R&D volatility and market value: the role of executive overconfidence

2019 ◽  
Vol 14 (2) ◽  
pp. 411-431
Author(s):  
Benlu Hai ◽  
Qingzhu Gao ◽  
Ximing Yin ◽  
Jin Chen
Keyword(s):  
Business Performance ◽  
Positive Impact ◽  
Market Value ◽  
Data Set ◽  
Content Type ◽  
Dynamic Perspective ◽  
Innovation Strategies ◽  
The Impact ◽  
The Relationship

Purpose Significant increase or decrease in research and development (R&D) expenditure may have an immense impact on market value. Based on the punctuated equilibrium theory, this paper aims to empirically analyze the impact of R&D volatilities on market value and the moderating effect of executive overconfidence. Design/methodology/approach The study uses the panel data set that covers 902 Shanghai and Shenzhen A-share manufacturing listed firms and multiple regression method to test the theoretical hypotheses. Findings The results show that both positive and negative R&D volatilities have a robust and significant positive impact on the market value. Further analysis shows that the executive overconfidence positively moderates the relationship between R&D volatilities and market value. Research limitations/implications In a rapidly changing and highly competitive environment, firms should recognize that the balance of innovation strategies will help to bring higher market value. Furthermore, firms could improve corporate governance to make the best of managerial characteristics, such as overconfidence, on the innovation decision-making process. Originality/value By pushing the static perspective to a dynamic perspective and empirically documenting the role of executive overconfidence, this study contributes to the literature on the relationship between R&D expenditure and market value, generating theoretical and practical insights for firms to improve innovation governance and innovation strategies to achieve better business performance.

The impact of innovation strategies on the relationship between supplier integration and operational performance

2019 ◽  
Vol 49 (2) ◽  
pp. 156-177 ◽  
Author(s):  
Jose Benedicto Duhaylongsod ◽  
Pietro De Giovanni
Keyword(s):  
Structural Equation ◽  
Group Analysis ◽  
Operational Performance ◽  
Equation Modeling ◽  
Data Set ◽  
Content Type ◽  
Supplier Integration ◽  
Innovation Strategies ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate whether implementing certain innovation strategies and adopting a portfolio of innovations improve the relationship between supplier integration (SI) and operational performance (OP). Design/methodology/approach The authors test several research hypotheses by using a data set of 173 firms. Data were collected by interviewing managers, presidents and directors, from ten European countries and across nine different industries. The authors use structural equation modeling to estimate the relationships between SI and OP. The authors apply multi-group analysis to test the effects of certain innovation strategies and a portfolio of innovations on these relationships. Findings The authors show that SI improves internal OP but has no direct effect on external OP. The latter can only be improved through well-performing internal operations. The adoption of an incremental product innovation strategy improves the relationship between internal and external OP and leads to more effective SI. Other types of innovations do not help in improving the impact of SI on OP. Finally, the adoption of a portfolio of innovations does not enhance the influence of SI on OP. Thus, firms should focus on a small number of innovations rather than expanding their innovation portfolio to improve the effectiveness of SI on OP. Practical implications When firms aim to improve the impact of SI on OP, they should concentrate on incremental product innovations. Other strategies obtained by combining process, incremental and radical innovations are not adequate for that purpose. An expanded portfolio of innovations does not improve the effect of supplier innovation on OP. Originality/value This research suggests how the impact of SI on OP can be improved by adopting certain innovation strategies and without diversifying the portfolio of innovation projects.

Innovation, firms’ performance and environmental turbulence: is there a moderator or mediator?

2019 ◽  
Vol 22 (1) ◽  
pp. 213-232 ◽  
Author(s):  
Lejla Turulja ◽  
Nijaz Bajgoric
Keyword(s):  
Business Performance ◽  
Heterogeneous Firms ◽  
Environmental Turbulence ◽  
Equation Modeling ◽  
Data Set ◽  
Content Type ◽  
Process Innovations ◽  
Product And Process ◽  
The Relationship

PurposeThe purpose of this paper is to draw on dynamic capability view and contingency theory to clarify the nature of the effect of environmental turbulence on the relationships between firm’s both product and process innovations and business performance.Design/methodology/approachThe authors developed and empirically tested two structural models using structural equation modeling approach. The first model deals with both product and process innovations as the mediators between environmental turbulence and business performance. The second model considers the moderating effect of environmental turbulence between innovation and business performance.FindingsThe findings show that environmental turbulence does not moderate the relationship between innovation and business performance. The authors have found a clear role of environmental turbulence in boosting innovation rather than moderating the relationship between innovation and performance.Research limitations/implicationsThe data set is a cross-section of heterogeneous firms regarding the industry.Practical implicationsManagers should be aware of the importance of the innovation for the environmental turbulence and dynamism counteracting. The results imply a negative influence of environmental turbulence on business performance. However, with the innovation in the equation, this influence can be positive, because it boosts firms to innovate and though to achieve better business performance.Originality/valueIt contributes the management and innovation research and practice through offering insights into the role of environmental turbulence in product innovation, process innovation as well as organizational business performance through comprehensive analysis of mediation and moderation effects between the observed constructs.

scholarly journals Momentum investment strategies, corporate governance and firm performance: an analysis of Islamic banks

2017 ◽  
Vol 17 (2) ◽  
pp. 192-211 ◽  
Author(s):  
Tasawar Nawaz
Keyword(s):  
Corporate Governance ◽  
Human Capital ◽  
Positive Impact ◽  
Dominant Role ◽  
Market Value ◽  
Investment Strategies ◽  
Islamic Banks ◽  
Data Set ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to empirically examine the effect of investments in organisational resources and corporate governance features on market-based performance of Islamic banks (IBs). Design/methodology/approach The required data to calculate different constituents of banks’ investment strategies and governance mechanism were hand collected from 268 annual reports. Different regression models were used to determine the impact of investment in human and structural capital and corporate governance features on market performance of IBs. Findings The paper finds that investments in knowledge resources (human capital, in particular) have a significantly positive impact on the market value of IBs. The results further reveal that IBs’ strategy to rely on long-term human capital accumulation can be seen as idiosyncratic problem-solving knowledge capital. Based on market measure, the paper finds role duality to have a significant positive impact and the size of the advisory board to have the opposite effect on market value. Research limitations/implications This study includes IBs only and ignores other Islamic financial services providers such as Takaful (insurance) companies. The study leaves this chasm to be filled by future researchers. Practical implications The findings may serve as a useful input for both Islamic bankers and regulators to apply knowledge management in their institutions. Furthermore, the dominant role of human capital also provides insight to managers with respect to business performance levers. Originality/value The main contribution of this paper is to provide insight into the Islamic banking business model using a unique hand-collected data set, to identify the effect of investments in organisational resources and bank governance on market value in before, during and after financial crisis.

Customer involvement and NPD cost performance: the moderating role of product innovation novelty

2019 ◽  
Vol 34 (4) ◽  
pp. 711-722 ◽  
Author(s):  
Yi Li ◽  
Gang Li ◽  
Taiwen Feng ◽  
Jinpeng Xu
Keyword(s):  
Product Innovation ◽  
Positive Impact ◽  
Cost Performance ◽  
Content Type ◽  
Customer Involvement ◽  
Positive Effects ◽  
The Impact ◽  
Innovation Novelty ◽  
The Relationship

Purpose The purpose of this study is to examine the influence of product innovation novelty on the relationship between customer involvement and new product development (NPD) cost performance. Design/methodology/approach The authors use organizational information processing theory and adopt hierarchical regression and slope difference test to assess the relationships between constructs and test the hypotheses. Findings The authors evaluate the concept of product innovation novelty from the perspectives of suppliers and customers and infer that these two types of product innovation novelty exert a moderate effect on the relationship between customer involvement and NPD cost performance. First, product innovation novelty for customers strengthens the positive effects of customer involvement on the NPD cost performance. Second, product innovation novelty for suppliers weakens the positive impact of customer involvement on the NPD cost performance. The authors also find that the interaction between product innovation novelty for suppliers and product innovation novelty for customers weakens the positive impact of customer involvement on NPD cost performance. Originality/value The findings of this study explain the reasons for the controversies surrounding the impact of customer involvement on cost performance and discuss the role of product innovation novelty in customer involvement in NPD process. The results of this study can be used to establish whether customer involvement improves or weakens NPD cost performance and identify the role of product innovation novelty in NPD. The conclusions derived from this study can provide theoretical knowledge and managerial insights for both academicians and corporate professionals.

Succession planning and family business performance in SMEs

2017 ◽  
Vol 36 (3) ◽  
pp. 330-347 ◽  
Author(s):  
Mozhdeh Mokhber ◽  
Tan Gi Gi ◽  
Siti Zaleha Abdul Rasid ◽  
Amin Vakilbashi ◽  
Noraiza Mohd Zamil ◽  
...  
Keyword(s):  
Family Business ◽  
Succession Planning ◽  
Business Performance ◽  
Positive Impact ◽  
Family Businesses ◽  
Related Factors ◽  
Content Type ◽  
The Family ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to examine the impact of preparation level of heirs and the relationship between family and business members on the performance of family business in small- and medium-sized enterprises (SMEs) in Malaysia. Design/methodology/approach A quantitative research design involving the use of a survey questionnaire was implemented to investigate the influences of succession planning factors on the performance of family business in SMEs. The survey was conducted on 50 family business successors in Malaysian SMEs. Findings The result showed that the two studied factors – preparation level of heirs and the relationship between family and business members – have a positive impact on the performance of family business. Research limitations/implications The research concentrated on the performance of family business in SMEs in Malaysia’s southern region. The generalization therefore must be made very cautiously to the overall Malaysian SMEs. Practical implications The findings help family businesses to better understand the importance of the preparation level of heirs and the relationship between family and business members on business performance. This study shows the importance of key factors influencing succession planning so that the successor to the family business can bring the family firm to the next stage of success. Originality/value This study serves as a reference or guide for the management of family businesses to better understand the important factors for effective succession planning. It considers the best possible preparation and family-related factors affecting the end results of business, particularly in Malaysian SMEs.

The mediating role of job satisfaction in the relationship of vertical trust and distributed leadership in health care context

2016 ◽  
Vol 11 (2) ◽  
pp. 722-738 ◽  
Author(s):  
Ajay K. Jain
Keyword(s):  
Job Satisfaction ◽  
Health Care ◽  
Distributed Leadership ◽  
Positive Impact ◽  
Public Hospitals ◽  
Content Type ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose This study aims at investigating the effect of vertical trust on distributed leadership (DL) and performance as mediated by job satisfaction, and further to observe the role of DL in carrying out the effect of satisfaction on employees’ performance. Design/methodology/approach As grounded in the organizational citizenship behavior (OCB) literature, the author proposes that employees’ participation in DL should be viewed as an extra role behavior, as leadership functions are not directly related to their job description. The study uses large-scale survey data from a study in one of Denmark’s largest public hospitals (N = 1,439). Findings The results of structural equation modelling (SEM) analysis showed that job satisfaction mediates the relationship between vertical trust and DL, and DL had a positive impact on job performance. Furthermore, the results showed that job satisfaction had a positive impact on DL and employees’ performance. Moreover, DL has positively affected employees’ performance, and it carries the impact of job satisfaction on performance. Research limitations/implications The study showed that trust and job satisfaction are important triggers of DL. Furthermore, results are interesting because literature so far has shown an insignificant relationship between satisfaction and performance. Here, the author establishes that the satisfaction–performance relationship is mediated by DL. The findings should motivate health care organizations to introduce structures and educate formal leaders so that DL can be enabled. Originality/value This should be the first study that relates trust and DL in an empirical manner. As grounded in the OCB literature, results also showed the significance of job satisfaction as a mediator variable.

The relationship between leadership style and the success of Lean management implementation

2018 ◽  
Vol 39 (6) ◽  
pp. 807-824 ◽  
Author(s):  
Daniela Maria da Costa Nogueira ◽  
Paulo S.A. Sousa ◽  
Maria R.A. Moreira
Keyword(s):  
Leadership Style ◽  
Positive Impact ◽  
Intellectual Stimulation ◽  
Lean Management ◽  
Empowering Leadership ◽  
Content Type ◽  
On Line ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to better understand the role that leadership plays in the success of Lean management (LM) implementation, by trying to identify what is the impact of the transactional, transformational, directive and empowering leadership styles on the success of such an implementation in Portuguese companies, and what are the most important leaders’ attributes. Design/methodology/approach An on-line questionnaire was distributed to 65 manufacturing and services Portuguese organizations that have implemented LM. Findings The results suggest that the empowering leadership style has a positive impact on the success of LM implementation. Even though results do not allow concluding about the impact of the other styles, several leader’s attributes were identified as having influence: individualized consideration, information sharing, skill development, intellectual stimulation, assigned goals and self-directed decision making. Originality/value Very few studies have addressed the role of leadership in the success of adopting LM and, to the best knowledge, only one paper studied the critical attributes of leaders in LM implementation. Moreover, the present study focuses in Portugal, country where this topic has rarely been investigated.

scholarly journals The governance role of shareholders and board of directors on firm performance: an eclectic governance-performance model

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ozgur Ozdemir ◽  
Erhan Kilincarslan
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Board Of Directors ◽  
Positive Impact ◽  
Ownership Concentration ◽  
Data Set ◽  
Resource Based View ◽  
Content Type ◽  
The Impact

Purpose This study aims to examine the governance role of shareholders and board of directors in determining firm performance through an eclectic multi-theoretic model that integrates structure and incentive functions of agency theory and capability aspect of the resource-based view. Design/methodology/approach The research model uses a large panel data set of 2,364 UK firms over the period 2000–2010 and uses alternative specifications of the model to improve robustness. Findings The results show that the industry experience of major shareholders as a proxy for shareholder capability has a significant positive impact on investee firm performance. The findings also reveal that the lock-in effect of the largest shareholder has a positive impact on performance, whereas the monitoring effectiveness of shareholders is not associated with ownership concentration. Moreover, the results indicate the underlying capabilities of the board of directors and their impact on corporate performance – particularly, the interlocking directorates of executives have a positive impact on firm performance but those of non-executives have a negative one. However, the previous directorship experience of non-executives has a positive impact on performance. Research limitations/implications This study presents a more comprehensive and complete understanding of the governance-performance relationship beyond the narrow or partial explanations provided by single-theory-based studies or those of investigating the effect of various governance tools separately. Practical implications This study provides more insights into the capability dimension of shareholders and the role of incentives in motivating shareholders to exercise stronger oversight on the management rather than just using ownership concentration. Hence, the study can serve as valuable guidance for investors, corporate managers and policymakers. Originality/value To the best of the knowledge, this is the first comprehensive study that uses an eclectic philosophical approach, integrating the agency theory and resource-based view, to not only examine the impact of board of directors but also investigate the governance role of shareholders in modern corporations to understand how shareholders acquire the requisite skills and information, the best practices and processes, and ultimately use the scarce and inimitable resources that help investee firms in improving their performance.

Do fellow-feelings and organisational harmony matter for logistic firms?

2018 ◽  
Vol 30 (5) ◽  
pp. 1319-1346 ◽  
Author(s):  
Jashim Khan ◽  
Gary Rivers ◽  
Sonjaya S. Gaur ◽  
Ali Quazi ◽  
Na Zuo ◽  
...  
Keyword(s):  
Market Orientation ◽  
Business Performance ◽  
Dissemination And Implementation ◽  
Service Firms ◽  
Senior Managers ◽  
Data Set ◽  
Content Type ◽  
Mediating Role ◽  
The Relationship

PurposeThe purpose of this paper is to explore the mediating role of organisational harmony and fellow-feelings in the relationship between intelligence generations, dissemination and implementation on business performance and explain how market orientation impacts certain aspects of organisational behaviour which in turn lead to the performance of service firms.Design/methodology/approachThe data set comprises 108 responses of senior managers within the logistics sector. The multi-level sequential mediation path analysis is used to examine the above mediating role.FindingsResults indicate that intelligence dissemination (ID), response implementation (RI) and business performance relationship is significantly mediated via fellow-feelings and organisational harmony. However, the relationship between dissemination, implementation and overall business performance is mostly mediated by fellow-feelings and followed by organisational harmony. Furthermore, when overall market orientation (intelligence generation, dissemination and RI) is used as a determinant of business performance, organsiational harmony emerged as the most significant contributor to organsiational performance.Practical implicationsManagers are urged to focus on building fellow-feelings among their employees, resulting in a harmonious work environment between functional units and market orientation organisation wide.Originality/valueCompared to previous research, this is one of the first attempts to develop an understanding of fellow-feelings, contributing to organsiational harmony resulting market orientation and, hence, business performance. Market orientation conceptualisations lump intelligence generation, dissemination and RI of business activities together but do not explain how market orientation impacts fellow-feelings and organisational harmony which in turn leads to performance. The authors specifically address this important lacuna in our conceptualisation and propose that ID and RI lead to fellow-feelings within functional departments and results in organisational harmony.

The impact of technology CSFs on customer satisfaction and the role of trust

2014 ◽  
Vol 32 (5) ◽  
pp. 429-447 ◽  
Author(s):  
Muhammad Tahir Jan ◽  
Kalthom Abdullah
Keyword(s):  
Customer Satisfaction ◽  
Structural Equation ◽  
Service Industry ◽  
Positive Impact ◽  
Valuable Insight ◽  
Content Type ◽  
Impact Of Technology ◽  
The Impact ◽  
The Relationship

Purpose – The purpose of this paper is to identify and test technology-related critical success factors (CSFs) and its impact on trust and customer satisfaction. Design/methodology/approach – This paper analyses the causal relationship that exists between technology CSFs and customer satisfaction. It also investigates the mediating role of trust between these two. For this purpose data were collected quantitatively from 349 employees working in different banks, through self-administered questionnaire. The data analysis was conducted using SPSS and AMOS software. Factor analysis was performed to extract and decide on the number of factors underlying the measured variables of interest. Structural equation modelling was then used to examine the variables and the fitness of proposed model. Findings – The result revealed that technology CSFs positively affect customer satisfaction. Also, trust partially mediates the relationship between technology CSFs and customer satisfaction. A significant positive impact of technology CSFs on trust, and trust on customer satisfaction have also been obtained. Practical implications – The significant influence that technology CSFs have on customer satisfaction and trust shows that technology-related CSFs are inevitable for the success of customer relationship management (CRM) in financial services industry, particularly banks. Policy makers of service industry in general and financial service industry in particular may benefit from the findings of this study. Originality/value – Despite the plethora of research on CSFs for CRM, very limited attention has been given to testing and validating the identified CSFs. Negligible research has been conducted to investigate trust as a mediating variable in the relationship between technology CSFs and customer satisfaction. This paper, therefore, offers valuable insight into technology-related CSFs and trust with their impact on customer satisfaction.

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