Research, innovation, and bankruptcy: evidence from European manufacturing firms

2021 ◽  
Author(s):  
Mariarosaria Agostino ◽  
Domenico Scalera ◽  
Marianna Succurro ◽  
Francesco Trivieri
Keyword(s):  
Empirical Evidence ◽  
Financial Distress ◽  
Manufacturing Firms ◽  
Default Probability ◽  
Probability Of Default ◽  
Research And Innovation ◽  
Innovation Activities ◽  
Innovation Strategies ◽  
The Relationship ◽  
The Eu

Abstract This paper investigates the effects of R&D and innovation activities of firms on the risk of bankruptcy. The analysis is carried out on data drawn from the EU-EFIGE Survey and Amadeus Database (Bureau Van Dijk) on European manufacturing firms over the years 2009–2014. The empirical evidence shows that default probability is increasing in R&D investments and decreasing in innovation and productivity of research, measured by the ratio of innovation revenues to R&D outlays. In addition, to disentangle the influence of different innovation strategies (product, process, and patenting), 16 different firm profiles are compared. Firms carrying out R&D, adopting process innovation, and filing for patents are found to show the lowest probability of default. Sensitivity checks indicate that research and innovation do not affect the risk of financial distress events short of default (such as reorganization or application for insolvency procedure). Our findings are robust to potential endogeneity and hence allow for causal inference about the relationship between research and innovation and corporate bankruptcy.

Innovation drivers in Ecuadorian manufacturing

2019 ◽  
Vol 17 (4) ◽  
pp. 510-539
Author(s):  
María Engracia Rochina-Barrachina ◽  
Jorge Antonio Rodríguez
Keyword(s):  
Design Methodology ◽  
Organizational Innovation ◽  
Probit Model ◽  
Manufacturing Firms ◽  
Content Type ◽  
Innovation Activities ◽  
Different Types ◽  
Innovation Strategies ◽  
Over Time

Purpose The purpose of this paper is to study which are the drivers of different types of innovations for manufacturing firms. The considered innovation types are product, process, organizational and marketing innovations. In addition, this study also aims to understand why most types of innovation (with the exception of organizational innovation) have decreased over time. Design/methodology/approach The two non-overlapping waves of the Ecuadorian National Innovation Activities Survey 2013 and 2015 (NIAS) are used. To identify the determinants of the different types of innovations and to check whether the decisions to innovate are correlated, a tetravariate probit model is used. Findings The results obtained point to some relevant differences in terms of the drivers of the different types of innovation. In addition, it is also evident that with the passage of time, certain problems that may be reducing the incentives to innovate have become more acute. Originality/value The study adds new empirical evidence to the literature on the role of investments in incorporated technology in innovation in developing countries. In particular, for Ecuadorian firms, the acquisition of incorporated technology in capital goods seems to be very relevant. This highlights the existence of a supply-driven innovation strategy. However, there is also room for innovation strategies driven by demand conditions.

scholarly journals Different Approaches to Managing Innovation Activities: An Analysis of Strong, Moderate, and Modest Innovators

2017 ◽  
Vol 28 (1) ◽  
pp. 47-55 ◽  
Author(s):  
Viktor Prokop ◽  
Jan Stejskal
Keyword(s):  
Spillover Effects ◽  
Innovation Performance ◽  
Community Innovation Survey ◽  
Policy Makers ◽  
Eu Member States ◽  
Research And Innovation ◽  
Innovation Potential ◽  
Innovation Activities ◽  
Microeconomic Analysis ◽  
The Eu

In the present day, innovation has become a key element of competitive advantage. However, most countries are failing in their innovative activities, and their innovative performance is below that of the EU average. Therefore, the European Commission annually publishes its Innovation Union Scoreboard, which provides a comparative assessment of the EU member states’ research and innovation performance. The countries are divided into four groups according to their innovation performance: innovation leaders, strong innovators, moderate innovators, and modest innovators. In this paper, we have selected countries whose innovation performance was close to, below, or well below that of the EU average in 2015, and we have performed microeconomic analysis of the situation in these countries’ firms to analyze the conditions of their innovation environment and uncover barriers to their innovation activities. We analyzed firms in the manufacturing industries in Slovenia (a strong innovator), Croatia (a moderate innovator), and Romania (a modest innovator) by using original multiple regression models and data from the 2010–2012 Community Innovation Survey. The results demonstrate the different backgrounds for innovation in each country. In Romania, there is a lack of both a satisfactory environment for innovation and sufficient capacity for absorbing public funds; investment into innovation-related activities is also absent. In Croatia, the innovation potential has not been fully exploited. However, we show that the appropriate targeting of innovation determinants (e.g., collaboration with different partners or public financing) could lead to the creation of synergies and spillover effects that would be able to support their innovative activities and strengthen the country’s competitiveness. There is a completely different situation in Slovenia. Firms there effectively utilize the various determinants of innovation activities, and these determinants have strong influence when utilized on their own. On the other hand, results also show that certain significant combinations of determinants of innovation activities are missing in Slovenia. In conclusion, we have proposed practical implications for policy makers that would be able to support innovative activities and help each country to improve its innovation ranking.DOI: http://dx.doi.org/10.5755/j01.ee.28.1.16111

scholarly journals The Relationship between Sustainability– Oriented Innovation Practices and Organizational Performance: Empirical Evidence from Slovenian Organizations

Organizacija ◽  
2014 ◽  
Vol 47 (1) ◽  
pp. 3-13 ◽  
Author(s):  
Matjaž Maletič ◽  
Damjan Maletič ◽  
Jens J. Dahlgaard ◽  
Su Mi Dahlgaard-Park ◽  
Boštjan Gomišček
Keyword(s):  
Organizational Performance ◽  
Empirical Evidence ◽  
Corporate Sustainability ◽  
Reliability And Validity ◽  
Service Industries ◽  
Innovation Activities ◽  
Sustainability Practices ◽  
Performance Results ◽  
Innovation Practices ◽  
The Relationship

Abstract Background and Purpose - The purpose of this paper is to empirically analyse the effects of sustainability-oriented innovation practices on the overall organizational performance. Further, this paper also aims to advance understanding of the measurement of corporate sustainability practices with the focus on innovation dimensions. Design/Methodology/Approach - The study uses data obtained from a survey of 116 organizations encompassing both the manufacturing and service industries in Slovenia. Descriptive statistics were used in order to determine the level of sustainability-oriented innovation practices deployment. Exploratory factor analysis was applied to extract the underlying factors and to provide a basis for assessing their reliability and validity. In addition, regression analysis was used to quantify the effect of sustainability practices on the organizational performance. Results - Data analysis result showed that sustainability-oriented innovation practices are significantly associated with organizational performance. Therefore, empirical evidence from this research confirmed the premise that building innovation competencies and integrating innovation activities in organization’s processes lead to performance benefits. This contributes to the debate about the potential for organizations to be sustainable and competitive. Conclusion - The presented research on corporate sustainability provides important theoretical and practical insights on which the deployment of sustainability-oriented innovation practices are conducive to fostering a broader set of performance benefits. As such, managers should increase organizations’ capacity for innovation which can be beneficial in terms of performance implications and achieving sustainability goals

scholarly journals Board diversity in the perspective of financial distress: Empirical evidence from the Netherlands

2009 ◽  
Vol 5 (2) ◽  
pp. 23-35 ◽  
Author(s):  
Bernard Santen ◽  
Han Donker
Keyword(s):  
Empirical Evidence ◽  
Financial Distress ◽  
Positive Relationship ◽  
Performance Measure ◽  
Company Performance ◽  
Executive Directors ◽  
Board Diversity ◽  
Show Evidence ◽  
Micro Level ◽  
The Relationship

This paper analyses the relationship between board diversity (in gender and in nationality) and financial distress. A summary of the theory behind board diversity precedes an overview of the empirical evidence on the relationship between diversity and company performance. The paper presents empirical research on the relationship between a negative performance measure, financial distress, and diversity on the board. The results show a positive relationship between the presence of foreign non-executive directors and financial distress. It is suggested that this is caused by negative communication and misunderstandings. No relationship is found between the gender of a director and financial distress. On a micro-level, the data do not show evidence for the glass cliff hypothesis.

scholarly journals The Moderating Effect of Non-audit Services Fee on Aggressive Tax Planning: Empirical Evidence From Malaysian Listed Companies

2021 ◽  
Vol 12 (3) ◽  
pp. 240
Author(s):  
Rosmaria Jaffar ◽  
Chek Derashid ◽  
Roshaiza Taha
Keyword(s):  
Developing Countries ◽  
Empirical Evidence ◽  
Financial Distress ◽  
Capital Intensity ◽  
Listed Companies ◽  
Tax Planning ◽  
Moderating Effect ◽  
Financial Accounting ◽  
The Relationship ◽  
Non Audit Services

The purpose of this study is to examine the moderating effect of non-audit services fees on the relationship between size, profitability, leverage, capital intensity, inventory intensity, financial distress and ethnicity with aggressive tax planning. This study uses a sample from companies listed on the Malaysian (Access, Certainty, Efficiency (ACE) Market from 2014 to 2018, comprising of 105 firm year-observations. The finding shows that the non-audit services fee moderate the relationship between size, profitability, leverage, inventory intensity, financial distress and ethnicity with aggressive tax planning except for capital intensity. It is hoped that the finding can assist readers in understanding the nature of companies listed on the ACE Market, particularly their behaviour towards tax planning. This study contributes to knowledge in the areas of financial accounting and taxation specifically on aggressive tax planning, by introducing the moderating variable of non-audit services fee. The uniqueness of the use of companies listed on the Malaysian ACE market will provide new avenue on the discussion on an aggressive tax planning issue, which usually more focus on big firms. The framework used in the present study could serve as a basis for research in other developing countries or regions.

Does risk management committee gender diversity matter? A financial distress perspective

2019 ◽  
Vol 34 (8) ◽  
pp. 1050-1072 ◽  
Author(s):  
Jing Jia
Keyword(s):  
Risk Management ◽  
Empirical Evidence ◽  
Financial Distress ◽  
Gender Diversity ◽  
Listed Companies ◽  
Management Committee ◽  
Content Type ◽  
Listed Firms ◽  
The Relationship ◽  
Risk Management Committee

Purpose Using 2010 corporate governance principles and recommendations (CGPR) as a natural setting, the purpose of this paper is to investigate the relationship between risk management committee (RMC) gender diversity and a firm’s likelihood of financial distress. Empirical evidence regarding whether CGPR (2010) enhances RMC gender diversity (RMCGD) is also provided. Design/methodology/approach Data were collected from the annual reports of the top 300 Australian Stock Exchange (ASX) listed companies from 2007 to 2014. To control for potential endogeneity, the association between (RMCGD) and a firm’s likelihood of financial distress was investigated using an instrumental variable approach (panel 2SLS regression). The relationship between CGPR (2010) and RMCGD was explored using panel regression analysis with firm fixed effects. Findings RMCGD was found to be associated with a lower probability of financial distress, suggesting that women are better at monitoring and reducing firms’ excessive risk-taking behaviours, which, in turn, decreases firms’ risk of financial distress. The results also indicate that CGPR (2010) is quite effective in enhancing committee gender diversity. In the additional analysis, the results show that RMCGD moderates the negative relationship between risk and likelihood of financial distress. Importantly, the proportion of women with financial experience on RMCs is more effective in reducing the likelihood of financial distress compared to the proportion of men with financial experience on RMCs. These results highlight the benefits of having a gender diverse RMC. Research limitations/implications The results were based on the top 300 ASX-listed companies; thus, restricting generalisability. In addition, this study only focussed on listed firms, non-listed firms may add additional insights to the literature. Practical implications The results provide new and useful empirical evidence about RMCGD for Australian policymakers. This paper suggests that, in the short-term at least, RMCGD should be encouraged by regulators. Regulators could also recommend that the firms with a non-diverse RMC include women with financial experience on their RMC. Originality/value Given that prior studies have indicated that gender diversity is closely related to risk, this study contributes to the previous literature by investigating RMCGD and its effect on the likelihood of financial distress. It is expected that the role of RMC member would be to protect the firm from ultimate failure (likelihood of financial distress), especially during a financial crisis.

scholarly journals THE IMPACT OF CASH CONVERSION CYCLE ON FINANCIAL DISTRESS WITH PROFITABILITY AS A MODERATING VARIABLE

2019 ◽  
Vol 3 (2) ◽  
pp. 214-225
Author(s):  
Fitratul Firda Amaliah ◽  
Arif Darmawan
Keyword(s):  
Regression Analysis ◽  
Empirical Evidence ◽  
Financial Distress ◽  
Stock Exchange ◽  
Total Sample ◽  
Sample Collection ◽  
Collection Method ◽  
Cash Conversion Cycle ◽  
The Impact ◽  
The Relationship

This study aims to provide empirical evidence on the impact of profitability on the correlation cash conversion cycle  to financial distress. The population in this study is a manufacturing company listed on the Indonesia Stock Exchange period 2010 to 2016 with a total sample of 9 companies. The sample collection method using purposive sampling and the testing measurement used was regression analysis. The result of this study proves that the cash conversion cycle affect positive to financial distress and profitability able to moderate the relationship between the cash conversion cycle to financial distress.

scholarly journals Debt Service and Default

2019 ◽  
Vol 19 (182) ◽  
Author(s):  
Erlend Nier ◽  
Radu Popa ◽  
Maral Shamloo ◽  
Liviu Voinea
Keyword(s):  
Empirical Evidence ◽  
Debt Service ◽  
Counterfactual Analysis ◽  
Probability Of Default ◽  
Consumer Loans ◽  
Non Linear ◽  
National Bank ◽  
Loan Defaults ◽  
The Relationship

We provide empirical evidence to support the calibration of a limit on household indebtedness levels, in the form of a cap on the debt-service-to-income (DSTI) ratio, in order to reduce the probability of borrower defaults in Romania. The analysis establishes two findings that are new to the literature. First, we show that the relationship between DSTI and probability of default is non-linear, with probability of default responding to increases in DSTI only after a certain threshold. Second, we establish that consumer loan defaults occur at lower levels of DSTI compared to mortgages. Our results support the recent regulation adopted by the National Bank of Romania, limiting the household DSTI at origination to 40 percent for new mortgages and consumer loans. Our counterfactual analysis indicates that had the limit been in place for all the loans in our sample, the probability of default (PD) would have been lower by 23 percent.

Spotting a liar by looking for microexpressions: Challenges and Opportunities

2019 ◽  
Author(s):  
Xunbing Shen
Keyword(s):  
Empirical Evidence ◽  
Deception Detection ◽  
Empirical Studies ◽  
High Stake ◽  
Challenges And Opportunities ◽  
Cues To Deception ◽  
The Relationship

Microexpressions do exist, and they are regarded as valid cues to deception by many researchers, furthermore, there is a lot of empirical evidence which substantiates this claim. However, some researchers don’t think the microexpression can be a way to catch a liar. The author elucidates the theories predicting that looking for microexpressions can be a way to catch a liar, and notes that some data can support for the utilization of microexpressions as a good way to detect deception. In addition, the author thinks that the mixed results in the area of investigating microexpressions and deception detection may be moderated by the stake. More empirical studies which employ high-stake lies to explore the relationship between microexpressions and deception detection are needed.

The Concept of Europeanization and Possibilities of its Application to the Analysis of Ukraine-EU Relations

2017 ◽  
pp. 149-160
Author(s):  
Natalia Popova
Keyword(s):  
European Integration ◽  
Theoretical Research ◽  
Member States ◽  
External Governance ◽  
Definition Of ◽  
The Relationship ◽  
Eu Studies ◽  
The Eu

The concept of Europeanization has become quite fashionable in EU studies in recent years. It is often used for the analysis of the relations between the EU and non-member states. The aim of the article is to examine the possibilities of its application in explaining the relationship between the EU and Ukraine. The structure of the article is as follows: firstly, the concept of Europeanization is defined considering such two disputable issues as distinguishing among concepts of Europeanization and European integration as well as Europeanization and EU-ization. Next, the evolution of the theoretical research of Europeanization and definition of this concept are analyzed. Two main mechanisms of Europeanization (conditionality and socialization) are examined. The author considers main approaches to the analysis of the "external" Europeanization emphasizing the concept of "external governance". Three groups of factors which influence the effectiveness of Europeanization are briefly analyzed. And finally, the peculiarities of application of the Europeanization concept to the Ukraine-EU relations are outlined. Keywords: EU, Ukraine, Europeanization, EU-ization, ‘external’ Europeanization, conditionality, socialization, concept of ‘external governance’

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