Wernerfelt and Montgomery, 1988). ...
Purpose
This study investigates whether the disclosure of derivatives is value relevant in emerging markets and evaluates the effects of the 2008/2009 global financial crisis on the value relevance of derivative disclosures.
Design/methodology/approach
Panel regression models using sub-samples and a crisis interaction term were applied to a sample of the 200 largest non-financial firms by market capitalization listed on the Johannesburg Stock Exchange (JSE) from 2005 to 2017 to assess the consequences of the financial crisis.
Findings
The results suggest that the disclosure of derivatives is value relevant in the hitherto understudied context of emerging markets. The 2008/2009 financial crisis had a significant impact on derivatives use and the value relevance of derivatives disclosure by JSE-listed companies.
Practical implications
Companies should reconsider both how they employ derivatives as part of their risk management practices and how they communicate derivatives use to stakeholders in the financial statements. The findings facilitate a comparative analysis across various market contexts by researchers and assist investors in better decision-making. The findings can influence regulatory practices and can help standard setters to review disclosure requirements.
Originality/value
The benefits of corporate hedging were studied from an emerging market perspective, using an original dataset and approach to investigate the effects of international financial volatility on emerging markets. The authors tested whether companies are valued differently, based on their disclosure of the use of derivatives in the financial statements, and the effect of the financial crisis on the value relevance derivatives disclosures.
... Respecto al resto de indicadores, resultan muy útiles los indicadores de actividad (Peteraf, 1993;Zornoza, 1997;Camisón, 2001;Delmar & Davidsson, 2000), los indicadores de internacionalización (Dorrosoro et al., 2001), los del grado de innovación (Marbella, 1998), los índices de creación de riqueza o valor (Kay, 1993;Westhead & Cowling, 1995;Almus, 2002) y la Q de Tobin (Wernerfelt & Montgomery, 1988;McGahan, 1999). ...
p>El propósito de este artículo es proponer un nuevo método para evaluar el nivel de éxito alcanzado por los emprendedores. Si bien el concepto de éxito tiene muchas facetas subjetivas, debe tratar de evaluarse para conseguir objetivos como el de mejorar los sistemas de apoyo al emprendimiento. En un primer paso, se analizan y adaptan los enfoques preexistentes habituales para la evaluación del desempeño de pequeñas empresas. Sobre la base del caso real de la región con las tasas de desempleo más altas de Europa, se estudian las variables más relevantes para detectar el éxito y se establece un proceso algorítmico para determinar si un emprendedor ha logrado o no el éxito. El modelo proporciona un conjunto mínimo de variables para evaluar el desempeño en cada caso particular. También se establece un conjunto simple de preguntas, que sirve para clasificar a la mayoría de los empresarios por su nivel de éxito (se clasifica a más del 98% en el caso analizado).</p
... (1) ROA is measured as the ratio of profit after taxes to total assets (Anderson et al., 2003), and (2) TBQ is the sum of the market value of the equity and the book value of the debt over the book value of asset (Wernerfelt & Montgomery, 1988). ...
This study examines the impact of innovation on firm performance and how intellectual capital (IC) moderates the association between innovation and firm performance. We apply an innovation index that measures the frequency of innovative related words, which appear in firm financial reports to proxy for innovation. IC is estimated through the value-added IC (VAICTM) model. This study analyses Chinese firm-year observations of financial profitability (firm value) datasets, which total 19,152 (18,276) over the years from 2007 to 2019. Results indicate that the innovation index is positively related to financial profitability and firm market value. Moreover, the moderating outcomes suggest that IC boosts the positive relationship between innovation index and firm performance. Overall, this study highlights the importance of having innovation and IC together for gaining firm competitive advantages and progressing profitably. That is, firms should be innovative and must manage their IC well.
... Tobin's-q is the ratio of firm's market value to its assets replacement value and it is widely used indictor for firm performance [1,[102][103][104][105]. Tobin's-q diminishes most of the shortcomings inherent in accounting profitability ratios as accounting practices influence accounting profit ratios and valuation of capital market applicably integrates firm risk and diminishes any distortion presented by tax laws and accounting settlements [106]. Moreover, this variable has preference over other accounting measures (such as; ROA) as an indicator of relative firm performance [107]. ...
The main purpose of this research is to investigate the impact of changes in cash flow measures and metrics on firm financial performance. The study uses generalized estimating equations (GEEs) methodology to analyze longitudinal data for sample of 20288 listed Chinese non-financial firms from the period 2018:q2-2020:q1. The main advantage of GEEs method over other estimation techniques is its ability to robustly estimate the variances of regression coefficients for data samples that display high correlation between repeated measurements. The findings of study show that the decline in cash flow measures and metrics bring significant positive improvements in the financial performance of firms. The empirical evidence suggests that performance improvement levers (i.e. cash flow measures and metrics) are more pronounced in low leverage firms, suggesting that changes in cash flow measures and metrics bring more positive changes in low leverage firms' financial performance relatively to high leveraged firms. The results hold after mitigating endogeneity based on dynamic panel system generalized method of moments (GMM) and sensitivity analysis considering the robustness of main findings. The paper makes significant contribution to the literature related to cash flow management and working capital management. Since, this paper is among few to empirically study, how cash flow measures and metrics are related to firm performance from dynamic stand point especially from the context of Chinese non-financial firms.
... For instance, Khanna and Palepu (2000a), comparing the performance of affiliates and independent firms in India, reveal that members of the most diversified groups have larger Tobin's q than those unaffiliated. (Tobin's q, which is used as a measure of performance, is defined as the ratio of the market value of capital to its replacement cost (Tobin, 1969;Wernerfelt & Montgomery, 1988). Khanna and Palepu (2000b), examining business groups in Chile between 1988 and 1996, show that affiliation has a favorable impact on return on assets when group diversification is controlled for in the early periods. ...
The present study examines whether business group affiliates engage in social capital and knowledge sharing relations with firms within their groups more than they do with peers outside the group. In addition, this study compares group affiliated and independent firms in terms of performance and innovation. Using survey data from 128 Turkish business group affiliated and independent manufacturing firms, findings indicate that while group firms’ relations within and outside the group show significant differences in terms of tacit, explicit knowledge sharing and social capital in the form of trust, affiliated and independent firms do not differ in terms of performance, innovation and other characteristics, such as institutional support, organizational capital and absorptive capacity. This study contributes to the business group research by examining whether affiliation creates value for firms in an emerging economy.
... Source: Author's own creation/workKlein (1998);Wernerfelt and Montgomery (1988),Yang et al. (2019);Watkins et al. (2009), ...
Purpose
The study aims to investigate the relationship between renewable energy use and financial performance in non-financial companies in European countries.
Design/methodology/approach
This study examines a panel data set consisting of 1,919 firm-year observations of non-financial companies operating in 13 European nations, covering the period from 2014 to 2021. The study uses the ordinary least squares (OLS) and the two-stage least squares method (2SLS) as the baseline models and further enhances robustness with sub-sample analysis.
Findings
The results demonstrate a positive link between renewable energy use and financial performance, and these results hold up across different measurements, sub-sample analysis and model specifications, demonstrating their robustness. Furthermore, the results indicate that some factors such as the industry nature and environmental, social and governance (ESG) controversies have an impact on this positive association.
Practical implications
The findings are substantial for both policymakers and companies, highlighting the benefits of incorporating renewable energy into their operations for improved business success.
Originality/value
This study adds to the existing body of literature on the effect of environmental performance on a company’s success by focusing on a novel aspect – the correlation between renewable energy usage and firm performance. It responds to the recent request from researchers to investigate different aspects of sustainability, with a specific emphasis on renewable energy, which is a vital factor in reducing carbon emissions and improving financial performance.
... Combining the benchmark regression results shown in Table 4, we can conclude that ETS indirectly increases corporate cost through diversification transformation. This is consistent with the findings of Chang and Wang (2007), Hitt et al. (1997), and Wernerfelt and Montgomery (1988), who found that diversification increases the cost of governance, coordination, and control of enterprises. Overall, our findings are contrary to those of Chao et al. (2012), but similar to those of Garrido-Prada et al. (2019). ...
This study examines the impact of the Chinese regional emission trading system (ETS) pilots on enterprise transformation from the perspective of diversification. We use data on Chinese A-share listed companies from 2004 to 2021, and adopt the staggered difference-in-differences (DID) and difference-in-difference-in-differences (DDD) models. The empirical results show that first, the ETS significantly increases the product quantity and revenue diversification of regulated firms. Second, the ETS promotes enterprise diversification through three channels: emission cost, emission risk, and market efficiency. Third, the ETS has a greater impact on the diversification of state-owned enterprises, firms with high business concentration, and firms with low innovation investment. Fourth, the ETS-driven diversification has not been successful as it has increased firms' costs and reduced their profitability. We recommend introducing industrial policies to guide the transformation of enterprises, encourage them to improve their innovation capabilities, and choose appropriate transformation strategies.
... The dataset comprises information about both bankrupt firms and operating firms. Tobin's Q has been taken as a proxy of a firm's operating performance in many studies of corporate governance Wernerfelt and Montgomery (1988), Fu et al. (2016), Hennessy and Whited (2005). Has considered the coefficient of the variable Q (Tobin's Q) as the primary proxy for an index of the probability of bankruptcy while modeling for the same. ...
The study’s objective is to check whether the predictive power of Machine Learning Techniques is better than Logistic Regression in predicting the bankruptcy of firms and that the same predictive power of ascertaining bankruptcy improves when a proxy for uncertainty is added to the model as a default driver. We considered the covid pandemic a black swan event that had caused ambiguity. A significant factor that has increased the probability of bankruptcy in recent times has been the large-scale supply chain disruptions and crippling lockdowns. Firms are trying to get back to pre-Covid utilization of plant capacity or pivot their business models differently to seize newer opportunities amidst the crisis. We considered the change in operating expenditure (primarily decrease) as our proxy for uncertainty as firms were forced to cut down majorly on their operations and thus incurred lesser variable costs. In an economy showing inflationary trends, the operating expenses will generally increase. But we found that the operational costs had shown a dip in the case of many of the firms during FY 20–21, and we attributed it to Covid disruptions. Results show that Machine Learning Techniques are better than Logistic Regression in predicting the bankruptcy of firms and that the same predictive power of ascertaining bankruptcy improves when a proxy for uncertainty is added to the model.
... Son yıllarda yapılan araştırmalar (Wernerfeld ve Montgomery, 1988;Rumelt, 1991;Hail, 1992Hail, , 1993Zander ve Kogut, 1995;Welbourne ve Wright, 1997;Powell ve Dent-Micallef, 1997;Mauri ve Michaels, 1998;McGahan, 1999;Claver ve diğerleri, 2002;Fahy, 2002;Caloghirou ve diğerleri, 2004;McNamara ve diğerleri, 2005;Chen ve Feng, 2006;Ambrosini ve diğerleri, 2007;Short ve diğerleri, 2007;Galbreath ve Galvin, 2008; Ang ve Wight, 2009), işletme içi kaynakların (kaynak temelli yaklaşım), endüstriyel faktörlere (endüstriyel organizasyon yaklaşımı) oranla, gayri fiziki varlıkların ise fiziki varlıklara oranla işletme performansına daha fazla katkı sağladığını kanıtlarken, firmaların aşırı rekabet ortamında rakiplerine özellikle hangi tür stratejik davranış ve seçimlerle cevap verdikleri, bu stratejik seçimlerin gerçekten rekabet avantajı yaratıp yaratmadıkları ve işletme performansını nasıl ve ne kadar etkiledikleri halen araştırılmaktadır. ...
Porter, işletmelerin uzun dönemde sürdürülebilir rekabet avantajını ancak ve ancak farklılaştırma ya da düşük maliyet liderliği olarak ifade edilen jenerik stratejilerden sadece bir tanesinin başarı ile uygulanması sayesinde elde edilebileceğini, çoklu seçimleri benimseyerek, farklı stratejileri kombine etmeye çalışan işletmelerin ise, hiçbir stratejiyi tam olarak uygulayamayarak, stratejik seçimler arasına sıkışıp (stuck in the middle) kalacaklarını iddia etmektedir. Bu araştırmada, Porter'ın rekabet modeli esas alınarak, tekli ya da çoklu jenerik strateji seçimlerinin işletmeler arası karlılık, pazar büyüme oranı ve toplam satış büyüme oranı kriterleri açısından performans farklılığı yaratıp yaratmadığı incelenmiştir. 157 işletme üzerinde Yamin, Gunasekaran ve Mavondo tarafından geliştirilen "Jenerik Strateji Ölçeği" kullanılarak gerçekleştirilen araştırma sonunda, hem farklılaştırma hem de düşük maliyet liderliği stratejilerini aynı anda izleyebilen işletmelerin, diğer işletmelere oranla hem karlılık hem de pazar performansı (pazar payı ve toplam satış büyüme oranı) açısından belirgin olarak daha başarılı olduğu ortaya çıkarken, ne düşük maliyet liderliği ne de farklılaştırma stratejilerinden herhangi birisini başarı ile uygulayamayan ve "arada sıkışıp kalanlar" olarak adlandırılan işletmelerin ise, gerek karlılık, gerekse pazar performanslarının diğer tüm işletmelere göre daha düşük olduğu belirlenmiştir. Anahtar sözcükler: Farklılaştırma, düşük maliyet liderliği, çoklu stratejik seçim, işletme performansı. 47
... TQ is a market-based indicator of a company's performance. It is prospective, risk-aware, and less susceptible to changes in accounting practices [116,117]. This study measured earnings management (EM) using the absolute value of discretionary accruals (ADA) following the modified Jones model [118]. ...
In accordance with the segregation of oversight from management decision making, the board-level information technology governance is accountable for supervising managerial IT activities. This research empirically analyzes the impact of board-level IT governance on the performance and earnings management practices of Saudi Arabian stock exchange (Tadawul)-listed companies between 2008 and 2020. The study sample includes cross-sectional time-series data from 154 firms with 18,018 firm-year observations. This study used regression analysis and other econometric models to examine probable endogeneities. The findings show that only the return on assets’ operational performance is positively and significantly related to board-level IT governance among the three performance metrics (return on assets, return on equity, and Tobin’s Q). This indicates that a higher proportion of members with IT experience and the presence of a board-level IT professional as chief information officer/chief technology officer and an IT committee positively impact operational performance. Finally, board-level IT governance competence and other governance attributes do not deter earnings management practices. Therefore, countries like Saudi Arabia should enhance their corporate governance environment considering the increasing significance of IT governance (control, service, and monitoring). There is also a need to review provisions of the Saudi Arabia Corporate Governance Regulations, especially for board composition, the appointment of independent and IT-literate directors, and penalties for non-compliance with regulations.
... Firm value: This study employs two measures: Tobin's Q and market-to-book ratio for market value creation or as growth options proxies by the firm. A number of studies have used Tobin's Q to measure firm performance (Wernerfelt and Montgomery, 1988) and firm value (Mak and Kusnadi, 2005). There have been a number of studies regarding firm value as one of the major factors affecting the cash holding level. ...
... Certaines études sont arrivées à la conclusion que l'hétérogénéité et la diversification de l'entreprise affectent plus leur performance que le secteur d'activité (McGahan et Porter, 1997;Rumelt, 1991;Mauri et Michaels, 1998;Ngobo et Stephany, 2001). Néanmoins, les études de Schmalensee (1985) et Wernerfelt et Montgomery (1988) confirment l'impact du secteur d'activité sur la performance des entreprises. ...
Objectif : L’engagement d’une entreprise à atteindre l’excellence est largement déterminée par l’utilisation des outils de contrôle de gestion mis en place (Ngo Biheng et al., 2020). Dans ce contexte, l’objectif de cet article est d’analyser l’effet de l’utilisation des outils de contrôle de gestion mise en place par les entreprises sur leur performance organisationnelle au Cameroun. Méthode : Pour y parvenir, nous exploitons les données collectées via un questionnaire au cours de la période 2019, sur un échantillon de 77 entreprises exerçant leurs activités au Cameroun. Concernant les outils statistiques, nous avons utilisé les tris à plats pour la description des variables qualitatives de l’étude, les caractéristiques de tendance centrale et de dispersion pour les variables quantitatives de l’étude, l’Analyse en Composantes Principales (ACP) pour calculer les indices synthétiques de la performance organisationnelle, du budget et du tableau de bord prospectif. Pour étudier la relation existante entre les outils de contrôle de gestion et la performance organisationnelle des entreprises on a eu recours à la méthode des Moindres Carrés Ordinaires. Résultats : Dans l’ensemble, les résultats indiquent que le tableau de bord prospectif fait partie des outils du contrôle de gestion qui améliorent le plus la performance organisationnelle des entreprises contrairement à l’utilisation du budget qui bien qu’utiliser par 58,5% des entreprises de l’échantillon n’influence pas significativement la performance organisationnelle des entreprises au Cameroun. Originalité/Pertinence : Bien que la relation entre les outils du contrôle de gestion et la performance organisationnelle ait été mise en avant dans la littérature, il reste que très peu de travaux ont été réalisés dans le contexte camerounais. Le bilan de ces travaux empiriques aboutit à des conclusions nuancées, parfois contradictoires et n’apporte pas de connaissances cumulatives et généralisables. Notre étude devrait contribuer au débat relatif à la relation entre les outils du contrôle de gestion et la performance organisationnelle dans les entreprises. Contributions sociales/de gestion : La contribution de cette étude est importante dans la mesure où l’utilisation des outils de contrôle de gestion à l’instar du tableau de bord prospectif permet aux responsables de l’entreprise de s’approprier des objectifs stratégiques et de stimuler par la suite leur processus d’apprentissage organisationnel.
... RBV indicates that firms within an industry tend to be uneven in terms of the resources they can control, and, further, that those that do not control many resources are not mobile among firms [34]. In light of this heterogeneity, Wernerfelt and Montgomery [35] argue that each organization can be defined as a distinctive set of resources (tangible and intangible) and capabilities ( Figure 1). From this perspective, the former can be assessed and traded, while the latter are information-based, intangible, as "invisible assets" [36], and cannot be valued independently. ...
Despite the growing interest of the wine industry in quality and environmental certifications and the influence of these standards on positioning in international markets, scholarly research has paid proportionally limited attention to the link between winery export intensity and the adoption of internationally recognized standards. This study aims to analyze which factors make an organizational model performant, and to verify the impact of the adoption of third-party certifications on the export performance by using the resource-based view (RBV) theory as a theoretical lens. Findings show that younger wineries are more oriented towards the adoption of voluntary quality and environmental certifications, and they achieve the best economic performance, expressed in terms of overall turnover on the market. On the contrary, the better export performance is achieved by the largest group of wineries, which make the greatest effort in promotion and advertising activities and sell their products through intermediaries, while showing a low adoption of certifications. Our results have a number of theoretical and practical implications.
We explore investment efficiency before and after a spin‐off to assess whether post‐spinoff managerial structure helps maintain investment efficiency. Our findings reveal that the investment efficiency of parent firms remains significant when there is a clear separation of management between the parent and spun‐off firms. However, a considerable decline in efficiency is observed after the spin‐off in cases where there is overlapping management. This decrease in efficiency is particularly pronounced when the parent and spun‐off firms operate in different industries and are geographically distant from each other. Furthermore, we show that inefficient alignment of incentives for the overlapped management exacerbates this decline in investment efficiency.
Purpose
The Companies Act of 2013 stressed upon gender diversity in the board of management considering the significant role of women toward the success of an organization. Following it, both public and private sector banks in India implemented the act from 2015 onward. This study aims to investigate whether its implementation has improved board gender diversity uniformly across public and private sector banks. Furthermore, the authors study the impact of board gender diversity on the performance of public and private sector banks in India.
Design/methodology/approach
Secondary data on listed Indian commercial banks for the period 2015–2021 have been used in this study that encompasses 15 commercial and 12 public sector banks. Return on assets, return on equity and Tobin’s Q are considered as the banking performance indicators in this study, while gender diversity of the board is measured by using Blau index. Furthermore, generalized method of moments has been adopted to analyze the effect of board gender diversity on performance of the Indian banking sector.
Findings
Empirical results exhibit that board gender diversity has been gradually improving since 2015 in both public and private sector banks in India. However, board diversity in case of public sector banks is seen to be lower than that of private sector banks. Furthermore, this study found a significant impact of board diversity on the performance indicators of both public and private sector banks.
Practical implications
This study gives a clear picture that board diversity of both public and private banks has remained quite low over the years. Apparently, women representation has been found to be less than 50% throughout the period of 2015–2021. As board diversity has significant impact on banking performance, it is important on the part of banks to take proper steps to improve the board diversity.
Originality/value
This study has added to the existing literature by highlighting on the divergence between gender diversity across public and private sector banks in India. It emphasizes on the need to improve gender diversity by a significant increase in the proportion of women in the board to create an impact on decision-making.
In the post-COVID global landscape and particularly in the era of economic uncertainty following war in Europe, a looming recession and intensifying economic tensions between the West and China, the MNC can no longer be conceptualized as the vertically integrated unit it used to be, but a much more amorphous network. An important paradox intensifies the problem of MNC control in the current scenario: while most empirical research suggests that diversified firms need decentralized control systems, some studies also contend that singular strategies must be developed to exploit synergies in the homogenizing world market. In this paper, we attempt to resolve this paradox by studying contingencies such as the level of centralization, reward systems, transfer pricing, and the geographic and technological contiguities within MNCs. These contingencies will hopefully assist us in developing a new paradigm of MNC control.
Research Summary
We discuss two research design considerations that jointly influence the choice of financial performance metrics in strategy research: (a) expected temporal payoff of the strategic choice and (b) source of variation invoked in the research design (i.e., within‐firm vs. between‐firm comparisons). We map existing performance metrics commonly used in the research literature to these considerations, and highlight the lack of performance metrics well suited for the combination of strategies with not‐well‐defined temporal payoffs and within‐firm research designs. To remedy this, we introduce a value partitioning methodology that provides a performance metric we call dynamic value. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance.
Managerial Summary
This article introduces the value partitioning methodology for interpreting two distinct elements of stock market valuations: (a) the firm's implied future value from continuing operations in a “steady state” and (b) the market's estimate of dynamic future value associated with the firm's strategic choices or competitive positioning. We describe situations where the latter element is useful for measuring strategy performance. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance.
This study adopts the resource-based view (RBV) to explain the difference in firm profit and growth determinants. We argue that profit is driven more by valuable, rare, inimitable, non-substitutable (VRIN) resources, and growth is driven more by versatile resources. Since some versatile resources, such as cash, are less firm-specific, the firm effect is more critical in determining profit than growth. We also expect that emerging market firms are more capable of utilizing versatile resources than developed market firms, and developed market firms are more capable of utilizing VRIN resources than emerging market firms. As a result, the determinants of firm performance also differ between emerging and developed markets. The study employs multilevel mixed models to decompose firm performance in the U.S., Chinese, and global samples. The findings confirm that the firm effect is more important in influencing profit than growth, persisting across all three samples. The firm effect is also more important in influencing performance in developed countries than emerging markets.
Dengan menggunakan kerangka teori manajemen risiko yang telah berkembang di dalam literatur keuangan, penelitian ini antara lain: (1) menguji secara empiris perilaku hedging perusahaan-perusahaan Indonesia dengan instrumen derivatif valuta asing, (2) mengembangkan dan menguji suatu pemikiran baru tentang pengaruh restrukturisasi hutang terhadap perilaku hedging perusahaan-perusahaan tersebut, serta (3) menguji pengaruh kebijakan hedging perusahaan terhadap kekayaan pemegang saham.
Sampel penelitian terdiri dari perusahaan-perusahaan non-finansial yang terdaftar di Bursa Efek Jakarta selama periode 1996-2001; di mana penelitian ini menggunakan metode estimasi Logit untuk meneliti keputusan hedging (hedging decision) perusahaan, metode estimasi Tobit untuk meneliti intensitas/aktifitas hedging (extent of hedging) perusahaan, dan metode estimasi OLS untuk menguji pengaruh hedging terhadap kekayaan pemegang saham.
Berdasarkan pendekatan pooling dengan dummy tahun, seperti juga hasil temuan kebanyakan penelitian terdahulu, hasil penelitian kali ini pun menunjukkan bahwa perilaku hedging perusahaan lebih dimotivasi oleh keinginan untuk meningkatkan kekayaan pemegang saham daripada maksimisasi utilitas manajer. Secara lebih spesifik, penelitian empiris menemukan bahwa perusahaan melakukan hedging dengan instrumen derivatif valuta asing untuk: (1) mengurangi risiko kepailitan dan biaya-biaya financial distress, (2) menghindari kerugian akibat underinvestment, (3) mengatasi permasalahan asset substitution, dan (4) meningkatkan kapasitas hutang. Namun demikian, masih dalam konteks maksimisasi kekayaan pemegang saham, penelitian ini tidak menemukan bukti bahwa perilaku hedging perusahaan dimotivasi oleh keinginan untuk menghemat pajak penghasilan.
Penelitian ini pun menemukan bahwa perusahaan-perusahaan yang sedang melakukan restrukturisasi hutang cenderung untuk tidak melakukan hedging, atau setidaknya mengurangi jumlah nosional instrumen derivatif valuta asing yang dimiliki. Temuan ini konsisten dengan pemikiran option value of levered equity yang pertama kali dikembangkan oleh Black dan Scholes (1973), di mana penelitian ini menunjukkan bahwa peningkatan volalitas dari nilai tukar mata uang akan meningkatkan nilai ekuitas pemegang saham, sehingga tidak dilakukannya hedging oleh perusahaan yang hutang-hutangnya sedang direstrukturisasi akibat financial distress merupakan perilaku yang rasional.
Terdapat pula beberapa temuan lain. Perusahaan-perusahaan milik negara dan perusahaan-perusahaan yang bergerak di sektor properti cenderung untuk tidak melakukan hedging; hal ini karena masing-masing kelompok perusahaan tersebut dipandang memiliki biaya-biaya financial distress dan kepailitan yang lebih rendah, di mana perusahaan-perusahaan milik negara praktis dijamin oleh pemerintah, sementara perusahaan properti memiliki asset tangibility and collateralizability yang relatif tinggi. Dilakukannya hedging oleh perusahaan-perusahaan multinasional yang terdiversifikasi secara geografis menunjukkan bahwa operational hedging saja dipandang kurang memadai untuk meredam risiko perubahan nilai tukar, sehingga tetap diperlukan financial hedging.
Akhirnya, penelitian ini menemukan bukti bahwa kebijakan hedging perusahaan merupakan value creating activity untuk pemegang saham. Kendati nilai pemegang saham bereaksi positif terhadap keputusan dilakukannya hedging, namun pengaruh yang lebih signifikan diperoleh dari intensitas hedging atau nilai nosional instrumen derivatif yang dimiliki perusahaan.
This study considered how several aspects of corporate governance impact the financial performance of a few manufacturing companies in a developing country leading to sustainable innovations.
This study considered how several aspects of corporate governance impact the financial performance of a few manufacturing companies in a developing country leading to sustainable innovations. Nigeria was considered for the study since it is a fast-growing economy and the most populous country in Africa. Tobin's Q methods of analysis and purposive sampling techniques were utilized for analyzing the data gathered from annual reports of companies selected between 2011-2020. Both descriptive statistics and econometric analysis employing panel data techniques were used in the study. Results indicate that board independence and board size had substantial negative impact on Tobin's Q of manufacturing firms in Nigeria. The chapter reveales that audit committees should comprise people with the necessary accounting or finance knowledge and experience to embrace corporate governance procedures since they help interpret business performance in terms of Tobin's Q ratio.
Chief Executive Officers (CEOs) have repeatedly been referred to as icons in accounting research and in the business world. The popularity of a CEO is a function of his ability to revive a dying firm back to life and infuse energy into the firm to enable it bounce back to its feet. This paper seeks to ascertain the relationship between CEO Attributes and the value of listed Consumer goods companies in Nigeria from 2011-2018. The study identifies CEO Tenure, CEO Compensation as measures of CEO attributes while Tobin's q are used as a measure of Firm Value. Furthermore, the study was controlled by Firm age and firm size. With a sample size of 26 Consumer goods firms in Nigeria, Ordinary Least Square Regression method was carried out to test the relationship between the variables and findings revealed that CEO tenure positively and significantly affects the value of the firm measured as Tobin's q. Again, results revealed that there is also a positive and significant relationship between CEO compensation and Firms' value. Conclusively, the study submits that there is a relationship between CEO Attributes and Firms' Value. Based on this finding the study recommended that the necessary regulatory agencies should review CEO remuneration in order enhance the value of firms listed in the Nigerian stock exchange. Secondly, the result is consistent with the notion that long CEO tenure enhances firm value because of their expertise and experience hence this study recommended that a maximum ten years tenure for CEO should be reviewed.
Nghiên cứu xem xét tác động của công bố thông tin trách nhiệm xã hội đến phát triển bền vững và hiệu quả hoạt động của các doanh nghiệp khai khoáng. Dữ liệu được thu thập từ 45 doanh nghiệp khai khoáng tham gia chương trình “Đánh giá, Công bố Doanh nghiệp bền vững tại Việt Nam” do VBCSD tổ chức từ 2015 đến 2021. Kết quả nghiên cứu cho thấy, công bố thông tin trách nhiệm xã hội có tác động trực tiếp cùng chiều đến phát triển bền vững và hiệu quả hoạt động của doanh nghiệp. Hơn nữa, mức độ công bố thông tin trách nhiệm xã hội còn tác động gián tiếp đến hiệu quả hoạt động của doanh nghiệp thông qua biến phát triển bền vững. Từ kết quả, nhóm đã đưa một số khuyến nghị nhằm khuyến khích các doanh nghiệp khai khoáng nâng cao ý thức minh bạch thông tin môi trường, xã hội.
This study evaluated the effect of triple bottom line reporting on economic value added of listed manufacturing firms in Nigeria from 2012 to 2019. In the course of study, Ex post facto research design was employed and secondary data were used sourced from the Nigerian Stock Exchange Fact Books and related companies' Annual Financial Reports for the periods covered. To test the hypotheses which were formulated in the study, the researcher adopted the robust panel least square regression technique. The findings revealed that social disclosure had a negative insignificant effect on economic value added while environmental and governance disclosure had a positive significant effect on the economic value added of listed manufacturing firms in Nigeria. It was recommended that policies that will sustain disclosure on environmental issues should be encouraged because this has shown to be beneficial to the health and survival of the firms. Also, valuable financial, material and human resources should be channeled more on policies that relates to improving governance sustainability if the desire is to gain improved economic value.
This paper introduces a moderated‐mediation model to investigate the relationship between green innovation, as measured by green patent stocks, and firms' stock market value, as measured by Tobin's Q. Using longitudinal data drawn from 351 heavily polluting firms in China's A‐share market from 2007 to 2018, we find that green innovation is likely to affect firms' stock market value positively. A 1% increase in the green innovation over assets index will enhance by 0.18% the Tobin's Q at the firm level. Environmental compliance costs significantly mediate the green innovation‐firms' stock market value association by 8.5%. We also emphasize the positive moderating role of technological collaboration with public research organizations on green innovation‐environmental compliance costs linkage. Our results emphasize that the recurrent question in the extant literature “does it pay to be green?” should be substituted by “how and under what conditions does it pay to be green for firms?” and further stress how firms obtain sustainable development in the environment and economy through green innovation. Implications for firms and investors are also proposed.
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