The influence of firm age and intangible resources on the relationship between entrepreneurial orientation and firm growth among Japanese SMEs

With the relationship between entrepreneurial orientation (EO) and firm performance having broad scholarly acceptance, researchers are now delving with increased focus into the contextual factors that change the nature of the relationship between EO and various manifestations of organizational performance. In this vein, this study adopts the resource based view and investigates the moderating influence of firm age and intangible resources on the EO-firm growth relationship among small to medium sized enterprises (SMEs) in Japan. Further, we propose a three-way interactive model between EO, firm age, and intangible resources to better identify entrepreneurial configurations that promote superior SME growth.     

The effects of firm size and firm performance on CEO pay in Canada: A Re-Examination and Extension

Using insights from academic and practitioners' perspectives and recent data, this paper extends the literature by using pay variables that are typically used by practitioners, including those not studied in previous academic research. Consistent with previous findings, firm size, measured by three-year average revenues, has strong effects on CEO pay. However, the relationship is not the same for firms of different sizes. Revenue elasticity is strong among small companies and disappears for medium and large companies. Firm performance, measured by accounting-based measures (return on assets and return on equity), and market-based measures (total shareholder return and shareholder value), have little effects on CEO cash compensation, but strong positive effects on equity compensation. Implications for research and practice are discussed.     

Internationalization and firm performance of SMEs: The moderating effects of CEO attributes

This paper examines the impact of CEO attributes on the internationalization–performance relationships of SMEs. Based on the upper echelons and information processing theories, we argue that CEOs play an important role in the internationalization of SMEs. Furthermore, some of the attributes of CEOs who have a greater information processing capability have positive moderating effects on the internationalization–performance relationship. Using panel data of 187 Taiwanese SMEs that expanded abroad, we find that age, educational level, international experience, and duality of the CEO have moderating effects on the relationship between internationalization and firm performance.     

Models of the relationship of the firm to society

Authors of books on business ethics and corporate social responsibility fall into two general approaches when they answer the question: ‘Why should a business firm, which represents private property, have greater obligations to the local community than an ordinary citizen?’ Authors generally subscribe to a ‘rights’ approach or to a ‘power’ model. This paper will present four rights approaches and three power models which are used to describe the relationship of the firm to society. Introducing these different approaches and models will be two brief expositions which provide the setting for determining the relationship of a firm to society. The first traces two lines to the development of the contemporary American corporation. The second views the business corporation as a quasi-public institution.     

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.     

The relationship between online chatter and firm value

The visible trace of online communications has given rise to research on their effect on firm outcomes. The literature has established a link between online communication about a product and the product??s sales and price performance. On the assumption that financial markets understand this link, we conjecture financial markets consider the amount of online communication, or chatter, about a firm to be an indication of the firm??s performance in the marketplace. Our results confirm this conjecture. The relationship between stock returns and chatter are robust to alternative specifications of the model and to alternative measures of stock returns. We also investigate the issues of reverse causality and omitted variable bias driving a spurious relationship between stock returns and chatter. The data are not consistent with any of these alternative explanations for our results.     

The relationship between firm growth and labor demand

Gibrat's Law is tested on a sample of Italian firms. The results are similar to those recently obtained on various sets of U.S. data and confirm that departures from Gibrat's Law are modest, also when firms' age is accounted for.     

Growth beyond Gibrat: firm growth processes and strategies

Firm growth studies have been focused on the question of whether firm growth is independent of firm size. This shadow of Gibrat’s Law has drawn attention to the randomness in firm growth. However, it has also clouded relevant research avenues that enquire into the role of firm growth processes and strategies. This paper takes stock of the current state of the art of firm growth studies in small business economics, and makes a plea for more specific research approaches that highlight the nature of the firm, organization, and growth paths. This rejuvenation of firm growth studies comprises a search for necessary mechanisms and contingent conditions for the growth of firms.     

Family governance practices and teambuilding: paradox of the enterprising family

This paper explores the relationship between family governance practices and financial performance of the business and family assets of business-owning families. A business-owning family that shares a focus on preserving and growing wealth as a family is defined as the enterprising family. Results of the study are consistent with predictions about the functioning of the enterprising family derived from research using social capital theory and group dynamics, especially with respect to teams. Family governance practices (family constitution, family code of conduct, clear selection and accountability criteria, family council, formal family communication mechanisms and family reunions) are hypothesized to build a strong and unified business-owning family functioning as a team. Results show that these practices are positively associated with financial performance. This relationship is mediated by a focus on preserving and growing business wealth as a family. Analyses are conducted on a sample of 64 family businesses from 18 countries.     

Family CEO and board service: Turning the tide for export scope in family SMEs

Adopting the socioemotional wealth perspective, we argue that the presence of a family CEO in family SMEs negatively affects export scope, but that such negative effect is mitigated by board service. We develop and test a model that considers the synergistic combination of family management and another important aspect of family governance in the context of family firm internationalization: the service behavior of the board of directors. The empirical evidence from a sample of 248 Belgian family SMEs shows that governance is crucial to overcoming the problems of family management: family CEOs may negatively influence export scope, but board service is able to turn the tide so that the family CEO effect becomes positive. With such novel findings, we contribute to international business and family business studies     

A model to study the organizational culture of the family firm

The results of research of the utilitarian type on the culture of the family firm is reported here. A model is built and defined on the basis of the main arguments supporting the following theories: general systems theory, neoinstitutional theory, transformational leadership theory, field theory, learning theory, and group dynamics theory. The resulting model is an instrument that can be used to deepen our understanding of the organizational culture of this type of firm. It should prove to be a powerful tool to exploit the competitive potential of this culture, which has often been noted in the literature.     

The relationship between incentive compensation and performance related CEO turnover

We study the relationship between incentive compensation and performance related CEO turnover. Our theoretical model predicts that the slope of the compensation contract and forced turnover may be complements. Our results support this prediction. We find that incentives and turnover are positively related. This relationship however, varies with the equity ownership of CEOs and does not hold for CEOs who own more than 5% equity. Moreover, this relationship is stronger if the firm under performs its industry. Our results suggest that high-powered incentives may increase the signaling power of performance measures and lead to higher likelihood of turnover.     

Symbiotic relationship of modern contract and traditional ethic: Entrepreneur??s Zhongyong rationality and family firm governance choice

What is the relationship between Chinese familism and the modern economic organization? Can a rational, contractual relationship grow out of Chinese familism that widely exists in Chinese family businesses? This paper holds that Chinese familism can nurture a rational and contractual relationship. However, such a relationship is not an extremely instrumental rationality of Logocentrism, but a zhongyong rationality characteristic of Confucian culture essence. This paper verifies empirically for the first time the existence of zhongyong rationality by analyzing family entrepreneurs’ governance choices. The results reveal that under the guidance of zhongyong rationality, entrepreneurs in Chinese family firms lay more emphasis on restraints than on efficiency, balance the interests among the management, the firm and the owning family, and maintain equilibrium between the insiders and outsiders. This research also finds that a shift from instrumental rationality to zhongyong rationality can provide more satisfactory and indigenous explanations to some phenomena widely in existence among Chinese family firms, as compared with corresponding Western theories.     

The French paradox: A financial crisis during the golden age of the 1960s

The French stock market crisis of 1961–67 was the biggest of the twentieth century after that of the 1930s. Using the new stock index (historical CAC 40), it is possible to get a fair idea of its amplitude and detail its chronology. The possibility is considered that the crisis of the 1960s was more of a market correction after the bull run of the 1950s. The fall of the stock prices is an adjustment to the abrupt halt of the growth of dividends, the potential impacts of internal political choices and of the structural characteristics of the French stock market during this period are also investigated.     

Efficiency and profitability: An inverse relationship according to the size of Austrian firm?

This paper tries to shed some light on the Austrian situation of the efficiency of firms according to their size class. For total Austria we find that large firms seem to be more efficient with respect to value-added per employee, but small firms are more efficient with respect to the gross residual quota and to profitability (= (value added — wages)/(value added)). On the other side a similar analysis for Upper Austria does not show this result. Here firms with the size of 500 employees or more seem to be the most efficient with respect to efficiency and profitability, and only the employment cost efficiency criteria reveals the picture, the smaller the firm, the more cost effective it seems to be. Hence, the result obtained from most studies in Europe, that at least the biggest firms are not the most efficient, can only be confirmed to a limited extent for (Upper) Austria.     

Modeling the relationship between networking and firm performance

Network theory suggests that successful business ownership might depend on the ability of owners to gain access to resources not under their control in a cost effective way through networking. To date, however, there has been little empirical support for this proposition, particularly for established firms. The results of this study, based on a large longitudinal database, indicate a significant positive relationship between networking (particularly with formal networks such as external accountants) and both firm survival and, to a lesser extent, growth, but not ROE. Further, network intensity is found to be associated with survival, and network range with growth.     

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.     

The relationship between ethics and firm practices in Russia and the United States

One of the fundamental objectives of corporate governance is to promote a climate that fosters ethical decision-making. As transitioning economies move toward more transparent and democratic systems the existence of policies, such as codes of ethics, that attempt to monitor and control moral behavior will become increasingly important. The establishment of ethical standards not only encourages trust with potential trade partners but also is likely to cultivate foreign direct investment. In this study, data collected from 112 U.S. and 74 Russian respondents reveal some intriguing patterns across these two diverse economies. Managerial implications and future research directions are also discussed.     

Top management attention to trade shows and firm performance: A relationship marketing perspective

B2B marketers allocate significant resources to trade shows, but often struggle to make a strong business case for these activities. Responding to calls to justify such investments, this research examines the effect that top management attention to trade shows has on firm value. Based on attention theory, this study suggests that top management's focus on trade show relationship marketing efforts results in better trade show performance. This helps develop market-based assets that in turn augment firm value. Using an event study to extrapolate the contingent effect that top management attention to trade shows has on firm value, the basic hypothesis is supported. Additionally, this research tests three top management orientations that are key to performing trade show relationship marketing activities. The findings address the absence of top management from extant trade show research and provide marketers with new insights related to maximizing their trade show investments.