Capital subsidization is a widespread instrument of regional and industrial policy in Europe. A number of recent works have examined the influence of capital subsidization on the total factor productivity of recipient sectors and firms, and have provided strong evidence of neutral or even negative effects. The present study examines the effect of capital subsidization on four dimensions of the financial performance of firms, that is efficiency, profitability, capital structure, and growth, and provides evidence that capital subsidization affects solely firm growth.

Purpose -This work sets out to explore the effects of ISO 9001 on productive efficiency of firms. Design/methodology/approach -A sample of 1,572 firms from three Greek manufacturing industries is used for empirical work. The firms are from the food and beverages industries, the machineries industries as well as from the electrical and electronics appliances manufacturing industries and include both adopters and non-adopters of ISO 9001. A stochastic frontier methodological approach is adopted and the effects of ISO 9001 can be modeled in four ways: as a managerial input alongside the conventional inputs of capital and labor, as a factor affecting technical inefficiency, as an input and a factor affecting technical inefficiency and as having no effect at all. Findings -ISO 9001 operates as a factor affecting technical inefficiency with non-neutral effects on capital and labor. The combined effect of ISO 9001 with capital increases the level of technical inefficiency reflecting adjustment costs incurred when ISO 9001 is adopted. The combined effect of ISO 9001 with labor decreases the level of technical inefficiency reflecting the positive result of ISO 9001 on reducing x-inefficiency.Research limitations/implications -The analysis isolates the effects of ISO 9001 on capital and labor but specific case studies are necessary in order to reveal managerial best practices that confront negative and support positive effects of ISO 9001 adoption within firms. Originality/value -The paper illustrates that ISO 9001 is a managerial factor reducing productive inefficiency.

This study examines the causal linkage between environmental and financial performance in Greek manufacturing firms. Environmental performance is measured according to accounting data following the Eco Management and Auditing Scheme guidelines and ISO certification. Return on assets and return on sales are used as indicators of financial performance. Empirical findings suggest that there seems to be a link between these dimensions irrespectively of the particular sector of activity. Contrary to similar studies a "virtuous circle" does not exist as the avoidance of environmental improving investments is related to a better financial performance. On the other hand firms with superior financial performance seem to achieve a better environmental performance. At the same time firm specific and market characteristics significantly affect this relationship. These findings provide evidence that governmental and corporate actions are necessary in order to lead to a more sustainable corporate performance in the long run.

Capital subsidies form a major instrument of industrial and regional policy for economically developed countries all over the world, including many European Union and Organisation for Economic Cooperation and Development countries. Research findings have challenged the effectiveness of capital subsidies in assisting productivity growth. This paper treats capital subsidies as a new input and estimates a stochastic production frontier that is not bound by the restrictions imposed by approaches used in previous research works. It is shown that capital subsidies affect total factor productivity growth through technical change and not through scale efficiency, while the disadvantaged location of firms affects technical efficiency.

PurposeThe purpose of this study is to explore the association between cash holdings and business strategy for nonfinancial and nonutility US firms over the period from 1970 to 2016.Design/methodology/approachThe authors have used Miles and Snow's (1978, 2003) theoretical background and followed Bentley et al. (2013) to construct a strategy index. Thus, the authors have distinguished two extreme corporate strategies, prospectors and defenders, based on a firm's resource allocation and investment behavior patterns. Following the methodology of Bates et al. (2009), the authors have used the multiple regression analysis to explore the relationship between business strategy and corporate cash holdings.FindingsThe empirical results show that business strategy is positively related to cash holdings. Prospectors are more likely to hold higher cash levels than defenders. Furthermore, the authors have found that cash holding's speed of adjustment (SOA) is slower for prospectors than for defenders, suggesting that business strategy influences cash holding's trend. Interestingly, the results show that the market value of cash increases significantly only for the firms that pursue a defender strategy.Research limitations/implicationsThe results of this work have valuable implications for researchers, by unveiling the relationship between corporate strategy and firm's cash holdings. This study, however, is limited to a sample of US firms; empirical evidence based on international samples of firms would add value to the current literature.Practical implicationsThe findings could be useful to financial managers and investment strategists, who seek to maximize firm value through the adoption of an effective liquidity policy. What is more, this study provides support for the view that strategic choice and optimal cash management are of great importance for firms' market value.Originality/valueThis study enriches the knowledge of business strategy's impact on financing policy of firms and contributes to the empirical literature of cash holdings' determinants. In addition, it complements previous studies on US firms by documenting the effect of business strategy on the SOA in cash holdings and firm value.

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PurposeThe recent performance literature suggests that policies that enhance corporate environmental performance are more likely to lead to sustainable development, as these strategies are connected to superior technical efficiency. This paper aims to investigate the possible link between the environmental performance achieved by Greek listed firms and the level of their technical efficiency, using financial reporting information as a proxy for environmental performance.Design/methodology/approachData extracted from the financial statements of the most polluting firms listed in Athens Stock Exchange were used. An econometric framework based on stochastic frontier analysis was developed to estimate the probable linkage between the level of environmental performance, measured by environmental performance indicators (EPIs), and efficiency.FindingsThe empirical findings reveal that improved environmental performance is a potential source of competitive advantage leading to more efficient processes, improvements in productivity, lower costs of compliance and new market opportunities.Research limitations/implicationsThis research was based on corporate financial data coming from the firms listed in Athens Stock Exchange whose activities can be considered as environmentally harmful.Practical implicationsFrom the stock market investor's perspective, the combination of financial and environmental information can lead to decisions with prosper future growth, whereas regulating authorities and managers can adopt useful policies for sustainable development.Originality/valueIn this paper content analysis approach was used on financial and environmental reporting data to measure the level of corporate environmental performance. To the best of the authors' knowledge, this is the first study conducted with Greek firm level data that explores the relationship between EPIs and productivity, an issue which has not been lucidly investigated in the academic literature.