Mind the Gap: Is Water Disclosure a Missing Component of Corporate Social Responsibility?

Corporate water stewardship is conventionally internally focused, but now it is becoming a critical issue in a wider socio-political context. Drawing on the theory of self-regulation, we investigate the rationale behind, and the factors contributing to, corporate decisions to voluntarily disclose water information via the CDP. The study uses innovative proxies for corporate self-regulation, including water governance, water policy, water actions, and water performance. Our results show that these proxies are significantly related to the propensity of the companies participating in the CDP to disclose water information. Furthermore, belonging to a water-intensive industry may moderate the impact of self-regulation on water transparency. Finally, sharing water information privately with key institutional investors is a strategic tool for implementing self-regulation. The study suggests that corporate self-regulation can play a powerful role in reducing corporate water opaqueness when mandatory water legislation is absent or not yet applicable.     

How to survive a pandemic: The corporate resiliency of travel and leisure companies to the COVID-19 outbreak

What protects travel and leisure companies from a global pandemic, such as COVID-19? To answer this question, we investigate data on over 1200 travel and leisure companies in 52 countries. We consider 80 characteristics, such as company financial ratios, macroeconomic variables, and government policy responses. Using regressions and machine learning tools, we demonstrate that firms with low valuations, limited leverage, and high investments have been more immune to the pandemic-induced crash. We also find a beneficial effect of stringent containment and closure policies. Finally, our results indicate that countries with less individualism may be better positioned to cope with the pandemic. Our findings have implications for regulatory bodies, managers, and investors concerning future pandemic outbreaks.     

Performance measurement systems in higher education: How levers of control reveal the ambiguities of reforms

This paper focuses on the introduction of new performance measurement system (PMS) for measuring teaching performance in Universities. The adoption of such PMS should prompt significant changes in existing control processes, but the goals of reform do not automatically translate into the desired organisational responses. Given the impact of PMS on management controls, the nature of such ambiguities may be better investigated using a framework that allows management control systems (MCS) to be taken in account. This paper investigates key actors' perceptions regarding the introduction of PMS through the lens of the levers of control (Simons, 1995, 2000). A qualitative analysis is conducted on interviews held with Italian university teaching managers and heads of programmes to examine the ambiguities arising from the implementation of a PMS.Several ambiguities emerge, both within and between the levers analysed, suggesting some reasons for the (partial) ineffectiveness of PMS reforms. In particular, the belief systems lever is crucial in making reforms acceptable, bureaucratic procedures are important in the diagnostic control systems lever, and performance indicators operate as a boundary system lever. Our findings show that administrative and academic actors perceive the interactive control capacity of PMS differently.     

Market entry into Africa: Acquisitions and international joint ventures. Studies of foreign firms' market entry strategies,challenges, and performance in Africa

While the interest in investing in Africa is rising, the know‐how of business on the continent is very limited. There have been only recently few special issues focusing on sub‐Saharan Africa in the top international business journals: “Sub‐Saharan Africa at a key inflection point” (Thunderbird International Business Review 2009); “Contemporary developments in the management of human resources in Africa” (Journal of World Business 2011); “Contemporary challenges and opportunities of doing business in Africa” (Journal of Technological Forecasting and Social Change 2016); “Critical perspectives on international business in Africa (Critical Perspectives on International Business 2016); “Strategic Management in Africa (Global Strategy Journal, 2017); and “The internationalization of African firms (Thunderbird International Business Review 2016). The aim of this special issue is to advance understanding of international business in Africa and specifically focus on how foreign firms enter African markets via acquisitions and international joint ventures and extend knowledge of these market entry strategies and performance in Africa for research and for foreign firms intending to, or currently doing business in Africa. This guest editorial provides a summary of the five articles and one book review in this special issue categorized into three broad thematic issues: International joint ventures and acquisitions as market entry strategies in Africa; cross‐border investments of African firms; and theoretical underpinnings.     

A netnographical approach to typologizing customer engagement and corporate misconduct

Customer engagement has important implications for the organization. The study developed a typology to understand customer engagement and its relationship with corporate misconduct. Customer engagement is categorized into co-developing, augmenting, influencing, and mobilizing behaviors, which are typologized into organizational and peer engagement, with co-developing and augmenting behaviors classified as organizational engagement, and the remaining two as peer engagement. In view of a focus on negative engagement in the case of corporate misconduct in previous research, this study deployed a netnographical approach to exploring positive and neutral engagement within the organization and with peers. The findings indicate that corporate misconduct not only elicits a negative response but may also elicit positive or indifferent engagement behaviors. This study contributes to customer engagement and corporate misconduct research by delving into underexplored aspects of consumer behavior.     

Corporate governance and family firm performance during the Global Financial Crisis

We investigate the impact of corporate governance on accounting and market performance relationships of family firms during the Global Financial Crisis (GFC). We expect the monitoring aspects of corporate governance to complement the long-term orientation of family firms, improving the value relevance of accounting and market performance during times of exogenous financial shocks such as the GFC. We find that the family-firm value is more sensitive to book value than earnings changes. We also find better corporate governance, irrespective of whether it is a family firm or non-family firm, is associated with better accounting and market performance during the GFC.     

Cross-shareholding network and corporate bond financing cost in China

This study examines the effect of cross-shareholding network centrality on the cost of corporate bond financing. Based on a sample of Chinese A-share listed firms that issued general corporate bonds from 2007 to 2018, we adopt a social network analysis method and use three indicators (Degree, Betweenness, and Eigenvector) and the principal factor (Composite) extracted from them to measure the firms’ centrality in the cross-shareholding network. We find that bondholders’ demand lowers bond yield spreads for firms with higher cross-shareholding network centrality. In further analyses, we explore the impact mechanisms using mediator models and find that such centrality promotes resource accessing, information disclosure, and corporate governance, thus decreasing corporate bond financing cost. In addition, we incorporate the moderate effect of geographical location and find that the relationship between cross-shareholding network centrality and corporate bond financing cost is more significant in firms located in remote places.     

Do common owners influence corporate social responsibility? Firm-level evidence from China

Using a sample of Chinese A-share listed companies from 2007 to 2018, this article explores the influence of common owners on corporate social responsibility (CSR). The results show that common owners significantly promote CSR investment, indicating that increased CSR represents a bright side to common owners, in contrast to their anticompetitive effect. Further analysis shows that the nature of state ownership significantly weakens the positive relationship between common owners and CSR investment. Prospector firms strengthen the positive influence of common owners on CSR investment, whereas defender firms weaken the effect. Moreover, common owners benefit from increasing CSR investment, and co-owned firms benefit by easing their financial constraints when they invest or increase their investment in social responsibility. The findings enhance the outstanding of how common owners affect corporate behavior and enrich the literature on common ownership and CSR investment.     

Information system and corporate income tax enforcement: Evidence from China

This paper adds the literature by investigating the effect of information system on corporate income tax (CIT) enforcement. We exploit the regional variations generated by the implementation in 2013 of the third stage of the China Tax Administration Information System (CTAIS-3) pilot. The CTAIS-3 is a nationally unified information system that significantly reduces information asymmetry between different tax authorities across regions. We find that the CTAIS-3 pilot significantly reduced firms’ conforming and non-conforming tax avoidance. The enhanced tax enforcement is particularly prominent if a firm is of a smaller size, or is administrated by the State Administration of Taxation, or is a non-state-owned enterprises, or locates in cities with a higher level of local fiscal pressure. Furthermore, we show that the CTAIS-3 improved the CIT enforcement by deterring firms from underreporting accounts receivable, as well as over-reporting accounts payable, inventory and the number of employees. In general, it would be more difficult for firms to hide profits from tax authorities under the CTAIS-3.     

Independent technical directors and their effect on corporate innovation in China

As outside advisors, independent directors serve as both consultants and monitors. Based on empirical studies of corporate innovation and independent directors, we used data from listed firms in China from 2007 to 2017 to examine the effect of hiring independent technical directors on the board of directors. This study focused on a firm’s innovation performance and the extent to which this performance is influenced by the relevance of a director’s expertise to the activities of the firm. The results show that when the technical expertise of an independent director is relevant to the operational field of the firm, the firm should perform better in terms of innovation. This result is still significant when applying the two-stage instrumental variable method, showing a higher significance when using the exogenous event of the 2014 Wenfeng.plc case. Moreover, independent technical directors influence innovation primarily by encouraging firms to deepen their current field of research rather than expanding to other fields. Our findings can guide corporations to hire more relevant independent technical directors and can help the government design more accurate policies that promote innovation and entrepreneurship.