Effects of foreign acquisitions on financial constraints,productivity and investment in R&D of target firms in China

This paper examines whether foreign acquisitions lessen financial constraints, improve investment in research & development (R&D) and productivity of the target firms in China based on a sample of 914 cross-border mergers and acquisitions (CBM&A) over the period of 1994–2011. Using investment to cash-flow sensitivity to measure financial constraints, we find that foreign acquisitions in China are associated with a reduction of target firms’ financial constraints, irrespective of the ownership type of the target firm. However, the extent of financial constraint reduction is pronounced for non-SOEs compared to state-owned enterprises (SOEs). This study also provides evidence that foreign acquisitions improve Chinese target firms’ productivity and investment in R&D.     

Capital Structure and Bank Performance: Empirical Evidence from Ghana

The aim of this paper is to examine the impact of capital structure on profitability of commercial banks in Ghana. The study used a sample of 21 commercial banks over the period 2000–2014 using panel corrected standard errors and two‐stage least‐squares estimation approaches. The results show that bank capital structure measured as capital‐to‐asset ratio is a robust and positive driver of bank performance (profitability) measures (return on assets and net interest margin). Additionally, the results further indicate that share of customer demand deposit positively affects bank profitability. The positive relationship between the capital‐to‐asset ratio and performance provides support for the bank capitalization policy implemented by the Bank of Ghana. Also, the findings provide evidence in support of the recent upsurge in bank short‐term deposit mobilization strategies and promotions by commercial banks in the country to enhance their deposit base.     

Online relationship marketing and affective customer commitment – The mediating role of trust

The pervasive use of information technology has implications for consumer relationship management among financial services organisations. There is a need for increased understanding of how digital channels might influence the development and maintenance of firm–customer relationships and in particular the role of the Internet upon commitment and trust outcomes. Thus, this research aims to determine the relationship between online relationship marketing practices and affective customer commitment, and how this relationship is mediated by online channel trust. Data were collected from 200 online retail bank customers and Structural Equation Modelling was used to test the impact of five key online relationship marketing practices on affective commitment, and how trust mediates these relationships. We found that advocacy and collaboration have a direct relationship with affective commitment, while trust mediates the influence of engagement and personalisation on affective commitment. The article highlights the significance of trust in technology when using online channels to build customer relationships.     

The impact of state ownership,formal institutions and resource seeking on acquirers’ returns of Chinese M&A

We examine the effects of state ownership, institutions and resource-seeking behavior on post-acquisition stock price returns of Chinese cross-border mergers and acquisitions over the period 1998–2008. Chinese acquiring firms experience negative returns ranging from 2.92 to 10.80 % in 12- and 60-month post-event periods, respectively. State ownership (SOE), interaction between R&D and SOE, formal institutional distance and acquirer size have a positive and significant impact on the long-term acquirer returns. However, the interaction between tangible resources and SOE and acquirer cash holdings appears to have a negative and significant impact on long-term returns. Overall, our results suggest that the state and institutions constitute important sources of long-term value creation for Chinese acquirers.     

Analysis of government policies,institutions, and inward foreign direct investment: Evidence from sub‐Saharan Africa

This article examines the effects of government policies and institutions on foreign direct investment (FDI) inflows in sub‐Saharan African context using both quantitative and qualitative approaches. On the quantitative approach, we analyzed the effects of institutions on FDI using two statistical techniques—canonical cointegration regression (CCR) and fully modified ordinary least square (FMOLS)—over the period of 1984–2012. We find that political instability, democratic accountability, and investment risk have significant impact on inward FDI in Nigeria. Using a trend analysis, our results provide evidence to suggest that liberal government investment policies have positive influence on FDI inflows. Our qualitative analysis over the 1962–2012 period supports the results of the quantitative analysis.     

Cross‐border M&As by Chinese firms: An analysis of strategic motives and performance

This article considers the strategic motivation and performance of Chinese cross‐border mergerand‐ acquisition (M&A) activities of 27 deals that took place in the Shanghai and Shenzhen stock markets in 2000–2004. The study finds that cross‐border M&As formation by Chinese firms are primarily motivated by market development (that is, increasing market share) to enable faster entry into new markets, promote diversification, and obtain foreign advanced technology and other resources. In terms of wealth creation, the study finds that cross‐border M&As create value for Chinese acquiring firms. © 2008 Wiley Periodicals, Inc.     

Explaining the trends in the UK cross-border mergers & acquisitions: An analysis of macro-economic factors

Most of the growth in international production over the past decades has been via cross-border mergers and acquisitions (CBM&As). Yet prior studies examining the trajectory of cross-border M&A activities as an entry mode of FDI have focused on industry and firm level factors. Dunning (2009) emphasised the importance of macroeconomic variables which may explain foreign direct investment and called for more research to improve our understanding on the effects of macroeconomic variables. Building on prior studies, this study attempts to investigate the role of macroeconomic influences on CBM&As activities in the UK over the 1987–2006 period. This study finds that GDP, exchange rate, interest rate and share prices have significant impact on the level of outward UK CBM&As. On the other hand, GDP, money supply and share price have statistically significant impact on the UK CBM&As inflows.     

The Growth Effects of the Bulging Economically Active Population in Sub‐Saharan Africa: Do Institutions Matter?

This paper examines the importance of good institutions in harnessing the growth effects of the bulging economically active population in sub‐Saharan Africa (SSA). The paper utilizes a panel dataset comprising 39 countries over the period 2002–13. Based on the system generalized method of moments estimator, this paper finds that an increase in the relative size of the working‐age population has no direct significant impact on growth, except through the presence of strong and high‐quality institutions. The paper also finds that control of corruption, rule of law and political stability are the specific aspects of institutions that matter the most in reaping the dividend. These results do not only highlight the primacy of strong institutions but also shed light on the key institutional pillars that need to be strengthened to rake in the positive effects of an increasing working age population on economic growth in SSA.     

Measuring performance of non‐profit organisations: evidence from large charities

How to measure performance in charitable organisations continues to excite interest among academics and practitioners. Despite the intellectual interest, little consensus has emerged as to what are the best measures of performance in charities. This is against the backdrop of an increased demand by donors and other stakeholders on charities to provide information on their performance. Building on prior studies, this paper examines the measures of performance in charities using a hybrid methodological approach which consists of 14 exploratory interviews and a quantitative survey of 105 chief executive officers/board of trustees of large British charities. The results of factor analysis and internal reliability produced five broad measures of performance of charities: (1) financial measures; (2) client satisfaction; (3) management effectiveness; (4) stakeholder involvement; and (5) benchmarking, indicating that the overall performance of charities is best measured by a set of factors that reflect the multiple and diverse stakeholders associated with charities. Further analysis using structural equation modelling corroborates the results that non‐financial measures such as management effectiveness, stakeholder involvement and benchmarking are important to the performance of charities.