Financial Centers And The Relationship Between ESG Disclosure And Firm Performance: Evidence From An Emerging Market

2015 ◽  
Vol 31 (4) ◽  
pp. 1239 ◽  
Author(s):  
Omar Farooq
Keyword(s):  
Firm Performance ◽  
Stock Market ◽  
Emerging Markets ◽  
Emerging Market ◽  
Negative Relationship ◽  
Financial Information ◽  
Information Asymmetries ◽  
Market Participants ◽  
The Relationship ◽  
The Way

<p>Is the disclosure of non-financial information, such as that related to environmental, social, and governance (ESG), important for firm performance in emerging markets? Does the extent of information asymmetries affect the way stock market participants react towards ESG disclosure? This paper answers these questions and shows that ESG disclosure is negatively related to firm performance in environments with lower information asymmetries. We argue that this negative relationship exists because ESG activities are considered as unrelated costs that reduce shareholders profits and wealth. Our results also show no significant impact of ESG disclosure on firm performance in environments with higher information asymmetries. Given that information is less reliable in environments with lower information asymmetries, it is very much possible that ESG disclosure is not valued by stock market participants.</p>

scholarly journals Media Independence And Dividend Policy: Evidence From Emerging Stock Markets

2012 ◽  
Vol 28 (5) ◽  
pp. 977
Author(s):  
Omar Farooq ◽  
Salma Dandoune
Keyword(s):  
Stock Market ◽  
Emerging Markets ◽  
Negative Relationship ◽  
Information Asymmetries ◽  
Market Participants ◽  
Dividend Policies ◽  
Emerging Stock Markets ◽  
Independent Media ◽  
The Relationship ◽  
Media Independence

Can media pressurize managers to disgorge excess cash to shareholders? Do firms in countries with more independent media follow different dividend policies than firms with less independent media? This paper seeks to answer these questions and aims to document the relationship between media independence and dividend policies in emerging markets. Using a dataset from twenty three emerging markets, we show a significantly negative relationship between dividend policies (payout ratio and decision to pay dividend) and media independence. We argue that independent media reduces information asymmetries for stock market participants. Consequently, stock market participants in emerging markets with more independent media do not demand as high and as much dividends as their counterparts in emerging markets with less independent media. We also show that press independence is more important in defining dividend policies than TV independence. Furthermore, our results show that the relationship between media independence and dividend policies is more pronounced in firms that generate greater interest from investors.

scholarly journals Media Independence And Firm Performance: Evidence From Emerging Stock Markets

2013 ◽  
Vol 29 (4) ◽  
pp. 1011 ◽  
Author(s):  
Omar Farooq
Keyword(s):  
Firm Performance ◽  
Stock Market ◽  
Emerging Markets ◽  
Information Asymmetries ◽  
Analyst Coverage ◽  
Concentrated Ownership ◽  
Emerging Stock Markets ◽  
The Relationship ◽  
Better Than ◽  
Media Independence

Can media have any influence on firm performance? Do firms incountries with more independent media perform better than firms with lessindependent media? This paper seeks to answer these questions and aims todocument the relationship between media independence and firm performance inemerging markets. Using a dataset fromtwenty-four emerging markets, we show a significantly positive relationshipbetween media independence and firm performance. We argue that independentmedia reduces information asymmetries for stock market participants.Consequently, it becomes hard for managers to expropriate, thereby improvingperformance of firms. We also show that the relationship between mediaindependence and firm performance is more pronounced in firms that have higheragency problem. For instance, our results show stronger impact of mediaindependence on firms with no dividend payouts, no analyst coverage,concentrated ownership, and higher level of operational complexity. It showsthat media can play a substitute for traditional governance mechanisms inemerging markets.

scholarly journals The Impact of Media Independence On Firm Performance: A Panel Data Analysis From Emerging Markets

2015 ◽  
Vol 31 (4) ◽  
pp. 1277 ◽  
Author(s):  
Omar Farooq ◽  
Mounia Rbiha ◽  
Samir Aguenaou
Keyword(s):  
Data Analysis ◽  
Firm Performance ◽  
Emerging Markets ◽  
Panel Data Analysis ◽  
Market Participants ◽  
Independent Media ◽  
The Impact ◽  
The Relationship ◽  
Better Than ◽  
Media Independence

<p>Can media have any influence on firm performance? Do firms in countries with more independent media perform better than firms with less independent media? This paper seeks to answer these questions by documenting the relationship between media independence and firm performance in emerging markets. Using a dataset from twenty seven emerging markets, we show significantly better performance of firms headquartered in countries with relatively more independent media than firms headquartered in countries with relatively less independent media during the period between 2007 and 2011. We argue that independent media reduces information asymmetries for stock market participants. Consequently, it is more difficult for managers to expropriate, thereby improving performance of firms. Our results indicate that media can play a substitute role for traditional governance mechanisms in emerging markets.</p>

scholarly journals Sources of liquidity commonality, asymmetric information and ownership structure in emerging markets: evidence from the Chinese stock market

2008 ◽  
Vol 5 (4) ◽  
pp. 233-239
Author(s):  
Xinwei Zheng
Keyword(s):  
Asymmetric Information ◽  
Stock Market ◽  
Emerging Markets ◽  
Emerging Economies ◽  
Ownership Structure ◽  
Emerging Market ◽  
Stock Exchanges ◽  
Chinese Stock Market ◽  
Trading System ◽  
The Relationship

This study examines if common factors of liquidity can be determined by ownership structure measured by asymmetric information in an emerging market that has adopted an order-driven trading system. Using China as a case for the study, I select a broad sample of stocks from two separate Chinese stock exchanges to measure and analyse the relationship. My empirical evidence seems significant and pervasive. These findings about the Chinese stock market provide useful pointers for understanding commonality in emerging economies and shed critical light on a new dimension of the working of emerging markets

A strategic mismatch: organizational politics and creative propensity

2018 ◽  
Vol 28 (2) ◽  
pp. 223-239
Author(s):  
Fatima Omer ◽  
Hamid Hassan
Keyword(s):  
Emerging Markets ◽  
Structural Equation ◽  
Positive Relationship ◽  
Emerging Market ◽  
Negative Relationship ◽  
Organizational Politics ◽  
Equation Modeling ◽  
Content Type ◽  
Foreign Companies ◽  
The Relationship

Purpose This paper aims to investigate the relationship between negatively perceived organizational politics (NPOP) on creative propensity (CP), while also studying their interplay with organizational commitment (OC) and job satisfaction (JS). Design/methodology/approach A survey technique was used in three different IT-related companies in an emerging market. Customers also included foreign companies for two of the three. In terms of age, these companies were roughly a decade old or more. Respondents were employees who were involved in IT-related jobs. Instrument was used five-point Likert scale. Data analysis involved partial least squares structural equation modeling (PLS-SEM). Findings JS appears to have a positive relationship with OC. Both factors have been shown to have a positive relationship with CP. NPOP appears to have a negative relationship with not only CP but also JS and OC. Originality/value This research aids in bridging a gap in research and contributes to literature with respect to the relationship among CP with JS, OC and NPOP. There is a need for greater research with respect to the relationship of CP with JS, OC and particularly with NPOP between these factors. This research would aid in bridging the gap by investigating relationships among these factors. Globalization and international business may increase the importance of creativity for IT-related as well as other companies. Businesses in emerging markets may require creativity for growth, survival and catching up to companies in developed markets or for competitiveness. With the prevalence of politics in organizations, it may be of strategic value for businesses in emerging markets to be able to calibrate these factors to increase their potential for creativity.

scholarly journals Gold-Stock Market Relationship: Emerging Markets versus Developed Markets

2017 ◽  
Vol 7 (1) ◽  
pp. 17-24 ◽  
Author(s):  
Jalal Seifoddini ◽  
Fraydoon Rahnamay Roodposhti ◽  
Elahe Kamali
Keyword(s):  
Stock Market ◽  
Emerging Markets ◽  
Structural Changes ◽  
Emerging Market ◽  
Market Returns ◽  
Stock Market Returns ◽  
Short And Long Term ◽  
The Relationship ◽  
Market Relationship

We perform a comparative study on the gold-stock market relationship in U.S. stock market as a developed market and in Iran stock market as an emerging market. By considering appropriate variables for emerging markets and by providing a more proper methodology, we improve earlier studies. According to our findings, the relationship between stock market returns and gold price returns does not follow any specific regimes and that this relationship changes in short and long term returns. It is necessary to mention that in the present research, we did not consider this relationship in major structural changes in the economies and instead considered usual economic circumstances that investors are regularly faced with in their investment decisions.

scholarly journals Cost Of Debt And Dividend Policy: Evidence From The MENA Region

2015 ◽  
Vol 31 (5) ◽  
pp. 1637 ◽  
Author(s):  
Omar Farooq ◽  
Imad Jabbouri
Keyword(s):  
Emerging Markets ◽  
Dividend Policy ◽  
Value Relevance ◽  
Negative Relationship ◽  
Cost Of Debt ◽  
Information Asymmetries ◽  
Mena Region ◽  
Dividend Payout ◽  
Policy Effect ◽  
The Relationship

<p>How does dividend policy effect cost of debt in emerging markets? Does it increase the perceived conflict of interests between creditors and shareholders or vice versa? This paper seeks to answer these questions by documenting the relationship between dividend payout ratios and cost of debt in emerging markets. Using a dataset from the MENA region, we document a significantly negative relationship between dividend payout ratios and cost of debt during the period between 2005 and 2011. We argue that high dividend payouts reduce information asymmetries. Consequently, creditors demand lower return for providing their capital to firms. We also show that the negative relationship between dividend payout ratios and cost of debt are more pronounced in firms with higher information asymmetries. It indicates that value relevance of high dividend payout ratios is more in firms that have higher information asymmetries. These firms have scarcity of information. Therefore, whenever information environment improves, it is highly valued by creditors.</p>

scholarly journals EXPRESS: Unbundling the Effects of Internationalization on Firm Performance in Emerging Economies: The Moderating Effects of Strategic Resource Decisions

2021 ◽  
pp. 1069031X2110306
Author(s):  
Nilay Bicakcioglu-Peynirci ◽  
Robert E. Morgan
Keyword(s):  
Firm Performance ◽  
Emerging Economies ◽  
Emerging Market ◽  
Strategic Marketing ◽  
Slack Resources ◽  
Moderation Effect ◽  
Strategic Resource ◽  
And Performance ◽  
Resource Decisions ◽  
The Relationship

We investigate how strategic resource decisions—concerning slack resources and strategic marketing ambidexterity—influence the relationship between internationalization and firm performance of emerging market firms. Based upon the resource-based view, we synthesize two dominant, yet divergent, perspectives that explain the respective resource slack advantages and liabilities in the internationalization literature: the flexible capacity and the efficient capacity perspectives. We also explore the moderating role of strategic marketing ambidexterity which comprises a bundle of marketing activities covering both exploitation-dominant actions and exploration-dominant actions. We empirically examine our hypothesized relationships with data from a sample of 1,683 firm-year observations for the period between 2005 and 2018 and find that distinct forms of resource slacks have contrasting effects on the relationship between internationalization and performance. Our results provide strong evidence for positive moderation effect of unabsorbed slack resources and a negative moderation effect of absorbed slack resources on the internationalization-performance relationship. We also indicate nonsignificant moderating effect of strategic marketing ambidexterity, demonstrating that internationalization attains higher firm performance regardless of its exploration-dominant or exploitation-dominant strategic emphasis in emerging economies.

Does investment in innovation impact firm performance in emerging economies? An empirical investigation of the Indian food and agricultural manufacturing industry

2021 ◽  
Vol 13 (2) ◽  
pp. 233-248
Author(s):  
Manogna R.L. ◽  
Aswini Kumar Mishra
Keyword(s):  
Firm Performance ◽  
Manufacturing Industry ◽  
Emerging Market ◽  
Developed Countries ◽  
Emerging Economy ◽  
Content Type ◽  
Agricultural Industry ◽  
Indian Food ◽  
The Impact ◽  
The Relationship

Purpose The study aims to analyze the impact of Research & Development (R&D) intensity on the firm’s performance, measured by growth of sales in the emerging market like India. Innovation strategy and its outcomes for firms may be different in developing countries as compared to developed countries. Thus, a study that focuses on the emerging economy like India, with a majority of the population dependent on agriculture, is of prime importance to the firm performance in the food and agricultural manufacturing industry. For this study, the broader focus will be on one widely recognised factor which may influence the growth rate of firms, i.e. investment in innovations which is in terms of R&D expenditure. Design/methodology/approach The paper investigates the relationship between the R&D efforts and growth of firms in the Indian food and agricultural manufacturing industry during 2001–2019. To empirically test the relationship between firm’s growth (FG) and R&D investments, system generalised method of moments technique has been used, hence enabling to avoid problems related to endogeneity and simultaneity. Findings The findings reveal that investments in innovations have a positive effect on the growth of firms in the Indian food and agricultural manufacturing industry. Investment in R&D also enables the firms to reap benefits from externalities present in the industry. Further analysis reveals that younger firms grow faster when they invest in R&D. More specifically, this paper finds evidence in the case of the food and agricultural industry that import of raw materials negatively affects the FG and export intensity positively affects the growth in the case of R&D firms. Research limitations/implications This study suggests that the government should encourage the industries to invest optimally in R&D projects by providing favourable fiscal treatments and R&D subsidies which are observed to have positive effects in various developed countries. Originality/value To the best of the author’s knowledge, the current paper is the first to analyse the impact of innovation in food and agricultural industry on firm’s performance in an emerging economy context with the latest data. This paper agrees that a government initiative to increase private R&D expenditure would have favourable effects on FG as growing investments in R&D lead to further growth of the firms.

scholarly journals Ownership And Firm Performance: The Experience Of Saudi Arabias Emerging Economy

2011 ◽  
Vol 8 (8) ◽  
Author(s):  
Abuzar M. A. Eljelly
Keyword(s):  
Saudi Arabia ◽  
Firm Performance ◽  
Stock Market ◽  
Market Performance ◽  
Return On Assets ◽  
Private Companies ◽  
Return On Equity ◽  
Net Profit ◽  
The Government ◽  
The Relationship

This study examines the relationship between firm ownership and corporate performance in Saudi Arabia, using a sample of Listed Private Companies (LPCs) and Listed Government Related Companies (LGRCs). The study compares the operating and market performance of the LPCs and LGRCs during the period 2000-2003 and found that, in general, LGRCs outperform or match the performance of LPCs. More specifically, the study finds that LGRCs tend to mostly outperform LPCs in terms of profitability, as measured by Return on equity (ROE) and Net Profit Margin (NPM), operating efficiently, as measured in terms of Return on assets (ROA), and match them in their stock market risk adjusted performance. The study concludes that these results may have implications for the issue of privatization programs which the government has recently started.

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