Impact of industry sector on corporate diversification and firm performance: Evidence from Indian business groups

Prior business group (BG) studies implicitly assume that corporate diversification‐firm performance relationships are uniform across industry sectors. This generalization may lead to research implications that are not equally true for BG‐affiliated manufacturing and service firms. Drawing on strategy and marketing literature, this research addresses this scholarly gap. Our empirical analysis of a large sample of BG‐affiliated Indian firms over a five‐year period (2004‐2008) indicates that the influence of corporate diversification on firm performance is greater for affiliated service firms than affiliated manufacturing firms. Results also indicate that the influence of BG size and diversity on diversification‐firm performance relationship varies significantly depending on whether the focal firm belongs to the manufacturing or service sector. Firm's share ownership does not generate similar influence. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

The effect of institutional quality on firm export performance in emerging economies: a contingency model of firm age and size

It is widely accepted that countries with sound formal and informal institutions create more robust environments for firm performance. However, due to the liabilities faced by firms without available slack and/or market power, we contend that institutions are especially important for new and small firms. Unfortunately, there is little research examining the potential moderating effect of firm size or age on the relationship between institutional quality and export performance. In response, we hypothesize that institutional quality will be more important to increasing the export performance of new and small firms compared with their large, established counterparts. We test our hypotheses using data from the World Bank’s World Business Environment Survey. The results of our analyses offer support for our model, although some institutional variables appear to be more important to export performance than others. We conclude by discussing the implications of our results.     

Outside directors,firm life cycle,corporate financial decisions and firm performance

We investigate whether directors with multiple outside board directorships are related to corporate financial strategy across firm life cycle stages. Using a large sample of firms from the Gulf Cooperation Council (GCC) countries, we find that when the number of directors with multiple board seats increases, firms' level of cash holdings rises, capital expenditure declines, selling, general and administrative (SG&A) expenses increase, and firm performance decreases. We further demonstrate how the relationship varies across different stages of their life cycle. Our findings have significant implications for policy makers, regulators and stockholders in GCC countries and in other emerging markets.     

Spatial agent-based modeling of household and firm location with endogenous transport costs

The paper describes a spatial economic agent-based model (ABM), consistent with the principles of new economic geography (NEG), which allows the discrete-time evolutionary simulation of complex interactions of household and firm location choices. In contrast with the current ABM approaches, it considers a multi-regional (multi-urban) setting to enable a more realistic representation of decisions related to commuting, migration and firm (re)location. The model allows simulating spatially differentiated, multi-commodity markets for land and labor in a system of cities and the behavior of profit-maximizing firms with multi-regional asset investment decisions, incorporating endogenous transport costs with congestion effects. It also accounts for the impact of agglomeration forces on industrial location choices and the formation of urban development patterns. The conceptual framework and main components of the spatial ABM are presented and several implementation issues are discussed with regard to possible case-specific applications and policy scenarios.     

Sub-national institutions,firm strategies,and firm performance: A multilevel study of private manufacturing firms in Vietnam

Some private small and medium sized enterprises (SMEs) in transition economies have actively internationalized. This decision needs to accommodate institutional conditions that vary, not only between countries, but also within an individual country. Our paper examines the relationship between export strategy and firm performance, and the extent that sub-national institutional factors moderate this relationship. Using multilevel data analysis techniques with a sample of private manufacturing firms in Vietnam, we find institutional factors moderate export strategy and firm performance's relationship.     

Knowledge quality,innovation and firm performance: a study of knowledge transfer in SMEs

Small Business Economics - Using structural equation modelling on 291 small and medium enterprises in Australia, we examine the impact of knowledge transfers from supply chain actors on innovation...     

National advertising,dual-channel coordination and firm performance

With the rapid development of e-commerce, many manufacturers nowadays opt to open an online channel to engage in direct online sales. The mix of retailing with an online channel adds a new dimension of competition and complementarity to a product's distribution channels. Our model focuses on the strategic effect of the manufacturer's national advertising on alleviating the channel competition. We use a game-theoretical model to show that opening an online channel with the added national advertising effectively alleviates the channel conflict and thus helps improve the whole channel and each channel member performance. Depending on the different product categories and the degree of channel substitutability, the manufacturer's investment in the national advertising also will be different. The value of national advertising increases as product is more compatible with online sales and channel substitutability increases.     

Market orientation, knowledge-related resources and firm performance

Based upon new perspectives to explain superior business performance, an integrative conceptual model that links these different explanations of superior performance is presented, highlighting the role of knowledge-related resources as key antecedents of the continuous creation of competitive advantages (Day 1994, Day George S. The capabilities of market-driven organizations. J Mark 1994a, 58 [October]: 37-52., Day George S. Continuous learning about markets. Calif Manage Rev 1994b, 36 [Summer]: 9-31., Hunt and Morgan, 1995, Hunt Shelby D., Morgan Robert M. The comparative advantage theory of competition. J Mark 1995; 59 [April]: 1-15). An empirical test of this conceptual model is conducted with a Chilean sample of publicly traded firms, using structural equations modeling. The results show a significant impact of: market orientation, market sensing and innovativeness (among other knowledge-related resources) on superior performance, thus providing support for the original ideas of Drucker (1954) [Drucker Peter F. The practice of management. New York: Harper and Row Publishers, 1954.] and Schumpeter (1934), and for the dynamic evolutionary approaches to strategy (Dickson, 1992, Dickson Peter R. Toward a theory of competitive rationality. J Mark 1992; 56: 69-83., Dicskson, 1996, Dickson Peter R. The static and dynamic mechanics of competition: a comment on Hunt and Morgan's comparative advantage theory. J Mark 1996; 60: 102-106.; Hill and Deeds, 1996, Hill C.W., Deeds D.L. The importance of industry structure for the determination of firm profitability: a Neo-Austrian perspective. J Manag Stud 1996; 33: 429-451.).     

Board gender diversity and firm performance: The moderating role of firm size

This paper investigates the relationships among board gender diversity, firm performance, and firm size. Our paper provides new insights into the relationship between board gender diversity and firm performance by examining whether firm size alters the impact of board gender diversity on firm performance. We use a panel data from A-share-listed non-financial firms in China to examine the relationship during the period of 2007–2012. Our finding demonstrates that the gender diversity on the board has a positive impact on firm performance if and only if the value of firm size is less than some critical value. In addition, we also find that firm size may undermine the positive impact of board gender diversity on firm performance. This paper contributes to the literature by offering a contingency approach to examine the relationship between board gender diversity and firm performance as well as shedding light on the relationship in the context of a developing economy.     

Entrepreneurial strategy making,resources, and firm performance: evidence from China

This article builds a model to answer a critical but unsolved research question: What are the resources and/or the resource portfolio firms need to achieve the performance implications of entrepreneurial strategy making (ESM)? Based on a survey of Chinese firms, we find that ESM has a significant positive influence on firm performance. In addition, to accomplish the performance implications of ESM, firms need both flexible employed resources and unabsorbed slack, while just one of them does not work. Thus, a resource portfolio composed of high flexible employed resources and unabsorbed slack is the appropriate one to achieve the value of ESM.     

CEO turnover,political connections,and firm performance: Evidence from China

In our analysis of 5738 CEO turnover events among A-share listed companies in China over the period of 1993 to 2019, we find that CEO turnovers on average hurt companies' market performance with significant negative abnormal returns in the event window. We then group the companies into four types based on whether the outgoing and successor CEOs have political connections, and then calculate the abnormal returns in the event windows of CEO turnovers once announced. We find that companies generally enjoy positive abnormal returns if they replace politically non-connected CEOs with connected ones. Such a positive effect is more evident among non-state-owned enterprises (non-SOEs), companies with worse performance, and companies with higher financial constraints. However, abnormal returns derived from hiring politically connected successor CEOs turn to negative following China's massive anti-corruption campaign in 2012. Our findings provide direct estimations of the economic value of CEOs' political connections for A-share listed companies in China and reveal boundary conditions that moderate the influence of hiring politically connected CEOs.     

Brand compass: charting a course to improve firm performance

This study contributes to the internal brand management domain from a firm asset perspective. We argue brand compass is an inside-out identity-focused firm asset consisting of brand vision, brand commitment and shared brand understanding. We build a theoretical argument for examining brand compass together with two important outward focused orientations: market orientation and innovation orientation. Through structural equation modelling, within the context of retailing, the findings chart a course to improve firm performance.     

Technological opportunism and firm performance: Moderating contexts

Technological opportunism is a sense-and-respond capability of firms with respect to new technologies. This research examines the effect of technological opportunism on firm performance from the dynamic capabilities' perspective, and how such an effect depends on relevant firm and/or market contingencies. Analyzing data from a variety of Taiwanese manufacturing industries, the authors find that technological opportunism has a positive effect on firm performance. The technological opportunism–firm performance link is negatively moderated by market orientation and network externality, and positively moderated by technological turbulence. These results confirm the underlying theme of the dynamic capabilities approach to technological changes and contextual (environmental and organizational) relevance. The finding that technological opportunism and market orientation fail to produce any synergistic impact implies that technological opportunism is a more influential source of a firm's competitive advantage.     

Competitor identification,perceived environmental uncertainty,and firm performance

To create a competitive advantage and generate superior performance, firms must first identify rivals. However, there is little understanding of how perceived environmental uncertainty affects competitor identification, why some firms are better at identifying domestic versus foreign rivals, or how competitor identification is related to firm performance. In this paper we theorize that perceived environmental uncertainty is an important antecedent of competitor identification; it influences how many competitors a firm identifies. Our theory also suggests that different firm characteristics influence domestic/foreign competitor identification and that there is an inverted‐U shaped relationship between under/overidentification of competitors and firm performance. Based on a large sample of Taiwanese firms, we find support for each of these ideas. Our study helps reinforce the importance of competitor identification for firm success. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Board independence, firm performance and ownership concentration: Evidence from Chile

What determines the composition of companies' boards in the context of high ownership concentration? Are independent directors important as an internal governance mechanism in companies with high ownership concentration? Do markets favor companies whose controlling shareholders use voting rights to elect professional directors?Using a four-year, 160-company panel data, and controlling for endogeneity, this paper addresses these three related questions, finding that an increase in the proportion of outside directors affects company value. The paper also finds that companies that present more exacerbated agency conflicts tend to incorporate professional directors to the boards, in an effort to improve corporate governance and ameliorate the agency problem.     

Financial service sector performance measurement model: AHP sensitivity analysis and balanced scorecard approach

This study applies the balanced scorecard in building a framework of wealth management (WM) banks' performance criterion and, using the Delphi method, a sub-criteria framework. The organisational performance of WM banks in Taiwan is evaluated by applying an analytic hierarchy process and sensitivity analysis. The proposed model can assist the banking sector in assessing the organisational performance of WM banks, making it highly applicable for bank managers.     

Top manager characteristics,agglomeration economies and firm performance

The role of agglomeration economies in firm performance has been extensively studied. Existing studies, however, almost invariably focus on firm, industry or city characteristics to examine the performance-enhancing effects of agglomeration while overlooking the attributes of the top executives involved in shaping corporate practices. In this study, we change that focus by empirically examining the moderating role of two particular top manager characteristics (age and educational level) on the agglomeration economies–firm performance relationship. Using a top manager-firm matched panel data set, we find that top manager age rather than educational level helps firms to realize the potential benefits of agglomeration. This paper contributes to the agglomeration literature by stating the importance of individual top managers.     

Dynamic capabilities and firm performance in a financial crisis

In this study, an organization means an active actor that can, at least to some extent, adapt to the environment, mainly within the limits of its resources and capabilities. The article enhances understanding of and explains organizational adaptive behavior in weathering the storm in the business environment resulting from the global financial crisis of 2008. The literature on dynamic capabilities, organizational change, and innovation in the context of organizational performance and survival captures this kind of adaptive behavior. The empirical study builds on a quantitative survey and a qualitative case study covering the food processing, maritime, and media industries. Structural equation modeling, group analysis, and qualitative case comparisons shed light on the connection between the constructs in question. Implications for theory and practice culminate in suggestions for future research.