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The transmission of foreign financial crises to South Africa: a firm level study

The transmission of foreign financial crises to South Africa: a firm level study

The financial integration of recent decades has had important benefits for emerging economies, but has also been associated with increased financial turbulence. South Africa has been no exception, with local financial markets severely affected by financial crises over the past ten years. These crises have motivated economists to study the dynamics and underlying causes of financial crises. This paper makes a modest contribution to this on-going academic project by investigating possible reasons for crisis transmission to South African financial markets from a firm-level perspective. It does so bearing in mind that the complexity of the crisis phenomenon requires extensive analysis and that the majority of studies are based on methodological approaches that differ from the one adopted in this paper. Nonetheless, it is argued that the results from this study may supplement the existing literature to help explain how financial crises are transmitted to the South African economy at large. In particular, the firm-level study of crisis transmission in this paper may offer an advantage over the use of aggregate statistics on account of the loss of information during compilation of national accounts.
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The economics of advertising: A firm level study

The economics of advertising: A firm level study

Contrasting results are found by the Rizzo and Zeckhauser (1992) study of doctors in the USA. Their explanation is that doctors advertise in order to attract premium patients. The result is both higher quality and prices, but lower equilibrium output. There is both casual and hard evidence (see, for example, Connor and Peterson, 1992; Nickell and Metcalf, 1978) that heavily advertised brands attract a premium over rivals. However, this does not necessarily imply a simple effect on welfare as there may be a quality premium, whether real or perceived on advertised branded goods. For example, Wiggins and Raboy (1996) find that price premia for brand names in the market for bananas are largely due to real quality differences rather than subjective product differentiation. However, their study focuses on sales to large supermarkets rather than to final consumers and advertising is concentrated in the trade press. As argued below, it is in precisely such circumstances that advertising is likely to be informative rather than persuasive.
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Liberalization, Firm Size and R&D performance: A Firm Level Study of Indian Pharmaceutical Industry

Liberalization, Firm Size and R&D performance: A Firm Level Study of Indian Pharmaceutical Industry

Liberalization: The variable, LIBDUM, which capture the possible effects of liberalization on the R&D performance of Indian pharmaceutical firms has come out with a positive coefficient statistically different from zero at 1% significance level. This suggests that R&D performance of pharmaceutical firms has increased substantially in the reform period (1993-94 to 2000-01) as compared to pre-reform period (1989-90 to 1992-93). The standardized coefficient indicate that in the post reform period R&D intensity of Indian pharmaceutical firms is expected to increase by 0.1624 standard deviations, holding all other variables constant. The marginal effects of LIMDUM on R&D intensity and probability to do R&D are also quite considerable. This suggests that liberalization of industrial, trade policies with impending product patent regime have made Indian pharmaceutical firms more conscious of the need to undertake R&D activity, and indeed they had devoted substantial resources in that direction. Remembering the structure of industry where majority of firms are essentially small size imply that the improved R&D performance in the reform period may well have come from the performance of a small group of large size firms. Small-scale sector due to scale and resource constraint are not in the position of venturing into R&D-led growth as few large Indian pharmaceutical firms are doing. The government incentive package often was of little help to small-sector as compared to large enterprises because latter are better
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The impact of electricity constraints on access to finance: A firm level study

The impact of electricity constraints on access to finance: A firm level study

. In a country where electricity supplied is less than that demanded, a firm that applies for an electricity connection during the last two years is also likely to adjust its production process such that its electricity usage costs do not influence its constraints on finance. As it is likely to face electricity shortages in a country with a deficit level of supply, it may consider investments in alternatives to complement electricity received from the public grid in order to produce without interruptions in electricity supply. Firms in countries with surplus level of electricity supply may not need to undertake such a strategy and their electricity usage costs may influence their constraints on access to finance. The underidentfication test and weak instrument test confirm the validity of the excluded instrument. The Wald tests for exogeneity suggests that the estimates from the probit estimations are likely to be efficient and consistent for the pooled set
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A firm level study of strike propensity in Ireland

A firm level study of strike propensity in Ireland

"Strike Activity i n Ireland: An Economic Analysis of a Particular Aspect of Irish Industrial Relations", Journal of the Statistical and Social Inquiry Society of Ireland, Vol.. "An Inte[r]

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Accounting Disclosure, Governance Standards and Innovation Activities in Emerging Markets

Accounting Disclosure, Governance Standards and Innovation Activities in Emerging Markets

The existing literature shows that innovation contributes to countries’ economic growth (Aghion and Howitt, 2006) and firms are trying to promote innovation (Hoskisson et al., 2002). Much of the extant research is based on the managerial conflicts (Jensen and Meckling, 1976; Holmstrom, 1989). The existing empirical studies find that innovation is determined by several corporate factors (Francis et al., 2012a; O’Connor and Rafferty, 2012; Aghion, Van Reenen, and Zingales, 2013). While most of the conclusion has been from U.S. firms, recent research has also investigated emerging economies (Chen et. al., 2011; Francis et al., 2012b; Gibson, 2003; Hasan and Song, 2014a; Klapper and Love, 2004). Our research further analyzes innovation in emerging countries by considering the impact of country-level and firm-level governance standards on the relationship between accounting disclosure and innovation, as measured by R&D.
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Understanding the impact of relationship disruptions

Understanding the impact of relationship disruptions

increasingly complex, often including risk-sharing and service-level agreements as customers ask vendors to ‘put more skin in the game’ to ensure that they stay committed to providing real value” (Davie, Stephenson, and De Uster 2010). When such complex business purchases increase rapidly, prior to a relationship disruption, the customer and selling firm likely have engaged in close exchanges to explore the customer’s needs and thus exploited the customer’s business potential. This customer is unlikely to be motivated to reexplore value creation potential further or purchase new products (Jap and Ganesan 2000; Zhang et al. 2016). Thus, for the incoming salesperson, identifying novel, unaddressed needs may be more difficult, and the potential to cross-sell new products is limited. Conversely, if complex purchases have not grown notably prior to the disruption, customer needs might not have been explored recently (Jap and Ganesan 2000; Zhang et al. 2016), so the incoming salesperson has more opportunity to uncover unmet customer needs, with implications for the customer’s motives to expand the relationship. In our preliminary study, SM4 explains, “Opportunities arise particularly if customers’ potential is untapped. You may then improve results when exchanging the colleague.”
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The impact of the institutional environment on the value relevance of fair values

The impact of the institutional environment on the value relevance of fair values

Few studies examine the value relevance of fair values in an international setting, and most of them focus on non-financial assets. For example, Müller et al. (2015) find for a sample of EU real estate firms that disclosed fair values have a lower association with equity prices than recognized fair values. The only study investigating the value relevance of financial assets, at least indirectly, is Barth et al. (2014) who provide evidence that net income adjustments related to IAS 39 are incrementally value relevant for financial firms but not for non-financial firms. The authors attribute this finding to the greater use of fair values under IAS 39 than under domestic GAAP, but do not directly test this argument. In this paper, we specifically test the value relevance of recognized fair values across different categories and institutional environments. We argue that the ability to process fair value information varies with institutional factors such as the country-level information environment and investors’ experience with fair values, in turn affecting the value relevance of fair values.
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ASSESMENT OF THE FACTORS INFLUENCING INNOVATIVE CAPACITY OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

ASSESMENT OF THE FACTORS INFLUENCING INNOVATIVE CAPACITY OF SMALL AND MEDIUM SCALE ENTERPRISES IN NIGERIA

Innovation is an important component of a firm’s strategy mainly because it constitutes one of the principal means through which it can seek new business opportunities (Covin & Slevin, 1991; Carla & Joao, 2009). Innovation reflects the tendency of a firm to lend its support to new ideas, novelty, experimentation and the creative processes that may result in new products, services or technological processes (Lumpkin & Dess, 1996). A broad categorization of innovation is difficult to achieve, because innovation normally covers a considerable range and combination of products/markets and technological innovation, as in the case of sophisticated, technologically innovative products designed to meet demand in a specific market. So far, research has centred on technological innovation, which mainly consists of the development of products and processes, engineering, research, and has an emphasis on industry-relevant technical expertise and knowledge. Innovation process may take the form of purposeful novelties to improve the quality of products or the efficiency of process, the form of an improved organization of work, the promotion of creating new relations between suppliers and consumers. Innovations are necessary precondition for a knowledge oriented business which promote not only the economic competitiveness of the whole country, but also the welfare of each entrepreneur and the society.
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Debt Level and the Firm Levered Cost of Capital

Debt Level and the Firm Levered Cost of Capital

In the WACC’s approach, the cost of equity cannot be estimated until the definition of the leverage ratio that, in turn, requires the estimation of the firm levered value that it is the aim of the analysis in which the WACC is used as discount rate. Consequently, the WACC can be used only if the debt level is an exogenous variable and, thus, it is defined and well known (Harris and Prigle, 1985). The Miles and Ezzell (ME) (1980) cost of capital model, as well as the WACC, it is derived from the MM’s approach. Thus, the market value of any levered cash flows stream is equals to the market value of the unlevered cash flows plus the market value of the tax shields. The ME’s model uses the unlevered cost of capital to discount the expected unlevered cash flows and for the first period only, the cost of debt to discount tax savings.
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Markups and Firm Level Export Status: Comment

Markups and Firm Level Export Status: Comment

A recent paper by De Loecker and Warzynski (AER, 2012), henceforth DLW, develops a method to estimate markups using plant-level production data. The paper has been cited by a lot of scholars, because the method (so-called DLW method) is relatively easy to operate. Although this paper aims to explore the relationship between markups and export behavior, its core value is the estimation method of firm-level markups. However, we find that the DLW method still has some errors. Because cannot obtain the primitive data, we just give a theoretical explanation.

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Taxonomy for Measurement of Firm level Export Performance

Taxonomy for Measurement of Firm level Export Performance

Majority of studies reviewed draw sample from multiple manufacturing industry. Some studies however, focused on a single industry type as their sample [8-12]. Singer and Czinkota [15] in their study also included service firms along with manufacturing firms. However, most of the studies in the field have incorporated manufacturing firms only in their samples. This observation may be attributed to the fact that relatively greater importance has been given to manufactured exports compared to service exports owing to generation of higher revenues by the former. But, this trend could limit the generalization of the findings to other industry contexts and hence, specific studies including service sector firms must
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Training, quality of management and firm level bargaining

Training, quality of management and firm level bargaining

14 difference is found in the PRP regression as the training coefficient obtained from the OLS is 5.2, whereas the fixed effect estimate is 3.3. Furthermore, the influence of bargaining on the labour organisation (LO) based on fixed effect estimates reduces both in magnitude and significance. However, the divide between firms run by high and low managerial quality is even more obvious when we adopt fixed effects estimates. For firms run by high-quality managers we have additional confirmation that the associations between training and our dependent variables, especially FLB and PRP, were not driven by unobserved characteristics of Italian firms. For this group of firms, the fixed effect estimates indicate that the role of training is even higher than that obtained with pooled OLS estimates. (In fixed effects estimates the coefficients for FLB and PRP are 0,089 and 0,0076, whereas the OLS estimates are, respectively, 0.081 and 0.069). Only the coefficient associated with bargaining in labour organisations (LO) loses significance. It is evident that in Low Qual.Man firms, only unobserved characteristics motivate the positive role of training, according to our dependent variables. Therefore, by correcting for unobserved firm individual heterogeneity in firms led by low quality management, the influence of training evaporates. On the contrary, for those firms led by high-quality management, opposite results are obtained. Accordingly, management quality may be behind the adoption of wage bonuses that are offered to obtain reciprocal behaviour and loyalty as well as to prevent the failure to accumulate firm specific skills. These types of agreements, which may well discourage separation and reduce turnover rates, may also represent a contractual solution to the failure to provide adequate firm-financed training.
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Firm Performance and Corporate Disclosure Level of Listed Companies in Nigeria

Firm Performance and Corporate Disclosure Level of Listed Companies in Nigeria

The study investigates the relationship between firm performance (proxied by profitability and liquidity) and corporate disclosure in Nigerian listed firms. The data used in the study were obtained from the annual reports of 60 companies listed on the Nigerian Stock Exchange from the various sectors of the country’s economy. The study covers the post International Financial Reporting Standards (IFRSs) adoption period of three years (2012 – 2014). Corporate disclosure (dependent variable) was disaggregated into mandatory, voluntary and total disclosure. The data were analysed using both descriptive statistics and the Ordinary Least Squares (OLS) regression. Findings from the descriptive statistics reveal that, contrary to prior findings, there is a steady improvement in mandatory disclosure by Nigerian companies since the country’s adoption of IFRSs. However, voluntary disclosure still remains relatively low. The regression results show no significant relationship between profitability and the three components of corporate disclosure. But liquidity shows a significant positive relationship with mandatory and total disclosure. The combined effect of profitability and liquidity shows no significant relationship with any of the components of corporate disclosure. The findings suggest that improved performance of companies does not necessarily induce them to disclosure more information as widely reported by previous researchers. These findings notwithstanding, the decision to disclose sufficiently and timely must be accorded priority attention by companies, considering the critical role of adequate and timely information disclosure in the global marketplace.
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The Impact of Higher Education Institution-Firm Knowledge Links on Firm-level Productivity in Britain

The Impact of Higher Education Institution-Firm Knowledge Links on Firm-level Productivity in Britain

Many studies have investigated the relationship between university-firm knowledge links and innovation (see, for example, Mansfield, 1991; Becker, 2003; Thorn et al, 2007). Most of these studies find a positive impact. Fewer studies have investigated the impact of university-firm knowledge links on productivity. Belderbos et al. (2004), using the Dutch CIS, find that cooperation with universities has no statistically significant impact on the growth of labour productivity. Medda et al. (2005) find no statistically significant effect of collaborative research undertaken by Italian manufacturing firms and universities on the growth of TFP. Arvanitis et al. (2008), using Swiss data, show that university-firm knowledge and technology transfer has both a direct impact on labour productivity and an indirect impact through its positive impact on innovation. In sum, there is as yet no clear consensus as to the impact of university-firm knowledge links on productivity.
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Regional Policies, Firm Characteristics, and Exporting in the Indian State of Karnataka

Regional Policies, Firm Characteristics, and Exporting in the Indian State of Karnataka

In August 2006, the state government articulated its New Industrial Policy 2006 − 11 that seek to double the state’s export from the current level of Rs.130000 crores. Recognizing the potential of SEZs in driving state exports, an exclusive SEZ Policy was announced with single point clearance to the SEZ proposals. Policy emphasis was also on improving skills of local labour force that contributes in the rapid transformation of industries and exports. The policy also invoked the need for supporting Karnataka based firms in the areas of market intelligence, export documentation, finance, technology upgradation, and capabilities to compliance with specifications of international buyers. For enhancing exports, special supports were visualized for EOUs in obtaining compulsory certifications such as China Compulsory Certificate, Conformité Européenne, etc. The policy was also geared towards encouraging industries in the state to participate in international exhibitions and trade fairs.
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Trade times, importing, and exporting: Firm level evidence

Trade times, importing, and exporting: Firm level evidence

The main variables of interest for this analysis are the data on trade and trade times. For exports, each firm is asked to record the percentage of its total sales that is exported directly and the percentage exported indirectly (through a third party, such as a distributor). Those firms that export at least part of their production directly are also asked to give the average number of days it takes for exports to clear customs after they arrive at their main point of exit (port or airport). For imports, firms provide data on the percentage of intermediate input use that is accounted for by imports. Importing firms are also asked to give the average number of days it takes from the time of arrival at the main point of entry (port or airport) until the goods can be claimed from customs. In addition, firms are asked if they have applied for an import license over the last two years, and if so, the number of days’ delay that
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Export Barriers in Pakistan: Results of a Firm Level Survey

Export Barriers in Pakistan: Results of a Firm Level Survey

There is also a body of empirical literature that emphasizes introspection on the part of firms regarding internal and external problems as an element in assessing the hindrances that exporters face. These studies add firms’ perceptions as an important ingredient to their models. Admittedly, perceptions can deeply be influenced by firms’ own capabilities and internal circumstances. However, since entrepreneurs are keenly aware of the environment in which they operate, one can safely assume that there is a positive correlation between actual problems and those perceived by the firm as problems. Viewed this way, firms’ perceptions can greatly facilitate our understanding of the actual problems they face.
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Middle Managers training in Italy: a firm-level analysis

Middle Managers training in Italy: a firm-level analysis

the issue focusing mainly on the eects on performance of rm of training of all the employees. By contrast, the present analysis is entirely focused on MMs. The importance of working on this specic target instead of a broad one is dictated by the two following considerations. As already sug- gested MMs represent a key professional gure for rms for several reasons. They are typically the decision makers with regard to knowledge diusion and seizing opportunities aorded by information and communication tech- nologies. They are able to exploit opportunities and neutralize threats. In addition, they could be rare in terms of rm-specic knowledge and consti- tute an imperfectly imitable, non-substitutable resource for the rm. Indeed, rm-specic knowledge accumulated by managers in a rm is not completely substitutable because the competitive advantage of a rm is determined in a unique historical, social and economic context: other managers would lack the knowledge of these particular circumstances, and they could replace the management team only imperfectly (Mahoney, 1995). Furthermore, orga- nizational capability at a management level is essential to improve interna- tional competitiveness (Castanias and Helfat, 1991). Finally, managers are particularly instrumental in creating organizational ethos of learning for all groups of employees (Martin et al., 1998). Indeed, the work of these authors explores the viability of the `bounded emotionality' in a large and success- ful private sector corporation. The `bounded emotionality' is an approach diering from the `classic' norms of impersonality characterizing large orga- nizations and encouraging the constrained expression of emotions at work to increase community building and well-being in the workplace. Thus, using data from qualitative surveys, Martin et al. (1998) underline that managers
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Technological trajectories as moderators of firm-level determinants of innovation

Technological trajectories as moderators of firm-level determinants of innovation

A sample of 105 companies was employed for the study’s empirical test, representing almost 3% of the population of listed Greek manufacturing firms (the most accurate list of Greek manufacturing was the ICAP annual directory - ICAP, 1997- including 3600 firms). One respondent from each company completed a questionnaire during a face-to-face interview. A “snowballing” sampling technique was used: at the end of each interview the researcher was recommended to other managers who could be business partners, customers, suppliers or personal friends of the respondent. Despite the fact that the research was not based on a strictly defined random sample, the companies were chosen in a way that simulated random selection, according to whether someone in their firm happened to know a previous respondent. Therefore, the sample was not confined to one industrial sector or a vertical channel of trade but it was expanded to various industries, due to the complex web of personal networks that are dominant in Greek management culture (see following table 3).
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