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The turbulent decade of the 1980s completely restructured the financial system of the 1990s. Deregulation and rising competition led to record numbers of failures among depository institutions in the U.S., especially savings and loan associations. These failures have caused tremendous taxpayer losses, which are estimated at around $200 billion in present value terms. Financial markets became increasingly volatile, with increased price movements in bond, stock, and currency markets. These events triggered both public and private sector responses, including increased regulatory standards for safety and soundness and financial innovation. Additionally, the fall of communism in Eastern Europe and the former Soviet Union, now known as the New Independent States (NIS), as well as the trend toward trading blocks, including the continuing process of European unification and the North American Free Trade Agreement (NAFTA) between the U.S., Canada, and Mexico, have greatly increased the demand for growth capital in a global sense.

This paper examined the relationships between national culture and strategic behavior in the banking industry in Jordan and U.S. The study first developed a strategic posture and secondly a cultural profile for the top management of the research domain. The strategic posture suggested the readiness for strategic response from managers. The degree of readiness was correlated with the constructed cultural profile of the managers and financial performance of the banks. The study found significant relationships between certain national cultural strategic characteristics, (risk propensity, time orientation, and openness to change, uncertainty avoidance and managerial perception of control over the environment) strategic behavior and financial performance.

The purpose of this paper is, from a resource accumulation and resource allocation perspective, to examine the variant effects of government subsidies among firms with varying levels of market power and to test how industry competition moderates the relationship between market power and allocative efficiency of government subsidies.

This study explores the relationship between government subsidies and firm performance from a resource-based view. The authors study the moderating role of market power and three-way interaction between subsidy, market power and industry competition on firm performance. The authors test their hypotheses using a sample of Chinese A-share manufacturing firms from 2006–2019. The authors apply firm-level panel data regressions and conduct a series of robustness tests. The marginal effect of market power and industry competition is explored via three-way moderator effect models.

This study finds that government subsidies are negatively related to firm performance. Market power, on average, strengthens the negative effect of government subsidies on performance, but such a reinforcement effect is neutralized when industry competition is intense. Government subsidies are least efficiently used when firms have market power and industry competition is low. In addition, the authors use different forms of firm performance and a various of robustness tests to verify their assumptions.

This paper contributes to the literature as follows. First, the authors look into subsidy–performance problem from the perspective of the resource-based view and contribute to explaining and mitigating the divergence of current findings on the subsidy–performance relationship. Second, the authors introduce market power and industry competition as moderators to study how resource allocative efficiency affects the subsidy–performance relationship. Third, the authors propose that managerial incentives have played an important role in the allocation of government subsidies, which enriches management practices.

This study adopts the Miles and Snow typology as a framework for analyzing export performance of manufacturing firms. The study investigates the role of distinctive competence and various strategic responses of firms belonging to each strategic type on their foreign market performance. The results of this study show that a firm’s strengths and strategic responses are related and that the impact of strategic responses on export performance differs according to the firm’s strategic type. Based on these results, the strengths that defenders, prospectors and analyzers should build and maintain as well as the strategic responses that each should pursue are identified.

The purpose of this paper is to show that distinguishing between gross and net tax shields arising from interest deductions is important to firm valuation. The distinction affects the interpretation but not valuation of tax shields for the famous Miller’s (1977) model with corporate and personal taxes. However, for the well-known Miles and Ezzell’s (1985) model, the authors show that the valuation of tax shields can be materially affected. Implications to the cost of equity and optimal capital structure are discussed.

This paper proposed a simple tax shield clarification that distinguishes between gross and net tax shields. Net tax shields equal gross tax shields minus personal taxes on debt. When an after-tax riskless rate is used to discount shareholders’ tax shields, this distinction affects the interpretation but not valuation results of the Miller’s model. However, when the after-tax unlevered equity rate is used to discount tax shields under the well-known Miles and Ezzell’s (1985) model, the difference between gross and net tax shields can materially affect valuation results. According to the traditional ME model, both gross tax shields and debt interest tax payments (i.e. net tax shields) are discounted at the after-tax unlevered equity rate. By contrast, the proposed revised ME model discounts gross tax shields at the unlevered equity rate but personal taxes on debt income at the riskless rate (like debt payments). Because personal taxes on debt are nontrivial, traditional ME valuation results can noticeably differ from the revised ME model to the extent that after-tax unlevered equity and debt rates differ from one another.

For comparative purposes, the authors provide numerical examples of the traditional and revised ME models. The following constant tax rates and market discount rates are assumed: T_c=0.30, T_pb=0.20, T_ps=0.10, r=0.06, and ρ=0.10. Table I compares these two models’ valuation results. Maximum firm value for the traditional ME model is 7.89 compared to 7.00 for the revised ME model. At a 50 percent leverage ratio, equity value is reduced from 3.71 to 3.49, respectively. Importantly, the traditional ME model suggests that firm value linearly increases with leverage and implies an all-debt capital structure, whereas firm value stays relatively constant as leverage increases in the revised ME model. These capital structure differences arise due to discounting debt tax payments with the unlevered equity rate (riskless rate) in the traditional ME (revised ME) model. Figure 1 graphically summarizes these results by comparing the traditional ME model (thin lines) to the revised ME model (bold lines).

Textbook treatments of leverage gains to firms or projects with corporate and personal taxes should be amended to take into account this previously unrecognized tradeoff. Also, empirical analyses of capital structure are recommended on the sensitivity of leverage ratios to the gross-tax-gain/debt-personal taxes tradeoff.

Financial managers need to understand how to value interest tax shields on debt in making capital structure decisions, computing the cost of capital, and valuing the firm.

The valuation of interest tax shields in finance is a long-standing controversy. Nobel prize winners Modigliani and Miller (MM) wrote numerous papers on this subject and gained fame from their ideas in this area. However, application of their ideas has changed over time due to the Miles and Ezzell’s (ME) model of firm valuation. The present paper adapts the pathbreaking ideas of MM to the valuation framework of ME. Students and practitioners in finance can benefit by the valuation results in the paper.

No previous studies have recognized the valuation issues resolved in the paper on the application of the popular and contemporary ME model of firm valuation to the MM valuation concepts. The new arguments in the paper are easy to understand and readily applied to firm valuation.

The study uses cyberattacks announcements on 96 firms that are listed on S&P 500 over the period from January 03, 2013, to December 29, 2017.

The empirical analysis was performed in two ways: cross-section and industry level. The authors use statistical tests that account for the effects of cross-section correlation in returns, returns series correlation, volatility changes and skewness in the returns.

These imply that studying the cumulative effects of cyberattacks on prices of listed firms without grouping them into the various sectors may be non-informative; financial sector firms tend to react cumulatively to cyberattacks over a three-day period than other sectors; and technology firms tend to be less reactive to the announcement of a data breach. Such firms may possibly have the necessary tools and techniques to address large-scale cyberattacks.

For cross-section analysis, the outcome shows that the market does not significantly react to cyberattacks for all the event windows, except [−30, 30], while for the sector-level analysis, the analysis offers two main results.

First, while there is a firm reaction to cyberattacks for long event window for retail sector, there is no evidence of a cumulative firm reaction to cyberattacks for both short and long event windows for the industrial, information technology and health sectors. Second, the firms in the financial sector, there is a strong evidence of cumulative reaction to cyberattacks for [−1, 1] for the financial industry, and the reactions disappear for relatively longer event windows.

These imply that studying the cumulative effects of cyberattacks on prices of listed firms without grouping them into the various sectors may be non-informative, the financial sector firms tend to react cumulatively to cyberattacks over a three-day period than other sectors, technology firms tend to be less reactive to the announcement of a data breach, possibly such firms may have the necessary tools and techniques to address large-scale cyberattacks.

The work provides new insights into the effect of cyber security on stock prices.

Our paper contrasts and validates the relevance of Miles and Snow (1978) and Robinson and Pearce (1988) strategic models, and their causal relationships with performance. The empirical study was carried out on a sample of 189 enterprises from the Spanish hospitality sector. The results confirm the relevance of both models, and the importance of the different strategies as a source to explain performance. The analysis uses structural equation models and variance analysis (ANOVA) methodologies.

A central goal of strategic management is to understand why some organizations outperform others. Based on the literature, we test the links among strategic resources, firm’s strategic orientation, and performance using data from 1,201 Spanish small and medium‐sized enterprises. The results can guide managers to invest in the appropriate resources since there is evidence that technology, innovation, quality, and human resource management leads to better company performance. It is also shown how strategic resources varies according to strategic orientation.

Adopts a firm‐level approach and attempts to develop our understanding of the means through which different types of firm compete. Addresses specifically, a lacuna in existing knowledge by investigating a fundamental research question: “How do firms pursuing a prospector mode of market strategy differ from those pursuing a defender, analyzer or reactor strategy in terms of the product‐market positioning attributes they exhibit?“ Miles and Snow provide the basis for the assessment of strategy types, while “strategic market positioning” is characterised as the product‐market positions established by the firm. Conceptualises strategic market positioning as the ways in which firm‐specific resources and assets are deployed to build positional advantages in product‐markets. Presents analyses of data generated from high technology, medium and large, industrial manufacturing firms and discusses these results in the light of previous findings. Places particular emphasis on the distinguishing characteristics of prospector‐type firms. Identifies a number of potential research avenues from this study and discusses several implications for executives.