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Firm Performance (firm + performance)
Terms modified by Firm Performance Selected AbstractsMEASUREMENT ERROR IN RESEARCH ON HUMAN RESOURCES AND FIRM PERFORMANCE: ADDITIONAL DATA AND SUGGESTIONS FOR FUTURE RESEARCHPERSONNEL PSYCHOLOGY, Issue 4 2001PATRICK M. WRIGHT Gerhart and colleagues (2000) and Huselid and Becker (2000) recently debated the presence and implications of measurement error in measures of human resource practices. This paper presents data from 3 more studies, 1 of large organizations from different industries at the corporate level, 1 from commercial banks, and the other of autonomous business units at the level of the job. Results of all 3 studies provide additional evidence that single respondent measures of HR practices contain large amounts of measurement error. Implications for future research into the HR firm performance relationship are discussed. [source] COMMENT ON "MEASUREMENT ERROR IN RESEARCH ON HUMAN RESOURCES AND FIRM PERFORMANCE: HOW MUCH ERROR IS THERE AND HOW DOES IT INFLUENCE EFFECTSIZE ESTIMATES?"PERSONNEL PSYCHOLOGY, Issue 4 2000AND SNELL, MC MAHAN, WRIGHT, by GERHART First page of article [source] THE RELATIONSHIP BETWEEN FINANCIAL INCENTIVES FOR COMPANY PRESIDENTS AND FIRM PERFORMANCE IN JAPAN,THE JAPANESE ECONOMIC REVIEW, Issue 4 2008KATSUYUKI KUBO Kaplan (1994) concludes that the relationship between top pay and stock performance in Japan is similar to that in the USA. Using a new and comprehensive data set that includes presidents' stock and their stock option holdings, this study estimates the sensitivity of Japanese presidents' wealth to shareholder wealth in the period 1977,2000. Contrary to the commonly held belief that Japanese corporate governance is becoming more like that in the USA, the results show that pay,performance sensitivity actually decreased substantially after 1990. In 2000, Japanese presidents received $US22,100 when stock returns increased from ,2.1% to 14.8%. [source] Business Group Affiliation, Firm Governance, and Firm Performance: Evidence from China and IndiaCORPORATE GOVERNANCE, Issue 4 2009Deeksha A. Singh ABSTRACT Manuscript Type: Empirical Research Question/Issue: This study seeks to understand how business group affiliation, within firm governance and external governance environment affect firm performance in emerging economies. We examine two aspects of within firm governance , ownership concentration and board independence. Research Findings/Insights: Using archival data on the top 500 Indian and Chinese firms from multiple data sources for 2007, we found that group affiliated firms performed worse than unaffiliated firms, and the negative relationship was stronger in the case of Indian firms than for Chinese firms. We also found that ownership concentration had a positive effect on firm performance, while board independence had a negative effect on firm performance. Further, we found that group affiliation , firm performance relationship in a given country context was moderated by ownership concentration. Theoretical/Academic Implications: This study utilizes an integration of agency theory with an institutional perspective, providing a more comprehensive framework to analyze the CG problems, particularly in the emerging economy firms. Empirically, our findings support, as well as contradict, some of the conventional wisdom, and suggest useful avenues for future research. Practitioner/Policy Implications: This study shows that reforms in general and CG reforms in particular are effective in emerging economies, which is an encouraging sign for policy makers. However, our research also suggests that it may be time for India and China to stop the encouragement for the empire building through group formation in the corporate world. For practioners, our findings suggest that firms need to balance the need for oversight with the need for advice, while selecting independent directors. [source] Corporate Governance and Firm Performance: the effects of regulation and competitivenessCORPORATE GOVERNANCE, Issue 2 2007Krishna Udayasankar We propose that the extent to which regulation and competitiveness play a role in the country environment has a complex, interactive effect on the relationship between corporate governance and firm performance. Using an analytical method, we develop an algorithm to express these effects, and offer proofs to show that our algorithm meets central conditions that are identified based on extant research findings in this domain. An illustration traces the performance of firms with different corporate governance standards across various environmental conditions. [source] The Impact of the Roles, Structure and Process of Boards on Firm Performance: evidence from TurkeyCORPORATE GOVERNANCE, Issue 2 2005Veysel Kula This study aims at investigating the impact of the roles, structure and process of boards on performance of Turkish companies. Drawing on the data obtained from a sample of 386 mostly small and non-listed stock ownership companies, it was found that the separation of chairman and general manager positions has significant positive impact on firm performance. From the board roles of control, service and resource acquisition, firm performance was found to be positively related only to the level of adoption of resource acquisition role. It was also found that the effectiveness, information access and performance evaluation attributes of boards are positively and significantly associated with firm performance. [source] The Agency Problems, Firm Performance and Monitoring Mechanisms: the evidence from collateralised shares in TaiwanCORPORATE GOVERNANCE, Issue 3 2004Lanfeng Kao This paper indicates that there is an inverse relationship between collateralised shares and firm performance. We further show that this inverse relationship exists only in conglomerate firms. These findings imply that agency problems resulting from shares used as collateral by boards of directors are more serious in conglomerate firms than in non-conglomerate firms. Moreover, we provide evidence that monitoring by institutional investors, creditors and dividend policy can effectively reduce the agency problems of shares used as collateral and thus can improve firm performance. [source] Bank Relationship and Firm Performance: Evidence From Thailand Before the Asian Financial CrisisJOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 9-10 2004Piman Limpaphayom Abstract: This study examines the relation between bank relations and market performance in Thailand, an economy in which commercial banks play a crucial role through lending relationship and, for a number of companies, equity ownership. Overall, bank relationships, both equity-based and debt-based, positively affect capital investment. However, there is a negative relation between lending relationships, both short-term and long-term, and market performance indicating that bank lending may not always be consistent with value maximization. There is also evidence of a positive marginal effect of bank monitoring through equity ownership on market performance. Further, the relation between bank equity ownership and market performance appears to be non-linear with a concave function. Ownership by corporate insiders is also negatively related to bank equity ownership. Overall, the findings highlight the detrimental effects of excessive short-term debt usage, one of the factors believed to contribute to the financial crisis in Thailand, and the marginal benefit of the equity-based relationship on firm value. [source] Firm Performance, Governance Structure, and Top Management Turnover in a Transitional Economy*JOURNAL OF MANAGEMENT STUDIES, Issue 6 2006Michael Firth abstract Recent research has argued that political and regulatory environments have a significant impact on corporate governance systems. In particular, countries with poor investor protection laws and weak law enforcement have low levels of corporate governance that manifests itself in substandard financial performance, management entrenchment, and the expropriation of minority shareholders. One implication of this research is that China will have poor corporate governance and entrenched managers as its legal system is relatively underdeveloped and inefficient. However, using data on top management turnover in China's listed firms, our results refute the prediction of entrenched management. We find evidence of very high turnover of company chairmen and there are many cases that we interpret to be forced departures. Our results show that chairman turnover is related to a firm's profitability but not to its stock returns. Turnover-performance sensitivity is higher if legal entities are major shareholders but the proportion of non-executive directors perversely affects it. We find no evidence that profitability improves after a change in chairman and this suggests that a firm's governance structure is ineffective as it is unable to recruit suitable replacements that can turn around its financial performance. [source] Managerial Behavior, Entrepreneurial Style, and Small Firm PerformanceJOURNAL OF SMALL BUSINESS MANAGEMENT, Issue 1 2003Eugene Sadler, Smith Considerable effort has been devoted to identifying the general characteristics of entrepreneur; however, much of this has been conducted from a trait,based rather than from a behavioral perspective. In this study of small firms in the United Kingdom, we explored the relationships among managerial behaviors (based upon a competence model), entrepreneurial style (based on Covin and Slevin's theory), and firm type (in terms of sales growth performance). Principal components analysis of a management competence inventory identified six broad categories of managerial behavior. Regressing a measure of entrepreneurial style on these six behaviors suggested that managing culture and managing vision are related to an entrepreneurial style, while managing performance is related to a nonentrepreneurial style. Entrepreneurial style,but not managerial behavior,was associated positively with the probability that a firm would be a high,growth type. The results are discussed from the perspective of a model of small firm management that posits separate entrepreneurial, nonentrepreneurial, and generic management behaviors derived from a global competence space. [source] R&D and Firm Performance in a Transition EconomyKYKLOS INTERNATIONAL REVIEW OF SOCIAL SCIENCES, Issue 4 2006Dirk Czarnitzki SUMMARY We estimate the effects of R&D on firms' credit ratings and on financial distress. The main purpose is the comparison of firms in Western Germany and Eastern Germany as a transitional economy. Innovative activity has a positive impact on firm value proxied by ratings in Western Germany, but a negative impact in Eastern Germany. We also consider future financial distress, and find that R&D in Eastern German firms leads to higher default risk. This stands in contrast to Western Germany where R&D enhances future performance. This result is highly politically relevant, since the high level of subsidies present in Eastern Germany may be subject to misallocation. [source] CEO Duality and Firm Performance during China's Institutional TransitionsMANAGEMENT AND ORGANIZATION REVIEW, Issue 2 2007Mike W. Peng abstract Does CEO duality , the practice of one person serving both as a firm's CEO and board chair , contribute to or inhibit firm performance? Agency theory suggests that CEO duality is bad for performance because it compromises the monitoring and control of the CEO. Stewardship theory, in contrast, argues that CEO duality may be good for performance due to the unity of command it presents. The empirical evidence, largely from developed economies, is largely inconclusive. This article joins the debate by extending empirical work to the largely unexplored context of institutional transitions. Our findings, based on an archival database covering 403 publicly listed firms and 1,202 company-years in China, offer stronger support for stewardship theory and relatively little support for agency theory. Finally, we also call for a contingency perspective to specify the nature of conditions such as resource scarcity and environmental dynamism under which CEO duality may be especially valuable. [source] Do Disability Laws Impair Firm Performance?AMERICAN BUSINESS LAW JOURNAL, Issue 1 2010Robert C. Bird First page of article [source] Rank-Order Tournaments and Incentive Alignment: The Effect on Firm PerformanceTHE JOURNAL OF FINANCE, Issue 3 2009JAYANT R. KALE ABSTRACT We investigate simultaneously the impact of promotion-based tournament incentives for VPs and equity-based (alignment) incentives for VPs and the chief executive officer (CEO) on firm performance. We find that tournament incentives, as measured by the pay differential between the CEO and VPs, relate positively to firm performance. The relation is more positive when the CEO nears retirement and less positive when the firm has a new CEO, and weakens further when the new CEO is an outsider. Our analysis is robust to corrections for endogeneity of all our incentive measures and to several alternative measures of tournament incentives and firm performance. [source] Equity-Based Compensation for Employees: Firm Performance and DeterminantsTHE JOURNAL OF FINANCIAL RESEARCH, Issue 1 2004Melissa B. Frye Abstract I examine the effect of employee equity-based compensation (EBC) on firm performance and the determinants of EBC. Using two samples, I find that firms have come to rely more heavily on EBC than in the past. For both samples, I document a significant, positive relation between Tobin's q and the percentage of employee compensation that is equity based. For accounting returns, I find a positive relation with the earlier sample. However, for the later sample I find that greater use of EBC leads to lower levels of future accounting returns. I also find that the determinants of the proportion of EBC are different between the two samples. [source] CEO Power and Firm Performance: A Test of the Life-Cycle Theory,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 1 2009Maretno A. Harjoto Abstract We examine the effects of corporate governance and monitoring mechanisms on the choice of board leadership structure and the value and performance of a firm according to the firm's life-cycle changes. Employing a large and extensive sample during the 1995,2005 period, we find that the board leadership choice is associated with governance characteristics including board independence, managerial entrenchment, and CEO abilities measured by CEO age and CEO tenure after controlling for various firm characteristics. In addition, after correcting for the endogenous treatment effect, our results show that while CEO dualities-i.e., CEO-chair of the board or CEO-nomination committee member , or CEO pluralities-i.e., CEO-chair of the board, and a chair or a member of the nomination committee-positively influences firm value and performance in firm's early stage, CEO duality or CEO pluralities adversely influences firm value and operating performance in firm's late stage. These results are supportive of the life-cycle theory, suggesting that CEO power concentration is beneficial in firms' early stage, but harmful in firm's late stage at which firms require check-and-balance as opposed to dictatorship. In addition, the impact of external monitoring by institutional ownership on firm value and performance is more effective than those of independent board and blockholders' ownership while the impact of Sarbane-Oxley Act on firm performance is not significant. [source] Updating the Determinants of Firm Performance: Estimation using the 1998 UK Workplace Employee Relations SurveyBRITISH JOURNAL OF INDUSTRIAL RELATIONS, Issue 3 2001John T. Addison We examine the determinants of establishment performance in the UK, using cross-sectional data from the 1998 Workplace Employee Relations Survey to replicate research by Fernie and Metcalf (1995) who used data from the 1990 Workplace Employee Relations Survey; specifically, we test whether employee representation, contingent pay and efforts to boost employee participation affect a set of economic and industrial relations outcome indicators in the manner they suggest. We also re-estimate the influential WERS90-based study of Machin and Stewart (1996) on the links between union status and financial performance. In both cases we report very different results. [source] Worker Participation and Firm Performance: Evidence from Germany and BritainBRITISH JOURNAL OF INDUSTRIAL RELATIONS, Issue 1 2000John Addison The Freeman,Lazear works council/worker involvement model is assessed over two distinct industrial relations regimes. In non-union British establishments our measures of employee involvement are associated with improved economic performance, whereas for unionized plants negative results are detected. The suggestion is that local distributive bargaining can cause the wrong level of worker involvement to be chosen. Also consistent with the model is our finding that mandatory works councils do not impair, and may even improve, the performance of larger German establishments. Yet smaller plants with works councils under-perform, illustrating the problem of tailoring mandates to fit heterogeneous populations. [source] The Impact of Board Independence and CEO Duality on Firm Performance: A Quantile Regression Analysis for Indonesia, Malaysia, South Korea and ThailandBRITISH JOURNAL OF MANAGEMENT, Issue 3 2010Dendi Ramdani We study the effect of board independence and CEO duality on firm performance for a sample of stock-listed enterprises from Indonesia, Malaysia, South Korea and Thailand, applying quantile regression. Quantile regression is more powerful than classical linear regression since quantile regression can produce estimates for all conditional quantiles of the distribution of a response variable, whereas classical linear regression only estimates the conditional mean effects of a response variable. Moreover, quantile regression is better able to handle violations of the basic assumptions in classical linear regression. Our empirical evidence shows that the effect of board independence and CEO duality on firm performance is different across the conditional quantiles of the distribution of firm performance, something classical linear regression would leave unidentified. This finding suggests that estimating the quantile effect of a response variable can well be more insightful than estimating only the mean effect of the response variable. Additionally, we find a negative moderating effect of board size on the positive relationship between CEO duality and firm performance. [source] International Diversification, Business Group Affiliation and Firm Performance: Empirical Evidence from India,BRITISH JOURNAL OF MANAGEMENT, Issue 2 2009Ajai S. Gaur We investigate the impact of business group affiliation on the relationship between international diversification and firm performance for emerging economy firms. We develop the theoretical arguments based on an integration of the literature on international diversification with the institutional theory perspective. We argue for a U-shaped relationship between international diversification and firm performance, and suggest that a firm's affiliation to a business group moderates the relationship between international diversification and firm performance. Based on a sample of Indian firms, we find that firm performance is positively related to the degree of internationalization, while business group affiliation reduces the positive effect of internationalization on firm performance. [source] Sourcing Strategy, Supplier Relationships and Firm Performance: An Empirical Investigation of UK OrganizationsBRITISH JOURNAL OF MANAGEMENT, Issue 2 2007Paul D. Cousins This article conceptualizes and empirically examines buyer,supplier relationships in respect of supply sourcing strategies, relationship characteristics and firm performance. Two sourcing strategies available to organizations are examined, critical and leverage, which in turn, influence the approach to managing the supplier relationship (arms-length or collaborative). We argue that different relationship approaches are appropriate to achieving different performance outcomes. A structural equation model, using a sample of 142 manufacturing firms based in the United Kingdom, is used to test this hypothesized model. The results indicate that a critical sourcing strategy requires collaborative supplier relationships in order to achieve higher relationship and business outcomes, while leverage sourcing strategies have a direct impact on these same performance outcomes. In addition, a leverage strategy was associated with increased levels of supplier power, though this power was found not to have a significant effect on performance. Our study provides support for the importance of aligning sourcing strategies to particular supplier relationship approaches in order to improve firm performance. Managerial implications of these findings and future directions for research are then offered. [source] From State to State: Quasi-privatization and Firm PerformanceCHINA AND WORLD ECONOMY, Issue 5 2009Kun Wang G32; G34; G38 Abstract This paper uses a sample of Chinese listed companies whose controlling shareholders have changed from government agencies to state-owned enterprises (SOEs), to examine whether reducing government intervention while maintaining government's ultimate control could improve firm performance. The results show that the overall performance of these firms improves after the transfer of their controlling shareholders, due to improvements in both operating and non-operating performance. When we separate all samples into solely SOEs and other SOEs based on the controlling shareholder, we find that operating performance improved significantly in the solely SOE group, whereas non-operating performance improved significantly in the SOE group. In addition, we identify sources of performance improvement from two perspectives: corporate governance and related party transactions. The results imply that the Chinese Government should continue to decentralize control and, at the same time, continue to monitor firm operating efficiency. [source] Optimal Board Monitoring in Family-owned Companies: Evidence from AsiaCORPORATE GOVERNANCE, Issue 1 2010En-Te Chen ABSTRACT Manuscript Type: Empirical Research Question/Issue: We propose that high levels of monitoring are not always in the best interests of minority shareholders. In family-owned companies the optimal level of board monitoring required by minority shareholders is expected to be lower than that of other companies. This is because the relative benefits and costs of monitoring are different in family-owned companies. Research Findings/Insights: At moderate levels of board monitoring, we find concave relationships between board monitoring variables and firm performance for family-owned companies but not for other companies. The optimal level of board monitoring for our sample of Asian family-owned companies equates to board independence of 38 per cent, separation of the chairman and CEO positions, and establishment of audit and remuneration committees. Additional testing shows that the optimal level of board monitoring is sensitive to the magnitude of the agency conflict between the family group and minority shareholders and the presence of substitute monitoring. Theoretical/Academic Implications: This study shows that the effect of additional monitoring on agency costs and firm performance differs across firms with different ownership structures. Practitioner/Policy Implications: For policymakers, the results show that more monitoring is not always in the best interests of minority shareholders. Therefore, it may be inappropriate for regulators to advise all companies to follow the same set of corporate governance guidelines. However, our results also indicate that the board governance practices of family-owned companies are still well below the identified optimal levels. [source] Business Group Affiliation, Firm Governance, and Firm Performance: Evidence from China and IndiaCORPORATE GOVERNANCE, Issue 4 2009Deeksha A. Singh ABSTRACT Manuscript Type: Empirical Research Question/Issue: This study seeks to understand how business group affiliation, within firm governance and external governance environment affect firm performance in emerging economies. We examine two aspects of within firm governance , ownership concentration and board independence. Research Findings/Insights: Using archival data on the top 500 Indian and Chinese firms from multiple data sources for 2007, we found that group affiliated firms performed worse than unaffiliated firms, and the negative relationship was stronger in the case of Indian firms than for Chinese firms. We also found that ownership concentration had a positive effect on firm performance, while board independence had a negative effect on firm performance. Further, we found that group affiliation , firm performance relationship in a given country context was moderated by ownership concentration. Theoretical/Academic Implications: This study utilizes an integration of agency theory with an institutional perspective, providing a more comprehensive framework to analyze the CG problems, particularly in the emerging economy firms. Empirically, our findings support, as well as contradict, some of the conventional wisdom, and suggest useful avenues for future research. Practitioner/Policy Implications: This study shows that reforms in general and CG reforms in particular are effective in emerging economies, which is an encouraging sign for policy makers. However, our research also suggests that it may be time for India and China to stop the encouragement for the empire building through group formation in the corporate world. For practioners, our findings suggest that firms need to balance the need for oversight with the need for advice, while selecting independent directors. [source] Corporate Boards and Company Performance: review of research in light of recent reformsCORPORATE GOVERNANCE, Issue 5 2007David Finegold Recent US corporate governance reforms introduced extensive regulations and guidelines for public corporations, particularly corporate boards. This article evaluates the extent to which empirical research on corporate boards and firm performance supports these reforms. Building on the meta-analysis conducted by Zahra and Pearce (1989), we review 105 studies published between 1989 and 2005. We find most of the practices mandated by the Sarbanes-Oxley Act of 2002, and the regulations issued by the New York Stock Exchange (NYSE) and the NASDAQ, had not been subject to prior study. Where board characteristics have been studied, we find limited guidance for policymakers on identifying governance practices that result in more effective firm performance. In an effort to increase the relevance of future research on boards and firm performance, we provide a framework on corporate boards. [source] Where is Independent Director Efficacy?CORPORATE GOVERNANCE, Issue 4 2007Chin-Jung Luan Theoretically and empirically, the linkage between outside directors and firm performance is not conclusive in previous studies. We suspect that the mixed results are due to the failure to meet the requirements of the independence of outside directors. As the Taiwanese government has a rigorous definition of outside director independence, we employ a data set from Taiwan to test the impact of independent outside director assignment on a firm's performance. Our findings suggest that after controlling for a firm's past performance, independent outside director appointments do have a significantly positive impact on a firm's performance, and outperforming firms may have better performance but not significantly when assigning outside directors due to their absorptive capacity. [source] Corporate Governance and Firm Performance: the effects of regulation and competitivenessCORPORATE GOVERNANCE, Issue 2 2007Krishna Udayasankar We propose that the extent to which regulation and competitiveness play a role in the country environment has a complex, interactive effect on the relationship between corporate governance and firm performance. Using an analytical method, we develop an algorithm to express these effects, and offer proofs to show that our algorithm meets central conditions that are identified based on extant research findings in this domain. An illustration traces the performance of firms with different corporate governance standards across various environmental conditions. [source] Does female board representation influence firm performance?CORPORATE GOVERNANCE, Issue 2 2007The Danish evidence Board diversity has become a major issue within corporate governance where a number of studies seek to explore the impact of diversity on firm performance. The debate focuses on questions such as whether a corporation's board should reflect the firm's stakeholders or be more in line with society in general. This article uses a sample of listed Danish firms during the period of 1998,2001 in a cross sectional analysis. Despite that fact that Denmark has gone very far in the liberalisation of women, Danish board rooms are still to a large extent dominated by men. Contrary to a number of other studies, this article does not find any significant link between firm performance as measured by Tobin's Q and female board representation. This is also the case for board members' educational background as well as the proportion of foreigners. It is argued that board members with an unconventional background are socialised unconsciously adopting the ideas of the majority of conventional board members, which entails that a potential performance effect does not materialise. [source] Ownership Concentration and Corporate Performance on the Budapest Stock Exchange: do too many cooks spoil the goulash?CORPORATE GOVERNANCE, Issue 2 2005John S. Earle We examine the impact of ownership concentration on firm performance using panel data for firms listed on the Budapest Stock Exchange, where ownership tends to be highly concentrated and frequently involves multiple blocks. Fixed-effects estimates imply that the size of the largest block increases profitability and efficiency strongly and monotonically, but the effects of total blockholdings are much smaller and statistically insignificant. Controlling for the size of the largest block, point estimates of the marginal effects of additional blocks are negative. The results suggest that the marginal costs of concentration may outweigh the benefits when the increased concentration involves "too many cooks". [source] The Impact of the Roles, Structure and Process of Boards on Firm Performance: evidence from TurkeyCORPORATE GOVERNANCE, Issue 2 2005Veysel Kula This study aims at investigating the impact of the roles, structure and process of boards on performance of Turkish companies. Drawing on the data obtained from a sample of 386 mostly small and non-listed stock ownership companies, it was found that the separation of chairman and general manager positions has significant positive impact on firm performance. From the board roles of control, service and resource acquisition, firm performance was found to be positively related only to the level of adoption of resource acquisition role. It was also found that the effectiveness, information access and performance evaluation attributes of boards are positively and significantly associated with firm performance. [source] | |||||||||||||||||||||||||||||||||||||||||||