Search

This study investigated the effect of corporate governance information (CGI) disclosure on profitability of firms listed in the Dar es Salaam Stock Exchange (DSE). 21 listed companies were studied for a period ranging from 2006 to 2021 using a mixed research method with an explanatory sequential design. Return on equity (ROE) and Return on Assets (ROA) were employed as dependent variables in the panel data analysis. CGI disclosure was an independent variable. Geographical diversification, firm age, firm size, and sales growth were the control variables. Secondary data was obtained from DSE. Qualitative data was gathered via semi-structured interviews. Thematic analysis and a random effect model with two estimates (1 and 2) were utilized to analyze qualitative and quantitative data respectively. The findings suggested that there was a positive and significant effect of CGI disclosure on firm profitability. The findings adds to the body of knowledge by signifying stakeholder’s theory. The study concluded that Disclosure of CGI may undeniably result in increased profitability. We recommended that firm managers should pay a closer look at CGI disclosure, enhance their disclosure practices, and invest in disclosure strategies that will benefit stakeholders.

Research Summary Extant empirical work partitioning the variance in firm (business segment) profitability has identified industry, corporate parent, business segment, and time as key sources. However, this variance decomposition research stream has treated firms as atomistic, autonomous entities. We employ a fast-unfolding community-detection algorithm to detect firms' network memberships and use the Shapley Value method to isolate the effect of the firm's alliance network, in addition to industry, corporate parent, business segment, and year effects, on the variance in business unit performance. Our findings demonstrate that the effect of the firm's alliance network explains 11% of the variance in firm ROA among 16,381 business segments from 1979 through 1996. We also extend the time period through 2018 and find that our results broadly hold. Managerial Summary In the search for superior firm performance, managers typically focus their attention externally on profitable industries in which to operate, as well as internally on their firms' idiosyncratic and valuable resources and capabilities. In addition to these profitability sources, our work suggests another important, but heretofore overlooked, factor in the managerial quest for competitive advantage: the value-creating potential of alliance networks. We employ a machine-learning algorithm to detect firms' network memberships. Our findings indicate that as much as 11% of the variance in firm profitability (ROA) is explained by the network of alliances of which the firm is a part. Our study also implies that the emphasis on networks continues to be relevant in a technology age in which industry boundaries are blurring. Published version

The purpose of this paper is to explore the impact of inventory turnover on the profitability level of Saudi manufacturers. The data comprises 78 manufacturers listed on the Saudi Stock Exchange and was used to test the research hypothesis. The related data over the 2017–2021 period were collected from annual reports and the Datastream database. After running a multiple regression analysis with a fixed effects model, findings showed that the higher the inventory turnover ratio, the higher the cost which could be suppressed, and the greater the profitability of a company. The outcomes of this study have significant implications for managerial accounting issues in the setting of Saudi Arabia. Further, they provide policy recommendations to decision makers and assist managers in enhancing sustainability in the manufacturing sector. This research is the first to investigate this relationship including the impact of COVID-19 among Saudi companies in several industries, thus filling a gap in comparable research.

This paper aims to study the performance implications of sustainable product attributes (SPA) of US manufacturing firms. Specifically, it analyzes the influence of aggregate and disaggregated SPA on firm profitability. The study further explores the moderating influence of marketing resource intensity on aggregate and disaggregated SPA and firm profitability relationships. The fixed-effect regression analysis of 433 US manufacturing firms’ panel dataset reveals that aggregate and disaggregated SPA positively influence the firm profitability. The moderation analysis also confirms the positive influence of marketing resource intensity on aggregate and disaggregated SPA and firm profitability relationship. The current paper contributes to the triple-bottom-line and theory-of-the-firm literature streams by empirically studying the influence of aggregate and disaggregated SPA on firm profitability. Furthermore, this study uses the resource-based view to complement theory-of-the-firm model of SPA and empirically study the moderating role of marketing resource intensity between aggregate and disaggregated SPA and firm profitability. Finally, the findings inform the managers of the increased firm profitability by aggregate and disaggregated SPA, and the pivotal role of marketing resource intensity in strengthening the positive influence of aggregate and disaggregated SPA on US manufacturing firms’ profitability.

Sustainable product development is an emerging research domain at the outset of contemporary climate change issues. Increasing customer demand for sustainable product attributes has set a challenge for firms to develop products carrying environmental and social attributes. In this regard, taking corporate social responsibility (CSR) initiatives is one potential option for sustainable product development. However, uncertainties and crises (such as the global financial crisis and the most recent Covid19 pandemic) left the firms in despair by lowering their liquidity levels. Consequently, firms are facing resource constraints. Therefore, to pursue sustainability objectives, firms are looking for ways to develop sustainable products, and with a balance between environmental and social pillars of sustainability. In the above-stated context, research exploring the possibility of pursuing sustainability objectives is much needed. The existing literature of product sustainability is developed around the environmental pillar. Hence, research studying determinants and performance outcomes of all-inclusive sustainable product development is scarce. Therefore, to fill this gap, this dissertation based on three research articles present an analysis of the potential role of research and development (R&D), human capital, and corporate social responsibility strategy (CSRS) in the sustainable product attributes (SPA) development and its performance outcome in a way that contributes to theoretical implications and suggests managers the ways to develop sustainable products in the ongoing Covid19 pandemic. A research sample of 433 United States (US) manufacturing industry firms spanning 16 years-period (2002–2017) is used to investigate the conceptual framework of this dissertation research. Firstly, this dissertation research contributes to triple-bottom-line-based sustainability literature by conceptualizing and operationalizing the sustainable product attributes construct. Secondly, this research contributes to R&D literature by studying it under the knowledge-based view and extending its implications to (aggregate and disaggregated) sustainable product development. Thirdly, this research provides coherence to R&D contribution in (aggregate and disaggregated) sustainable product development by studying the human capital complementarity in R&D. Fourthly, this research contributes to CSRS literature by studying it with (aggregated and disaggregated) sustainable product development under the theory-of-the-firm perspective. Fifthly, this research contributes to the SPA-performance literature stream by studying the (aggregate and disaggregated) SPA’s contribution to export performance and firm profitability of US manufacturing industry firms. Lastly, this research contributes to SPA-performance literature by studying the moderating role of marketing resource intensity. Tiivistelmä Ilmastonmuutos on nostanut kestävän tuotekehityksen tieteellisen tutkimuksen keskiöön. Asiakkaiden kasvava kysyntä kestäville tuoteominaisuuksille on haastanut yritykset kehittämään tuotteita, jotka sisältävät ympäristön ja sosiaalisen kehityksen näkökulmista kestäviä ominaisuuksia. Tässä mielessä yritysten yhteiskuntavastuulliset (CSR) aloitteet ovat yksi vaihtoehto edistää kestävää tuotekehitystä. Monet epävarmuustekijät ja kriisit (kuten maailmanlaajuinen finanssikriisi ja viimeisin Covid19-pandemia) ovat kuitenkin ajaneet yritykset epätoivoon. Niiden likviditeettitasot ovat alentuneet, minkä seurauksena yritykset kohtaavat nyt resurssirajoituksia. Kestävän kehityksen tavoitteiden saavuttamiseksi yritykset etsivätkin uusia tapoja kehittää kestäviä tuotteita ja oikean tasapainon ympäristön ja sosiaalisen kestävyyden pilarien välillä. Tässä kontekstissa tarvitaan kipeästi tutkimusta, jossa selvitetään mahdollisuuksia edistää kestävän kehityksen tavoitteita. Nykyinen kestävän tuotekehityksen kirjallisuus on kehitetty ympäristöpilarin ympärille, joten kokonaisvaltaisen kestävän tuotekehityksen taustatekijöitä ja suorituskykyä tarkasteleva tutkimus on vähäistä. Tämän tutkimusaukon täyttämiseksi tämä kolmeen tutkimusartikkeliin perustuva väitöskirja esittää analyysin T&K:n, inhimillisen pääoman ja CSR-strategian mahdollisista rooleista kestävien tuoteominaisuuksien kehittämisessä sekä tekijöiden vaikutuksista tulokseen tavalla, joka edistää aiheen teoreettista ymmärrystä ja ehdottaa johtajille tapoja kehittää kestäviä tuotteita meneillään olevassa Covid 19-pandemiassa. Tämän tutkimuksen empiiriseen analyysiin käytetään 433 yhdysvaltalaisen teollisuusyrityksen tutkimusotosta 16 vuoden ajalta (2002–2017). Ensinnäkin tämä väitöskirjatutkimus edistää kolmoistilinpäätökseen perustuvaa kestävän kehityksen kirjallisuutta käsitteellistämällä ja operationalisoimalla kestävän tuotteen attribuuttien konstruktion. Toiseksi tämä tutkimus edistää T&K-kirjallisuutta tutkimalla sitä osaamispohjaisesta näkökulmassa ja laajentamalla sen vaikutuksia kestävään tuotekehitykseen. Kolmanneksi tämä tutkimus tarjoaa johdonmukaisuutta T&K-osuudelle kestävässä tuotekehityksessä tutkimalla inhimillisen pääoman roolia T&K:ssa. Neljänneksi tämä tutkimus täydentää CSRS-kirjallisuutta tutkimalla sitä kestävän tuotekehityksen kanssa yrityksen teorian näkökulmasta. Viidenneksi tämä tutkimus edistää SPA-suorituskykyä koskevaa kirjallisuutta tutkimalla SPA:n osuutta yhdysvaltalaisten teollisuusyritysten vientituloksesta ja kannattavuudesta. Lopuksi tämä tutkimus edistää SPA-kirjallisuutta tutkimalla markkinoinnin resurssi-intensiteetin moderoivaa roolia.

Financial instability, financial crises, and business frauds cause a loss of society confidence on firms. Similarly, the economic uncertainty increased as a result of the social problems, such as rapid consumption of natural resources, climate change, water scarcity, violation of human rights. For these reasons, the reliability and validity of the reports published by firms have been questioned. Firms make voluntary disclosures, such as environmental, social, sustainability, in order to overcome these problems and gain trust of investors. In this context, the purpose of this study is to explore the impact of information disclosure, including environmental disclosures, within the context of sustainability on the cost of equity (COE). At the same time, the study examines the effect of information disclosure on financial performance in terms of firm value and profitability. In doing so, the study employs BIST100 data of non-financial firms from 2010 to 2019, and uses panel regression models for Turkey. As a result, it was found that information disclosure negatively impacts the COE while positively affecting firm value and profitability.

This research examines the extent to which proactivity in handling flight overbooking reduces negative electronic word-of-mouth (NeWOM) and the required costs of compensation, thus increasing firm profitability. It answers recent calls to use a multimethod approach (i.e., we include archival data, qualitative interviews, seven experiments, and a Monte Carlo simulation for a total of 10 studies) and to adapt recovery to specific contexts (i.e., airlines) and heterogeneous customers (i.e., voluntary/involuntary bumping or offloading). The preliminary studies indicate that overbooking and offloading are pervasive and that a proactive approach is both feasible and desirable. The experiments show that, compared to the default reactive approach (informing passengers at the gate), a proactive approach (informing them before they leave for the airport) substantially reduces NeWOM and the sought compensation. Further, a very reactive approach (informing them in the plane) significantly increases NeWOM and the sought compensation, especially when offloading occurs involuntarily. We also unveil the mechanism explaining the effects of proactivity on NeWOM, through the serial mediation of justice and betrayal. Finally, the results of a Monte Carlo simulation show that offering reduced compensation through a proactive approach allows more aggressive overbooking, higher capacity utilization, and increased net revenue of up to 1.3%.

The paper aims to examine the impact of human capital, capital structure choice and firm profitability of 48,673 Vietnamese construction firms in 2016. Measuring firm profitability by return on assets (ROA) or return on equity (ROE), the results demonstrated that using more debt in capital structure would positively increase the performance of the firm but this positive effect was increasingly declining. Moreover, evidence showed that human capital had a positive impact on the result of business activities. A larger size of a firm could positively boost firm performance. Regarding firm location, a firm locating in the metropolitan of Ho Chi Minh City had a higher level of performance than a firm locating in the metropolitan of Hanoi capital. Finally, operating status of the firm as well as the establishment of industrial park had insignificant impacts on firm profitability.

We document that firms holding academic patents in their portfolios perform better in terms of market power since they benefit from academic knowledge spillovers generated by academic patents. On the other hand, we detect a negative effect on firms’ short-term profitability imputable to a larger fixed cost associated to the acquisition and exploitation of these patents. In terms of policy, our analysis suggests focusing on company-owned academic patents. A set of economic incentives dedicated to university–industry knowledge transfer through academic patents could support integration between basic and applied research.

Manufacturing industries across developed countries such as Germany, Japan, and USA face stiff competition and rapid product commoditization. As a reaction, manufacturers are looking for new ways to gain and sustain a competitive edge in their markets. In the past decades, industrial services have become the central element around which manufacturers build a sustainable competitive advantage. Firms increasingly shift their strategic focus from producing physical goods to providing services. This fundamental transition from goods-based to service-based business models is known in research as ���servitization���. Real world examples such as IBM���s shift from a hardware manufacturer to a consulting and software company has fueled the continuous interest in servitization from researchers as well as practitioners. Extant research studies provide first valuable insights into the conceptualization, contingencies, and outcomes of servitization. However, there are two existing research gaps in the literature. First, there is no recent research study that takes stock of the servitization landscape and its development over time. Servitization is a very dynamic trend which requires an up-to-date look at developments. Second, research about the financial impact of servitization remains inconclusive. The majority of studies link servitization with positive financial outcomes. However, the type of link (i.e., linear vs. non-linear) as well as contingency factors vary significantly between studies. Against this backdrop, this study compiles a dataset consisting of panel data for over 1,000 U.S. manufacturers for the years 2009 to 2018. The first part of this dissertation draws a picture of the U.S. servitization landscape and its development during the past decade. The second part of the study investigates the profitability effect of industrial services., Industrieunternehmen in entwickelten Staaten wie Deutschland, Japan, oder USA sind zunehmend hohem Wettbewerbsdruck und Kommodifizierung ausgesetzt. Als Reaktion auf diese Entwicklung suchen Unternehmen neue Strategien, um in ihren Absatzm��rkten wettbewerbsf��hig zu bleiben. In den letzten Jahren haben sich industrielle Dienstleistungen zu einem zentralen Wettbewerbsvorteil in Industriem��rkten entwickelt. Unternehmen fokussieren ihre strategische Ausrichtung zunehmend auf die Erbringung von Dienstleistungen. Die strategische Neuorientierung von Produktion zu Dienstleistungen wird in der Marketingforschung als ���Servitization��� bezeichnet. Das Interesse an Servitization in der Forschung als auch Praxis ist durchgehend hoch und wird in der Realit��t zum Beispiel durch IBMs Transformation vom Hardwarehersteller zum Softwareanbieter veranschaulicht. Bestehende Forschung liefert bereits erste wertvolle Ergebnisse in Bezug auf Konzeptualisierung, Einflussfaktoren, und Folgen von Servitization. Jedoch gibt es zwei Forschungsl��cken in der Servitization Literatur. Zum einem gibt es keine aktuelle Forschung ��ber die gegenw��rtige Servitization-Landschaft und wie sich diese ��ber die Zeit entwickelt hat. Servitization ist ein sehr dynamischer Prozess, der stets einen aktuellen Blick darauf erfordert. Zum anderen sind die finanziellen Folgen einer Servitization Strategie immer noch nicht abschlie��end gekl��rt. Zwar weisen die meisten Studien auf positive finanzielle Auswirkungen industrieller Dienstleistungen hin, aber die genauen Zusammenh��nge sind noch relativ unklar. Zum Beispiel werden lineare als auch nicht-lineare Zusammenh��nge zwischen Dienstleistungen aufgezeigt. Diese Studie hat zum Ziel diese beiden Forschungsl��cken zu schlie��en. Dazu werden Paneldaten von ��ber 1.000 U.S. Unternehmen f��r die Jahre 2009 bis 2018 untersucht. Im ersten Teil der Studie wird ein ��berblick ��ber die Servitization Landschaft in amerikanischen Industrieunternehmen gegeben. Der zweite Teil der Arbeit fokussiert sich auf die Profitabilit��tseffekte industrieller Dienstleistungen.

De sterke stijging van de energieprijzen zal alle ondernemingen in alle sectoren van de economie treffen. Niet alle ondernemingen bevinden zich echter in een vergelijkbare situatie. Het aandeel van energie in de totale bedrijfsaankopen verschilt immers sterk tussen de verschillende bedrijfstakken en varieert van minder dan 1% tot meer dan 50%. De meest energie-intensieve sectoren zijn uiteraard het meest blootgesteld. Het gaat hierbij niet enkel over de industrie (basischemie, verdelgingsmiddelen, bakstenen, ...), maar ook over de visserij, de bosbouw, het vervoer of de datacentra. De uiteindelijke impact van deze schok op de ondernemingen hangt af van de mate waarin zij de kostenstijging kunnen doorrekenen in hun verkoopsprijzen. Indien ze daarin slagen, wordt de stijging van de productiekosten doorgerekend aan de eindklant. Het zijn dan de gezinnen maar ook de buitenlandse afnemers die de prijsstijgingen uiteindelijk moeten dragen. Op basis van bedrijfsgegevens uit het verleden zien we dat ondernemingen er in zekere mate in slagen kostenstijgingen door te rekenen. Wij stellen vast dat de bedrijven gemiddeld 60% van kostenstijgingen konden doorschuiven naar hun klanten. Deze ‘passthrough’ verschilt per bedrijfstak en is hoger voor grote dan voor kleine ondernemingen. Voor de energieintensieve industrie is de pass-through in het algemeen hoger dan gemiddeld, waardoor het effect van de energiecrisis op de bedrijven enigszins wordt afgezwakt. Vermits de kosten echter niet volledig kunnen worden doorgerekend, verwachten we wel dat de bedrijfsmarges zullen krimpen en een deel van de schok zullen opvangen. Via de automatische indexering heeft deze prijsstijging ook een effect op de lonen. Arbeidsintensieve bedrijfstakken, grotendeels in de dienstensector, worden nu getroffen. In het algemeen hebben arbeidsintensieve bedrijfstakken een lage energie-intensiteit en vice versa. Dit betekent dat slechts weinig sectoren zowel een sterke energieschok als een aanzienlijke loonschok ondervinden. De omvang van de gecombineerde schok is voor sommige bedrijfstakken in historisch opzicht wel substantieel. Over het algemeen zijn de marges van de ondernemingen in de loop van 2021 echter gestegen, waardoor ze sterker staan om de directe en indirecte gevolgen van de energieprijsstijging te kunnen opvangen. Ook hier blijven er sectorale verschillen en komen sommige bedrijfstakken die in 2021 al kwetsbaar waren, verder onder druk te staan (lucht- en scheepsvaart, groenten en fruit, diensten in verband met gebouwen). The sharp rise in energy prices affects all firms, in all branches of the economy. However, not all companies are in a comparable situation, because the share of energy in input purchases can vary from less than 1% to more than 50% from one branch to another. Most energy consumers are naturally more exposed. Among these, we find not only industry (chemical basic materials, pesticides, bricks, etc.), but also fishing, forestry, transport or even the centers of data. To measure the repercussions of this shock on firms, the question is to know in what proportions these can pass on the increase in their production costs to their selling prices. If they there arrive, the shock is then transmitted to end consumers, households or foreign customers, who have to bear price increases. Historical data and the first current data available indicate a certain transmission capacity. We estimate that, on average, companies are able to pass on 60% of cost increases to their customers. This transmission capacity differs according to the branches of activity and it is more important for large firms than for small ones. For energy-intensive industry, the transmission is generally above average, which should mitigate somewhat the effect of the energy shock on firms. The transmission capacity not being complete, corporate margins will nevertheless fall and absorb part of the shock. Under the effect of indexation mechanisms, the rise in prices also has an impact in Belgium on wages. Labour-intensive branches of activity, largely in services, are in turn affected. Generally, labor-intensive sectors have low energy intensity, and vice versa. This implies that few sectors experience both a marked energy shock coupled with a significant wage shock. However, the magnitude of the combined shock is historic for certain branches of activity. Generally speaking, corporate margins have increased in 2021. A year likely difficult would therefore follow a good year. Here again, sectoral disparities exist, and some branches of activity whose situation was already fragile in 2021 are even more under pressure (transport air and river, fruit and vegetables, building support).

This paper analyzes the determinants of firm profitability in energy-related sectors. The analysis is conducted on the sample of firm-level data from 2008 to 2017, for the seven ex Yugoslavia countries (Bosnia and Herzegovina, Croatia, Kosovo, Macedonia, Montenegro, Serbia and Slovenia), of which two are member states of the European Union. The analysis considers standard firm profitability determinants such as company growth, liquidity, solvency and indebtedness, production factor productivities and their cost, including the cost of the materials used in the production, and finally, the indicator of export intensity. The paper tests whether there is a significant difference between the profitability determinants of the two subsamples, namely, the countries that are EU member states, compared to those that are not. The empirical analysis is conducted using the one-step difference GMM dynamic panel estimator and the sensitivity analysis using different methodological approaches as well as alternative measures of different indicators. The results suggest that company growth and liquidity do not significantly affect profitability. Debt plays a significant negative role, possibly more so in EU companies, but the results are not robust. Accumulation of physical capital is more important in the non-EU countries, while the same is true for labor in the EU companies of the sample. The role of material costs and export intensity depends on the accompanying measure of indebtedness used in the analysis. However, there is a possible positive effect of material cost, and a negative effect of export intensity in the EU compared to the non-EU companies.

Şirketlerin iyi yönetilmesine yönelik çabalar kurumsal yönetim kavramı ile ifade edilmekte ve iyi bir kurumsal yönetimle oluşturulan etkili bir yönetim yapısının, şirketlerde karlılığı arttırdığına yönelik çalışmalar bulunmaktadır. Bu çalışmanın amacı, Irak’ta kurumsal yönetim faktörlerinin etkili olup olmadığını ve şirketlerin karlılığını arttıran kurumsal yönetim faktörlerini tespit etmektir. Bu amaçla 2011-2019 yıllarında Irak Borsası’nda işlem gören 51 şirketin 9 dönemlik verileri ile oluşturulan 459 şirket/yıl verisi kullanılmıştır. Yapılan panel veri analizi sonucunda Irak’ta şirketlerin karlılığını arttıran kurumsal yönetim faktörleri yönetim kurulunda yer alan kadın üyelerin oranı ve halka açıklık oranı olarak tespit edilmiştir., Efforts for good management of companies have been expressed with the concept of corporate governance and findings have been determined that an effective management structure created with good corporate governance increases financial performance in companies. The aim of this study is to determine whether corporate governance factors are effective in Iraq and the corporate governance factors that increase the financial performance of companies. Fort this purpose the data of 459 companies/year, which was created with the 9-period data of 51 companies traded in the Iraqi Stock Exchange between 2011-2019, was used. As a result of the panel data analysis, the corporate governance factors that increase the financial performance of companies in Iraq have been determined as the ratio of female members in the board of directors and the free float ratio.

Yüksek Lisans Öğrencisi, İstanbul Sabahattin Zaim Üniversitesi, Sosyal Bilimler Enstitüsü, İşletme Yönetimi Bölümü, Küçükçekmece / İstanbul, Türkiye EMAIL: sematrnnn@outlook.com ORCID: 0000-0003-0247-4106 2 Dr. Öğr. Üyesi, İstanbul Sabahattin Zaim Üniversitesi, İşletme ve Yönetim Bilimleri Fakültesi, İşletme Bölümü, Küçükçekmece / İstanbul, Türkiye EMAIL: rumeysa.bilgin@izu.edu.tr ORCID: 0000-0002-5919-0035 Bu araştırmada 2005-2018 yıllarında 39 ülkeden 142727 finans dışı sektörde faaliyet gösteren halka açık firmalardan oluşan geniş bir veri seti kullanılarak net işletme sermayesinin firma karlılığı üzerindeki etkisi incelenmiştir. Kullanılan panel veri seti ülke, firma ve zaman olmak üzere üç düzeyli hiyerarşik bir yapıda düşünülmüştür. Bu nedenle gelişmekte olan ülkelerdeki firma karlılığı belirleyicileri Hiyerarşik Lineer Model (HLM) yaklaşımı kullanılarak analiz edilmiştir. Analiz sonucunda firma karlılığındaki değişkenliğin büyük bir kısmının firma ve zaman düzeylerinden kaynaklandığı ortaya konmuştur. Ancak ülke düzeyindeki değişkenliğin küçük olması ülkeye özgü değişkenliğin firma karlılığı üzerinde etkisinin olmadığı şeklinde yorumlanmamalıdır. Sonuç olarak gelişmekte olan ülkelerde faaliyet gösteren firmaların yöneticileri net işletme sermayesi kararlarını verirken bu kararın firma karlılığını doğrudan etkileyeceğini dikkate almalıdırlar. In this study, the effect of net working capital on firm profitability was investigated by using a large data set which consist of 142727 publicly traded non-financial firms from 39 countries in 2005-2018. The panel dataset used was considered in a three-level hierarchical structure: country, firm and time. Therefore, determinants of firm profitability in developing countries were analyzed using the Hierarchical Linear Model (HLM) approach. As a result of the analysis, it was revealed that most of the variability in firm profitability originated from firm and time levels. However, small variability at the country level should not be interpreted as country-specific variability has no effect on firm profitability. Therefore, the managers of firms operating in developing countries should take into account that their net working capital decisions will directly affect the firm profitability.

This research focused on exploring capital structure that would have an impact on the Vietnamese company’s profitability. Theoretically, we apply agency theory which mentions the separation of ownership and management, which leads to the problem when the managers act in their own interests rather than the owner’s interest. We built a research model, and the quantitative data was clarified thanks to the regression model with the data given by 300 Vietnamese firms for the period from 2012 to 2018. The findings indicated that firm profitability, represented by Return on Equity (ROE) and Return on Assets (ROA), was associated with liquidity and debt. In detail, it was indicated that there would be a positive relationship between liquidity and profitability of Vietnamese entrepreneurs, while there was a negative relationship between long-term debt and profit maximization. Moreover, the short-term loan also has a positive impact on the firm’s profitability in the context of Vietnam. These preliminary outcomes negated some previous research, confirming that the higher the leverage, the better the firm’s profitability. The difference in findings may provide information about a dynamic Vietnam market as well as the financial environment that require changes in the capital structure to gain the optimal profit.

Research on the impact of environmental management practices (EMPs) on financial performance of firms to date has ignored the moderating role played by environmental cost-efficiency (ECE) and environmental liability. Despite the increasing interest in examining the environmental stance in the corporate world, there is lack of evidence on the reactive and proactive environmental management of Indian business entities and their impact on their profitability. This paper explores the EMPs of firms listed on S&P BSE GreenEx and CarbonEx. Content analysis is used to collect data on EMPs and pilot study is conducted in five experimental rounds to test the reliability of the coded categories by three coders, two academicians holding expertise in environmental sciences and the author. Coded categories are used as independent variables. Moderating variables viz. ECE and environmental liability are found to be intensifying the statistically significant negative effect of proactive and reactive EMPs on firm profitability. Findings clearly refute the ‘win-win’ hypothesis.

The aim of the paper is to analyze if independent internal audit committee has effects on firm profitability. By analyzing the annual reports of companies in 11 countries from Central and Eastern Europe (CEE), we aim to highlight the implications and relationships of internal audit independence and the effects on company profitability expressed through return on assets (using pROA acronym in the paper) and return on equity ratios (pROE). The data used in our paper is from 2004 to 2013. We analyzed the listed companies from Central and Eastern Europe using company financial characteristics data collected from Orbis database and dummy variable manually collected by investigating the annual reports of the companies from our sample. Our results, using OLS regressions on panel data (fixed and random effects), suggest that our independent internal audit variable has a positive sign on firm`s profitability. Our findings suggest that independent internal auditors have an important role for the company`s profitability in Central and Eastern Europe (CEE). The analysis could be important for corporate practices, as an evidence for strengthening the role of the independent internal audit committee in companies. In this respect, it could be argued that independent internal audit committee enhance its importance in creating added value, respectively increase company profitability by providing independent and objective opinions, assurance and consulting services regarding the company’s activity.

This study is the first to study the lasting effects of innovation on firm profitability in Vietnam. Using a unique panel dataset for the period 2005–2015, our results show that innovators achieve higher profit in comparison with non-innovating firms. The positive effects of innovation on firm profitability are observed not only in the short term but also in the longer term. The benefits of innovation for firm profitability can be seen in higher export probability, better productivity, better access to formal credit, and the ability to secure government support, but only after innovation.

Given that the goal of this study was to examine the influence of different factors on a firm’s profitability, we designed a model with three categories of profitability determinants: firm-specific, industry-specific and macroeconomic. The analysis was performed on 9359 firms operating in the Croatian manufacturing industry during the 2006–2015 period. Since the designed model was formulated in a way that encompasses the dynamic aspect of profitability, the General Method of Moments (G.M.M.) dynamic panel estimator was applied. Formulation of such a model adds to the existing literature if one takes into account that a dynamic analysis of the drivers of profitability has not been done using data from the Croatian manufacturing sector. The results of the conducted analysis revealed that a firm’s age, labour cost and industry concentration, as well as G.D.P. growth and inflation, have significant influence on a firm’s profitability.

The aim of the paper is to analyze the association between audit committee dimension and firm profitability, using a sample of listed companies from Central and Eastern European countries. In order to conduct the analysis, the data regarding the audit variable is hand-collated data from the Annual Reports of the companies, data regarding the financial characteristics of companies is from Orbis database, and data regarding the macroeconomic variables is from Word Bank database. Using OLS model we found that audit committee size positively influences firm profitability through better monitoring operating performance of the company providing higher authority and extensive knowledge base reflected in increased profitability. Our results benefit corporate practices as evidence in straining the role of audit committees, support shareholders and managers by providing evidence and solutions to improve credibility and compliance of financial statements, as well as investors and creditors in sustaining efficient allocation and monitoring of their capital.

How to manage financial performance through the utilization of intellectual capital (IC) is an important issue in the knowledge economy. The objective of this study is to investigate the impact of IC on financial performance for manufacturing listed companies in the Chinese context. Financial performance is measured from two distinct aspects: (1) firm profitability, measured through earnings before interest, taxes, depreciation and amortization (EBITDA), net profit margin (NPM), and gross profit margin (GPM), and (2) corporate return, measured through return on investment (ROI), return on assets (ROA), and return on equity (ROE). The results show a positive relationship between NPM, GPM, ROI, ROA, ROE, and IC (measured through the market-to-book ratio). In addition, the more intangible-intensive manufacturing listed companies exhibit better financial performance. The study provides evidence that higher investment in IC can improve value creation in the emerging economies. First published online 17 December 2020

วารสารวิชาชีพบัญชี JAP, 17, 53 (มีนาคม 64), 98

Working capital management (WCM) is one of the most important decisions for all firms. The main components of WCM are days sales outstanding (DSO), days inventory outstanding (DIO), days payable outstanding (DPO), and cash conversion cycle (CCC). Using a sample of 332 Czech firms, including 20 certified firms from the EFQM (European Foundation for Quality Management) Model, the current study explored the effects of the main components of WCM on firms' profitability. We used two different regression models to test the hypothesis, i.e. pooled regression and maximum likelihood estimation (MLE). The findings of the research revealed all the components of WCM have a negative impact on firm profitability. On the other hand, the interaction terms of the EFQM certified firms with the components of WCM showed a positive impact on firms' profitability which means that there is a positive relationship between the components of WCM of the certified firms and profitability. However, it is examined that the quality certificate/award from EFQM Excellence Model decreases the firm's profitability. The outcomes of the current research will be beneficial to academics, managers, leaders, and directors of the firms to improve their firm's profitability., Internal Grant Agency (IGA) in Tomas Bata University in Zlin; Internal Grant Agency [IGA/FAME/2021/009, IGA/FAME/2021/014], Univerzita Tomáše Bati ve Zlíně: IGA/FAME/2021/009, IGA/FAME/2021/014

International audience; Big data has gained momentum as an Information Technology that is capable of supporting organizational efforts to generate new and better business value. We here contribute to the emerging literature on big data analytic (BDA) solutions by investigating the moderating roles of firm size and industry concentration in the relationship between BDA solutions and firm profitability. Using a unique panel data set that covers 13 years, from 2004 to 2016, which contains information about 176 firms, we provide robust econometric empirical evidence of the negative moderating effects of industry concentration and the positive moderating effects of firm size on the relationship between the use of BDA solutions and firm profitability. Our findings provide strong empirical evidence on the business value of BDA as well as the essential role played by contextual conditions that managers should consider.

Does firm lobbying in the EU increase firm profitability? While there is a well-established literature on this issue in the US context, existing EU studies have overlooked this question. Ours is the first study to examine links between firm lobbying and firm profitability. To this end, we tailor theoretical insights from the US context to the EU. While money plays a fundamentally different role in EU lobbying compared to the US, the lobbying context and legislative processes of the EU are conducive to firm lobbying efforts translating into firm profits. Our two-stage OLS regression results, using a novel dataset for 728 firms over a four-year period, support this argument. Specifically, we find that the more money firms channel into their lobbying activities, the more tangible returns on this investment they can expect.

Purpose of the article: To examines the effect of corporate social responsibility on performance of Nigerian quoted firms. Methodology/methods: The study applies the survey research method, carrying out a crosssectional analysis of one hundred and fifty (150) firms quoted on the Nigerian Stock Exchange. The model was specified and analysed using the binary logistic regression analysis. Scientific aim: To examine the effect of corporate social responsibility on firm profitability, to evaluate the effect of corporate social responsibility on return on equality, and to assess the effect of corporate social responsibility on market success in Nigeria. Findings: The results revealed that corporate social responsibility (CSR) exerts a positive and statistically significant effect on firm profitability (PF), return on equity (ROE) and market success (MS) in Nigeria. Conclusions: Based on the findings, we concluded that corporate social responsibility (CSR) has a significant influence on firm profitability (PF), return on equity (ROE) and market success (MS). Thus, the study recommends among others that corporate firms in Nigeria should intensify efforts to increase their commitment to social responsibility in order to create good image in the mind of their host communities.

International audience; A lot of investment projects in European countries have been implemented by Chinese multinational enterprises since the introduction of the “China going global strategy”. Furthermore, the global financial crisis of 2008 increased the vulnerability of many European firms thereby providing great opportunities for Chinese multinationals to undertake international development. To date, few studies have been undertaken to evaluate the performance and profitability of Chinese multinationals after their internationalization undertakings. Our paper intends to assess the profitability and performance of Chinese multinationals according to the “psychic distance” between them and their host countries. We adopt a quantitative method by taking into account the performance of a number of investment projects by Chinese multinationals in Europe between 2007 and 2017. The results answer the question as to whether the relationship between the performance and international development of Chinese multinationals is influenced by psychic distance.

Bu çalışmada, net işletme sermayesinin firma karlılığı ve firma değeri üzerindeki etkileri analiz edilmiştir. Çalışmanın uygulama bölümü iki kısımdan oluşmaktadır. Birinci kısımda firma değerinin kendi geçmiş değerlerinden etkilendiği varsayımı altında dinamik panel veri analizi yöntemlerinden Sistem Genelleştirilmiş Momentler Metodu kullanılarak Türkiye'de faaliyet gösteren halka açık firmaların firma değerlerinin net işletme sermayesi yönetimi ile ilişkisi araştırılmıştır. Bu çalışma sonucunda, firma karlılığının net işletme sermayesi yönetiminde kullanılan yaklaşımdan etkilendiği bulgulanmıştır. İkinci kısımda ise gelişmekte olan ülkelerdeki halka açık firmalardan oluşan geniş bir veri seti kullanılarak net işletme sermayesinin firma karlılığı üzerindeki etkisi Hiyerarşik Lineer Model (HLM) yaklaşımı ile analiz edilmiştir. Kullanılan panel veri seti ülke, firma ve zaman olarak ayrıştırılan üç düzeyli hiyerarşik bir yapı olarak düşünülmüştür. İlk aşamada, firma karlılığındaki değişkenliğin hangi düzeyden kaynaklandığı varyans bileşenleri modeliyle incelenmiştir. Araştırma sonucunda değişkenliğin büyük kısmının firma ve zaman düzeylerinden kaynaklandığı ortaya konmuştur. Daha sonra net işletme sermayesinin firma karlılığı üzerindeki etkisini incelemek için rassal sabit modeli kullanılmıştır. Sonuçta, gelişmekte olan ülkelerde firmaların net işletme sermayeleri ile ilgili kararlarının karlılıkları üzerinde etkili olduğu görülmüştür. In this study, the effects of net working capital on firm profitability and firm value are analyzed. The study contains two applications. In the first one, system GMM method is employed in order to analyze the relationship between the market value of the firms and their net working capital management for publicly traded firms in Turkey. The results of this analysis indicate that firms with high net working capital are more profitable on average. In the second analysis Hierarchical Linear Model (HLM) approach is used to analyze the effect of net working capital management on firm profitability in developing countries. At the first stage, the level of variability in the profitability of the firm was investigated with the variance components model. As a result of the research, it was revealed that most of the variability originated from firm and time levels. Then the random coefficients model was used to examine the effect of net working capital on firm profitability. It has been revealed that the decisions of firms in developing countries regarding net working capital management have an impact on their profitability.

WOS: 000524980400003, Airline have developed a set of business models to increase their market share and gain competitive advantage against each other. One of the business models that have recently captured attention is the low-cost business model. The purpose of this study is to identify financial variables that affect profitability of airlines with a low-cost business model. For this purpose, 16 airlines with a continuing financial performance for the period 2004-2017 have been examined empirically. Panel data analysis was used as a method in the study. Within the scope of the study two different models were created. In the first model, return on assets (ROA) and in the second model, return on equity (ROE) is used as a dependent variable. The findings of the study indicate that in the first model, growth opportunities and asset structure have an effect on profitability. In the second model, growth opportunities, asset structure and leverage level have an impact on profitability.

International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 11, 9, 11A9F: 1-9

The authors study the effect of corporate board gender quotas on firm performance in France, Italy, and Spain. The identification strategy exploits the exogenous variation in mandated gender quotas within country and over time and uses a counterfactual methodology. Using firm-level accounting data and a difference-in-difference estimator, the authors find that gender quotas had either a negative or an insignificant effect on firm performance in the countries considered with the exception of Italy, where they find a positive impact on productivity. The authors then focus on Italy. Using a novel data set containing detailed information on board members’ characteristics, they offer possible explanations for the positive effect of gender quotas. The results provide an important contribution to the policy debate about the optimal design of legislation on corporate gender quotas.

This paper uses extensive firm-level data on Europe-an and US companies from 2014-2018 to explore the short-term impacts of the General Data Protection Regulation (GDPR) on European companies' financial performance.Our empirical analysis suggests that the costs of the GDPR during the first year of its implementation were substantial, at least for some European companies. The profit margins of the data-intensive firms in-creased, on average, by approximately 1.7 to 3.4 per-centage points less than the profit margins of their US counterparts. The European data-intensive SMEs were the most disadvantaged group regarding their post-GDPR profit developments, while the large Euro-pean data-intensive companies' short-term post-GD-PR profit margins dropped relatively less.We do not find any statistically significant difference in the profit margin developments of the very large European and US companies. This finding is consis-tent with the view that the very large, multinational US companies that often have European customers and deal with the personal data of EU citizens also faced substantial costs when they needed to comply with the GDPR.

The objective of this paper is to examine the relationship between intellectual capital (IC) and firms’ financial leverage by exploring whether firm profitability mediates this relationship, using a dataset of Chinese agricultural listed companies during the period of 2014–2020. Financial leverage is measured by the debt-to-asset ratio, and IC is measured via the modified value-added intellectual coefficient (MVAIC) model. The results reveal that financial leverage is lower in firms with higher levels of IC, and IC positively affects firm profitability. In addition, firm profitability partially mediates the relationship between IC and financial leverage. When MVAIC is disaggregated into its four components, firm profitability has a partially mediating effect on the relationship between physical and human capitals and financial leverage. This paper might provide corporate managers with a clear understanding of IC’s impact on firm indebtedness.

The paper aimed to contribute to the literature on the determinants of firm profitability, from the perspective of the Czech economy. We followed a multilevel/hierarchical approach towards the analysis of the sectoral and firm-level determinants of the profitability of companies operating in the Czech food processing industry during years 2005-2012 (622 Firms in 10 Sectors). We assessed an impact of industry (i.e. market concentration, sector growth rate and growth rate of imports) and firm-level characteristics (i.e. market share, firm age, firm size, number of employees, debt/equity ratio and short-term risk) on the return on assets (ROA). Surprisingly, there were no substantial differences between the separate models for industry and firm-level determinants and a combined one. We found a positive impact of market concentration and market share and a negative effect of age and risk-taking behaviour on a firm profitability. Based on these findings, managers in the Czech food and drink industry should pay more attention to the debt policy.

In light of the mixed findings upon whether good performers are good or bad acquirers, this paper explores the relationship between firm-level recent profitability and post-acquisition performance through the competing analysis of the managerial ability and the hubris hypotheses. The paper also builds on the organizational learning literature to examine the moderating effect played by a firm’s previous acquisition experience, as a potential contingency factor that may alter the performance effects of acquisitions. Based on a dataset of 469 acquisitions completed between 2007 and 2013, results provide support to the managerial ability hypothesis, according to which good performing firms exhibit better post-acquisition returns. Results also support the existence of learning benefits from previous acquisition experience, which further enhances the positive effect played by an acquirer’s recent profitability on post-acquisition performance.

Trade credit is one of the most flexible short-term funding sources for companies and covers a significant part of the financial resources used by firms. Trade credit received makes available financial resources to achieve other economic objectives of the company. The managerial decision to increase or reduce trade credit offered and received or the collection and credit period is influenced by the company’s financial performance. The aim of this paper is to analyse the correlation between trade credit receivable/payable and collection/credit period and six measures of financial performance and find if these variables have any impact on the decision to use trade credit. To achieve this aim, we used a sample of 958 European firms from the construction sector which were analysed using correlation and OLS regression, separately on developed and emerging countries. The main results found are: trade credit offered/received is directly correlated with return on equity and firm size, and inversely correlated with return on assets; trade credit offered is directly correlated with current liquidity and long-term banking loans; trade credit received is directly correlated with liquidity ratio and inversely correlated with current liquidity and long-term banking loans; and trade credit offered is inversely correlated with liquidity ratio.

This article examines the impact of Working Capital Management measured by Cash Conversion Cycle (CCC) on the financial performance of firms in the Indian context. The period of study is from the year 2000 to 2014 for companies listed on the National Stock Exchange, India. The study uses regression model to analyze panel data. Financial and banking related companies have been removed from the dataset to mitigate bias. This study finds that working capital management is an important variable that affects the financial performance of firms. An empirical examination has been conducted in this study over a fairly big dataset spread over a long period in the Indian context. Increasing the efficiency of CCC would lead to an increment in firm’s performance up to a certain point which is referred to as the “performance summit” in this study. Our study concludes that there exists an inverse U shaped relationship between WCM and performance.

We use proprietary archival compensation panel data from Finnish white-collar employees (WCEs) over the period of 2002 to 2011 in order to examine the relationship between performance-based incentives for WCEs and the future profitability of the firm as well as to determine whether this association is moderated by task complexity. While many studies examine the determinants and performance effects of CEO compensation, virtually no evidence has been presented to indicate that explicit financial incentives for WCEs improve the profitability of the firm. Our empirical results show that performance-based incentives for WCEs are significantly positively related to the future return-on-assets, return-on-equity, and profit margin ratios of the firm. We also find that this effect comes from the performance-based incentives for low-level WCEs, corroborating the importance of implementing performance-based incentives also to low-task complexity jobs. JEL Classifications: M40.

This thesis studies the relationship between efficient working capital management and firm profitability, and if the global financial crisis has affected the relationship. Previous literature has presented inconsistent results regarding the impact of working capital management on firm profitability, finding both negative and positive effects. It has also been argued that the global financial crisis has increased the attention of and possibly changed the attitude towards working capital management as a strategy in order to increase firm profitability. In the study, the cash conversion cycle is used as a measure for working capital management, and return on assets as a measure for firm profitability. The sample in this thesis consists of 1170 observations from 78 Swedish listed companies over the time-period 2003–2017. Both multiple regression analysis and an independent-sample t-test were conducted in order to examine the given relationship. The findings of this thesis indicate that firms can increase their profitability by implementing efficient working capital management. However, the global financial crisis has not brought a change in companies' working capital management.

The last two decades have seen a sharp increase in shadow banking activities in both advanced and emerging economies. Shadow banks have therefore become an important part of financial markets due to their credit creation and capital allocation roles. This study investigates the impact of shadow banking on firm profitability in South Africa and evaluates the linkages between shadow banking and real economic activity. We employ single equation cointegration methods and three measures of firm profitability in our analyses; and several macroeconomic and bank specific variables are used as control variables. Our results are mixed showing that shadow banking has a negative impact on traditional banks' profitability whilst on the other hand it positively impacts non-financial firms and the overall measures of firm profitability. Our results indicate that both non-financial firms and non-bank financial institutions could be benefiting from the expansion in shadow banking activities. Targeted, functional regulation is suggested in order to promote economic activities in the shadow banking sector whilst at the same time limiting possible risks that may arise.

In this paper, we investigate how the increase in minimum wages affect firm profitability. We focus on the firm-level panel data in Poland, where minimum wage growth remained stable and averaged around 4 percent between 2003 and 2007 but accelerated to 20 percent in 2008. Implementing a difference-in-difference approach in this quasi-experimental setting, we find that the minimum wage increase contributed positively to average wages and negatively to firm profitability. Intuitively, the increased labor costs due to a higher wage floor directly reduce profits in the absence of labor demand adjustments. We formally test and confirm validity of these empirical predictions in a simple theoretical model of a profit maximizing firm.

Considering that startups greatly contribute to the economic development and survival of a country through economic growth and job creation, it is necessary to investigate the profitability of startups. However, research on this issue has not been developed enough as most previous studies regarding firm profitability were based on large-scale public companies with relatively easy data accessibility, not on startups. In addition, it is meaningful to empirically prove whether venture capital investments and governmental support positively impact on the sustainability of startups as huge discrepancies exist between traditional academic research and recent practices. Findings from this study, based on data analytics, are expected to fill the gap in knowledge as it is not clearly known about firm profitability of startups for their sustainable growth and survival. Focusing on startup profitability, the main objective of this research is to provide significant theoretical contributions and practical guidelines for startup entrepreneurs, investors, and policymakers to avoid unsubstantial growth and find solutions for sustainable growth and survival. To properly and completely analyze the determinants of firm profitability of startups, this research used the 2018 and 2019 Survey of Korean Startups by the Ministry of SMEs and Startups of Korea and Korea Venture Business Association with over 3000 samples.

We improve upon existing literature on institutional reforms by analyzing a different type of reform that is very common in Latin American countries: the transitory market reforms. Under transitory market reforms, uncertainty lasts longer due to the more frequent shifts between opposing market orientations, thus reducing firms’ capacity to estimate their risk. We hypothesize that transitory reforms have a negative effect over firms’ profitability, and that this relationship is negatively moderated by institutional convergence, in which market agents have already comprehended the new institutional rules but are still internalizing them in their strategies. We test these relationships in a sample of 22,066 observations from 1,005 Brazilian firms and find support to our hypotheses. Reforms mechanisms are further analyzed and discussed, as well as their implications for theory. Desenvolvemos a literatura existente relativa a reformas institucionais a partir da análise de um tipo diferente de reforma que é bastante comum nos países da América Latina: as reformas de mercado transitórias. Durante reformas transitórias, o período de incerteza é mais duradouro devido às oscilações mais frequentes entre orientações de mercado opostas, reduzindo assim a capacidade das firmas de estimarem seus níveis de risco. Nossas hipóteses propõem que reformas transitórias possuem um efeito negativo sobre a lucratividade das empresas e que essa relação é negativamente moderada pela convergência institucional, durante a qual os agentes de mercado já compreenderam as novas regras institucionais, mas ainda não as internalizaram plenamente em suas estratégias. Testamos essas relações em uma amostra de 22.066 observações de 1.005 empresas brasileiras e encontramos suporte para nossas hipóteses. Mecanismos de reformas são posteriormente analisados e discutidos, bem como suas implicações para a teoria.

While much research has been done on the economic impacts of load-shedding in South Africa, fewer studies have focused on the effects of the rapidly rising electricity tariffs. The issue of tariff increases has now become even more critical, with technological developments making it easier and cheaper for consumers to reduce their demand for grid-based electricity. There have been some South African studies that have attempted to estimate the price elasticity of electricity demand or to show vulnerable sectors, but all have struggled to demonstrate the potential impacts on the competitiveness of individual firms and their decisions to invest in their own generation, and the longer-run impacts on electricity demand. This study examines the timing and type of own-generation investment decisions that are viable for 21 large companies, and the likely impact of this on South Africa's electricity utility.

We examine the evolution of the impact of e-business technology capability on operational competence and firm profitability.This is an empirical study with a three-year panel dataset of 154 large firms in Spain for the period 20082010.E-business technology has a positive effect on operational competence that decreases over time.Operational competence has a positive impact on firm profitability that becomes more substantial over time. This study examines the evolution of the impact of e-business technology on operational competence and profitability using a panel dataset of 154 Spanish firms. We find that (1) e-business technology has a positive effect on operational competence that decreases over time and (2) the firms proficiency in exploiting a portfolio of operational capabilities has a positive impact on profitability that becomes more substantial over time. The findings provide some insights on how the initial and subsequent IT investments affect operational competence and profitability over time. This study methodologically illustrates how to perform a partial least squares estimation using panel data.

Literatures view board of the directors as the cornerstone of firm’s success. Therefore, family involvement on the board and its impact on firm profitability is an issue of interest and need to be addressed. The purpose of this paper lies in the fact that it extracts new empirical evidence from a promising area in the world. The study proceeds with a cross-sectional time-series analysis based on a data of 75 Saudi non-financial public listed firms from 2007-2011(375 firm-year observations) to examine family representing on board of the directors, family chairman, and founder chairman and its impact on firm performance (ROA). The study concludes the outperformance of firms in which family represents heavily on the board. In addition, the results suggest that not all family members are good stewards. Strictly speaking, founder chairman only found to be beneficial to the firm profitability rather than others. However, the results confirmed its robustness against different indicator (EPS) and when family firms only being selected.

In the business of banking, banks do not only invest the received deposits to meet future obligations but also to make a profit. The study investigates the effect of asset allocation on profitability Deposit Money Banks in Nigeria. The study adopted a panel regression model involving five selected commercial banks. The data were obtained from the financial statement and annual reports of the selected banks spanning 2011 to 2015. The explanatory variables of the study are liquid assets, equities, loans, securities. The panel Ordinary Least Square regression was employed for data analyses. The findings have shown that aggregate asset allocation variable significantly explains 54 of changes in bank profits. Further results shows that liquid assets, investments equities have positive but insignificant effect on profitability of Deposit Money Banks in Nigeria loan extension of the banks have insignificant negative effect on profitability of Deposit Money Banks in Nigeria whereas investments in security have significant positive effect on the profitability of Deposit Money Banks in Nigeria. The study thus concluded that asset allocation is an important financial management tool to enhancing bank profitability, and that investments in securities are veritable channel for banks to improve profitability in Nigeria. Gloria Obiageli Izundu | Clem Nwakoby | Cyprian Okey Okoro | Udoka Bernard Alajekwu* "Asset Allocation as Determinant of Bank Profitability in Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-1 | Issue-5 , August 2017, URL: https://www.ijtsrd.com/papers/ijtsrd2278.pdf

(ProQuest: ... denotes formulae omitted.)IntroductionSince the pioneering studies on persistence of profit conducted by Mueller (1977), Mueller (1986) and Geroski and Jacquemin (1988) the literature has developed considerably. One of the reasons is the availability of firm-level data. Having comparable datasets about large number of companies, we are able to test theoretical models. This paper aims at testing the expected mean-reverting property of abnormal profit. From the theoretical point of view the competitive process should erode any abnormal profit in the market. In other words, in the competitive environment companies are not expected to have abnormal returns for long period of time and profit rates should converge to industry equilibrium level. However empirical data show that, at a given point in time profit rates differ widely not only across industries, but also across companies from the same industry. Moreover, many studies proved that abnormal profits are observed over longer period of time and this phenomenon is known in the literature as "persistence" of abnormal returns (Muller, 1986, 1990).Although the research literature about differences in profitability of firms is enormous, the question remains still open whether these differences disappear eventually. Theory assumes that abnormal profit attracts new entrants and if there are no significant barriers to entry, this finally leads to the reduction of prices and profit margins of all firms in the industry. This process persists until the profitability level of equilibrium is reached. This is possible only if the industry is competitive as a structure. Conversely, if firms are able to retain their abnormal profits over time it means that the competition in the industry fails to control the adjustment to long-run equilibrium level. Another question is the rate at which profits are converging to the equilibrium level and this is correlated with the level of competition in the industry. This is especially important from the antitrust law perspective. If abnormal profits disappear at a high pace this means that the competition in the industry is high, while if the rate is rather low this means that the intervention is needed in the industry to achieve competitive environment.1.Persistence of profit - literature reviewThe persistence of profit was investigated by various methods. A number of studies have tested profit persistence using OLS autoregressive method (e.g. Goddard and Wilson, 1999; Gschwandtner, 2005), while the others have been using panel unit-root tests (e.g. Yurtoglu. 2004; Resende, 2006; Aslan et al., 2010, 2011). More recent research departed from OLS method and used state space AR(1) model (Gschwandtner, 2012), Markov chain analysis and GMM (Stephan and Tsapin, 2008), non-linear threshold model (Crespo et al., 2008), asymmetric autoregressive model (McMillan and Wohar, 2011), dynamic panel model estimator (Goddard et al., 2004; Wolszczak-Derlacz and Parteka, 2015; Simionescu et al., 2016).There are studies focused on the question whether the persistence of profit exists as well as studies focused on the factors that impact the profitability of firms. Moreover, some studies are aimed at the analysis of a single country, while the others are performing multinational analysis. Previous results shows that profit persistence coefficient vary by country, industry and period. Many research done for developed countries showed that the persistence coefficient was somewhere between 0.2 to even 0.6. To mention only the outcomes of the pioneer research of Mueller (1990), who founded persistence coefficient for USA at the level of 0.18; Geroski and Jacquemin (1988), who founded 0.49 for UK 0.41 for France and Germany and most recent outcomes of Goddard et al. (2011) found the average for 65 countries (banking industry only) at the level of 0.42; Gschwandtner and Hirsch (2013), who founded 0.06 for Belgium, 0.19 for France, 0. …