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Article
Publication date: 5 September 2016

Amna Niazi and Hamid Hassan

Level of trust among the members is considered to be an important component that contributes towards the economic growth in an economy. The purpose of this paper is to examine the…

637

Abstract

Purpose

Level of trust among the members is considered to be an important component that contributes towards the economic growth in an economy. The purpose of this paper is to examine the effect of trust level along with income per capita, human capital (education level), investment, labor force and political institutions on the economic performance.

Design/methodology/approach

In this research, panel data as well as cross-country analysis were applied on a sample of 64 countries from 1980 to 2014. Countries were further divided into developed and developing countries to observe the resultant effect of trust on economic performance. To explain the monotonic relationship between trust and economic performance, a non-linear term of trust is added to the regression model to see the impact of change in trust level on economic performance.

Findings

Empirical results show that there is a positive relation between social trust and economic performance. The result further describes that investment and human capital are leading determinants of economic performance. To explain the monotonic relationship between trust and economic performance, the study adds non-linear term of trust in regression model. The result explains U-shaped path between trust and economic performance in developing countries and inverse U-shaped path in developed countries.

Practical implications

The study adds valuable insight to the debate of relationship between trust level and economic performance. Business and managers can use this insight while making international strategic decisions regarding foreign direct investments and international expansions.

Originality/value

This study highlights the importance of trust in developing and developed countries and shows that trust works as a strong binding in holding societies together and better economic performance is not possible, especially in developing countries where there is a lack of trust.

Details

Review of International Business and Strategy, vol. 26 no. 3
Type: Research Article
ISSN: 2059-6014

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Article
Publication date: 22 July 2022

Amna Yousaf, Fatima Yusuf and Waheed Ali Umrani

Using social information processing and sense-making theory, the current study examines how the poly-contextual factors and social environment of employees provide unique cues and…

349

Abstract

Purpose

Using social information processing and sense-making theory, the current study examines how the poly-contextual factors and social environment of employees provide unique cues and shape an employee's person-job (PJ) fit perceptions in ways that enable males to perceive a better PJ fit than their female counterparts at work. These perceptions of PJ fit act as mediating processes between gender-based differences in HR commitment or HR control attributions.

Design/methodology/approach

After collecting two waves of data over a six-month period from a sample of 498 banking sector professionals in Pakistan, the hypothesized relationships were tested using hierarchical multiple regression.

Findings

It was found that gender (female) was positively related to HR control attributions and negatively related to PJ fit perceptions and HR commitment attributions. The mean differences between males and females concerning these study variables were significant. Also, PJ fit mediated the relationship between gender and HR attributions.

Originality/value

The study contributes to the advancement and understanding of the predictors of HR attributions by examining the poly-contextual factors that shape unique experiences, knowledge structures and social information processing, thus forming distinct PJ fit perceptions and subsequent HR commitment or control attributions for males and females.

Details

Personnel Review, vol. 52 no. 7
Type: Research Article
ISSN: 0048-3486

Keywords

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Article
Publication date: 17 August 2021

Muhammad Farooq, Amna Noor and Shoukat Ali

The purpose of this research is to look into the governance–performance relationship in the context of critical firm characteristics, such as firm size.

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Abstract

Purpose

The purpose of this research is to look into the governance–performance relationship in the context of critical firm characteristics, such as firm size.

Design/methodology/approach

Based on total assets, sample firms were classified as small or large. The governance index, which is based on 29 governance provisions covering the audit committee, board committee, ownership and compensation structure of the respective firm, measures governance quality among sample firms. A higher governance index indicates a higher level of governance quality and vice versa. Accounting and market value measures are used to determine firm profitability. The authors used the two-stage least square (2SLS) method of estimation of the model to eliminate the simultaneous equation bias.

Findings

Corporate governance (CG) appears to have a positive impact on accounting return and market indices (Tobin’s Q), but it has little impact on return on equity. In terms of firm size, larger companies profited more from better governance implementation than smaller firms that lacked these principles, thus improving CG. The findings indicate that small businesses should improve their governance mechanisms to reap the benefits of CG in terms of increased profitability.

Research limitations/implications

There are certain drawbacks to this research. First, the authors omitted qualitative aspects of CG from the CG index, such as the board’s decision-making process, directors’ perceptions of the board’s position and directors’ age and qualifications. Such a qualitative component will improve the governance index in the future while building the governance index. Second, as the current study only looks at the nonfinancial sector, caution should be exercised before applying the findings to the entire population.

Practical implications

The findings show that companies that follow good governance standards have better accounting and market efficiency than those that do not. As a result, good governance practices can help firms in developing countries improve their performance. Academic researchers, regulators, investors, lenders and practitioners can find the findings useful in establishing a true relationship between firm performance and CG practices in Pakistan.

Originality/value

The relationship between governance and profitability in the context of firm size is examined in this research. Firms with varying resources and ability to implement CG codes have varying effects on profitability. To the authors’ knowledge, there was a gap in the literature that addressed this topic in the local context.

Details

Corporate Governance: The International Journal of Business in Society, vol. 22 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

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