Estimating the effect of chemical safety standards on firm performance in Malaysia and Vietnam

This paper uses firm-level data to examine the impact of chemical safety regulations imposed by importing countries such as RoHS and REACH on the production costs and export performance of firms in Malaysia and Vietnam. We find that in addition to the initial setup costs for compliance, EU RoHS and REACH implementation causes firms to incur additional variable production costs by requiring additional labor and capital expenditures of around 12% of the variable costs, respectively. We also find that compliance with RoHS and REACH significantly increases the probability of export. Furthermore, we find that compliance with EU RoHS and REACH helps firms to penetrate into a greater variety of countries. Also, we find that multinational enterprises and firms participating in global value chains generally exhibit better export performance and their costs rise less steeply.

Does institutional quality affect firm performance? Insights from a semiparametric approach

Using a novel modeling approach, and cross-country firm level data for the textiles industry, we examine the impact of institutional quality on firm performance. Our methodology allows us to estimate the marginal impact of institutional quality on productivity of each firm. Our results bring into question conventional wisdom about the desirable characteristics of market institutions, which is based on empirical evidence about the impact of institutional quality on the average firm. We demonstrate, for example, that once both the direct impact of a change in institutional quality on total factor productivity and the indirect impact through changes in efficiency of use of factor inputs are taken into account, an increase in labor market rigidity may have a positive impact on firm output, at least for some firms. We also demonstrate that there are significant intra-country variations in the marginal impact of institutional quality, such that the characteristics of “winners” and “losers” will have to be taken into account before policy is introduced to change institutional quality in any direction.

Red capitalists:political connections and firm performance in China

Using a unique firm level data, this paper analyses the role of political connections in the post-entry performance of private start-up companies in China. It documents robust evidence that political affiliation enhances firms' survival and growth prospects. But interestingly politically neutral start-ups enjoy faster productivity improvements conditional on survival. In addition, the benefits of political connections are largely confined to firms associated with local or top level governments, and they are more pronounced in capital-intensive industries. We conclude that the close association between the state and a segment of the business community is leading to sub-optimal resource allocation in the economy by interfering with the process of market selection.

Business model evolution and firm performance of entrepreneurial companies

This research explores the business model (BM) evolution process of entrepreneurial companies and investigates the relationship between BM evolution and firm performance. Recently, it has been increasingly recognised that the innovative design (and re-design) of BMs is crucial to the performance of entrepreneurial firms, as BM can be associated with superior value creation and competitive advantage. However, there has been limited theoretical and empirical evidence in relation to the micro-mechanisms behind the BM evolution process and the entrepreneurial outcomes of BM evolution. This research seeks to fill this gap by opening up the ‘black box’ of the BM evolution process, exploring the micro-patterns that facilitate the continuous shaping, changing, and renewing of BMs and examining how BM evolutions create and capture value in a dynamic manner. Drawing together the BM and strategic entrepreneurship literature, this research seeks to understand: (1) how and why companies introduce BM innovations and imitations; (2) how BM innovations and imitations interplay as patterns in the BM evolution process; and (3) how BM evolution patterns affect firm performances. This research adopts a longitudinal multiple case study design that focuses on the emerging phenomenon of BM evolution. Twelve entrepreneurial firms in the Chinese Online Group Buying (OGB) industry were selected for their continuous and intensive developments of BMs and their varying success rates in this highly competitive market. Two rounds of data collection were carried out between 2013 and 2014, which generates 31 interviews with founders/co-founders and in total 5,034 pages of data. Following a three-stage research framework, the data analysis begins by mapping the BM evolution process of the twelve companies and classifying the changes in the BMs into innovations and imitations. The second stage focuses down to the BM level, which addresses the BM evolution as a dynamic process by exploring how BM innovations and imitations unfold and interplay over time. The final stage focuses on the firm level, providing theoretical explanations as to the effects of BM evolution patterns on firm performance. This research provides new insights into the nature of BM evolution by elaborating on the missing link between BM dynamics and firm performance. The findings identify four patterns of BM evolution that have different effects on a firm’s short- and long-term performance. This research contributes to the BM literature by presenting what the BM evolution process actually looks like. Moreover, it takes a step towards the process theory of the interplay between BM innovations and imitations, which addresses the role of companies’ actions, and more importantly, reactions to the competitors. Insights are also given into how entrepreneurial companies achieve and sustain value creation and capture by successfully combining the BM evolution patterns. Finally, the findings on BM evolution contributes to the strategic entrepreneurship literature by increasing the understanding of how companies compete in a more dynamic and complex environment. It reveals that, the achievement of superior firm performance is more than a simple question of whether to innovate or imitate, but rather an integration of innovation and imitation strategies over time. This study concludes with a discussion of the findings and their implications for theory and practice.

Green supply chain management practices and firm performance: evidence from Finland

In order to address the increasing stakeholder requirements for environmentally sustainable products and processes, firms often need the participation of their supply chain partners. Green supply chain management has emerged as a set of managerial practices that integrate environmental issues into supply chain management. If implemented successfully, green supply chain management can be a way to achieve competitive advantage while enhancing the environmental sustainability of the firm. The overall purpose of this dissertation is to contribute to the discussion on green supply chain management practices from the perspective of their drivers and performance implications. The theoretical background arises from the literature on competitive strategy, firm performance and green supply chain management. The research questions are addressed by analysing firm-level data from manufacturing, trading and logistics firms operating in Finland. The empirical data comes from two consecutive Finland State of Logistics surveys in 2012 and 2014, combined with financial reporting data from external databases. The data is analysed with multiple statistical methods. First, the thesis contributes to the discussion of the drivers of GSCM practices. To enhance the understanding of the relationship between competitive strategy and GSCM practices, a conceptual tool to describe generic competitive strategy approaches was developed. The findings suggest that firms pursuing marketing differentiation are more likely to be able to compete by having only small environmental effects and by adopting a more advanced form of external green supply chain management, such as a combination of strong environmental collaboration and the increased environmental monitoring of suppliers. Furthermore, customer requirements for environmental sustainability are found to be an important driver in the implementation of internal GSCM practices. Firms can respond to this customer pressure by passing environmental requirements on to their suppliers, either through environmental collaboration or environmental monitoring. Second, this thesis adds value to the existing literature on the effects of green supply chain management practices on firm performance. The thesis provides support for the idea that there is a positive relationship between GSCM practices and firm performance and enhances the understanding of how different types of GSCM practices are related to 1) financial, 2) operational and 3) environmental performance in manufacturing and logistics. The empirical results suggest that while internal GSCM practices have the strongest effect on environmentalperformance, environmental collaboration with customers seems to be the most effective way to improve financial performance. In terms of operational performance, the findings were more mixed, suggesting that the operational performance of firms is more likely to be affected by firm characteristics than by the choices they make regarding their environmental collaboration. This thesis is also one of the first attempts to empirically analyse the relationship between GSCM practices and performance among logistics service providers. The findings also have managerial relevance. Management, especially in manufacturing and logistics industries, may benefit by gaining knowledge about which types of GSCM practice could provide the largest benefits in terms of different performance dimensions. This thesis also has implications for policy-makers and regulators regarding how to promote environmentally friendly activities among 1) manufacturing; 2) trading; and 3) logistics firms.

Do board contacts matter? : an analysis of the relationship between boards of directors’ ties and the performance of Australia’s largest companies.

Boards of directors are thought to provide access to a wealth of knowledge and resources for the companies they serve, and are considered important to corporate governance. Under the Resource Based View (RBV) of the firm (Wernerfelt, 1984) boards are viewed as a strategic resource available to firms. As a consequence there has been a significant research effort aimed at establishing a link between board attributes and company performance. In this thesis I explore and extend the study of interlocking directorships (Mizruchi, 1996; Scott 1991a) by examining the links between directors’ opportunity networks and firm performance. Specifically, I use resource dependence theory (Pfeffer & Salancik, 1978) and social capital theory (Burt, 1980b; Coleman, 1988) as the basis for a new measure of a board’s opportunity network. I contend that both directors’ formal company ties and their social ties determine a director’s opportunity network through which they are able to access and mobilise resources for their firms. This approach is based on recent studies that suggest the measurement of interlocks at the director level, rather than at the firm level, may be a more reliable indicator of this phenomenon. This research uses publicly available data drawn from Australia’s top-105 listed companies and their directors in 1999. I employ Social Network Analysis (SNA) (Scott, 1991b) using the UCINET software to analyse the individual director’s formal and social networks. SNA is used to measure a the number of ties a director has to other directors in the top-105 company director network at both one and two degrees of separation, that is, direct ties and indirect (or ‘friend of a friend’) ties. These individual measures of director connectedness are aggregated to produce a board-level network metric for comparison with measures of a firm’s performance using multiple regression analysis. Performance is measured with accounting-based and market-based measures. Findings indicate that better-connected boards are associated with higher market-based company performance (measured by Tobin’s q). However, weaker and mostly unreliable associations were found for accounting-based performance measure ROA. Furthermore, formal (or corporate) network ties are a stronger predictor of market performance than total network ties (comprising social and corporate ties). Similarly, strong ties (connectedness at degree-1) are better predictors of performance than weak ties (connectedness at degree-2). My research makes four contributions to the literature on director interlocks. First, it extends a new way of measuring a board’s opportunity network based on the director rather than the company as the unit of interlock. Second, it establishes evidence of a relationship between market-based measures of firm performance and the connectedness of that firm’s board. Third, it establishes that director’s formal corporate ties matter more to market-based firm performance than their social ties. Fourth, it establishes that director’s strong direct ties are more important to market-based performance than weak ties. The thesis concludes with implications for research and practice, including a more speculative interpretation of these results. In particular, I raise the possibility of reverse causality – that is networked directors seek to join high-performing companies. Thus, the relationship may be a result of symbolic action by companies seeking to increase the legitimacy of their firms rather than a reflection of the social capital available to the companies. This is an important consideration worthy of future investigation.

“Entrepreneurial management” as a strategic choice in firm behavior : linking it with performance

Establishing the core principals of “entrepreneurial management” within an organization describes a certain strategic choice that affects a company in six dimensions, according to Stevenson (1983). Our aim is to empirically measure entrepreneurial management (it’s existence and degree) and to link this measured strategic choice (for or against) entrepreneurial management with firm performance. Our argument here is that companies that follow core principals of entrepreneurial management should outperform other more administrative firms in certain measures of strategic performance. This paper builds on an empirical investigation published by Brown, Davidson & Wiklund (2001), who have developed and tested a reliable measurement instrument for Stevenson’s definition of “entrepreneurial management” (Stevenson 1983, Stevenson & Jarillo 1990). In the first part of our paper we aim to replicate and to some extent improve this study. In the second part we link the measured degree of “entrepreneurial management” with firm performance. To our knowledge, even so Stevenson’s definition of entrepreneurial management is commonly acknowledged and Brown et al. (2001) developed a reliable instrument to empirically capture this behavioral approach to management, the construct of entrepreneurial management never before has been linked to firm performance in an empirical study. Since most papers on corporate entrepreneurship and firm performance are based on Covin & Slevin’s (1991) or Miller’s (1983) concept of entrepreneurial orientation, we contribute to the literature on corporate entrepreneurship in a novel way, given the fact that the entrepreneurial management dimensions measured in our study can theoretically and empirically be clearly distinguished from the construct of entrepreneurial orientation as defined by Covin & Selvin (1991).

An examination of the critical resources and internet capabilities for leveraging global performance in international entrepreneurial firms

This PhD research investigates the critical resources and Internet capabilities utilized by firms for leveraging global performance in entrepreneurial firms. Firm resources have been identified as important firm assets, which contribute to the firm's competitive global position. The Internet is a critical resource for a new generation of small and medium sized enterprise (SME) in pursuing international opportunities. By facilitating international business, the Internet has the ability to increase the quality and speed of communications, lower transaction costs, and facilitate the development of networks. Despite the increasing numbers of firms utilizing the Internet to pursue international opportunities, limited research remains. Adopting multiple case study methodology and structural equation modelling, the research identified the firm-level resources, which coincide with capabilities in a model predicting how international performance in firms is achieved.

Understanding financial information used to assess small firm performance : an Australian qualitative study

Purpose The purpose of this paper is to investigate the reality of financial and management accounting in a small group of small firms. Specifically, from the owner's perspective, an exploration is undertaken to see what financial information is collected, how it is used (or not) to make business decisions and evaluate the firm's performance, and the role played by the accountant in that process. Design/methodology/approach A phenomenological paradigm underpins this exploratory study. Semi‐structured interviews were undertaken with the owners of ten small firms, where the focus was on understanding what happens in an organisational setting, as opposed to theory and textbook practice. Findings The qualitative data supported prior research in other countries. The in‐depth analysis revealed a very basic understanding of accounting information and problems with the financial literacy amongst these small firm owners. Accounting reports were not widely produced or used, so an informal assessment, such as how much cash was in the bank, was the primary means of assessing business performance. Accountants were used for taxation services, although some owners sought more general business advice. Originality/value An understanding is developed of why there might be a gap between textbook rhetoric and reality of accounting practice in small firms. The conclusion is that accounting textbooks need to include more information about the reality of financial management in small firms.

Corporate fraud culture: Re-examining the corporate governance and performance relation

We analyse the corporate governance and performance relation, when conditioning on corporate fraud, for fraud firms during 2000 – 2007. Fraud firms are identified as either self- reported fraud events, or subject to regulatory investigation. We use the inverse Mills ratio procedure to account for firms' (unobservable) fraud culture in the dynamic system GMM model of the performance- governance relation. We find that corporate governance is an endogenously determined characteristic that has no causal impact on firm performance when conditioning on fraud. Fraud is a significant regulatory event but its overall economic impact at the firm level is highly variable.

Ireland's Innovation Performance: 1991-2005

In this paper we use data from the five waves of the Irish Innovation Panel (IIP) to profile the innovation performance of manufacturing plants in Ireland and Northern Ireland over the period 1991 to 2005. Despite considerable public sector investment on both sides of the border levels of innovation activity have remained broadly similar throughout this period although somewhat different trends are evident in Ireland and Northern Ireland. In terms of product innovation for example, the proportion of manufacturing plants making product changes has increased 5 per cent in Ireland and just over 7 per cent in Northern Ireland. In terms of process innovation a decline of almost 7 per cent in Ireland has been accompanied by a 7 per cent increase in Northern Ireland. These trends provide some evidence of convergence in innovation performance over the 1991 to 2005 period. This is evident in the narrowing gap between the proportion of product innovators in Ireland and Northern Ireland, convergence in the proportion of plants undertaking process innovation and in terms of the increasingly similar proportions of sales derived from innovative products. Looking in more detail at the determinants of manufacturing innovation emphasises the importance of R&D and backwards supply chain linkages as sources of new knowledge for innovation. Other external linkages prove less important suggesting the value of policy initiatives designed to promote knowledge sharing. We also find a significant negative innovation effect from legislative restrictions on plants’ product innovation. Public support for both product and process innovation are having positive effects on innovation outputs at the level of the individual plant. Future research interest centres on the contrast between this strong positive result at firm level and the more modest increases in innovation among the population of firms in Ireland and Northern Ireland.

The motives and performance of cross-border acquirers from emerging economies: Comparison between Chinese and Indian firms

During the recent decade, the world has witnessed the rapid growth of MNEs from emerging economies. Their increasing participation in cross-border mergers and acquisitions has raised great attention in the extant literature. This study evaluates the value creation from these cross-border transactions from two representative emerging countries, namely China and India, and determines factors that result in the different performance of these international acquisition activities. Cross-border acquisitions conducted by these countries’ companies indeed lead to significant shareholder wealth creation. Furthermore, Indian shareholders are more likely to benefit from deals in small cultural distance countries, while Chinese investors gain from the cross-border expansion of manufacturing companies. Location also affects the performance of cross-border acquisitions, with acquisitions into developed countries generating higher returns to shareholders. Our sample consists of 203 Indian and 63 Chinese cross-border deals over the period 2000–2010 and our results hold after controlling for various deal-level and firm-level characteristics.

Corporate responsibility, supply chain partnership and performance: An empirical examination

Unlike corporate and business levels, there is little research examining corporate responsibility (CR) at the functional level of the firm including supply chain strategy. The results of a firm-level survey show that CR internal awareness, and monitoring CR performance are positively related to the supply chain partnership approach, however sharing CR best practices is negatively associated. Furthermore, the impact of CR on firm performance is mediated by the functional behaviour of supply chain partnership formation. Our study provides support for including CR awareness building and monitoring in the development of partnerships but cautions against imposing CR best practices on suppliers.

Supply management capabilities, routine bundles and their impact on firm performance

Despite the generally positive contribution of supply management capabilities to firm performance their respective routines require more depth of assessment. Using the resource-based view we examine four routines bundles comprising ostensive and performative aspects of supply management capability – supply management integration, coordinated sourcing, collaboration management and performance assessment. Using structural equation modelling we measure supply management capability empirically as a second-order latent variable and estimate its effect on a series of financial and operational performance measures. The routines-based approach allows us to demonstrate a different, more fine-grained approach for assessing consistent bundles of homogeneous patterns of activity across firms. The results suggest supply management capability is formed of internally consistent routine bundles, which are significantly related to financial performance, mediated by operational performance. Our results confirm an indirect effect of firm performance for ‘core’ routines forming the architecture of a supply management capability. Supply management capability primarily improves the operational performance of the business, which is subsequently translated into improved financial performance. The study is significant for practice as it offers a different view about the face-valid rationale of supply management directly influencing firm financial performance. We confound this assumption, prompting caution when placing too much importance on directly assessing supply management capability using financial performance of the business.

Demand and supply: price elasticities and corporate performance in the UK

This paper investigates the relationship between consumer demand and corporate performance in several consumer industries in the UK, using two independent datasets. It uses data on consumer expenditures and the retail price index to estimate Almost Ideal Demand Systems on micro-data and compute timevarying price elasticities of demand for disaggregated commodity groups. Then, it matches the product definitions to the Standard Industry Classification and uses the estimated elasticities to investigate the impact of consumer behaviour on firm-level profitability equations. The time-varying household characteristics are ideal instruments for the demand effects in the firms' supply equation. The paper concludes that demand elasticities have a significant and tangible impact on the profitability of UK firms and that this impact can shed some light on the relationship between market structure and economic performance.