The impact of appointment-based CEO connectedness on firms’ performance and profitability

This paper investigates whether the performance variables of newly added intangible capital elements give the appointment relationship a deeper impact on the firms’ performance and profitability. We document that after correcting for endogeneity, when considering intangible capital, Total Q is a better proxy than Tobin’s Q for explaining the effect of appointment-based CEO connectedness on firm performance and profitability. Furthermore, we show that the influence of directors on company performance and profitability is more important than that of executives or managers. We also find that the stronger the appointment relationship, the worse the company’s performance and profitability. We further provide a series of alternative interpretations and robustness test evidence showing that intangible capital is more important for high technology and internet firms than industrial firms. Further, we find that the greater the number of executives appointed by the CEO, the better the firm’s research and development, but the worse the firm’s investment policy.     

Integration risk in cross-border M&A based on internal and external resource: empirical evidence from China

This paper concerns the high failure rate during the integration phase of cross-border M&A from the resource-based view. This integration risk in cross-border M&A comes from both firm’s internal resource and external resource integration. On this basis, we clearly analyze the relationship between resource similarity and firm’s internal resources integration risk, as well as resource complementarity and firm’s external resource integration risk. Then, we put forward the main conclusion: stronger external resource complementarity and stronger internal resource similarity between the acquirer and target firms will make integration in cross-border M&A less risky. For this study’s empirical stage, we collect a large amount of questionnaire data from Chinese firms with cross-border M&A experiences. We use the logistic regression method to verify hypothesis. This paper provides both the acquirer and target firms with fresh ideas of how to avoid the integration risk of cross-border M&A. We hope to help firms from developing country to achieve more outstanding results through cross-border M&A in an intense global competitive environment.     

Firm Productivity Moderated Link Between Human Capital and Compensation: The Significance of Task‐Specific Human Capital

The human capital of a firm as manifested by employee knowledge and experience represents a key resource of a firm's capabilities. Prior empirical studies have found that firms composed of high levels of human capital experience superior firm performance. Human capital theory proposes that an individual's general or firm‐specific human capital is positively related to compensation. However, empirical studies examining firm‐specific human capital's association with higher employee compensation have been inconclusive. The current study proposes that firm‐specific human capital be categorized as task‐specific and non‐task‐specific. Employees accumulate task‐specific human capital through duties conducted in their current position. Non‐task‐specific human capital represents experiences gained in prior positions to an employee's current job within the firm. Utilizing human capital data from 38,390 employees representing 76 firms in the IT sector, this study examines the association between forms of human capital and employee compensation at different levels of firm productivity. Results show that task‐specific human capital is associated with higher employee compensation. In addition, firm productivity moderates this association.     

国际服务外包中服务提供商的创新路径研究——基于溢出效应与吸收能力视角

国际服务外包可在东道国产生溢出效应,包括示范效应、人才流动效应、行业间的产业聚集以及关联效应等。这些效应对东道国企业技术能力的形成和提升提供了一种有效路径选择。然而,溢出效应不会自动产生,它在很大程度上取决于东道国服务提供商的吸收能力。吸收能力又受企业自身的R&D资本、人力资本、社会资本和知识管理制度等的影响。研究结合国际服务外包中不同知识外溢途径和服务提供商的吸收能力,提出了不同国际服务外包模式以及不同的溢出知识下的服务提供商的学习路径及其技术创新路径。     

审计师工作量压力与盈余质量——基于门槛模型的研究

采用2012-2016年我国上市公司及其签字审计师为样本,引入门槛回归模型,实证分析不同事务所组织机制支持下审计师个人工作量压力如何影响审计行为决策及盈余质量。研究结果表明:会计师事务所行业专长存在门槛效应,行业专长水平越高,事务所组织支持力度越大,审计师工作量压力对公司盈余质量的负面影响越小;会计师事务所综合评价存在门槛效应,事务所综合评价水平越低,事务所组织支持力度越小,审计师工作量压力对公司盈余质量的负面影响越大;会计师事务所人力资本存在门槛效应,人力资本质量越高,审计师工作效率越高,审计师工作量压力对公司盈余质量的负面影响越小。     

Determinants of Capital Structure: United Kingdom Versus Continental European Countries

In this paper, we analyze how country‐specific differences influence capital structure indirectly through firm‐specific variables. We apply a system Generalized Method of Moments technique to a panel data sample of companies from five countries (France, Germany, Italy, Spain and the United Kingdom) during the period 1998–2008. As the different financial systems of European economies (bank‐oriented or market‐oriented) may influence capital structure differently through firm‐specific variables, we first examine the determinants of capital structure for each country separately and we then analyze whether the observed differences between the United Kingdom and the continental European countries are relevant. The results show that there are substantial differences in the capital structure choices of firms across five major European countries. These differences are motivated by the type of financial systems of the countries (bank‐oriented and market‐oriented) and influence the capital structure indirectly through the firm‐specific variables. Overall, our results support the relevance of the differences in the capital structure choices of firms across five major European countries, and in particular, the singularity of the United Kingdom (a market‐oriented economy) as opposed to continental European countries (bank‐oriented economies).     

Fiscal policy,entry and capital accumulation: Hump-shaped responses

In this paper we consider the entry and exit of firms in a Ramsey model with capital and an endogenous labour supply. At the firm level, there is a fixed cost combined with increasing marginal cost, which gives a standard U-shaped cost curve with optimal firm size. The costs of entry (exit) are quadratic in the flow of new firms. The number of firms becomes a second state variable and the entry dynamics gives rise to a richer set of dynamics than in the standard case: in particular, there is likely to be a hump shaped response of output to a fiscal shock with maximum effect after impact and before steady-state is reached. Output and capital per firm are also likely to be hump shaped.     

Tapping Deep Pockets: The Role of Resources and Social Capital on Financial Capital Acquisition by Biotechnology Firms in Biotech–Pharma Alliances

Strategic alliances with pharmaceutical firms allow small biotechnology firms to acquire needed financial capital in exchange for sharing new, cutting‐edge technologies. This study draws from aspects of resource‐based view and social capital theory to examine the factors that influence the extent of financial capital biotech firms acquire when forming an alliance with pharmaceutical firms. Using a sample of 184 alliances from the period 1995–2000, we found that alliances where the pharmaceutical firm has greater management control are associated with greater acquisition of financial capital by the biotech firm. We also found that the credibility of the pharmaceutical firm is positively associated with the extent of financial capital acquired by the biotechnology firm and that the number of patents that the biotech firm has is negatively associated to the financial capital the biotech firm receives. We discuss the implications of our findings for theory, research, and management practice.     

The role of human capital on the performance of manufacturing firms in Bangladesh

The efficiency determinants of manufacturing firms in developing countries have received increasing attention over the past few decades. This study examines the role of top managers' human capital and other exogenous determinants of the efficiency of manufacturing firms in Bangladesh by using heteroscedastic single‐step stochastic frontier analysis. We find that general human capital represented by educational qualification and specific human capital formed by work specific experience show different ways of impact on firm performance. Specifically, education has both a direct impact on firm outputs and an indirect impact as an efficiency determinant, whereas experience affects only technical efficiency.     

Does organization capital matter? An analysis of the performance implications of CEO power

Chief executive officer (CEO) power reflects the ability of the CEO to influence the firm's decision-making. Whether the CEO of the firm could manage the firm’s investment assets to support maximizing the efficiency of resource allocation is an important issue. As previous studies found, organization capital is a key intangible asset that improves the firm’s production efficiency and affects long-term performance. This study explores how CEO power affects organization capital investments and how it further affects the efficiency of firm resource allocation. We use the following three variables to measure CEO power: CEO founder, CEO-only insider and CEO duality. Our results indicate that the level of CEO power can influence a firm’s value by controlling the organization capital. When the firm’s CEO is also the founder, the CEO will attempt to increase investments in organization capital to create growth opportunities for the firm, which will therefore increase the firm's value. Specifically, when the company is in financial distress, the powerful CEO's increasing in organizational capital investment will expose the company to greater risk of loss of intangible assets. This result may further increase the company's price volatility.     

From original equipment manufacturing to branding: entrepreneurship,strategic leadership,and Taiwan’s firm transformation

This paper investigates firm transformation from original equipment manufacturing (OEM) to original brand manufacturing (OBM) based on variant experiences of Taiwan’s top global brands. Taking the competitive advantage of practicing OEM for multinational corporations (MNCs), latecomer firms can generate capital and accumulate capabilities by engaging with the global production network. Rarely does every firm transform into a global enterprise. We propose that only entrepreneurs with strategic leadership competence, which serves to manage a delicate balance between stability and change in a firm, are capable to facilitate firm transformation from OEM to a global enterprise practicing OBM. We provide an analytical framework that combines the research fields of entrepreneurship, strategic management, and leadership to analyze firm growth and firm transformation of Taiwanese firms. In light of possible branding dilemma when straddling dual-track businesses, successful transforming firms can alleviate this problem either by separating their OBM units from their OEM units or by creating a symbiotic relationship with their MNC customers. How Taiwanese firms first took advantage of initiating OEM to create capital and capabilities and later transformed into OBM provide useful experiences for other latecomer firms.     

Blockholdings in closely held corporations: An analysis of ownership coalitions in emerging countries

Blockholdings in closely held corporations have been examined in the literature to understand the importance of the size and structure of minimal coalitions in a volatile macroeconomic environment. We show, theoretically and empirically, that three-member minimal controlling coalitions provide the best performance results because the portfolio of potential strategies of such coalitions can increase strategic choices in the boom-bust-recovery cycle, but coordination costs are not that high. We also show that “competition” between potential minimal controlling coalitions (of the same firm) with two or more members improves the firm’s performance. With respect to the characteristics of the institutional owners of one-member controlling coalitions, we found that firms controlled by foreigners and/or other non-financial firms and financial holdings performed better than the average firm. Our study indicates that the change of ownership structures in emerging countries is determined by the extant economic systems and through administrative interventions.     

Dividend reinvestment plans and Pecking Order capital structure behavior: An empirical investigation

Due to the asymmetric information effect, corporations have been reluctant to use external sources of equity capital. The adoption of dividend reinvestment plans (DRP) by large numbers of firms may indicate an alternative way to raise external equity funds. It has been shown that many factors may explain a firm’s decision concerning the source of the shares made available to DRP participants. The hypothesis to be tested is that the nature of the DRP actually selected may be predicted by financial characteristics such as cash flow generation, investment needs, historical dividend policy, firm ownership structure and firm capital structure. Using logistic regression analysis, results of joint tests of financial variables suggested by the Pecking Order Theory of capital structure indicate significant support for the hypothesis. Specifically, ownership structure, historical dividend policy and debt ratio are found to be key determinants of the type of DRP utilized.     

The Relationship between Slack Resources and the Performance of Entrepreneurial Firms: The Role of Venture Capital and Angel Investors

In this study, we seek to further delineate factors that condition the relationship between slack resources and firm performance. To do so, we develop and test a model that establishes the role of venture capital (VC) and angel investors as powerful external stakeholders who positively moderate the slack–performance relationship. In addition, we provide more insight into this relationship by examining differences between these two types of private investors and by examining the role of their ownership stakes. We test our hypotheses using a sample of 1215 private firms, including VC‐backed firms, angel‐backed firms, and similar firms without such investors. We find that the presence of VC investors positively moderates the relationship between both financial and human slack resources and firm performance, while angel investors only positively moderate the effect of human resource slack. Further, VC investors are only marginally better at helping entrepreneurs to extract value from human resource slack than angel investors and they are no better when it comes to financial slack. Finally, we find that the impact of financial and human resource slack on firm performance is more positive in VC‐backed firms when investors hold high ownership stakes, an effect which is significantly stronger than when angel investors hold high ownership stakes.     

Strategic human resource management,human capital and competitive advantage: is the field going in circles?

The resource‐based view (RBV) of the firm has been consistently used as a backdrop in strategic human resource management (SHRM) research and has the potential to bridge the ‘micro–macro’ divide. The tension between the SHRM and the strategic human capital literature, however, signifies that RBV has not reached its potential. In this paper, we begin with a brief review of the conceptual logic linking human resource management (HRM) practices and firm outcomes that aim at highlighting the different treatment of RBV in the SHRM and strategic human capital literatures. We then propose a conceptual model that suggests that HRM practices are not simple levers that enable firms to create sustainable competitive advantage, as most of the strategic human capital research postulates. On the contrary, we argue that HRM practices can contribute to a firm's sustainable competitive advantage not only by enhancing employees' ability, and offering motivation and opportunities, but also by shaping supply‐side and demand‐side mobility constraints.     

Technology sourcing and outward FDI: A study of IT industry in India

Dunning’s eclectic or the OLI framework suggests that MNCs exist and grow due to possession of ownership (O) advantages consisting of the tangible and intangible assets of the firm (including technology); location (L) advantages consisting of production factors such as transportation, infrastructure, and human and natural resources available in the host country; and internalisation (I) advantages owing to firm’s competitive advantage in producing internally rather than selling or licensing technologies to others. There are several studies that have analysed MNCs of developed country origin from the perspective of both developed (home) and other developed or developing (host) countries. Recently, however, MNCs from developing countries are also making their presence felt in the world. Yet, there are hardly any studies that analyse MNCs of developing country origin.Using data on 130 firms from the high-tech Information Technology (IT) industry of India, we investigate whether ownership advantages (O), as proposed in the eclectic theory, holds true for the presence of MNCs from developing countries. Specifically, we analyse whether firm-specific technological advantages generated through differential technology sourcing at home (India) are important in determining inter-firm differences in the decision to invest abroad. The technological sources considered are in-house R&D efforts, import of designs, drawing and blueprints, and import of capital goods. The study reveals that in-house R&D efforts are indeed important for the firms to invest abroad. Size and export intensity of the firm also influence the decision of the firm to invest abroad. The study recommends a proper innovation and resource management strategy for developing country firms for efficient allocation of resources, technology sourcing, and technology assimilation.     

Corporate Capital Budgeting Decisions and Information Sharing

Firms must overcome agency and information asymmetry problems to make efficient corporate capital budgeting decisions; this is particularly true for firms with multiple units dispersed across geographic locations. Internal communication and coordination may therefore be crucial in reducing information asymmetry and achieving efficient resource allocation. We examine the relationship between corporate capital budgeting decisions and the degree of internal information sharing using a dataset of 342 U.S. firms from 1993 to 2002. Information sharing is measured by the internal linkages observed in firms’ research and development activities worldwide. The efficiency of a firm's capital budgeting decisions is measured by the deviation of the firm's estimated marginal q from the theoretical tax‐adjusted benchmark. We observe a significant relationship between value‐enhancing capital budgeting decisions and stronger internal linkages. Specifically, corporate overinvestment is significantly reduced with better information sharing across units. All results are robust to firm‐ and industry‐level controls.     

Impact of ICT on the productivity of the firm: evidence from Turkish manufacturing

This paper aims to explore the impact of Information and Communication Technologies (ICT) on labor productivity growth in Turkish manufacturing. This is the first attempt at exploring the impact of ICT on productivity in Turkish manufacturing at the firm level. The analysis is based on firm level data obtained from Turkish Statistical Institute (TURKSTAT) and covers the period from 2003 to 2012. The data used in the analysis includes all firms employing 19+ workers in Turkish manufacturing industry. Growth accounting results show that the contributions of conventional and ICT capital to value added growth are not significantly different from each other. On the other hand, results based both on static (fixed-effects) and dynamic panel data analysis highlight the positive influence on firms’ productivity exerted by ICT capital. The findings show that the impact of ICT capital on productivity is larger by about 25 to 50% than that of conventional capital. This contribution of ICT capital is higher than that of non-ICT capital for small sized and low-tech firms. Our findings imply that investing in ICT capital increases firm productivity by increasing the productivity of labor and also that convention growth accounting approaches may not be adequate to identify such linkages.     

Sustainable growth rate of firms in financial distress

Sustainable growth rate defines the rate at which a company’s sales and assets can grow if the company sells no new equity and wishes to maintain its capital structure. The traditional formula assumes that the firm can increase its indebtedness. Many private firms and most firms in financial distress have limited or no access to debt markets. While distressed firms may prefer a no growth strategy, external pressures such as inflation or demand increases may cause their sales to rise exogenously. A new sustainable growth rate formula is developed that describes how much growth the firm with no new debt capacity can endure.     

家族影响、创新与企业绩效——基于广东省家族企业的实证研究

以家族企业中的家族影响为研究视角,通过对广东省127家家族企业进行实证检验,探讨了家族成员的社会资本、家族成员管理参与度和家族成员间和谐度这三个家族影响维度对家族企业绩效和创新的影响。研究结果显示,此三个家族影响维度与家族企业绩效存在正相关,创新在两者之间的关系中起着正向的调节作用。