The Impact of the Financial Flexibility on the Performance: An Empirical Study on a Sample of Jordanian Services Sector Firms in Period (2010-2017)

Al-Slehat, Zaher Abdel Fattah

doi:10.5539/ijbm.v14n6p1

Cited by 9 publications

(8 citation statements)

References 14 publications

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“…Studies on the FF-EP relationship have found it to be either positive (Al-Slehat, 2019;Arslan-Ayaydin et al, 2014;Ma and Jin, 2016), negative (Agha and Faff, 2014) or an inverted U-shape (Gu and Yuan, 2020;Yi, 2020). However, this research found the FF-EP relationship to be U-shaped in the hospitality industry amid the COVID-19 shock.…”

Section: Theoretical Implicationscontrasting

confidence: 56%

“…The literature addressing the FF-EP relationship is still inconclusive. While one argument suggests a positive FF-EP nexus (Al-Slehat, 2019;Arslan-Ayaydin et al, 2014;Bilyay-Erdogan, 2020;Ma and Jin, 2016), other states that increased FF can cause over investment and low FF can lead to insufficient investment (Agha and Faff, 2014). A third viewpoint focuses on the nonlinear FF-EP relationship, with several articles reporting it as concave (inverted Ushaped) (Gu and Yuan, 2020;Yi, 2020).…”

Section: Introductionmentioning

confidence: 99%

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Convex-concave effect of financial flexibility on hospitality performance: quantile regression approach

Chang

2021

IJCHM

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Purpose The purpose of this paper is to study the influence of financial flexibility (FF) on enterprise performance (EP) within Taiwan’s hospitality industry during the COVID-19 shock and explore whether EP varies with hospitality industry characteristics. Design/methodology/approach Secondary data of 39 Taiwan Stock Exchange-listed hospitality firms were collected from the Taiwan Economic Journal databases. Quantile regression analysis was applied to examine the FF-EP relationship Findings The results evidence that there is a U-shaped (convex) FF-EP relationship for hospitality firms in the 10th, 25th and 50th Tobin’s Q quantiles and in asset-heavy firms. For asset-light firms, FF has an inverted U-shaped (concave) effect on EP in the 90th Tobin’s Q quantile Practical implications The empirical results highlight the need for Taiwan’s hospitality industry as a whole to take rolling adjustment and optimization of FF and concentrate on liquidity risk management after the COVID-19 pandemic and for long-term sustainability. Originality/value To the best of the authors’ knowledge, this study is one of the first to examine the nonlinear FF-EP relationship in the hospitality industry of Taiwan, particularly amid the COVID-19 shock. Moreover, this study extends current literature by revealing the hospitality industry’s FF-EP relationship and highlights the importance of the pandemic crisis context.

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Section: Theoretical Implicationscontrasting

confidence: 56%

Section: Introductionmentioning

confidence: 99%

Convex-concave effect of financial flexibility on hospitality performance: quantile regression approach

Chang

2021

IJCHM

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“…Unlike extant research that suggested either a positive (Gu & Yuang, 2020;Liu & Chang, 2019;Wang & Shi, 2014;Zhang & Geng, 2018) or negative linear FF-ERT relationship (e.g. Agha & Faff, 2014;Al-Slehat, 2019;Ali & Siddiqui, 2020), the U-shaped FF-ERT relationship becomes apparent during the COVID-19 pandemic period.…”

Section: Discussionmentioning

confidence: 80%

The nonlinear relationship between financial flexibility and enterprise risk-taking during the COVID-19 pandemic in Taiwan?s semiconductor industry

Chang

2021

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Research background: Risk-taking is the basis for sustainable development of enterprise. It was clear that the influence COVID-19 epidemic on the global market economy has increased operational risks for businesses. The semiconductor industry has high operating risks and financial risks. Moderate financial flexibility (FF) can improve the ability of semiconductor enterprises to acquire financial resources in real time, calmly cope with the impact of uncertainties in operation, improve investment opportunities, and enhance sustainable operation. It is therefore interesting to study the influence of FF on enterprise risk-taking (ERT). Purpose of the article: The aim of the contribution is to explore the effect of FF on ERT within Taiwan?s semiconductor industry amid the COVID-19 pandemic period, and investigate whether ERT varies with semiconductor industry characteristic. Methods: Data from first three quarters of 2020, from multinational semiconductor firms listed on the Taiwan Stock Exchange (TSE), were collected and analyzed. Fixed effects regression with heteroscedasticity adjustment used to evaluate the influence of FF on the ERT of Taiwan?s semiconductor industry. Furthermore, in order to corroborate and support the reliability of the results, this research also used the different measures of ERT and Quantile regression (median regression) in the research model to check the robustness. Findings & value added: Empirical results indicate that FF has a U-shaped effect on ERT for multinational semiconductor firms listed on the TSE, particularly within the integrated circuits (IC) manufacturing industry. Additionally, FF also has a U-shaped effect on ERT for the asset-light semiconductor and IC manufacturing industries. This article also suggests that for the asset-light semiconductor and IC manufacturing industries, the optimal inflection points are 1.1397 and 0.9729, respectively. Based on the consequences of this study, it is suggested that Taiwan?s semiconductor industry should reasonably maintain FF and focus on the liquidity risk management for the long term value added, even after the COVID-19 pandemic period.

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“…Existing literature suggests that the financial flexibility of a company is one of the most important organizational capabilities or internal capacities (Guo et al 2020). It has been found that confirmed financial flexibility has a positive impact on performance (Rapp et al 2014;Ma & Jin, 2016;Al-Slehat, 2019;Chang & Ma, 2019;Embaye & Haile, 2019;Teng et al 2021). These empirical results are consistent with the RBV perspective, which supports the relationship between internal resources and performance (Miller & Shamsie, 1996).…”

Section: Methodsmentioning

confidence: 99%

“…Previous research has shown inconclusive findings regarding the effects of financial flexibility on performance. Several studies have found evidence of a positive impact on performance (Rapp et al 2014;Ma & Jin, 2016;Al-Slehat, 2019;Chang & Ma, 2019;Embaye & Haile, 2019;Teng et al 2021). In contrast, other studies have confirmed a negative influence (Agha & Faff, 2014;Dong and Mao, 2016) and a U-shaped relationship (Kusnadi, 2011;Arslan-Ayaydin et al 2014), indicating an interval effect on performance.…”

Section: Introductionmentioning

confidence: 99%

Competitive Advantage in Mediating The Effect of Financial Flexibility on Financial Performance: Indonesian Sharia Stock Index

Hasyim,

Budiarta

2023

jabm

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Resources are considered a key driver of organizational performance. However, the means to improve performance through resources remains an issue that is yet to be conclusively addressed in both theoretical and practical terms. This study aims to examine the roles of competitive advantage and Islamic Label (IL) in the relationship between financial flexibility and the performance of companies listed on the Indonesian Sharia Stock Index (ISSI). Using a longitudinal approach covering the period 2012-2021 and observing 88 companies, a total of 880 observations were obtained for this study. The statistical technique used for the analysis was variance-based structural equation modeling utilizing partial least squares with the statistical tool of WarpPLS. The study revealed that competitive advantage is able to partially mediate the impact of financial flexibility on firm performance. Proxies of competitive advantage, such as receivable turnover and financial leverage, were found to be significant to all performance proxies, namely ROA, ROE, and Tobin's Q. However, IL did not significantly enhance the link between financial flexibility and performance. It was found that the mediating impact of competitive advantage on the relationship between financial flexibility and performance indicated that improving performance through financial flexibility is indirect. Thus, contingency factors should be given due consideration in enhancing resource-based performance. For Islamic label companies, competitive advantage can be built to enhance performance by optimizing resource utilization.

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The Impact of the Financial Flexibility on the Performance: An Empirical Study on a Sample of Jordanian Services Sector Firms in Period (2010-2017)

Cited by 9 publications

References 14 publications

Convex-concave effect of financial flexibility on hospitality performance: quantile regression approach

Convex-concave effect of financial flexibility on hospitality performance: quantile regression approach

The nonlinear relationship between financial flexibility and enterprise risk-taking during the COVID-19 pandemic in Taiwan?s semiconductor industry

Competitive Advantage in Mediating The Effect of Financial Flexibility on Financial Performance: Indonesian Sharia Stock Index

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