Director co‐option and the cash conversion cycle

Harris, Oneil; Hampton, Jonathan

doi:10.1002/jcaf.22540

Cited by 6 publications

(4 citation statements)

References 43 publications

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“…Also, the quick ratio and inventory turnover ratio is a moderate negative correlation (r=-.476). (Badakhshan & Ball, 2022;Harris & Hampton, 2022;Azam, 2022). The coefficient of determination, or R Squared, shows the overall variance in the dependent variable.…”

Section: Resultsmentioning

confidence: 99%

“…A decrease in the corporate CCC will increase profitability (Abolfathi et al, 2022). Numerous studies have examined the relationship between WCM and profitability and found a negative relationship between the cash conversion cycle and profitability (Soda et al, 2022;Harris & Hampton, 2022;Garg & Meentu, 2022). Richards & Laughlin (1980) came up with the concept of CCC.…”

Section: Literature Reviewmentioning

confidence: 99%

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Sustainable Working Capital and Financial Performance in Cement Industry of Pakistan: An OLS Approach*

Raza,

Tursoy,

Balal

2023

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This research aims to demonstrate for the first time how the Pakistani cement sector's financial health is impacted by sustainable working capital. The cement Industry uses sustainable working capital techniques and practices for magnificent financial outcomes. Considering the importance of these profitable techniques, we practice these in cement firms with a sample size of 25 cement firms listed in the Pakistan stock market (PSX) from 1997-2022. The data is collected from annual reports available on the financial statements. The current ratio and Quick ratio are measured for liquidity. Ordinary Least Square & correlation analysis indicates that the cash conversion cycle (β1= -0.564, p= 0.00), Current ratio (β2= -0.20, p= 0.040), Quick ratio (β3= -0.585, p= 0.000) and Inventory Turnover ratio (β4= -0.244, p= 0.004) have a negative effect on financial performance (Tobin's Q). This study helps policymakers that can handle liquidity Sustainable working capital for the cement industry.

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Section: Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Sustainable Working Capital and Financial Performance in Cement Industry of Pakistan: An OLS Approach*

Raza,

Tursoy,

Balal

2023

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“…Industry‐adjusted days payable outstanding ( ADJ_DPO ) is the average account payables divided by cost of goods sold minus the industry‐year mean at the end of the fiscal year before the attack. Lower ADJ_DIO and ADJ_DRO values imply that firms are better at selling products and collecting cash from customers than their rivals, whereas higher ADJ_DPO values indicate that firms get more favorable trade credit terms from suppliers than their peers (Harris & Hampton, 2022).…”

Section: Methodsmentioning

confidence: 99%

Cyberattacks, cash conversion cycle, and corporate performance

Harris,

Nguyen

2023

J Corp Accounting Finance

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This study examines the effect of working capital efficiency on the performance of firms that experience cyberattacks. We find robust evidence that an aggressive working capital policy improves the immediate and after‐market stock returns as well as the operating performance of firms that suffer an outside party or a malware hacker attack. Specifically, we document a negative relationship between announcement period abnormal returns and the industry‐adjusted cash conversion cycle, implying that investors react less favorably when breached firms have more conservative working capital policies. We also find a negative association between the cash cycle and long‐horizon buy‐and‐hold abnormal returns indicating that working capital efficacy has a protracted positive effect on stock performance after an attack. The cash conversion cycle is also negatively related to operating performance, as measured by industry‐adjusted market power, industry‐adjusted return on assets, and industry‐adjusted market‐to‐book ratio. In addition, we find that access to trade credit and the ability to delay payments made to suppliers (depicted via days’ payables outstanding) are the most important factors in helping breached firms mitigate the financial and operating costs of cyberattacks. Overall, our results are robust to endogeneity concerns and expand the literature on the firm‐level aspects of data breaches.

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“…As board co‐option helps insulate managers with career concerns, it should give these managers a stronger incentive to pursue risky, value‐enhancing projects. Existing literature finds that board co‐option is associated with a greater inclination towards LGBT‐supportive policies (Kyaw et al, 2021), higher R&D investments and innovation (Chintrakarn et al, 2016; Nguyen et al, 2020), and more efficiently managing working capital (Harris & Hampton, 2022).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Co‐opted board, environment, social and governance

Maneenop,

Padungsaksawasdi,

Treepongkaruna

2023

Bus Strat Env

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The ultimate goal shared by society is sustainable development, a process of addressing current needs without sacrificing resources of future generations. To achieve sustainability, companies should consider of environmental, social, and governance (ESG) in their stakeholder engagement process. Investment in ESG activities is unavoidably decided at the board, making board characteristics become crucial for sustainability. We explore the effect of co‐opted directors, appointed after the incumbent CEO assumes office, on corporate ESG performance. Our findings show that firms with co‐opted directors tend to have poorer ESG performance. Investing in ESG is a long‐run corporate policy. Consistent with the managerial myopia hypothesis, the co‐opted directors, representing weaker governance mechanisms with ineffective monitoring roles, provide managers fewer incentives to invest in the long run. We address endogeneity concerns by conducting instrumental variable analyses.

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Director co‐option and the cash conversion cycle

Cited by 6 publications

References 43 publications

Sustainable Working Capital and Financial Performance in Cement Industry of Pakistan: An OLS Approach*

Sustainable Working Capital and Financial Performance in Cement Industry of Pakistan: An OLS Approach*

Cyberattacks, cash conversion cycle, and corporate performance

Co‐opted board, environment, social and governance

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