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In this study, we provide new evidence regarding return on equity and its components for firms recognized for their effective use of social media compared to firms that use social media to a lesser extent. Using the Russell 3000 firms, we compare firms' return on equity and sub components using difference in means tests and regression analysis. We find that firms recognized for their effective use of social media generate higher return on equity than other firms. Furthermore, when testing the disaggregation components, we find that the increased return on equity exhibited by firms using social media effectively is due to higher asset turnover and lower interest burden. We also find that such firms experience a higher tax burden. [ABSTRACT FROM AUTHOR]

The aim of the paper is to analyze the simultaneous influence of environmental risk, corporate strategy and financing strategy on firm profitability. Data for the period of 2013-2019 was collected from COMPUSTAT and respective Stock exchanges. The sample consists of a total of 4837 publicly traded firms from South East Asian Countries. Using fixed effects model, the findings of the study revealed that independent constructs explain significant variation in firm profitability. These findings are helpful for managers in formulating better strategies particularly those that are concerned with addressing the volatility and uncertainty dimension of the environment as well as resource development for supporting their decisions related to strategy formulation.

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.

This study examines the link between capital structure and firm performance (measured by ROA and ROE), focusing on a large sample of SMEs in Vietnam during the postcrisis period (2008-2016). SMEs are more exposed to risks than large firms and have very restricted access to external financing, thus limiting their growth and performance. Empirical results from various panel data models confirm the nonlinear relationship between debt financing and firm profitability. This relationship takes the form of an inverted-U shape. Firm profitability only increases to a certain level of leverage. When the debt ratio becomes too high, firm performance starts to decrease. These results highlight the role of financial distress costs in debt financing for SMEs. Furthermore, the paper also confirms the heterogeneity between state-owned firms and private ones. Policy implications are also discussed. [ABSTRACT FROM AUTHOR]

We investigate how increases in minimum wage affect various firm-level characteristics. We study firm-level data from Poland, where the minimum wage experienced a large and persistent increase in 2008 and 2009. We show that firms which were more exposed to the minimum wage increase faced higher increases in total labour costs and larger reductions in profitability. Intuitively, higher total labour costs driven by higher minimum wages directly reduce firm profits in the absence of price adjustments. We also show that the sharp increases in the minimum wage increased capital and decreased overall labour productivity and employment. The impact of policy is statistically significant only on capital. [ABSTRACT FROM AUTHOR]

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.

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.

This study examined the effect of CEO overconfidence on restaurant performance and how franchising, a key business format in the restaurant industry, affects the relationship. Based on the notion that overconfident individuals take more risks than non-overconfident people, this study hypothesized that CEO overconfidence positively (negatively) influences restaurant growth (profitability). Furthermore, since franchising reduces operational and financial risk, this study hypothesized that franchising moderates the relationship between CEO overconfidence and firm performance. The results of this study confirmed that CEO overconfidence positively influences firm growth but negatively affects firm profitability in the restaurant industry. This study also found that franchising negatively (positively) influences the effect of CEO overconfidence on restaurant firm growth (profitability). The results suggest that overconfident CEOs are more suitable for growth-seeking restaurant firms but less desirable for profit-seeking firms. The results also highlight that franchising mitigates the risk associated with CEO overconfidence. More detailed results and implications are discussed in this article. [ABSTRACT FROM AUTHOR]

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%. [ABSTRACT FROM AUTHOR]

This paper examines the non-linear relationship between a firm's inventory and sales performance. Specifically, whether there exists an optimal level of inventory that maximizes sales performance is investigated. In order to better understand the effect of supply chain inventories on firm performance, three types of inventories: raw materials, work-in-process, and finished goods are separately considered. Analyzing the panel data set of 272 Korean manufacturing firms for the period 1996 to 2012, the following conclusions based on regression methodology has been drawn. After controlling for previous inventory, we find there exists an optimal level of current inventory that maximizes current firm profitability. Furthermore, it is examined whether the external competition level is high using clustering analysis. We find that the effects of supply chain inventories on performance are influenced by the competitive intensity of an industry. The results suggest that while all types of inventories show the non-linear effects on firm performance in the highly competitive market, only finished goods inventory shows significant effects on firm performance in the low competitive market. Our study provides empirical supports for how each type of inventories should be managed and contributes to the extant literature by suggesting managerial implications from a supply-chain perspective perspective for practical engineers and technical professionals. [ABSTRACT FROM AUTHOR]

The aim of this paper is to examine the relationship between working capital management (WCM) and firm profitability for a sample of 2122 Indian SMEs. The study is based on secondary financial data obtained from electronic database PROWESS of Centre for Monitoring Indian Economy (CMIE), pertaining to a period of 12 years. The study employs two-step generalized method of moments (GMM) estimation to arrive at the results. The estimates of two-step GMM confirm an inverted U-shape relationship between WCM and firm profitability. [ABSTRACT FROM AUTHOR]

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.

Despite significant advances in economic literature on the relationship between graft and economic growth, the consensus in nowhere in sight. The current paper enriches the extant literature on the subject by: 1) extending econometric techniques in an attempt to quantify and model institutional development; and 2) providing novel results on the dynamics between non-standardised and standardised institutional metrics. Utilising a new dataset compiled for 423 publicly quoted Czech, non-financial companies with macroeconomic and institutional metrics, we fashion a dynamic model approximating the interactions between the country's institutional development and firm profits as well as examining the relationship between the Czech corruption and the national institutional framework in the years of 2007–2016. The economic property rights appear to contribute to firm accounting profits- and cash flow-based profitability metrics. As regards the anti-corruption policies, the study's outcomes indicate that improvement in economic property rights could have propelled the positive impact of lax anti-corruption government action and inefficient judiciary on firm profits. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

Copyright of Omer Halisdemir Universitesi Iktisadi ve Idari Bilimler Fakültesi Dergisi is the property of Omer Halisdemir University, Faculty of Economics & Admistrative Sciene and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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 study examines impact of working capital management on firm’s profitability. The study focus on six (6) conglomerates firms listed on Nigeria Stock Exchange. Using the panel data set for the period 2012-2017, the impact of aggressive working capital investment and financing policies has been evaluated using return on asset. Random effect regression model was adopted for the study. The study reveals that Total Current Assets to Total Assets (TCA/TA) and size of the study firm have a positive and significant impact on firm profitability. The result further found that Total Current Liabilities/Total Assets (TCL/TA) has a negative significant impact on firm profitability. Though, the sales growth revealed an insignificant negative effect on the profitability of the firms. The study concluded that managers can create value if they adopt a conservative approach towards working capital investment and working capital financing policies since aggressive approach has been found to have a negative impact on return on asset. The study recommends that conglomerate companies in Nigeria adopt the conservative approach to working capital management so as to experience an increase in profitability for business sustainability.

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.

According to the traditional cost behavior, costs are categorized as fixed or variable costs. Variable costs change proportionately with changes in the activity driver. Nevertheless, empirical evidence shows that cost increase with activity increase is more rapid than cost decrease with activity decrease. This phenomenon is named as sticky cost. In this paper, we measure the cost stickiness of each company and answer the research question that whether sticky costs affect the profitability of listed companies in Vietnam. We find that selling costs, general costs, and administration costs of listed companies in Vietnam are sticky in period 2011 – 2015, and the situation is more serious than the case of US and Brazil. Our analysis shows that the stickiness of selling and administration costs affects the earnings per share forecast. The paper suggests some recommendations for managers to avoid the negative effects of sticky cost on business performance.

Nowadays, firms are evaluated not only based on their financial reports but also on their corporate social responsibility and environmental disclosures. These disclosures are generally included in corporate social responsibility, environmental, and sustainability reports. Firms provide transparent and accountable information to shareholders and stakeholders through these reports. Therefore, information disclosures can be effective in enhancing the corporate image of companies and achieving their financial goals (reducing the cost of equity, increasing financial performance, and so on). 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. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the moderating effects of corporate governance mechanisms on the financial leverage–profitability relation in emerging market firms. Design/methodology/approach: The paper examines the impacts by estimating the empirical model in which a firm's accounting profitability is a dependent variable, while financial leverage, board size, board independence, CEO duality, CEO ownership, state ownership and the interaction variables are predictors. The paper uses the panel data set of 295 listed firms in Vietnam in the period 2011-2015 and two key econometric methods for panel data, namely, the two-stage least square instrumental variable and general moments method. Findings: The paper finds the evidence for the significant and positive effect of board size, board independence and state ownership on the financial leverage–profitability relation. The effect of CEO duality on the financial leverage–profitability relation tends to be negative, and the impact CEO ownership inclines to be positive, although both of them are statistically insignificant. The results are consistent across different estimation methods. Originality/value: This paper is the first investigating the moderating effect of various corporate governance mechanisms on the financial leverage–profitability relationship in emerging market firms. [ABSTRACT FROM AUTHOR]

We examine whether customer-base concentration has a differential impact on profitability for firms contracting with major government customers versus firms contracting with major corporate customers. We document that firm profitability increases with the concentration of major government customers, but decreases with the concentration of major corporate customers. We attribute the contrasting results to the differential impact of major government and corporate customers on demand uncertainty. Specifically, firms contracting with major government customers face lower demand uncertainty that enables them to realize more efficiency gains from customer-specific investments, whereas firms contracting with major corporate customers are exposed to higher demand uncertainty that reduces the efficiency of customer-specific investments. Overall, our study suggests that major government customers are unique and important in the composition of customer base, and they impact firm outcomes in a significantly different way than major corporate customers. JEL Classifications: M41; L25; G14; H57. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

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.

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.

We explore a special case of electronic word of mouth that of employees' online reviews to study the determinants of job satisfaction and employee turnover. We perform our analysis using a novel dataset of 297,933 employee online reviews from 11,975 US tourism and hospitality firms, taking advantage of both the review score and text. Leadership and cultural values are found to be better predictors of high employee satisfaction, while career progression is critical for employee turnover. One unit increase in the rating for career progression reduces the likelihood of an employee to leave a company by 14.87%. Additionally, we quantify the effect of job satisfaction on firm profitability, where one unit increase leads to an increase between 1.2 and 1.4 in ROA. We do not find evidence supporting the reverse relationship, that growth on firm profitability increases job satisfaction. The feedback to management in employee reviews provides specific managerial implications. • We use online reviews to evaluate job satisfaction and employee turnover factors for tourism and hospitality firms. • 297,933 employee review ratings and texts for 11,975 U.S tourism and hospitality firms from Glassdoor are analyzed. • A recent extension of probabilistic topic modeling the Structural Topic Model (STM) is used for the text analysis. • A one unit increase of the rating for career opportunities decreases the likelihood of an employee to leave by 14.87%. • An increase by one star in the overall rating of a company is linked with an increase between 1.2 and 1.4 of ROA. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

In this study, the relationship between firm growth and profitability is investigated through the annual data of the companies operating in Borsa İstanbul Industrial Sector for the period 2003-2016. For this purpose, panel cointegration and panel causality tests are used and the results of the study showed that there is a long-term relationship between profitability and growth. Panel causality test results show that there is a two-way causality relationship between growth and profitability. [ABSTRACT FROM AUTHOR]

Using a unique dataset on board directors from 2008 to 2016, we document a positive relationship between board business connections and firm profitability for listed firms in China. The positive relationship is robust to various estimation methods and is stronger when the connections are possessed by independent directors or extended to listed firms. Finally, well-connected firms are more likely to have access to external financing and to obtain favorable audit opinions. Overall, our findings signify the importance of connections (guanxi) in business activities in China. [ABSTRACT FROM AUTHOR]

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. [ABSTRACT FROM AUTHOR]

The impact of socially responsible corporate behavior on economic performance is a major preoccupation of managers today. This article explores the links between narrowly defined constructs: stakeholder orientation, environmental proactivity and profitability, from the perspectives of stakeholder theory and resource-based theory. We collected data on the food and beverage, and household and personal products industries. Using structural equation modeling, this paper makes two contributions. We found a negative link between companies simply having a higher stakeholder orientation and profitability. Importantly, however, environmental proactivity not only had a positive impact on profitability, but also appeared to mediate the relationship between stakeholder orientation and profitability. In other words, if a company is more environmentally proactive, it will be more attentive to a broad array of stakeholders, and this will in turn contribute positively to profitability. [ABSTRACT FROM AUTHOR]

Copyright of Polish Journal of Management Studies is the property of Czestochowa University of Technology, Faculty of Management and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

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. [ABSTRACT FROM AUTHOR]

Notwithstanding the recent banking innovations, like mobile money services, microfinance institutions still rely on brick‐and‐mortar branches to provide financial services to the poor in the sub‐Saharan Africa (SSA) region. Moreover, the number of microfinance branches has continued to increase remarkably since the early 2000s. In light of that, we study the influence of geographic expansion of the branches network on the profitability of 343 microfinance institutions operating in 36 countries of SSA over the period 2003 to 2012. By exploiting the ordinary least squares and generalised method of moments approaches, we found that the geographic expansion of microfinance branches is positively associated with an increase in profitability. Conspicuously, the policy implication regarding this study's findings is that extending financial services to the poor, via branch expansion, is optimal for microfinance institutions operating in SSA. Nevertheless, the branching strategy must be accompanied by operational efficiency to safeguard the advantages of economies of scale gained through the scale‐up of the branch network. © 2019 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]

Using corporate accounting profitability measures to proxy for management quality, we report evidence that acquisitions made by higher quality acquirers create greater shareholder value. More profitable acquirers earn better stock returns over the long term, although no consistent relationship is found between announcement‐period abnormal returns and firm profitability. More profitable acquirers also preserve shareholder value by reducing the likelihood of paying stock for acquisitions or overpaying the targets. Overall, our results provide new support for the hypothesis that better acquirers make better acquisitions. Our results also convey a clear message to corporate accounting and financial executives, outside investors, and other professionals. When firms with poor accounting profitability make acquisitions, it is usually not good news. [ABSTRACT FROM AUTHOR]

Loyalty programs (LPs) are marketing investments designed to foster behavioral loyalty among a firm's best customers and, ultimately, increase firm performance. Surprisingly, the effectiveness of introducing LPs on firm performance in the short and long term has not been thoroughly evaluated. This research examines the extent to which introducing an LP can increase both firm sales and gross profits. Leveraging data from 322 publicly-traded firms that introduced an LP between 2000 and 2015, the authors demonstrate that introducing an LP can increase sales and gross profits in the short term (within the first year), and these positive effects are sustained long term (for at least three years). However, the effects on gross profits do not become significant until the second quarter after LP introduction, and their overall impact on performance lags substantially behind sales. Complementing these primary findings, the results reveal that offering an LP with tiers or earning mechanisms can provide firms with significant increases in sales and gross profits. Taken together, this research demonstrates that introducing strategically designed LPs can dramatically increase firm performance in both the short and long term. [ABSTRACT FROM AUTHOR]

We test two potential hypotheses regarding the effects of major customer concentration on firm profitability. Under the collaboration hypothesis, customer power facilitates collaboration, and both the supplier firm and its major customers obtain benefits. Under the competition hypothesis, customer power results in rent extraction, and the major customers benefit at the expense of the supplier firm. We document that major customer concentration is negatively associated with the supplier firm's profitability but positively associated with the major customers' profitability. We demonstrate that these effects weaken as the supplier firm's own power grows over its relationship with major customers, supporting the competition hypothesis. We carefully reconcile our results with prior studies' findings that focus only on the supplier firm's profitability and identify their research design and interpretation problems. We obtain similar inferences in a setting of major customers' horizontal mergers and when we use an alternative measure of major customer power. [ABSTRACT FROM AUTHOR]

Most marketing practitioners and scholars agree that marketing assets such as brand equity significantly contribute to a firm's financial performance. In this paper, we model brand equity as an unobservable stock that results from up to 30 years of past brand-related investment flows. Using firm-specific trademarks as investment proxies, our results show a significant long-run impact on financial performance. The dynamic profile of brand-related investments has an inverted-U shape that reaches its peak after 11 years. On average, it takes four years before brand-related investments show a positive return, and investments older than 19 years show no significant impact. For the median trademarking firm, brand equity contributes €265,000 to annual profits. [ABSTRACT FROM AUTHOR]

The study measures the impact of anti-corruption policies on the profitability and growth of firms listed in the Singapore Stock Exchange (SGX). It is the first paper that investigates the impact of macro and micro economics variable together. The study uses panel data regression to examine the effect of corruption on firm profitability and growth in 392 listed firms in Singapore Stock Exchange for the period from 1995 to 2014. We used 2 models; in the first model we measure the relation between corruption and profitability measured by net profit margin. In this model we run 2 sub-models; in the first one we added only micro-variables to corruption and in the second we incorporated macro-and micro-variables together. Moreover, in the second model we measure the relation between corruption and company growth measured by total asset growth. In this model we run 2 sub-models; in the first one we added only micro-variables to corruption and in the second we incorporated macro- and micro- variables together. All data are coming from DataStream database except the corruption index which comes from the transparency international index (CPI) The main conclusion of this study is that anti-corruption policies that was conducted in Singapore over the period from 1995 to 2014 resulted in better firm performance measured by net profit margin (1-point index improvement increases net profit margin by about 12.8%) and asset growth (1-point index improvement increases total asset growth by about 11.7%). Since this result might not be generalized in all countries with different level of growth, further research is suggested to investigate the factors that differentiate the anti-corruption policy effect among different countries including national culture that may impacts the fanatical system. [ABSTRACT FROM AUTHOR]

The objective of this research is to determine the relationship between corporate governance practices and firm profitability for the companies in agricultural sector of Asian countries for the period of 2008 to 2017 as agriculture is one of the most important sectors in these economies. The results demonstrate that the variables of board independence, ownership concentration, audit committee independence, leverage and sales growth have significant positive relationship with return on assets (ROA), whereas, the variables of quality of corporate governance, board size, CEO duality and firm size have significant negative association with return on assets (ROA). Moreover, the endogeneity of the board structure variable was investigated by applying the Two Stage Least Squares (2SLS) regression model. The results of the 2SLS regression model depicts that variables of board independence, audit committee independence and sales growth have significant positive association with return on assets (ROA), whereas, the variables of quality of corporate governance, leverage and firm size have significant negative relationship with return on assets (ROA). [ABSTRACT FROM AUTHOR]