Thi Bich Tran and Duy Khoi Nguyen
This study investigates the optimum size for manufacturing firms and the impact of subcontracting on firms' likelihood of achieving their optimal scale in Vietnam.
Abstract
Purpose
This study investigates the optimum size for manufacturing firms and the impact of subcontracting on firms' likelihood of achieving their optimal scale in Vietnam.
Design/methodology/approach
Using data from the enterprise census in 2017 and 2021, the paper first estimates the production function to identify the optimum firm size for manufacturing firms and then applies the logit model to investigate factors associated with the optimal firm size.
Findings
The study reveals that medium-sized firms exhibit the highest level of productivity. Nevertheless, a consistent trend emerges, indicating that nearly 90% of manufacturing firms in Vietnam operated below their optimal scale in both 2017 and 2021. An analysis of the impact of subcontracting on firms' likelihood to achieve their optimal scale emphasizes its crucial role, especially for foreign firms, exerting an influence nearly five times greater than that of the judiciary system.
Practical implications
The paper's findings offer crucial policy implications, suggesting that initiatives aimed at enhancing the overall productivity of the manufacturing sector should prioritise facilitating contract arrangements to encourage firms to reach their optimal size. These insights are also valuable for other countries with comparable firm size distributions.
Originality/value
This paper provides the first empirical evidence on the relationship between firm size and productivity as well as the role of subcontracting in firms' ability to reach their optimal scale in a country with a right-skewed distribution of firm sizes.
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The purpose of this paper is to analyse econometrically determinants of total factor productivity (TFP) in Indian manufacturing plants with a focus on the influence of services…
Abstract
Purpose
The purpose of this paper is to analyse econometrically determinants of total factor productivity (TFP) in Indian manufacturing plants with a focus on the influence of services input on productivity.
Design/methodology/approach
Plant-level data drawn from Annual Survey of Industries for the years 1998-1999 to 2012-2013 are used for the estimation of TFP at plant-level by applying the Levinsohn–Petrin methodology. Econometric models are estimated to explain variations in plant-level TFP. The explanatory variables used are services input intensity (split into manufacturing services purchased and other services), the share of information communication technology (ICT) assets in total fixed capital stock, the share of contract workers in total workers and the share of imported materials out of total materials used, with plant size taken as a control variable. Model estimation is done by applying the fixed effects model.
Findings
Econometric results indicate that services input and ICT intensity have a significant positive effect on productivity of manufacturing plants in India. Use of imported materials raises productivity, whereas the use of contract workers in place of regular workers tends to lower productivity. The impact of imported materials on TFP of manufacturing plants seems to be relatively bigger for labour-intensive, low technology industries.
Originality/value
Care has been taken for TFP measurement. Analysis of the impact of services input on TFP has been undertaken for Indian manufacturing using plant-level data for the first time.
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K.G.P. Senani, Roshan Ajward and J.S. Kumari
This study aims to examine the determinants and consequences of integrated reporting (IR) disclosures of listed non-financial firms in an emerging economy.
Abstract
Purpose
This study aims to examine the determinants and consequences of integrated reporting (IR) disclosures of listed non-financial firms in an emerging economy.
Design/methodology/approach
This study uses data from 39 listed non-financial firms that had adopted IR disclosure framework in Sri Lanka for the period from 2011 to 2018. Firm size, growth opportunity, profitability and firm age are considered significant determinants of IR disclosure, while their consequences are measured in terms of share price, Tobin’s Q, return on assets and return on equity. The authors used the results of the correlation and panel regression analyses to draw this study’s conclusions.
Findings
This study finds that firm size and age are the significant determinants of IR disclosure, which is consistent with this study’s expectations. Considering the consequences of IR disclosure, only share price and Tobin’s Q show significant results as per the panel regression analyses.
Practical implications
The findings of this study would be useful in the decision-making processes of existing and prospective investors, regulators, policymakers and society at large. Further, the findings of this study communicate the benefits of this new reporting paradigm in shaping their disclosures in the annual corporate reporting process.
Originality/value
Although existing studies attempted to examine the determinants of IR disclosure and its consequences as isolated studies, this study provides new insights by merging these two aspects into a single study and consider several determinants and consequences as well.
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Nasser S. Elgazery, Asmaa F. Elelamy, Elena Bobescu and R. Ellahi
The study aims to determine an efficiency of external magnetic field on the bacteria surrounded by thousands of magnetic magnetite nanoparticles. The interstitial nanoliquid in…
Abstract
Purpose
The study aims to determine an efficiency of external magnetic field on the bacteria surrounded by thousands of magnetic magnetite nanoparticles. The interstitial nanoliquid in which an artificial bacteria swims in biological cell is utilized with variable thermal conductivity. Two dimensions unsteady motion of second grade fluid are considered. The stretching wall is taken as a curved surface pattern.
Design/methodology/approach
The mathematical results have been obtained by Chebyshev pseudospectral method.
Findings
The impact of the various governing parameters is described by numerical tables and diagrams. It is proven that the pure blood velocity curves are higher when compared with the magnetite/blood. It is demonstrated from clinical disease that dangerous tumors show diminished blood flow. This study concludes that the blood velocity profile increases by increasing the values of fluid parameters. This implies that the medication conveyance therapy lessens the tumor volume and helps in annihilating malignancy cells. The blood temperature distribution raises as the magnetite nanoparticles concentration increases. Consequently, the physical properties of the blood can be enhanced by immersing the magnetite nanoparticles. Further, the present outcomes cleared the thermal conductivity as, a variable function of the temperature, has an important role to enhance the heat transfer rate.
Originality/value
To the best of authors’ knowledge, this study is reported for the first time.
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The purpose of this paper is to determine the most efficient hotels in the Indian hotel industry, the competitive positioning of these hotels, and the factors that affect their…
Abstract
Purpose
The purpose of this paper is to determine the most efficient hotels in the Indian hotel industry, the competitive positioning of these hotels, and the factors that affect their efficiency change.
Design/methodology/approach
This study conducts a two-stage analysis and uses data envelopment analysis (DEA) and Global Malmquist productivity index (MPI) approach in the first stage to calculate the managerial performance of a panel of 63 Indian hotels in 2019–2020 and their efficiency change from 2009–2010 to 2019–2020. Bootstrapped generalized least square (GLS) approach is applied in the second stage to evaluate the impact of contextual variables on efficiency change.
Findings
Using the results of the first stage analysis, the authors categorized the 63 Indian hotels into 7 distinct clusters. These clusters represent different levels of competitiveness and pace of growth. The GLS regression reveals a U-shaped relationship between hotel size and efficiency change and a negative relationship between pro social investments and efficiency.
Originality/value
This is the first study in the hotel industry that has used global MPI as a measure of efficiency change in the first stage and GLS in the second stage. In the Indian context, to the best of authors’ knowledge, no such study exists.
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Abhishek Kumar Sinha, Aswini Kumar Mishra, Manogna RL and Rohit Prabhudesai
The objective of the study is to analyse the impact of research and development investment on the firm performance of “small” scale firms vis-a-vis “medium”-scale firms.
Abstract
Purpose
The objective of the study is to analyse the impact of research and development investment on the firm performance of “small” scale firms vis-a-vis “medium”-scale firms.
Design/methodology/approach
The dataset comprised of a balanced panel of 486 research and development conducting Indian manufacturing small and medium enterprises, constructed for the period of 2006–2017. Fixed Effects, Random Effects Model and Hausmann test were used to analyse the determinants of firm performance in manufacturing small and medium enterprises in India.
Findings
It was found that from firms’ research and development (R&D) investments in terms of performance could be attained if simultaneously internationalisation and higher capital intensity could be achieved.
Practical implications
Managers could pay specific attention to the antecedents of firm performance and calibrate their R&D investment, internationalisation efforts and capital intensity simultaneously to achieve higher growth and productivity. For policymakers, the results provide an insight into how the firms in both categories could be differently incentivised, such that resources are better utilised.
Originality/value
The study analysed the determinants of firm performance in small and medium-sized firms at a disaggregate level as well as at a sectoral level using fixed effects, random effects and lagged effects to arrive at novel results, which have important implications for their competitiveness.
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Zihao Jiang, Jiarong Shi and Zhiying Liu
Wind power is the most promising renewable energy source in China. The development of digital technologies has brought about unprecedented growth opportunities and prospects for…
Abstract
Purpose
Wind power is the most promising renewable energy source in China. The development of digital technologies has brought about unprecedented growth opportunities and prospects for wind power. However, the relationship between digital technology adoption and total factor productivity (TFP) in the wind power industry in China has not been empirically assessed. This study aims to clarify whether and how digital technology adoption affects the TFP of the wind power industry in China.
Design/methodology/approach
Based on the data of listed companies in the Chinese wind power industry from 2006 to 2021, this study proposes and verifies relevant hypotheses with two-way fixed effects regression models.
Findings
The empirical results indicate that digital technology adoption is the cornerstone of the TFP of China’s wind power industry. Reconfiguration capability and technological innovation serially mediate the above relationship. In addition, the incentive effect of digital technology adoption varies among wind power firms. The impact of digital technology adoption is more significant in firms that are old and located in economically undeveloped regions.
Originality/value
This study is one of the earliest attempts to investigate the relationship between digital technology adoption and TFP in the renewable energy sectors of emerging economies. By integrating dynamic capability theory and the analytical framework of “Capability-Behavior-Performance” into the digital context, this study offers the theoretical insights into how digital technology adoption can enhance organizational reconfiguration capability, thereby stimulating technological innovation and subsequent TFP. Additionally, the impacts of different digital technologies are estimated in entirety, rather than in isolation.
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Edison Jolly Cyril and Harish Kumar Singla
The paper aims to investigate the effect of firm age and size on profitability and productivity of construction firms in India. It also attempts to understand the indirect effect…
Abstract
Purpose
The paper aims to investigate the effect of firm age and size on profitability and productivity of construction firms in India. It also attempts to understand the indirect effect of firm age and size on profitability mediated through firm's productivity.
Design/methodology/approach
Data of 64 construction firms, for a period of 12 years (2006–2017), were collected. In order to measure the direct and indirect effect of size and age on profitability and productivity, a structural equation model was developed. In the structural models, productivity is a latent variable measured through proxies of material productivity (MP), labor productivity (LP) and equipment productivity (EP). The profitability is measured using three financial ratios: return on asset (ROA), return on capital employed (ROCE) and return on net worth (RONW). Then the direct and indirect effect of age and size is measured on ROA, ROCE, RONW and productivity.
Findings
The findings of the study suggest that age has a direct negative effect on profitability; however, it has an indirect positive effect on profitability, which is mediated by firm's productivity. This positive indirect effect compensates the direct negative effect and leads to an overall positive effect of firm age on profitability. However, firm size shows no effect on profitability and productivity.
Originality/value
To the best of authors’ knowledge, the study is the first attempt to measure the indirect effect of age and size on profitability, mediated through productivity. The study also examines the interrelationship among firms’ profitability and productivity and bridges an important research gap. The study proposes an integrated theoretical framework with a clear view of the interrelationships among age, size, profitability and productivity for construction firms in India, which can be further tested and validated for generalization.
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The purpose of this paper is to investigate the linkage between exchange rate exposure and firms’ productivity in India. This study also tries to compare the effects of exchange…
Abstract
Purpose
The purpose of this paper is to investigate the linkage between exchange rate exposure and firms’ productivity in India. This study also tries to compare the effects of exchange rate exposure on the productivity of the pre- and post-financial crisis periods and also between export- and import-oriented firms.
Design/methodology/approach
By using the annual data of 232 manufacturing and service sector firms for the period of 2000-2013, this paper examines the exchange rate exposure and firms’ performance in India. In the first stage, the two-factor regression model, Adler and Dumas, is used, and in the second stage, the Levinsohn and Petrin (2003) approach is used for estimating the total factor productivity of significant firms. Finally, for examining the relationship between exchange rate exposure and productivity, the instrumental variable panel data regression model is used.
Findings
This study observes that a negative relation exists between the appreciation of exchange rate exposure and firms’ productivity. The study also reveals that the export-oriented firms make loss during exchange rate appreciation which decreases the productivity. The financial crisis has the negative impact on productivity, as well.
Originality/value
Although there are an ample number of studies which examined the effects of the exchange rate on firm’s export, growth, investment, however impact of exchange rate exposure on productivity at firm level is scanty. This study tries not only to compare the effects of exchange rate exposure on the productivity of the pre- and post-financial crisis periods but also between the export- and import-oriented firms which is another innovation of this study.
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Calvin W.H. Cheong, Miin Huui Lee and Marc Arul Weissmann
This study investigates the effects of credit access and tax structures on the performance of Manufacturing SMEs in Malaysia.
Abstract
Purpose
This study investigates the effects of credit access and tax structures on the performance of Manufacturing SMEs in Malaysia.
Design/methodology/approach
This study uses the dynamic panel system generalized method of moments, controlling for firm-specific as well as macroeconomic effects
Findings
The paper finds that (1) debt funding is not conducive to SME performance; (2) access to non-bank credit sources and tax incentives support SME performance by lowering opportunity costs of riskier projects; (3) existing tax structures in Malaysia inhibit SME growth and encourage manipulation of accounts; and (4) investors in Malaysia prefer SMEs that are more conservative in their accounting and taxation practices.
Research limitations/implications
Access to Malaysian SME data is restricted. Although robust methods are used, there is a chance that different conclusions may arise with a much larger sample.
Practical implications
The findings provide clear direction in the discussion and enactment of new policies that support SME growth especially in support of non-bank credit sources instead of revising tax policies. The paper also contributes by providing guidance to future SME studies that are inhibited by limited access to data.
Originality/value
SME-related studies on credit access and tax structures have often relied on traditional metrics (e.g. total amount of bank loans; tax expenses) to measure its impact on entrepreneurial/SME performance. Although relevant to the past, financial policies have evolved to embrace Industrial Revolution 4.0. This paper is a shift from the traditional by investigating the impact of new and innovative sources of funding such as incubators and crowdfunding. Also, since one cannot exist without the other, examining the joint impact of credit access and tax structures provides a more holistic view on policy-making, something prior studies have not addressed.