Firm age, ultimate ownership, and R&amp;D investments

The primary purpose of this study is to investigate the impacts of earnings management (EM) and related party transactions (RPTs) on corporate financial performance in an emerging market, Iran. This paper also aims to examine the moderating role of internal control weakness (ICW) in the relationship between them. The study sample includes 108 Iranian manufacturing companies listed on the Tehran Stock Exchange (TSE) between 2013 and 2018, and panel data with random effects are used to test the hypotheses. When an accounting-based measure called ROA is defined as a proxy for corporate performance, the results show that there is a negative association between real earnings management (REM) and corporate financial situation, while accrual-based earnings management (AEM) and firm value are correlated positively. However, when Tobin’s Q index is defined as a proxy for corporate performance, we do not find any significant association between them. Consistent with the tunneling hypothesis or agency theory, our findings confirm RPTs damage corporate value (ROA and Tobin’s Q) because managers probably consider it a mechanism to exploit enterprise resources owing to existing conflictual interests. Moreover, purchase-related party transactions lead to lower ROA, whereas sale-related party transactions and Tobin’s Q are correlated negatively. Moreover, weak internal control has a positive moderating influence on the linkage between AEM and Tobin’s Q index. Finally, we provide robust evidence that there is a positive association between sale growth and institutional owners with ROA and Tobin’s Q, although financial leverage and mergers and acquisitions (M&A) have a destructive effect on corporate value.

show abstract

“…The number of years of company activity (Sarlak and Akbari 2014;Fan and Wang 2019;Moradi et al 2021).…”

Section: Firm Age Controlmentioning

confidence: 99%

Earnings Management, Related Party Transactions and Corporate Performance: The Moderating Role of Internal Control

Zimon

Appolloni

Tarighi

et al. 2021

Risks

View full text Add to dashboard Cite

show abstract

“…One of the key factors identifying the development of companies is age, which often indicates experience, more effective entrepreneurship [91] (p. 256), greater competitiveness, as well as greater market valuation and less profitability uncertainty [92,93]. Age is also considered an important determinant of a company's innovation because of the existence of learning outcomes which allow mature companies to innovate more effectively as they rely on previous routines, experience and skills [15], also in the food industry [20]. The company's age is closely related to the concept of the company's life cycle.…”

Section: Company's Life Cyclementioning

confidence: 99%

“…Therefore, this study was conducted in order to solve the following research problem: what is the importance of the age of companies, which are food producers selling online among the local community, depending on the selected aspects indicated as important based on the literature analysis below. However, studies that would directly measure the impact of the company's age [15][16][17][18][19], on the variety of marketing activities are very rare and typically touch this aspect just indirectly, especially among food producers [20]. Some researchers also studied other factors related to marketing activity, including sources of marketing inspirations [21][22][23][24][25][26], additional sales channels [27][28][29][30][31][32][33][34], variety of sales offer [35][36][37][38][39][40][41] and problems and barriers in online selling [42][43][44][45].…”

Section: Introductionmentioning

confidence: 99%

Marketing Activities of Local Food Producers in E-Commerce

Szymański

2021

Sustainability

View full text Add to dashboard Cite

The food industry is characterized by a constant increase in value. The purpose of this study is to identify the most popular marketing forms used by the analyzed enterprises, which were food producers selling online among the local community and identification of the correlation of the analyzed variables with the age of companies. The survey was carried out with the use of the CATI (Computer Assisted Telephone Interviewing) method, and the research tool was a questionnaire. The Chi-square statistics was used to examine the dependencies of individual variables and V-Cramer coefficient was used to identify the strength of the correlation. The obtained results and their analysis enable to conclude that there is a strong relation between the number of encountered problems in conducting online sales and the period of the company’s existence. The relationship (with a moderate strength) between sources of marketing inspirations used in e-stores and the company’s age was also confirmed. Furthermore, it was noticed that the number of marketing tools increases with the period of the company’s existence. Sales promotion, social media marketing and website positioning were indicated among the most popular tools.

show abstract

“…Aktivitas inovasi perusahaan berubah dari waktu ke waktu dan usia perusahaan mencerminkan proses pertumbuhan dan akumulasi pengalaman (Coad et al, 2016;García-Quevedo et al, 2014). Usia dianggap sebagai penentu penting inovasi perusahaan karena adanya efek pembelajaran, yang memungkinkan perusahaan dewasa untuk berinovasi lebih efektif karena mereka membangun rutinitas dan kemampuan sebelumnya (Fan & Wang, 2019). Seiring waktu, perusahaan tidak hanya dapat berinovasi berdasarkan pengalaman dan kemampuan masa lalu, tetapi juga dapat mengakumulasi sumber daya, pengetahuan manajerial, dan kemampuan menangani ketidakpastian (Fan & Wang, 2019).…”

Section: Pendahuluanunclassified

“…Penelitian yang dilaksanakan oleh Kieschnick & Moussawi (2018) menunjukkan bahwa usia perusahaan berkorelasi positif dengan penggunaan utang, itu berkorelasi negatif dengan berapa banyak utang yang digunakan perusahaan, dan juga ditemukan bahwa efek usia perusahaan pada berapa banyak hutang yang digunakan perusahaan terutama disebabkan oleh interaksi antara usia perusahaan dan fitur tata kelolanya, dimana semakin banyak kekuatan yang dimiliki orang dalam, semakin sedikit hutang yang digunakan perusahaan seiring bertambahnya usia. Penelitian Fan & Wang (2019) mengungkapkan bahwa investasi research and development (R&D) berbeda menurut usia perusahaan. Hubungan antara usia perusahaan dan investasi R&D secara umum berbentuk lonceng, dan jenis kepemilikan utama memoderasi hubungan usia dengan R&D, karena hubungan tersebut lebih dramatis di antara perusahaan yang dimiliki oleh negara (Fan & Wang, 2019).…”

Section: Kajian Teori Dan Hipotesisunclassified

Pengaruh Usia Perusahaan terhadap Kinerja Keuangan (Studi pada Bank Victoria Syariah)

Putra¹

2021

E-BISMA

View full text Add to dashboard Cite

Company age and experience are concepts that remain the same. Younger and older companies differ in experience and other aspects. The company's innovation activities change over time and the age of the company reflects the process of growth and accumulation of experience. Age is considered an important determinant of corporate innovation because of its learning effect, which enables mature companies to innovate more effectively as they build on previous routines and capabilities. Over time, companies can not only innovate based on past experience and capabilities, but can also accumulate resources, managerial knowledge, and the ability to handle uncertainty. The purpose of this study was to determine the effect of company age on financial performance, as measured by return on assets (ROA) and return on equity (ROE). The results of the regression analysis show that the age of the company has no effect on ROA and ROE. Based on the results of this study, the management of Bank Victoria Syariah should try to increase market share to increase financial performance, for example by intensifying promotions and corporate cooperation.

show abstract

Firm age, ultimate ownership, and R&D investments

Cited by 32 publications

References 92 publications

Earnings Management, Related Party Transactions and Corporate Performance: The Moderating Role of Internal Control

Earnings Management, Related Party Transactions and Corporate Performance: The Moderating Role of Internal Control

Marketing Activities of Local Food Producers in E-Commerce

Pengaruh Usia Perusahaan terhadap Kinerja Keuangan (Studi pada Bank Victoria Syariah)

Contact Info

Product

Resources

About