Search results

The purpose of this paper is to evaluate firm financial success across a broad range of performance measures and identify areas of the performance spectrum for which positive results were most difficult to achieve. Simultaneously, the authors identify the firms that most frequently ranked among the top five in terms of composite financial performance.

The dichotomous Rasch model was applied to 13 financial ratios for two industries for the years 2002‐2011. Of these ratios, the authors identify those that are consistent with the requirements of the Rasch model and suitable for ranking composite firm financial performance in each industry during the sample years. Ratio difficulty rankings are obtained, along with firm rankings reflecting managers' ability to achieve broad‐based financial success.

For the Foods and Aerospace/Defense industries during 2002‐2011, above average performance was most difficult to achieve in the areas of liquidity, financial leverage, and market valuation. Above average profitability and returns on investment seem to have been easier performance targets during this sample period. The authors also list the ticker symbols of firms with managers who consistently achieved top overall financial performance.

The performance data for each industry and time period have to fit the requirements of the Rasch model. In addition, it must be possible to translate continuous metric readings into binary measures without losing relevant information. Future research might explore the use of more sophisticated Rasch models, measures of non‐financial firm performance dimensions, additional industries and time periods.

This research offers managers, investors and regulators a fresh perspective on the evaluation of firm financial performance and managerial ability.

Rasch models are widely used in the human sciences. Application of this methodology to firms offers a more comprehensive view of firm performance and may reveal factors relevant to firm valuation that have previously been ignored, thus possibly impacting the allocation of capital across firms and industries.

To the authors' knowledge, this research represents a first attempt to apply the Rasch approach to an evaluation of managerial ability as reflected in a firm's overall financial performance.

The purpose of this paper is to examine the impact of financial ratios on the financial performance of a chemical company: LyondellBasell Industries (LYB). Some selected ratios: current ratio (CR) and quick ratio (QR) represent the liquidity ratios, debt ratio (DR) and debt equity ratio (DTER) represent the leverage ratios, while operating profit margin (OPM) and net profit margin (NPM) represent the profitability ratios. LYB faced financial problems after its merger and the financial performance of the company shrank to negative due to the world financial crisis. However, this company has bounced back after a year and is now the world's third largest chemical company based on revenue.

The financial ratios were measured from 2004 to 2011, quarterly. A multiple regression model has been used and secondary data has been analyzed.

The results shows that CR, QR, DR and NPM have a positive relationship while DTER and OPM have a negative relationship with the company's financial performance. Among the six ratios, CR, DR and NPM show the highest significant impact on the company's performance.

This research paper contributed the result of the impact of financial ratios on the financial performance of a chemical company as the previous studies with this focus are hard to find and some of the sources are not specifically related to the topic.

This study investigates the economic outcomes of the strategic deviation (SD), the fundamental and crucial question in institutional theory and strategic management. Previous studies have yielded contradictory findings. This study reconciles conflicting results by distinguishing the effects of the SD on financial and market performance, examining the mechanism of financing constraints and the boundary condition of institutional investor heterogeneity.

This research collected data from Chinese A-shares listed manufacturing firms from 2009 to 2021 from the CSMAR and Wind databases. This study conducted empirical tests using OLS models with Stata 15.

Empirical results demonstrate that the SD has different impacts on different dimensions of performance. The SD negatively impacts financial performance while positively impacts market performance. Financing constraints mediate the main effects. Moreover, transactional institutional investors positively moderate the negative effect of the SD on financial performance, whereas stable institutional investors negatively moderate the positive effect of the SD on market performance.

By systematically revealing how the SD has different effects on financial and market performance, this study reconciles the debate on the SD between institutional theorists and strategy scholars. This research makes contributions to the research stream by providing reasonable explanations for conflicting conclusions. Furthermore, by introducing the overlooked perspective of financing constraints, this research identifies crucial mediating mechanisms and highlights the double-edged effect of financing constraints, enriching our understanding of financing constraints. Finally, this study investigates the moderating effects of institutional investor heterogeneity, thereby making valuable contributions to the comprehension of boundary conditions.

This examine the impact of environmental, social and governance (ESG) performance on financial reporting quality (FRQ) before and during COVID-19 in the Egyptian market.

This study uses quarterly data from 2017 to 2021 to draw conclusions, with a sample consisting of 486 firm-year observations for 27 Egyptian companies listed on the Standard and Poor’s/Egyptian Stock Exchange ESG index. This study uses both firms’ ESG scores and the Beneish Model, an earnings detection model, as proxies for FRQ. COVID-19 effects on ESG performance and FRQ were examined by using Pearson’s correlation coefficient and two-stage least squares.

COVID-19 has a significant impact on the link between ESG and FRQ. This implies that corporations with high ESG performance are less likely to manipulate earnings (having a low M-score) and thus provide high FRQ during the COVID-19 pandemic. Moreover, there is a significant positive relationship between firm size, leverage and M-Score, indicating that large firms typically present a high FRQ.

The sample size and data availability are the main research limitations. Additionally, this study only considers the effects of firms’ ESG performance on FRQ during the COVID-19 pandemic. Thus, future research should consider other factors associated with investors’ corporate social responsibility (CSR).

This research has practical implications for market regulators seeking to establish a legislative framework and enhance guidance to mandate managers to provide ESG data and CSR reports appropriate for Egypt and other developing economies in times of crisis.

Promoting the adoption of ESG practices in business, particularly during crises, has the potential to effectively provide high-quality and reliable financial reporting required for investment.

This study aspires to address notable deficiencies in the pertinent literature concerning the relationship between ESG performance and FRQ during COVID-19. To the best of the authors’ knowledge, little is known about how ESG performance changes in response to pandemics in emerging markets. To address this gap, this study examines the effects of COVID-19 on the relationship between ESG performance and FRQ in Egyptian-listed firms from 2017 to 2021.

The purpose of this paper is to investigate whether audit committee characteristics, in particular audit committee size, audit committee activity and audit committee gender diversity, are associated with financial performance in Egyptian banks. The second purpose of this paper is to explore the moderating role of board gender diversity on the relationship between audit committee characteristics and financial performance.

A multiple regression analysis is used to estimate the moderating role of board gender diversity on the relationship between audit committee characteristics and financial performance of a sample of Egyptian banks during the period between 2018 and 2022.

The results indicate that audit committee size has a negative and insignificant effect impact on return on assets (ROA) and return on equity (ROE), respectively. The results also indicate that the audit committee gender diversity has a significant positive impact on ROA and ROE, respectively. Regarding audit committee activity, the number of board meetings has a negative and insignificant effect on ROA and ROE, respectively. Regarding gender diversity as a moderating variable, in general there is a positive effect of gender diversity on the relationship between audit committee characteristics and financial performance.

The study was limited to 20 banks in one country, but it sets the tone for future empirical research on this subject matter. The study also relied on one moderating variable, which is board gender diversity. This study provides an avenue for future research in the area of corporate governance and financial performance in other emerging countries, especially other African countries.

This study provides useful insights for managers and policymakers to better understand which audit committee characteristics can best encourage a company to improve financial performance. Furthermore, regulators should ensure that banks strictly adhere to corporate governance principles to build a strong banking industry capable of achieving economic development.

Banks will benefit equally from valuable qualities across demographic groupings in society by having females on the audit committee and appropriate audit committee meetings. Additionally, if audit committee members are correctly selected, banks with more females in audit committee and suitable audit committee meetings can successfully contribute to strengthening financial performance and social welfare of diverse segments of society. A culture of good banking governance must emerge to improve bank financial stability and, as a result, greater stability and economic growth.

To the best of the authors’ knowledge, the study is, perhaps, the first to examine the moderating role of board gender diversity on the relationship between audit committee characteristics and financial performance in Egyptian banks. This study adds to the literature by investigating such an issue in a developing economy that operates in a different context than those in developed countries.

This paper aims to investigate the relationship between corporate tax avoidance and environmental, social and governance (ESG) performance and the moderating effect of financial constraints on the relationship between corporate tax avoidance and ESG performance.

The sample consists of a global data set involving 24,259 firm-year observations from 49 countries for the years 2011–2020. Corporate ESG performance was extracted from the Thomson Reuters database. The book-tax difference model was used for measuring corporate tax avoidance, while financially constrained firms were identified using the Kaplan and Zingales (1997) index.

The results show that firms with higher tax avoidance are associated with higher ESG performance, but lower ESG performance is shown for firms with higher financial constraints. The results further indicate that the positive impact of corporate tax avoidance on ESG performance becomes weaker for firms with higher financial constraints.

The findings imply that policymakers and regulators should focus on mechanisms to promote more internal funds to assist firms in pursuing ESG-related initiatives, such as through tax incentives. Investors should understand the “smokescreen” effect of corporate tax avoidance on ESG performance, especially for firms with financial constraints.

This analysis provides international evidence on the link between tax avoidance and ESG and considers the joint effect of pressures for internal funds, through tax and financing constraints, on corporate ESG performance.

This paper aims to investigate the interrelated role of relational commitment and dependence as drivers of key performance outcomes. Specifically, the authors provide a conceptual model of the impact of commitment on relationship value dependence and switching cost dependence. The authors further investigate how these dimensions of dependence offer differing noneconomic and economic paths to strategic and financial performance.

Survey data was collected from 296 purchasing agents across multiple industries located in the USA. The conceptual model and accompanying hypotheses were tested via partial least squares structural equation modeling.

The results show that the relational path is driven by affective and normative commitment, which are related to relationship value dependence. Conversely, calculative commitment is related to switching cost dependence. This economic path is related to both strategic and financial performance, whereas the relational path is more closely related to strategic as opposed to financial performance outcomes.

This study extends research on Business-To-Business (B2B) relationships by leveraging social exchange theory to examine the interrelated roles played by two forms of dependence on performance outcomes. Thus, the authors answer Scheer et al.’s (2015) call for research into the two distinct types of dependence – relationship value and switching cost dependence – and their roles in determining B2B relationship outcomes. The findings contribute to the literature by integrating social exchange and relationship marketing concepts to develop a dual pathway approach to B2B partnerships.

The results suggest that dependence is not necessarily negative for firms. Specifically, buyers can and do still exhibit positive performance, both strategic and financial, in relationships with suppliers even when dependent on the relationship. Regardless of whether buyers are dependent due to a relationship or economic factors, both can, in different ways, lead to positive strategic and financial outcomes. Together, the authors contribute to the understanding of B2B partnerships by offering guidelines for both buyers and suppliers in the dyad.

The authors derive a comprehensive model depicting primarily relational and economic paths to performance through different types of commitment and dependence. The authors contribute to the literature by demonstrating that relational and economic paths to success are not the same, highlighting how firms could influence performance even when the relationship is not necessarily characterized by generally positive relational benefits and behaviors.

This study examines the evidence of the impact of climate change on the financial performance of basic materials companies in Vietnam.

The research sample includes eighty-two basic materials companies listed on the Vietnamese stock market from 2003 to 2022. This study used one-way and two-way fixed-effects feasible generalized least squares (FGLS) estimation methods.

Climate change, measured through variables including changes in temperature, average rainfall, greenhouse gas emissions and rising sea levels, has a negative impact on the financial performance of companies in this industry. The study also found that, with rising temperatures, the financial performance of steel manufacturing companies decreased less than that of coal mining and forestry companies, but increasing greenhouse gases and rising sea levels reduced the financial performance of steel companies. We did not find evidence of any difference in the impact of climate change on the financial performance of basic materials companies before and after the UN Climate Change Conference (COP 21). This is a new finding, which is consistent with empirical studies in Vietnam and different from previous studies in that it provides new evidence on the impact of climate change on the financial performance of basic materials companies in the Vietnamese market and cross-checks the impact of climate change by sector and over time.

To the best of our knowledge, this is one of the first articles on climate change and the financial performance of basic materials companies.

The goal of this study was to determine the impact of access to credit facilities on financial performance among farmers of cooperative societies. The study also tested the predictive power of financial literacy.

The descriptive survey research design was used for the study while the sample size was 240 farmers of cooperative societies from South-East Nigeria. The farmers were categorised into those with access to credit facilities and those without access to credit facilities. A structured questionnaire was used to collect data for the study. Data were analysed using multiple analyses of variance (MANOVA) and multiple regression analysis.

Farmers with access to credit facilities reported higher financial performance such as return on investment, working capital, net profit, profit margin and sales. However, those without access to credit facilities reported lower mean scores on financial performance. Also, financial literacy, like financial knowledge, attitude and awareness, significantly predicts the impact of access to credit facilities on financial performance. It was also found that the duration of repayment of credit facilities, like medium and long term, contributes more to improving financial performance.

This study has shown that even though access to credit facilities impacts financial performance, financial literacy is an important consideration. Also, the duration of repayment is a crucial factor.

This study examines the effect of employees' perceptions of political connections on performance measurement systems (PMS) design choice and firm performance. In addition, this study explores the moderating effect of social networking, a very common and widely used factor by domestic and foreign multinational firms operating in China, and its joint effect with political connections or PMS design choice on firm performance. We collected survey responses from a sample of 110 managers from manufacturing firms in China. Our results reveal that highly politically connected managers use nonfinancial measures, leading to improved firm performance. Our results suggest that social networking interacts significantly with political connections, and nonfinancial and financial measures on firm performance. The theoretical and practical implications of our findings are discussed.