The Impact of Forest Certification on Firm Financial Performance in Canada and the U.S.

The purpose of this article is to examine empirically the impact of environmental certification on firm financial performance (FP). The main question is whether there is a “green premium” for certified firms, and, if so, for what kind of certification. We analyze the short-run and the long-run stock price performance using an event-study methodology on a sample of Canadian and U.S. firms. The results of short-run event abnormal returns indicate that forest certification does not have any significant impact on firm FP regardless of the certification system carried out by firms. Unlike the short-run results, the long-run post-event abnormal returns suggest that forest certification has, on average, a negative impact on firm FP. However, the impact of forest certification on firm FP depends on who grants the certification, since only industry-led certification (Sustainable Forestry Initiative, Canadian Standards Association and ISO14001) are penalized by financial markets, whereas non-governmental organizations–led Forest Stewardship Council certification is not.     

The Drivers of Climate Change Innovations: Evidence from the Australian Wine Industry

This study examined the drivers of climate change innovations and the effects of these innovations on firm outcomes in a sample of 203 firms in the South Australian wine cluster. The results of structural equation modeling analysis suggest that absorptive capacity has a direct effect on climate change innovations, and stimulates knowledge exchanges (KEs) between firms in the cluster. KEs between firms in the cluster in turn directly affect the climate change innovations. The findings suggest a perhaps counterintuitive interrelationship between firm- and cluster-level impacts, in which KEs between firms in the cluster play a partial mediating role in the innovation process. The study further finds that climate change innovations are related to firm performance (FP) and reductions in greenhouse gases (GHGs): mitigative innovations lead to greater GHG reductions while adaptive innovations impact on FP. Contributions of the findings are discussed, as are future research directions.     

Performance feedback and export intensity of Chinese private firms: Moderating roles of institution-related factors

Building on the behavioral theory of the firm and institutional view, we examine how performance feedback (i.e., a focal firm’s performance relative to its industry peers) affects export intensity and how institution-related factors moderate this relationship. Using a sample of Chinese private manufacturing firms, we find that positive performance feedback lowers export intensity while the relationship between negative performance feedback and export intensity is insignificant. Moreover, outperforming firms are likely to decrease their export intensity even more when they are located in regions of better institutional development or have political connections. Underperforming firms with political connections tend to increase their export intensity. These findings enrich our understanding of the export behavior of emerging market firms.     

Performance feedback and location choice of foreign direct investment

Integrating the behavioral theory of the firm and the OLI paradigm, this paper studies how performance feedback affects the location choice of emerging market firms between developed countries (DCs) and less developed countries (LDCs) during the process of internationalization. Using the sample of 1,306 Chinese public listed firms which established new foreign subsidiaries between 2008 and 2019, we find that the further a firm’s performance is below aspiration, the more likely it will invest in LDCs than DCs, whereas the further a firm’s performance is above aspiration, the more likely it will invest in DCs than LDCs. In addition, technology-based capability and labor intensive production capability have moderating effects on the relationship between performance feedback and location choice between DCs and LDCs. This paper complements and extends the OLI paradigm by injecting dynamic and non-economic factors to explain OFDI location choice.     

Market Orientation and Performance Measurement System Adoption Impact on Performance in SMEs

Previous research has shown a connection between market orientation (MO) and firm performance, as well as between performance measurement systems (PMS) adoption, but their mutual interactions are as yet little understood in small and medium‐sized enterprises (SMEs). Using empirical data collected by a survey from 123 Finnish SMEs, we analyze the relationship between MO, PMS adoption, and performance. According to the results, MO has positive relationships with PMS adoption and nonfinancial performance. However, the impact of MO on financial performance is mediated by PMS adoption. PMS adoption is thus an important factor in explaining variance in firm performance. Finally, empirical analysis shows that the larger SME firms adopt PMS more extensively.     

Does Corporate Social Responsibility Influence Firm Performance of Indian Companies?

This study examines whether corporate social responsibility (CSR) towards primary stakeholders influences the financial and the non-financial performance (NFP) of Indian firms. Perceptual data on CSR and NFP were collected from 150 senior-level Indian managers including CEOs through questionnaire survey. Hard data on financial performance (FP) of the companies were obtained from secondary sources. A questionnaire for assessing CSR was developed with respect to six stakeholder groups – employees, customers, investors, community, natural environment, and suppliers. A composite measure of CSR was obtained by aggregating the six dimensions. Findings indicate that stock-listed firms show responsible business practices and better FP than the non-stock-listed firms. Controlling confounding effects of stock-listing, ownership, and firm size, a favorable perception of managers towards CSR is found to be associated with increase in FP and NFP of firms. Such findings hold good when CSR is assessed for the six stakeholder groups in aggregate and for each stakeholder group in segregate. Findings suggest that responsible business practices towards primary stakeholders can be profitable and beneficial to Indian firms.     

Time Allocation and Performance: The Case of Chinese Entrepreneurs

This paper analyses the effect of time allocation on the financial performance of entrepreneurial firms. We apply the Lewbel estimator to a pooled data set of Chinese private manufacturing firms that are managed by their owners. Time is allocated between management, networking, and study activities. After accounting for endogeneity, we find an inverted U-shaped relationship between management hours and firm performance and between networking and firm performance. However, no relationship between time spent studying and firm performance is observed. We also find that the managing hours–performance relationship is particularly strong for companies managed by entrepreneurs who own more than 75% of share, for companies that are managed by owners with previous experience, for male entrepreneurs, and for smaller-sized firms.     

Causality Between Corporate Social Performance and Financial Performance: Evidence from Canadian Firms

This study assesses the causal relationship between corporate social performance (CSP) and financial performance (FP). We perform our empirical analyses on a sample of 179 publicly held Canadian firms and use the measures of CSP provided by Canadian Social Investment Database for the years 2004 and 2005. Using the “Granger causality” approach, we find no significant relationship between a composite measure of a firm’s CSP and FP, except for market returns. However, using individual measures of CSP, we find a robust significant negative impact of the environmental dimension of CSP and three measures of FP, namely return on assets, return on equity, and market returns. This latter finding is consistent, at least in the short run, with the trade-off hypothesis and, in part, with the negative synergy hypothesis which states that socially responsible firms experience lower profits and reduced shareholder wealth, which in turn limits the socially responsible investments.     

Organizational Structure and Performance in Dutch small Firms

The relationship between organizational structure and performance in small firms has received relatively limited attention over the last few decades. In understanding small firm performance this seems to be a serious omission. In this paper, we first present the rationale for including organizational structure in the analysis of small firm performance. Then, from the literature on organizational theory, we retrieve several dimensions that may be postulated to describe organizational structures of small firms. Based on the study of a stratified sample of 1411 Dutch small firms we show that nine structure stereotypes can be delineated. We further investigate the relevance of the empirical taxonomy by looking at the relationship with firm performance in terms of sales growth, profitability and innovativeness. Eventually, we conclude that organizational structure indeed matters and that it deserves to be taken into account in models and future analysis of small firm performance.     

The Effect of Entrepreneurship Orientation on Firm Performance: A Multiple Mediation Model

Scholars have recognized the important role that entrepreneurial orientation (EO) plays in driving firm performance. However, this relationship is not yet well understood and studies have sought to examine various contingencies that might mediate or moderate this relationship. This study investigates the impact of organization behavior variables on the EO – firm performance relationship. The structural model was tested using primary data from 321 South Korean industrial firms. The results show that EO is positively related to firm performance and that adaptive organizational culture and people-centered management have a multiple mediating effect on the relationship between EO and firm performance.     

Variance of Firm Performance and Leverage of Small Businesses

We investigate the relationship between leverage and firm performance using small business data from Japan by estimating the effects of leverage on both average firm performance and the variance of firm performance. We find that leverage has a negative effect on average firm performance and a positive effect on the variance of firm performance. This suggests that the problem of moral hazard is severe for highly leveraged firms. However, when highly leveraged firms have sufficient collateral assets, the effects of leverage are positive for average performance, but negative for the variance of performance. This implies that when small firms have sufficient collateral assets, highly leveraged businesses are better performers.     

Entrepreneurial Orientation and Firm Performance in New Ventures and Established Firms

Lots of studies suggest a positive relationship between entrepreneurial orientation (EO) and firm performance; however, the empirical findings are inconclusive. There are two explanations for the contradictory results: the performance implication of EO is context‐specific and the relationship between EO and performance may be curvilinear. Consulted on the perspective of the liability of newness and taken together these explanations, this paper probes into the difference in the EO‐performance linkage between new ventures and established firms. We find that the relationship between EO and performance is inverse U‐shaped in new ventures but positive in established firms. Finally, we discuss our contributions, implications, and possible future extensions.     

What a Difference a Year Makes: Time Lag Effect of Information Technology Investment on Firm Performance

How long does it take for a firm to realize the performance benefits of its IT investment? This article explores the time lag effects of IT investment on firm performance. Using longitudinal data of 1421 firm-time observations over a period of six years (1991–1996) as the initial time point of IT investment, we examined time lag effect on firm performance in a five-year time window. The performance data for the sample spans 12 years, from 1989 to 2000. The results demonstrate a strong support for time lag effects on the relationship between IT investment and firm performance. Specifically, our study found that it took an average of approximately three to four years after the year of investment for the firms in our sample to realize the greatest performance benefits. The findings offer useful implications for researchers and managers to better understand the link between IT and firm performance so that they can make wiser decisions to maximize the business value of their investments.     

Market Orientation and CSR: Performance Implications

Corporate social responsibility (CSR) has become of great interest to both researchers and practitioners alike with much discussion on whether the costs outweigh the performance implications. CSR has become a firm strategic tool (not only an ethical concept) as firms recognize that the customer value proposition and CSR is integrated with the focus on how to differentiate the firm from the view of the customer. We utilized market orientation (MO) theory as our foundation for our research as it explains how organizations adapt to their customer environment to develop competitive advantages. With the current customer focus on CSR, MO assists the field in identifying a possible firm differentiation. Our research found that firms that ranked high on CSR correlated positively to performance. We also found our theoretically developed constructs of firm customer orientation (CO) and firm market orientation correlated with the firm adopting CSR. The results also indicated that CSR positively mediates CO and MO to firm performance. As past research had mixed results over the direct relation of MO to performance, our research suggests that CSR may be the missing variable to explain the MO/Performance relationship.     

Home Firm Performance After Foreign Investments and Divestitures

An almost undisputed aim for firms in today's globalised world is to operate internationally. Several papers find a positive relationship between foreign direct investment (FDI) and the domestic performance of firms. In this paper, we address the ‘FDI – export’ relationship to better understand this trend. Furthermore, by presenting results on firm's post‐divestiture employment growth at home, we are able to provide a more comprehensive view on firm performance after stepping in and out of foreign markets. We apply a propensity score matching technique in combination with a difference‐in‐difference estimator to analyse the performance dynamics of French firms that either invested abroad or carried out foreign divestitures during the period 2000–2007. FDI has, on average, a positive effect in terms of export share, operating turnover and employment in firm's domestic market. Industry differences reveal that firms in high‐tech industries experience a strong increase in their domestic performance, whereas firm performance in low‐tech industries increases only moderately in post‐investment periods. In contrast, the divestiture impact on the post‐divestiture performance is rather negligible.     

Founding Family Controlled Firms: Performance, Risk, and Value

An agency theory framework is used to test the effects of founding family control on firm performance, capital structure, and value. Both the finance and management literatures regarding the relationship between firm control and firm value are explored. Controlling for size, industry, and managerial ownership, the results suggest that firms controlled by the founding family have greater value, are operated more efficiently, and carry less debt than other firms.     

Bonding Ties,Bridging Ties,and Firm Performance: The Moderating Role of Dynamic Capabilities in Networks

ABSTRACT

Purpose: Building on the dynamic capabilities view and the configuration of network ties, this study investigates how dynamic capabilities moderate the relationships between bonding and bridging ties and firm performance, thus an area with potential to explain the divergent empirical results contained in the existing literature on the relationship between intra/extraorganizational ties and performance.

Methodology: This study employed a mail survey to senior executives. A total of 169 firms operating in an industrial district were collected. Regression analysis was employed to test the proposed model.

Findings: This study found that the combination of dynamic capabilities and bonding/bridging ties helps improve firm performance. Furthermore, this study found a positive relationship between bonding ties and firm performance, but no equivalent relationship for bridging ties.

Research Implications: Research results indicate that firm performance is significantly enhanced by bonding ties, which provide opportunities for sharing information and exchanging resources. Moreover, the empirical results reaffirm the proposition that dynamic capabilities are important transformational mechanisms for managing resources.

Practical Implications: The findings reveal that managers can improve firm performance by simultaneously building social ties and developing and implementing dynamic capabilities.

Originality/Value: This study demonstrates that the components of dynamic capabilities (i.e., sensemaking and reconfiguration) are transformational mechanisms and can moderate the positive relationship between bonding and bridging ties and firm performance, empirically supporting recent perspectives from the literature on dynamic capabilities and social networks.     

客户群体特征对企业创新绩效的影响研究——以中国制造业上市公司供应链为例

通常认为,供应链下游在地理空间上的集聚会促进信息交互和组织学习,强化核心企业的话语权,提升创新绩效。文章认为,在特定条件下,客户地理邻近也可能会拉低企业创新绩效,形成创新“空间锁定”困局。基于2009-2017年中国A股制造业上市公司及其供应链数据,考察客户地理邻近性对企业创新绩效的影响作用,并将客户集中度和客户属地多样性作为情境因素纳入研究框架。研究发现：客户地理邻近性与企业创新绩效呈倒U型关系,在一定阈值范围内客户地理邻近性拉升企业创新绩效,而超过该阈值客户地理邻近性抑制企业创新绩效;客户集中度对客户地理邻近性与企业创新绩效的关系不存在调节效应;客户属地多样性强化了客户地理邻近性与企业创新绩效的倒U型关系。以上结论从供应链视角揭示企业创新规律,对企业创新的内生机制研究形成了有益补充,有助于重新认识企业创新绩效的影响机制。     

The Long‐Term Impact of Entrepreneurial Self‐Efficacy and Entrepreneurial Orientation on Venture Performance

We collected multi‐wave survey data to assess the lagged effects of entrepreneurial self‐efficacy (ESE) and entrepreneurial orientation (EO) on firm performance over a five‐year period. The results of our study indicate that ESE and EO are both positively associated with firm performance but in different, and interesting, ways. Entrepreneurially self‐efficacious founder/managers may help improve the performance of very young firms but such benefits dissipate over time. An EO, on the other hand, does not appear to be particularly beneficial to very young firms. However, our results suggest an EO may play an increasingly valuable role as new firms mature.     

Family firm performance: The influence of entrepreneurial orientation and absorptive capacity

This article investigates the influence of entrepreneurial orientation and absorptive capacity on family firm performance. Partial least squares structural equation modeling (PLS‐SEM) was used to analyze empirical data for 218 Spanish family firms. Absorptive capacity positively mediated the relationship between entrepreneurial orientation and family firm performance. This total mediation effect suppressed the direct effect of entrepreneurial orientation on family firm performance. A major implication of this finding is that for family firms to improve their performance through entrepreneurial orientation, absorptive capacity must act as a mediator.