Firm-level political capabilities and subsequent financial performance

2015 ◽  
Vol 16 (3) ◽  
pp. 303-313 ◽  
Author(s):  
Richard S. Brown
Keyword(s):  
Financial Performance ◽  
Firm Level ◽  
Political Capabilities

Revisiting the impact of organized labor on corporate bottom lines

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dmytro Osiichuk ◽  
Paweł Mielcarz ◽  
Julia Kavalenka
Keyword(s):  
Financial Performance ◽  
Organized Labor ◽  
Corporate Financial Performance ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
International Panel ◽  
Transmission Mechanisms ◽  
Credible Threat ◽  
The Impact

Purpose Relying on an international panel data set, the purpose of this paper is to quantify the economic impact of labor unionization on corporate financial performance. Design/methodology/approach Static panel regression analysis is performed for a firm-level multinational data set to elucidate the postulated empirical relationships between employee unionization and corporate performance. The transmission mechanisms intermediating the studied effects are discussed and operationalized. Findings The empirical evidence demonstrates that firms with a higher level of employee unionization spend more on wages and labor-related expenses. The concomitant downside of higher resource extraction by unions is a lower rate of net employment creation and a higher possibility of redundancy layoffs. Originality/value Overall, the authors demonstrate that by creating a credible threat of employee disobedience manifested through strikes and internal wage disputes, labor unions remain an effective mechanism of increasing employees’ bargaining power. Despite the discovered weak negative associative link between the degree of unionization and corporate financial performance, the authors perceive the overall evidence to be inconclusive on this matter.

Assessing the Value of Information Technology Investment to Firm Performance

2002 ◽  
pp. 257-278
Author(s):  
Qing Hu ◽  
Robert T. Plant
Keyword(s):  
Information Technology ◽  
Firm Performance ◽  
Financial Performance ◽  
Capital Investment ◽  
Large Scale ◽  
Performance Data ◽  
It Investment ◽  
Firm Level ◽  
It Investments ◽  
And Performance

The promise of increased competitive advantage has been the driving force behind the large-scale investment in information technology (IT) over the last three decades. There is a continuing debate among executives and academics as to the measurable benefits of this investment. The return on investment (ROI) and other performance measures reported in the academic literature indicate conflicting empirical findings. Many previous studies have based their conclusions on the statistical correlation between IT capital investment and firm performance data of the same time period. In this study we argue that the causal relationship between IT investment and firm performance could not be reliably established through concurrent IT and performance data. We further submit that it would be more convincing to infer causality if the IT investments in the preceding years are significantly correlated with the performance of a firm in the subsequent year. Using the Granger causality models and three samples of firm-level financial data, we found no statistical evidence that IT investments have caused the improvement of financial performance of the firms in the samples. On the contrary, the causal models suggest that improved financial performance over consecutive years may have contributed to the increase of IT investment in the subsequent year. Implications of these findings as well as directions for future studies are discussed.

Does guanxi in China always produce value? The contingency effects of contract enforcement and market turbulence

2016 ◽  
Vol 31 (7) ◽  
pp. 861-876 ◽  
Author(s):  
Liping Qian ◽  
Pianpian Yang ◽  
Yao Li
Keyword(s):  
Financial Performance ◽  
Empirical Test ◽  
Contract Enforcement ◽  
Behavioral Risk ◽  
Negative Effects ◽  
Dyadic Relationship ◽  
Firm Level ◽  
Content Type ◽  
Strategic Performance ◽  
Market Turbulence

Purpose The purpose of this study is to reconcile the positive, non-significant and even negative effects of guanxi on firm performance from two aspects. First, it explores the linear and curvilinear relationships between guanxi and distinct performance dimensions. Second, it examines the moderating effects of both exchange-related behavioral risk (reflected by contract enforcement in this study) and market-related environmental risk (reflected by market turbulence in this study) on the above relationship. Design/methodology/approach Based on data for 206 samples collected from distributors of house furnishings, computers and their components, a moderated regression is used to test the hypotheses. Findings The empirical test generally supports the conceptual model and demonstrates three findings. First, guanxi has a linear, positive effect on financial performance and an inverted U-shaped effect on strategic performance. Second, contract enforcement decreases the effect of guanxi on financial performance and enhances its effect on strategic performance. Third, market turbulence enhances the effect of guanxi on financial performance and weakens its effect on strategic performance. Research limitations/implications First, this study collects data only from China. Future studies should collect data from other emerging markets to allow for either model validation or cross-country comparisons. Second, the data come only from buyers, and suppliers’ viewpoints are not included. Third, in addition to contract enforcement and market turbulence, other important contingencies should be considered in the guanxi–performance link. Practical implications The results provide important implications for managers to manage guanxi in an emerging economy. Managers should be very clear about their primary goal (i.e. pursuing short-term financial revenue or long-term strategic targets); next, they should understand how to match guanxi with various levels of contract enforcement and market turbulence to achieve that goal. Originality/value First, prior research has documented guanxi’s role in channel relationships, but it has not achieved consistent conclusions. Second, although existing studies have analyzed the contingencies of guanxi at the firm level, market level and institutional level, another important contingency “the dyadic relationship condition” is rarely considered. Third, although the extant research has realized the value of guanxi contingent on various market conditions, conflicting views exist. This study contributes by addressing these issues.

Concentrated supply chain membership and financial performance: Chain- and firm-level perspectives

2009 ◽  
Vol 28 (1) ◽  
pp. 1-16 ◽  
Author(s):  
Danny Lanier ◽  
William F. Wempe ◽  
Zach G. Zacharia
Keyword(s):  
Supply Chain ◽  
Financial Performance ◽  
Firm Level

scholarly journals A financial performance-based assessment of SMEs’ competitiveness – an analysis of Hungarian and US small businesses

2020 ◽  
Vol 18 (3) ◽  
pp. 452-464
Author(s):  
Vivien Csapi ◽  
Virgínia Balogh
Keyword(s):  
Financial Performance ◽  
Performance Measures ◽  
Small Businesses ◽  
Outcome Variable ◽  
Firm Level ◽  
Significant Difference ◽  
Performance Based Assessment ◽  
Innovation And Technology ◽  
Financial Performance Measures ◽  
Tools And Techniques

The study aims to identify the financial performance measures used as a proxy of the firm-level competitiveness dimensions of small and medium-sized enterprises and their competitiveness. By investigating the factors that affect competitiveness in general, those areas will be introduced, related to an identified competitiveness dimension. Financial and non-financial performance indicators will assess these areas. The paper considers competitiveness as an outcome variable, suggests a relationship between financial performance and the identified areas, and searches for the financial performance measures drivers. A panel data model was tested on Hungarian small and medium-sized enterprises (SMEs) and US SMEs. The collected data cover the period between 2013 and 2017. As a result of the applied panel regression, those variables were successfully identified that drive and could predict financial performance measures related to competitiveness. The research found a significant difference between the two-sample dataset results, which differences can be connected to country, industry, and, in general, to economic development characteristics.The results provide decision-making support and hint about the managerial tools and techniques aiming to control the firm characteristics, performance, and, eventually, firm-level competitiveness. Based on the results, further research can be dedicated to the development characteristics of firm-level competitiveness and the analysis of the relationship between the competitiveness dimensions and competitiveness itself. AcknowledgmentThe research was financed by the Higher Education Institutional Excellence Programme of the Ministry for Innovation and Technology in Hungary, within the framework of the 4th thematic programme „Enhancing the Role of Domestic Companies in the Reindustrialization of Hungary” of the University of Pécs.

Doing good does not preclude doing well: corporate responsibility and financial performance

2018 ◽  
Vol 14 (4) ◽  
pp. 764-781 ◽  
Author(s):  
Jegoo Lee ◽  
Samuel B. Graves ◽  
Sandra Waddock
Keyword(s):  
Financial Performance ◽  
Corporate Responsibility ◽  
Design Methodology ◽  
Supply And Demand ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Windows Of Opportunity ◽  
Business Cases ◽  
Practical Implications

Purpose This paper aims to propose and test a modified interpretation of long-standing issues on the corporate responsibility (CR)–corporate financial performance (CFP) relationship: companies involved in CR are in general no better and no worse in their level of financial performance than companies without such engagement because of the trade-off between benefit and cost at firm level and imbalance between supply and demand at industry (market) level. Design/methodology/approach The authors apply this frame to a data set with more than 12,000 observations over a 14-year period, using confidence intervals, as a useful and statistically valid approach for testing the null hypothesis. Findings The present study’s findings support neutrality between CR and CFP at the firm and industry levels, implying that a firm’s CR involvement neither penalizes nor improves its CFP. Research limitations/implications CR activities may provide windows of opportunity for companies but do not systematically improve financial performance. Practical implications “Doing good” is not a panacea for corporate achievement with respect to market-facing activities. For firms to succeed, instead, they need to create and implement their business cases and models by converting their involvement in CR activities into drivers for better outcomes because investments in CR practices do alone not guarantee improved financial performance. Originality/value The innovations in this study are twofold. Conceptually, this paper proposes a comprehensive approach for a neutral CR–CFP linkage. Empirically, it introduces a novel and appropriate method for testing neutrality. These will mark an important advance in the theoretical and empirical debates over CR and CFP.

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