Corporate governance, human capital, and productivity: evidence from Chinese non-listed firms

Kong, Gaowen; Kong, Dongmin

doi:10.1080/00036846.2016.1245837

Cited by 17 publications

(15 citation statements)

References 50 publications

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“…The second control variable included in the model is firm size, SIZE, calculated as the log of total assets (Kong and Kong 2017;Tyagi et al 2018). We predict a positive effect of firm size on firm value, consistent with Palaniappan (2017a), who show that company size positively affects firm performance.…”

Section: Control Variablessupporting

confidence: 84%

Do board characteristics drive firm performance? An international perspective

2019

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The aim of our research is to analyze how board characteristics influence firm performance. In this paper, we specifically examine how board size, board independence, CEO duality, female directors and board compensation affect firm performance in a sample of international firms. The final panel data sample is composed of 10,314 firm-year observations belonging to 34 countries that have been grouped into six geographic zones: Africa, Asia, Europe, Latin America, North America and Oceania. Drawing on agency theory and dependence resource theory, we posit five hypotheses. The results show that some board characteristics, such as board size, board independence and having a female director, are positively associated with firm performance, whereas CEO duality, contrary to our expectations, also impacts positively on firm performance. Moreover, board compensation is not associated with firm performance. Tobin's Q was used to measure firm performance, although an accounting measure was also employed for robustness analyses and to provide more validity to our results.

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Section: Control Variablessupporting

confidence: 84%

Do board characteristics drive firm performance? An international perspective

2019

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“…Investment in human capital is one of the most critical decisions of enterprises because it significantly leads to productivity [ 50 ]. Kong and Kong [ 51 ] also dissected that human capital significantly and positively increases the productivity of private and public enterprises in China. Haris, Yao [ 52 ] displayed that structural capital significantly underpins the profitability of the banking sector in the emerging market Pakistan.…”

Section: Theoretical Background and Hypotheses Developmentmentioning

confidence: 99%

Intellectual capital and the efficiency of SMEs in the transition economy China; Do financial resources strengthen the routes?

Liu

Anwar

et al. 2020

PLoS ONE

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Intellectual capital has been grabbed the attention of researchers due to its momentous role in sustainable competitive advantage and organizational success. There is a growing catalog of related assessments, publications and reviews that display the direct and indirect role of intellectual capital in business success and profitability. Despite the bourgeoning literature, studies have not yet unleashed the influence of each dimension of intellectual capital; human capital, structural capital and customer capital on SMEs' efficiency with financial resources as a moderator. The present study fills the gap and assesses if financial resources strengthen the paths between the dimensions of intellectual capital and SMEs' efficiency. A survey method was used and collected evidence from 264 Chinese SMEs. The findings exhibit that human capital directly enhances SMEs' efficiency but the presence of financial resources as a moderator weakens the influence. However, social capital and customer capital do not directly improve SMEs' efficiency but financial resources reinforce the paths social and customer capital and SMEs efficiency. This research recommends that owners and managers of SMEs need to use their financial resources complementary with structural and customer capital while human capital should be used exclusively.

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“…To control the probable effect of the directors and the firm’s characteristics on its financial performance, the following variables were used: Leverage level (LEVEG) was measured by dividing the total liabilities by the total assets (Bansal and Sharma , 2016; Khan, 2016; Zhou et al , 2018; Awan et al , 2020; Leyva-Townsend et al , 2021). Audit quality (AQ) was measured by the utilisation of a Big 4 audit firm as a proxy for audit quality. Audit quality is denoted by a binary variable taking the value of 1 if a Big 4 four audit firm was used and 0 if otherwise (Al Ani and Mohammed, 2015; Cheema et al , 2016; Sadiq and Othman, 2017).…”

Section: Methodsmentioning

confidence: 99%

“…Leverage level (LEVEG) was measured by dividing the total liabilities by the total assets (Bansal and Sharma , 2016; Khan, 2016; Zhou et al , 2018; Awan et al , 2020; Leyva-Townsend et al , 2021).…”

Section: Methodsmentioning

confidence: 99%

“…In terms of the helping-hand approach, the BoD can use their political links to reduce the external environment’s uncertainty in many ways. These include having better access to resources and legitimacy and more information and additional advice, thereby enhancing a firm’s financial performance and prospects (Khan, 2016). Politically connected companies perhaps have a competitive edge via lower taxation (Faccio, 2006; Cheema et al , 2016), easy access to profitable government contracts and financing (Goldman et al , 2008; Wang et al , 2019) and lower cost of equity and debt (Boubakri et al , 2012; Saeed et al , 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

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Political connections and financial performance: the moderating role of director efficacy

Niazi

Othman

Chandren

2023

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Purpose Firm performance has become a thriving research field. However, a review of previous studies shows that the answers to several fundamental questions remain vague and require further investigation. Thus, the purpose of this study is twofold. The first is to determine the extent of the involvement of political connections (PCs) in Pakistani-listed companies, and the second is to examine the association between PCs and firm financial performance with director efficacy’s moderating role. Design/methodology/approach A data set of 221 non-financial companies listed on the Pakistan Stock Exchange for 10 years (2008–2017) was analysed using panel-corrected standard error regression. Additionally, the authors address endogeneity issue by using Hackman two-stage estimation and lagged variables regression. Findings The study found that PCs negatively affected the firm’s financial performance, and director efficacy as a moderator strengthened this relationship. The result is consistent with the political economy theory that argues that an unstable political system and a weak judicial system will strongly affect investors and their rights. Practical implications The impact of political influence on the corporate sector remains a concern for policymakers, regulators, investors, financial experts, auditors and academic researchers. This study’s findings are that an effective board of directors can strengthen the company’s best practices by controlling political connectedness to protect all the interested parties, particularly investors, and restore their confidence. Therefore, the results of this study can assist all stakeholders when a PCs exists to make the right decisions. Originality/value The study extends the literature in terms of theoretical contribution that uses an integrative approach to combine political economy theory, agency theory and resource dependence theory to address the moderating role of director efficacy with an association between PCs and firm financial performance. To the best of the authors’ knowledge, no extant research has investigated the association between PCs and firm financial performance using five aspects of PCs, along with moderator director efficacy.

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Corporate governance, human capital, and productivity: evidence from Chinese non-listed firms

Cited by 17 publications

References 50 publications

Do board characteristics drive firm performance? An international perspective

Do board characteristics drive firm performance? An international perspective

Intellectual capital and the efficiency of SMEs in the transition economy China; Do financial resources strengthen the routes?

Political connections and financial performance: the moderating role of director efficacy

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