Employee‐friendly practices, product market competition and firm value

Chang, Saeyoung; Jo, Hoje

doi:10.1111/jbfa.12353

Cited by 32 publications

(25 citation statements)

References 102 publications

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“…The positive values of the mean, median and significance of the match-adjusted variables in the Faleye and Trahan (2011) study, as summarized in the latter statistics compiled for this paper, yielded interesting implications when compared with the Chang and Jo (2019) research. All four measures of value among the Fortune best companies outperformed their matched pairs in Faleye and Trahan.…”

Section: Analysis Of the Four Measures Of Valuementioning

confidence: 68%

“…All four measures of value among the Fortune best companies outperformed their matched pairs in Faleye and Trahan. However, from the statistical perspective of central tendency, the sample in Faleye and Trahan’s study shows that the firms tend to be undervalued, whereas Chang and Jo’s (2019) research revealed a centrally overvalued sample of firms. Faleye and Trahan’s sample was from 1998 to 2005, an eight-year period, whereas Chang and Jo’s sample was from 1991 to 2012 or two decades.…”

Section: Analysis Of the Four Measures Of Valuementioning

confidence: 91%

“…As evidenced by empirical data from Chang and Jo, the LFP of a firm associate with higher stock market returns (an indicator of firm value) as a result of high or extensive competition in the product market. Theoretically, the foregoing relationship is supported by the value creation theory (Chang and Jo, 2019).…”

Section: How Labour-friendly Practices Translate To Higher Stock Returns: An Analysis Underpinned On the Value Creation Theorymentioning

confidence: 98%

“…This subsection compares the empirical relationships emanating from hypotheses evaluated in a (Chang and Jo, 2019) research and the theoretical grounding in value creation theory examined by Windsor (2017). The statistical effect of specific highly noteworthy events on the stock return of firms recognized for their LFP illustrates a measure of firm value (i.e.…”

Section: How Labour-friendly Practices Translate To Higher Stock Returns: An Analysis Underpinned On the Value Creation Theorymentioning

confidence: 99%

“…However, further analysis should lead research to one or more mediating and/or explanatory factors that link firm value with stock returns. One explanatory variable examined in the work of Chang and Jo (2019) within a familiar context as in Faleye and Trahan, is product market competition. Chang and Jo’s study also evidence a positive relationship between employee-friendly practices and value creation in a large sample of US firms.…”

Section: How Labour-friendly Practices Translate To Higher Stock Returns: An Analysis Underpinned On the Value Creation Theorymentioning

confidence: 99%

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Labour-friendly practices and value maximization: a SEM approach

Al-Tawil

Gantasala

Younies

2021

IJLMA

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Purpose This paper aims to present a vital strand that is part and parcel of an informed discussion towards the adoption of labour-friendly practices (LFP). This study is intended to examine the influence of LFP on five dimensions: job performance (JP), employee satisfaction (ES), corporate governance (CG), customer satisfaction (CS) and organizational performance (OP). Design/methodology/approach The study was conducted on top and middle-level management personnel in several companies across the United Arab Emirates (UAE). A total of 1,000 questionnaires was distributed personally and via email of which 366 usable responses were analysed using confirmatory factor analysis and structural equation modelling (SEM). Findings The results reinforce the premise that LFP positively and significantly influences value maximization. Originality/value This paper affirmed that what is good for the employees (or other stakeholders) is also good for shareholders, but within the constraints of an ideal context, where the shareholders subscribe to strict ethical principles and the stakeholders act with their moral agency intact. Thus, the discussion of LFP comprises not just about what is satisfying for the employees but also what is conducive for optimal value creation. The empirical findings were, however, more compatible within the agency theory framework because of the non-instrumentality that was observed too ideal and philosophical for the stakeholder theory of value creation.

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Section: Analysis Of the Four Measures Of Valuementioning

confidence: 68%

Section: Analysis Of the Four Measures Of Valuementioning

confidence: 91%

Section: How Labour-friendly Practices Translate To Higher Stock Returns: An Analysis Underpinned On the Value Creation Theorymentioning

confidence: 98%

Section: How Labour-friendly Practices Translate To Higher Stock Returns: An Analysis Underpinned On the Value Creation Theorymentioning

confidence: 99%

Section: How Labour-friendly Practices Translate To Higher Stock Returns: An Analysis Underpinned On the Value Creation Theorymentioning

confidence: 99%

See 3 more Smart Citations

Labour-friendly practices and value maximization: a SEM approach

Al-Tawil

Gantasala

Younies

2021

IJLMA

View full text Add to dashboard Cite

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Environmental transparency and investors' risk perception: Cross‐country evidence on multinational corporations' sustainability practices and cost of equity

Tanda

Luu

et al. 2021

Bus Strat Env

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We explore whether a greater amount of environmental disclosure can reduce a firm's ex ante cost of equity. This could occur because the quantity of environmental information changes investors' risk perception of the company, thereby influencing its ex ante cost of equity. Our study is a cross-country analysis of 1481 multinational corporations (MNCs) across 43 countries and territories from 2013 to 2019. Firstly, we measure investors' risk perception as a firm's ex ante cost of equity by employing five different valuation models, all based on equity analysts' forecasted data. We then investigate whether large quantities of environmental information disclosed by an MNC affect its ex ante cost of equity. We find evidence that investors price the amount of environmental disclosure. More environmental disclosure decreases a firm's ex ante cost of equity because it lessens investors' information asymmetry.However, this relationship is non-linear. Once the amount of environmental disclosure data exceeds a certain threshold level, a firm's ex ante cost of equity will rise again. Our empirical results also suggest that non-financial factors at the country level play a role in shaping how investors perceive a firm's riskiness. Locating the firm in a country with better environmental performance and a higher score of the human development index can reduce investors' risk perception and result in a lower ex ante cost of equity. A policy implication of our findings is that a global standardised and effective corporate sustainability reporting is needed to provide investors a more holistic view for evaluating the riskiness of their investments.

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