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This paper aims to examine the effects of political connections (PCs) on corporate financial performance (CFP) in an emerging economy. It also investigates the moderating influence of the directors’ financial expertise (DFE) on the relationship between politically connected firms and their financial performance.

The study sample includes 304 firm-year observations from non-financial Tunisian listed firms covered over 2012–2019. Financial data are from various sources: financial statements, annual reports, official bulletins of the Tunisian Stock Exchange (TSE) and the Financial Market Council. PCs and DFE data are manually collected from the TSE and companies’ websites. Multivariate regression analyses are used to test the research hypotheses.

The results show that PCs negatively affect CFP and the DFE is a moderator variable that exacerbates this negative relationship. These results could be explained on the one hand by the fact that politicians often lack management, professionalism and know-how. On the other hand, political members on boards focus mainly on their political agendas and prioritize their interests rather than firm performance. Furthermore, board directors are more inclined towards the grabbing-hand approach to create personal linkages with these politicians and take personal benefits rather than protect the interests of minority shareholders and effectively use firm resources.

The most important limitation of the study is the small number of non-financial TSE-listed firms. Indeed, the small sample size prevents us from considering industry specificities and working in a homogeneous environment.

This study recommends that external investors pay particular attention to politically connected firms as PCs tend to weaken corporate governance. Also, it helps policymakers better assess the need to harmonize and develop corporate governance standards and practices that account for the specific conditions in Tunisia to mitigate the lobbying of political parties and supervise their abuse of power. Furthermore, the negative relationship between PCs and CFP in a poorly regulated and governed country could be used by financial institutions in their credit scoring.

The findings suggest that the nexus between politics and business draws attention to corruption post-revolution.

The originality and the relevance of this study consist in studying the moderating effect of the DFE on the association between PCs and CFP. To the best of the author’s knowledge, this study pioneers assessing the role of the DFE as a moderating variable. It also supplements prior literature by examining the combined factors, such as PCs and DFE, on CFP in an emerging market.

This study investigates how the maximum cultural intelligence (Max CQ) within a team – defined as the highest cultural intelligence level of an individual member – affects intra-team communication, conflict dynamics and, ultimately, team satisfaction and performance in global virtual teams (GVTs).

Utilizing quantitative research methods, this investigation draws on a dataset comprising 3,385 participants, which forms a total of 686 GVTs.

The study reveals that MaxCQ significantly enhances team communication, which in turn mitigates conflict, increases satisfaction and improves performance. It is noteworthy that the influence of MaxCQ on GVT success is more significant than the average cultural intelligence (CQ) of team members, providing critical insights for effective GVT management strategies.

The findings suggest that managers may optimize team dynamics not by uniformly increasing each member’s CQ but by concentrating on maximizing the CQ of one individual who can act as an influencer within the team. Strategically placing individuals with high CQ in GVTs can enhance overall team function.

While existing literature primarily examines the individual effects of CQ on communication and conflict management, this study sheds light on the collective interplay between MaxCQ, communication and conflict. It highlights the importance of MaxCQ, along with the frequency of team communication and conflict, in influencing team satisfaction and performance in GVTs.

While the concept of reciprocity has gained traction in qualitative research, especially as the term relates to challenging power dynamics inherent within the research and evaluation process, a gap remains in understanding how a researcher's or elevator's cultural background shapes the way reciprocity is conceptualized and practiced. We explore how Filipino concepts connected to reciprocity (utang na loob, pakikipagkapwa, and alalay) inform the practice of Filipina American researchers and evaluators in academia. We use Sikolohiyang Pilipino and Critical Kapwa in the conceptual framework to guide our study and employ a collaborative autoethnography (CAE) methodology. We present three findings: (1) reciprocity and utang na loob as a nontransactional debt, (2) reciprocity and pakikipagkapwa as seeing the humanity in others, and (3) reciprocity and alalay as carrying the weight together. We discuss this study's implications – regarding theorizing reciprocity, using collaborative autoethnography as methodology, and reclaiming deeper ways of knowing from a critical perspective – for transforming evaluation and research practice. Specifically, through a collaborative autoethnography, we learned the importance of understanding the nuances of language (i.e., Tagalog and other Filipino languages) as a decolonizing approach to arriving at our analysis of pakikipagkapwa through kuwentuhan. Methodologies that attend to a culturally responsive evaluation and research practice – –such as CAE and kuwentuhan– – amplify the voices of silenced communities. Lastly, deeply understanding the cultural context of evaluators' and researchers' experiences and cultural identities as well as studying oneself through a collaborative autoethnography can create practices of reciprocity that have been buried by settler colonialism.

The behavioural theory adds a new paradigm of analysis with the assumptions of the decision maker’s cognitive biases and their repercussions on financing decisions. The aim of the study is to analyse the repercussions of these biases on the adjustment speed of firm’s capital structure toward the optimal level.

Based on a partial adjustment model, the study uses the Dynamic Panel Fractional estimator to analyse panel data from 4,990 Portuguese entrepreneurial firms.

The results show that the cognitive overconfidence bias impacts the entrepreneurial firm’s capital structure. In fact, the firms run by overconfident managers adjust more slowly than their counterparts. Furthermore, the findings suggest that entrepreneurial firms make relatively fast adjustments toward the optimal debt level and follow a hierarchical financing order in the funding process.

The results of this paper are not only interesting to the academia, but also contain practical implications for corporate, institutional and business policy and governance. First, the paper introduces a new measure of cognitive bias in optimistic managers, which is useful for current and future academic research. Also, in practical terms, the findings of the paper reveal that when a company is contemplating hiring a manager, it should consider whether they need an optimistic or non-optimistic manager based on the company's present life cycle or situation.

The current analysis extends the existing literature. The study suggests that financial classical and behavioural paradigms should not be separated, which can provide evidence to help narrow the gap between these two major perspectives.

The purpose of our study is to investigate the effects of politically-connected boards (PCBs) on over-(under-)investment in labor. We also examine the impacts of the supervisory board (SB)’s optimal tenure on the association between PCBs and over-investment in labor.

We constructed the proxy for PCBs using a dummy variable set to 1 (one) if a firm has politically-connected boards and zero (0) otherwise. For the robustness check, we used the number of politically-connected members on the boards as the proxy for PCBs.

We find that the presence of PCBs reduces over-investment in labor. Consistent with our prediction, we found no significant association between PCBs and under-investment in labor. We also find that the SB with optimal tenure strengthens the negative association between PCBs and over-investment in labor. In our channel analysis, we find that the presence of PCB mitigates over-investment in labor through a higher dividend payout ratio.

Due to the unavailability of data in firms’ annual reports regarding the number of poorly-skilled and highly skilled employees, we were not able to examine the effect of low-skilled and high-skilled employees on over-investment in labor. Also, we were not able to examine over-(under-)investment in labor by drawing a distinction between general (generalist) and firm-specific human capital (specialist) as suggested by Sevcenko, Wu, and Kacperczyk (2022). Generally, it is more difficult for managers to hire highly-skilled employees, specialists in particular, thereby driving the choice of either over- or under-investing in the labor forces. In addition, in the firms’ annual reports, there is no information regarding temporary employees. Therefore, if and when such data become available, this would provide another avenue for future research.

Our study offers several practical implications and insights to stakeholders (e.g. insiders or management, shareholders, investors, analysts and creditors) in the following ways. First, our study highlights significant differences between capital investment and labor investment. For instance, labor investment is considered an expense rather than an asset (Wyatt, 2008) because, although such investment is human capital and is not recognized on the firm’s balance sheet (Boon et al., 2017). In addition, labor investment is characterized by: its flexibility which enables firms to make frequent adjustments (Hamermesh, 1995; Dixit & Pindyck, 2012; Aksin et al., 2015), its non-homogeneity since every employee is unique (Luo et al., 2020), its direct impact on morale and productivity of a firm (Azadegan et al., 2013; Mishina et al., 2004; Tatikonda et al., 2013), and its financial outlay which affects the ongoing cash flows of a firm (Sualihu et al., 2021; Khedmati et al., 2020; Merz & Yashiv, 2007). Second, our findings reveal that the presence of PCBs could help to reduce over-investment in labor. However, if managers of a firm choose to under-invest in labor in order to obtain better profit in the short-term through cost saving, they should be aware of the potential consequences of facing a financial loss when a new business opportunity suddenly arises which requires a larger labor force. Third, our findings help stakeholders to re-focus on the labor investment. This is crucial due to the fact that labor investment is often neglected by those stakeholders because the expenditure of labor investment is not recognized on the firm’s balance sheet as an asset. Instead, it is written off as an expense in the firm’s income statement. Fourth, our findings also provide insightful information to stakeholders, suggesting that an SB with optimal tenure is more committed to a firm, and this factor plays an important role in strengthening the negative association between PCBs and over-investment in labor.

First, our findings provide a valuable understanding of the effects of PCBs on over-(under-)investment in labor. Stakeholders could use information disclosed in the financial statements of a publicly-listed firm to determine the extent of the firm’s investment in labor and PCBs, and compare this information with similar firms in the same industry sector. Second, our findings give a better understanding of the association between investment in labor and political connections , which are human and social capital that could determine the long-term survival and success of a firm. Third, for shareholders, the appointment of board members with political connections is an important strategic decision to build political capital, which is likely to have a long-term impact on the financial performance of a firm; therefore, it requires thoughtful consultation with firm insiders.

Our findings highlight the role of PCBs in reducing over-investment in labor. These findings are significant because both investment in labor and political connections as human and social capital can play an important role in determining the long-term survival and success of a firm.

This paper aims to analyze the direct and indirect effects of investor protection on forced CEO turnover.

The authors investigate 5,175 firm-year observations from 16 European countries over 2012–2018, collect data on four national investor protection indicators, identify 196 forced CEO turnovers and use multiple logistic regression models.

The results show that a reduction in the degree of investor protection significantly increases the probability of a forced change of the company’s CEO. Furthermore, when the degree of investor protection increases, directors are attributed a lower degree of responsibility in the event of a decline in earnings performance. Therefore, the relation between a decrease in profitability and a forced change of CEO is reduced.

The research is focused on countries belonging to the European Economic Area and most of the investor protection indicators are derived from surveys. Concerning policy implications, the findings suggest that regulators should focus on the effective enforcement of investor protection mechanisms.

The results confirm that characteristics at the country level have an impact on corporate decisions, highlighting the importance of increasing the degree of investor protection as a means of mitigating agency conflicts and improving stewardship.

To the best of the authors’ knowledge, this study explores a relatively underinvestigated topic as it uses investor protection indicators to jointly evaluate both direct and indirect effects on forced changes of CEO through cross-national research.

There is still an ongoing debate on the value relevance of capital structure and its determinants. Recently the issue has been explored in family firms after being explored in mature firms. This paper investigates the role of institutional investors and the firm's innovation activity in influencing the firm's decision and ability to acquire debt capital.

A large sample of 700 privately-held family firms in Italy from 2010 to 2019. Two analysis techniques are used: panel analysis and path analysis. The value of debt and the debt ratio are used as leverage measures. The value of patent (as a proxy for innovation) and institutional investor are the explanatory variables.

The results show that institutional investors have no relationship with financial leverage measures except when controlling for an interaction variable (Institutional investors × Lombardy region). The patent value is positively correlated with debt; however, the ratio patent-to-asset is negatively related to financial leverage indicating higher risk exposure. The nonlinearity test demonstrates a turning point when the relationship between patent value and debt inverts.

Firms should monitor their innovation activity since excessive innovation increases risk exposure and affects financing opportunities and value. The involvement of institutional investors does not always enhance value.

Existing literature focuses separately on family firm innovations and financial leverage as outcome variables, emphasizing the role of institutional investors in both fields by adopting agency theory and socioemotional wealth framework. In this study, the authors go further by merging both relationships, investigating the dynamics of the institutional-family firm innovation relationship in influencing the firm's capital structure. The authors contribute to the ongoing debate by providing original findings on capital structure, governance and innovation, supported by rigorous methods to enhance family firms' decision-making.

Agriculture is one of the oldest socio-economic activities. It involves growing valuable plants and animals for human existence. Sustainable agriculture should be understood in light of the global sustainable development movement, which emphasizes balancing environment, society and economics. With the ongoing effects of the COVID-19 pandemic and the recent war between Russia and Ukraine, sustainable agriculture can help eliminate food insecurity caused by food shortages and agricultural sector disruptions. Recently, investors, practitioners, academicians, researchers, regulators and financiers are increasingly interested in using Islamic financing products and qualified Shari'ah-compliance contracts to promote sustainable agriculture. Many Organization of Islamic Cooperation (OIC) states still rely on agriculture for socioeconomic growth. These countries are major contributors to Islamic financial growth. This study assesses Islamic finance’s role in promoting sustainable agriculture in selected OIC countries. The researchers use qualitative methods and meta-analysis data to determine the constraints and benefits of implementing Islamic financial products for sustainable agriculture. This study suggests that OIC state governments should promote sustainable agriculture. OIC member states have different achievements relating to their sustainable agriculture. Based on socio-economic factors, agriculture policies or plans, leadership and political will, Islamic finance products and Shari'ah-compliance contracts are found underutilized in meeting sustainable agriculture and sector stakeholders’ needs. A solid Islamic financial framework for sustainable agriculture, good governance and improved agriculture policy are needed.