Technological capabilities, technology management and economic performance: the complementary roles of corporate governance and institutional environment

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Weiwei Wu ◽  
Zhou Liang ◽  
Qi Zhang
Keyword(s):  
Corporate Governance ◽  
Technology Management ◽  
Economic Performance ◽  
Knowledge Integration ◽  
Institutional Environment ◽  
Economic Effect ◽  
Least Square ◽  
Technological Capabilities ◽  
Institutional Perspective ◽  
Content Type

Purpose Nowadays, faced with increasingly dynamic and fierce competition, knowledge is considered to be the core to survive and maintain competitive advantages in both managerial practices and academia. Against this background, this study analyzed the influence of technological capabilities (TC) and technology management (TM) on corporate economic performance in the contexts of corporate internal governance mechanisms and external institutional environment from the institutional perspective. Design/methodology/approach This study collected data on Chinese publicly listed manufacturing firms in Shenzhen and Shanghai stock markets from 2008 to 2017 and the final data included 3,679 firm-year observations. Ordinary least square regression was used in both regression analysis and robustness tests. Findings The empirical results showed that the interaction between TC and TM was positively related to corporate economic performance and both corporate incentives and monitoring mechanisms strengthened this positive relationship; the positive moderating effects of corporate governance were stronger under a more developed corporate external institutional environment. Originality/value This research provides a better understanding of the economic effect of TC and TM from the perspective of knowledge integration by indicating that the interaction between TC and TM can enhance corporate economic performance and delimiting the boundaries of this relationship from the institutional perspective.

Corporate governance and firm performance: empirical evidence from Pakistan

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Farooq ◽  
Amna Noor ◽  
Shoukat Ali
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Firm Size ◽  
Good Governance ◽  
Positive Impact ◽  
Least Square ◽  
Local Context ◽  
Content Type ◽  
Governance Index ◽  
Governance Quality

Purpose The purpose of this research is to look into the governance–performance relationship in the context of critical firm characteristics, such as firm size. Design/methodology/approach Based on total assets, sample firms were classified as small or large. The governance index, which is based on 29 governance provisions covering the audit committee, board committee, ownership and compensation structure of the respective firm, measures governance quality among sample firms. A higher governance index indicates a higher level of governance quality and vice versa. Accounting and market value measures are used to determine firm profitability. The authors used the two-stage least square (2SLS) method of estimation of the model to eliminate the simultaneous equation bias. Findings Corporate governance (CG) appears to have a positive impact on accounting return and market indices (Tobin’s Q), but it has little impact on return on equity. In terms of firm size, larger companies profited more from better governance implementation than smaller firms that lacked these principles, thus improving CG. The findings indicate that small businesses should improve their governance mechanisms to reap the benefits of CG in terms of increased profitability. Research limitations/implications There are certain drawbacks to this research. First, the authors omitted qualitative aspects of CG from the CG index, such as the board’s decision-making process, directors’ perceptions of the board’s position and directors’ age and qualifications. Such a qualitative component will improve the governance index in the future while building the governance index. Second, as the current study only looks at the nonfinancial sector, caution should be exercised before applying the findings to the entire population. Practical implications The findings show that companies that follow good governance standards have better accounting and market efficiency than those that do not. As a result, good governance practices can help firms in developing countries improve their performance. Academic researchers, regulators, investors, lenders and practitioners can find the findings useful in establishing a true relationship between firm performance and CG practices in Pakistan. Originality/value The relationship between governance and profitability in the context of firm size is examined in this research. Firms with varying resources and ability to implement CG codes have varying effects on profitability. To the authors’ knowledge, there was a gap in the literature that addressed this topic in the local context.

CEO behavior and sustainability performance: the moderating role of corporate governance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amel Kouaib ◽  
Asma Bouzouitina ◽  
Anis Jarboui
Keyword(s):  
Corporate Governance ◽  
Real Estate ◽  
Corporate Sustainability ◽  
Least Square ◽  
Content Type ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
Good Corporate Governance ◽  
Governance Practices ◽  
The Impact

PurposeThis paper explores how the tension between a firm's CEO overconfidence feature and externally observable hubris attribute may determine the level of corporate sustainability performance. This work also contemplates the impact of the moderator “corporate governance practices.”Design/methodology/approachThis study uses a sample of 658 firm-year-observations using a sample of European real estate firms indexed on Stoxx Europe 600 Index from 2006 to 2019. To test the developed hypotheses, feasible generalized least square (FGLS) regression is applied.FindingsFindings suggest that a good corporate governance score strengthens the positive effect of the psychological bias (CEO overconfidence) on corporate sustainability performance while it fails to attenuate the negative effect of the cognitive bias (CEO hubris).Research limitations/implicationsThe research provides an overview of the impact of CEO personality traits on the corporate sustainability performance level in the European real estate sup-sector. As corporate governance can have a major impact to control these traits, the authors recommend European real estate companies to improve their corporate governance practices.Originality/valueThis study contributes to the existent literature this gap with two empirical novelties: (1) providing a novel insight into sustainability involvement using a sample of European real estate sup-sector and (2) investigating the moderating effect on the link between CEO psychological and cognitive biases and sustainability performance. This study provides empirical evidence that entrenchment problems arising from CEO hubris would not be mitigated by a good corporate governance practice.

Sustainability practices during COVID-19: an institutional perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olena Klymenko ◽  
Lise Lillebrygfjeld Halse
Keyword(s):  
Data Collection ◽  
Institutional Theory ◽  
Supply Chains ◽  
Institutional Environment ◽  
Secondary Data ◽  
Institutional Perspective ◽  
Additional Time ◽  
Content Type ◽  
New Business ◽  
The One

PurposeThe purpose of this paper is to investigate how sustainable practices in supply chains are affected by the COVID-19 pandemic through the lens of institutional theory.Design/methodology/approachThis research applies a twofold data collection approach: 1) qualitative semistructured interviews and 2) secondary data collection that includes sustainability reports, newspaper articles, journal articles, strategic plans, research reports and statements made by authorities and stakeholders concerning decision-making. In total, managers representing six companies in Norway were interviewed.FindingsThe study suggests that during the COVID-19 pandemic, companies tend to focus on short-term decisions and economic issues. The long-term focus on sustainability has, however, increased at the cluster level. The research also indicates that the pandemic has led to the development of new business routines that may transform institutional norms. The diversity of institutional contexts can, on the one hand, drive sustainability transitions through pressures and supportive programs but, on the other hand, also hinder the development of sustainability thinking.Research limitations/implicationsInstitutional factors must be included when analyzing the effects of crises and sustainable transitions. Researchers are encouraged to explore the COVID-19 implications in the form of longitudinal studies.Practical implicationsPolicymakers can benefit from in-depth knowledge on the adverse effects of an institutional environment on sustainability. For managers, the outbreak of the pandemic can afford them additional time to revise their strategies and seek innovation. The pandemic highlights the need to build more resilient and sustainable systems that will aid managers in responding rapidly during future uncertainties and enduring sustainability trajectories in operations.Originality/valueThe paper offers an in-depth investigation of COVID-19 effects on the sustainability of supply chains by drawing on institutional theory.

Do corporate governance practices restrain earnings management in banking industry? Lessons from India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Deepa Mangala ◽  
Neha Singla ◽  
Neha Singla
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Board Of Directors ◽  
Audit Committee ◽  
Least Square ◽  
Loan Loss ◽  
Content Type ◽  
Governance Practices ◽  
Indian Banks

Purpose This study aims to investigate the role of corporate governance practices in restraining earnings management in Indian commercial banks. Design/methodology/approach Estimation of earnings management is based on discretionary loan loss provision and discretionary realised security gains and losses using Beatty et al. (2002) model. The effect of corporate governance on earnings management is examined by performing two-way least square dummy variable regression. Data for a period of five years (2016–2020) is collected from the Centre for Monitoring Indian Economy ProwessIQ database, Reserve Bank of India website, annual report of banks, National Stock Exchange and bank’s website. Findings Regression results exhibit that number of board committees, size and independence of audit committee and joint audit are significantly effective in curbing earnings management. Other board-related variables (size, independence, meetings and diligence) and audit committee variables (meetings and diligence) are not effective in restraining earnings management in Indian banks. Practical implications The findings may prove to be helpful to regulators, board of directors and investors. It shows the weak area of corporate governance in India that is lack of autonomy to independent directors, which needs regulators attention and it also suggests that the number of independent auditors should be adequate for audit purposes. The board of directors must ensure the formulation of an adequate number of committees, which perform their own super specialised functions. This study brings an alarm to investors not to rely on reported earnings alone as they may be manipulated. Originality/value This paper substantiates the scant literature on the role of corporate governance practices in restraining earnings management in banks of emerging markets and to the best of the authors’ knowledge impact of joint audits on earnings management is previously unexplored in Indian banks, which are examined in this study.

Corporate governance mechanisms and R&D intensity in OECD courtiers

2020 ◽  
Vol 20 (5) ◽  
pp. 863-885
Author(s):  
Aws AlHares
Keyword(s):  
Corporate Governance ◽  
Risk Taking ◽  
Oecd Countries ◽  
Least Square ◽  
European Countries ◽  
Board Structure ◽  
Governance Mechanisms ◽  
Content Type ◽  
Anglo American ◽  
The Impact

Purpose This study aims to investigate the impact of ownership structure and board structure on risk-taking as measured by research and development (R&D) Intensity in OECD countries. Design/methodology/approach A panel data of 300 companies from Anglo American and European countries between 2010 and 2016 were used. The ordinary least square multiple regression analysis procedure is used to examine the relationships. The findings are robust to alternative measures and endogeneities. Findings The results show that institutional ownership, board size, independent directors and board diversity are negatively related to risk-taking, with greater significance among Anglo American countries than among Continental European countries. In contrast, the results show that director ownership is statistically insignificant. Originality/value This study extends and contributes to the extant corporate governance (CG) literature, by offering new evidence on the effect of ownership and board structure on risk-taking between two different traditions. The findings will help regulators and policy-makers in the OECD countries in evaluating the adequacy of the current CG reforms to prevent management misconduct and scandals. These findings are relevant for companies aiming to adopt the most suitable governance mechanisms to pursue their R&D objectives and for policymakers interested in promoting R&D investment.

scholarly journals Firm- and country-level antecedents of corporate governance compliance and disclosure in MENA countries

2018 ◽  
Vol 33 (6/7) ◽  
pp. 558-585 ◽  
Author(s):  
Ahmed A. Sarhan ◽  
Collins G. Ntim
Keyword(s):  
Corporate Governance ◽  
Best Practice ◽  
Least Square ◽  
Content Type ◽  
Mena Countries ◽  
Practice Recommendations ◽  
Country Level ◽  
Voluntary Compliance ◽  
Analysis Technique ◽  
Governance Quality

Purpose This paper aims to investigate the level of compliance with, and disclosure of, corporate governance best practice recommendations and the firm- and country-level factors that can explain discernible differences in the level of compliance with, and disclosure of, corporate governance best practice recommendations in a number of Middle Eastern and North African (MENA) countries. Design/methodology/approach The authors use the widely used content analysis technique to examine the level of compliance with, and disclosure of, corporate governance best practice recommendations in a sample of listed corporations in MENA countries. In addition, the authors use the ordinary least square multiple regression analysis technique to examine the firm- and country-level antecedents of the level of compliance with, and disclosure of, corporate governance best practice recommendations. The findings are generally robust to different types of firm- and country-level factors, alternative measures and potential endogeneity problems. Findings The findings of this study are two-fold. First, the level of voluntary compliance with, and disclosure of, corporate governance best practice recommendations among MENA listed corporations is low and differs substantially across firms. Second, the evidence suggests that firm- and country-level factors, including religiosity, national governance quality and macroeconomic factors, have a positive and significant impact on voluntary compliance with, and disclosure of, corporate governance best practice recommendations. Originality/value To the best of the authors’ knowledge, this paper is the first to examine both the potential firm- and country-level factors affecting voluntary compliance with, and disclosure of, corporate governance best practice recommendations among MENA listed corporations from a neo-institutional theoretical perspective. The results of our study provide regulators and policymakers with the impetus to encourage greater efforts towards pursuing reforms that seek to improve national governance quality, economic environment and positive religious practices.

Corporate governance and firm performance in Malaysia

2017 ◽  
Vol 17 (5) ◽  
pp. 896-912 ◽  
Author(s):  
Padmanabha Ramachandra Bhatt ◽  
R. Rathish Bhatt
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Design Methodology ◽  
Institutional Environment ◽  
Listed Companies ◽  
Resource Dependency ◽  
Government Agencies ◽  
Content Type ◽  
Corporate Governance Code ◽  
The Relationship

Purpose The purpose of this paper is to study the effect of Malaysian Code on Corporate Governance (MCCG, 2007 and 2012) on the performance of the listed companies in Malaysia. The agency theory and resource dependency theories indicate that the firms with strong corporate governance outperform firms with weaker governance. This paper explores this relationship in a developing country like Malaysia having different institutional environment compared to western countries. Design/methodology/approach The study used a sample of 113 listed companies in Malaysia. The study incorporates the endogenous relationship between corporate governance, firm performance and leverage. Findings The study analyzes how the corporate governance framework affected firm performance in Malaysia with the help of self-developed corporate governance index (MCGI). The authors’ findings show that the performance of the firm is positively and significantly related with corporate governance measured by MCGI. Secondly, corporate governance of sample firms shows marked improvements after implementation of MCCG 2012 as compared to MCCG 2007. Originality/value The findings of this paper support the agency and the resource dependency theories. The study contributes to the understanding of the relationship between the corporate governance and firm performance in emerging economy and builds a case for enforcement of strong corporate governance code by government agencies.

Examining the influence of business environment on socio-economic performance of informal microenterprises

2015 ◽  
Vol 35 (3/4) ◽  
pp. 273-288 ◽  
Author(s):  
Eijaz Ahmed Khan ◽  
Mohammed Quaddus
Keyword(s):  
Firm Performance ◽  
Field Study ◽  
Economic Performance ◽  
Structural Equation ◽  
Business Environment ◽  
Partial Least Square ◽  
Least Square ◽  
Business Practices ◽  
Mixed Method Research ◽  
Content Type

Purpose – This study realize that the relationships between business environment and firm performance in context of small- and medium-sized enterprises and large organizations is well understood and focused, but less research has been done on microenterprises, especially in informal sector. The purpose of this paper is to examine these relationships. Design/methodology/approach – A mixed method research design was used. In the field study, data were obtained from 14 participants via one-to-one personal interview. Content analysis was applied to extract, classify, and cross-examine of the data. In the quantitative approach, questionnaire was developed and data were collected from 438 informal microenterprises (IMs) owners. The data were analysed using the partial least square structural equation modelling. Findings – Results from this field study and survey recognized these relationships and vibrates well with the existing literature and establish the hypothesis. Practical implications – In order to create more favourable environment and ensure the performance, the policy makers, professional bodies could formulate decent requirements for IMs to have a code of business practices and socio-economic performance. Originality/value – This study provides a first step towards business environment and firm performance in context IMs and makes several contributions to the literature.

Crossing the threshold from founder management to professional management in Russian firms

2015 ◽  
Vol 21 (1) ◽  
pp. 76-106 ◽  
Author(s):  
Galina Shirokova ◽  
Gina Vega ◽  
Dmitri Knatko
Keyword(s):  
Emerging Markets ◽  
Institutional Environment ◽  
Negative Impact ◽  
Institutional Factors ◽  
Ceo Succession ◽  
Institutional Perspective ◽  
Data Set ◽  
Content Type ◽  
Professional Management ◽  
Organisational Factors

Purpose – The purpose of this paper is to bring together a strategic choice perspective and an institutional perspective in order to address the key research questions: how do Russian founder-CEOs perceive the institutional environment when succession issues are taken into consideration?; how do the perceived characteristics of different formal and informal institutions affect the founder-CEO’s decision to delegate authority to a professional CEO?; and what are the main barriers to founder-CEO succession in threshold firms in emerging markets such as Russia? Design/methodology/approach – Using a data set of 500 entrepreneurial companies from fast growing industries in Russia, the paper defines and studies threshold firms and analyses how various perceived characteristics of the institutional environment in emerging markets influence the likelihood of transition from founder management to professional management. Findings – Institutional factors such as poor security of property rights and dependence of the business on relationships with government officials have a negative impact on the likelihood of founder-CEO succession in threshold firms in emerging markets. At the same time, the perception of contract law as insecure increases the likelihood of transition from founder management to professional management. Originality/value – Most research on initial succession deals with internal organisational factors and does not consider external environments and their influence on founder-CEO departure and willingness to exit from company management. This study is unique in its focus on the external environment and institutional factors and their impact on management transitions in threshold firms in emerging economies.

Corporate governance and transparency: evidence from stock return synchronicity

2015 ◽  
Vol 7 (2) ◽  
pp. 157-179 ◽  
Author(s):  
Matthew Ntow-Gyamfi ◽  
Godfred Alufar Bokpin ◽  
Albert Gemegah
Keyword(s):  
Corporate Governance ◽  
Stock Returns ◽  
Capital Market ◽  
Stock Return ◽  
Emerging Market ◽  
Least Square ◽  
Specific Information ◽  
Stock Selection ◽  
Content Type ◽  
Reputation Effects

Purpose – The purpose of the study is to examine the influence of corporate governance on the flow of firm-specific information in an emerging market. Design/methodology/approach – Synchronicity is estimated under assumptions of contemporaneous and non-contemporaneous relationship between individual stock returns and the market return. Possible thin-trading effect is also corrected using the Dimson’s Beta approach to estimate synchronicity. In the main empirical model, both the Panel-Corrected Standard Errors and the Generalized Least Square estimations were used to provided robust evidence of governance influencing transparency. Findings – Corporate governance was found to broadly influence the release of firm-specific information in a relatively opaque market through the information environment. However, no evidence in support of the “auditor-reputation effects” theory was found. As well, CEO duality does not create an individual powerful enough to reduce the monitoring role of boards. We further document the presence of noise trading on the Ghana Stock Exchange. Practical implications – This study suggests that specific corporate mechanism practices have implications for stock selection in a relatively high information asymmetry Capital Market. Investors require transparency; hence, firms with governance mechanisms that elicit such transparency are likely to attract investors. Originality/value – This study is the first to examine the relationship between governance and transparency while using stock return synchronicity as a proxy for transparency in an emerging Ghanaian Capital Market.

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