Sudip Datta, Trang Doan, Abhijit Guha, Mai Iskandar-Datta and Min-Jeong Kwon
This paper examines how “strategic” chief financial officers (CFOs) with an elite MBA (i.e. elite CFOs) influence (1) stock market reaction to CFO hiring announcements (ex ante…
Abstract
Purpose
This paper examines how “strategic” chief financial officers (CFOs) with an elite MBA (i.e. elite CFOs) influence (1) stock market reaction to CFO hiring announcements (ex ante measure) and (2) post-hiring firm performance (ex-post measure).
Design/methodology/approach
This paper utilizes a comprehensive, proprietary database with information about the educational qualifications and prior professional experience of 1,340 CFOs hired during the period 1994–2014. For each CFO, the authors hand-collected data on the CFO's prior experience as well as CFO's educational profile. The authors also identified the date of CFO hiring from financial press articles. To evaluate performance, the authors consider two different, yet complementary performance measures: (1) the stock market reaction, a priori measure and (2) a traditional measure of performance, which is a post-facto metric related to firm performance.
Findings
The results show that hiring CFOs with scarce and strategic human capital elicits a positive market response and leads to significant improvement in firm performance. Further, firms with greater managerial discretion benefit more from hiring elite CFOs. The results hold after controlling for chief executive officer (CEO), CFO, top managment team (TMT), and board characteristics.
Originality/value
This study shows converging and mutually consistent results about what specific types of CFO human capital create firm value and, more importantly, show that such value-creation is only in the case of small firms and high growth firms. The study also advances the stream of literature that contrasts the relative benefits of specialist versus generalist qualifications.
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Shamindra Nath Sanyal, Saroj Kumar Datta and Asok Kumar Banerjee
The purpose of this paper is to examine the physicians’ attitude toward branded generic drugs in prescribing those drugs in some selective medical conditions and to identify the…
Abstract
Purpose
The purpose of this paper is to examine the physicians’ attitude toward branded generic drugs in prescribing those drugs in some selective medical conditions and to identify the factors that influence physicians’ behavior toward prescribing branded generic drugs in the said selective medical conditions.
Design/methodology/approach
The study was carried out across six major cities in eastern India with 301 physicians. The current study introduced some significant elements into the modified technology acceptance model (TAM) with title the extended tam for product usage (TETPU) to analyze the prescribing factors that influence physicians in five common yet serious medical conditions in India. Out of nine factors considered here, seven were selected from the previous literature studies of different product segments and two were proposed by the authors. Demographic factor was proposed as the confounding variable.
Findings
The results indicated that apart from the factors “perceived no need” and “physicians’ perception and need achievement” rest of the factors showed satisfactory to excellent results.
Practical implications
The current study findings may enable the pharmaceutical managers to revise or modify their current marketing communication and other brand-building strategies so as to achieve a superior performance that offers them a competitive advantage.
Originality/value
The paper fulfils a need for advancing the knowledge on the physician’s prescription influencing factors by introducing the newer aspects of the concept and offers a theoretical framework for the academia and practical framework for the managers who desire to implement the strategies to achieve competitive advantage.
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Jhumana Akter, Shuvo Dip Datta, Mobasshira Islam, Bassam A. Tayeh, Sadia Ahmmed Sraboni and Niloy Das
The purpose of this research paper is to investigate and evaluate the impacts of utilising Building Information Modelling (BIM) as a lean management tool in Bangladesh's…
Abstract
Purpose
The purpose of this research paper is to investigate and evaluate the impacts of utilising Building Information Modelling (BIM) as a lean management tool in Bangladesh's construction management field. The paper explores how adopting BIM as a lean management tool can improve and expedite a number of processes in building projects, which will ultimately increase project success, cost-effectiveness and efficiency.
Design/methodology/approach
A comprehensive survey was conducted to investigate how BIM deployment as a lean management tool affected project outcomes. This research involved a structured survey amongst construction professionals and a case study on a real project in Bangladesh to assess the effects of using BIM as a lean management tool. The data collected from 112 respondents were analysed statistically and qualitatively to identify the effect of BIM as a lean management tool. Additionally, several software tools, including Revit, Navisworks, Design Review and BIM 360, were used to compare conventional and BIM-based methods.
Findings
The research findings demonstrate that utilising BIM practices improves the quality and safety of construction in Bangladesh. The “Improving the quality of construction” (RII = 0.732) achieved the highest rank in the questionnaire survey. In addition, the case study represents that the construction industry can benefit from BIM-based project management. The BIM implementation can shorten the design process by over 50% and save up to 1.5 weeks by minimising idling time. By applying BIM, it is possible to avoid a price rise of roughly 2.5% and a delay of about 11.9% of the original contract period.
Practical implications
The significance of the results goes beyond the direct advantages of the project's achievements. The successful integration of BIM as a lean management tool in Bangladesh's construction sector suggests transformative potential for the industry. The enhanced coordination and decreased errors point to a future where construction projects can achieve higher levels of precision and reliability. The improved efficiency observed implies a more sustainable and cost-effective future for construction projects in the region.
Originality/value
The research provides a unique perspective on the impact of BIM implementation on project outcomes. It includes a comprehensive survey on BIM adoption as a lean management tool, gathering real-world experiences from construction professionals in Bangladesh. The case study explores the practical implications and advantages of implementing BIM in construction projects. By comparing conventional methods with BIM-based approaches and utilising BIM software, the study contributes value to the construction sector.
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The purpose of this study is to analyze the effect of low carbon product design on firm's competitiveness and economic performance. It also examines the mediating role of the…
Abstract
Purpose
The purpose of this study is to analyze the effect of low carbon product design on firm's competitiveness and economic performance. It also examines the mediating role of the proactive environmental strategy and eco-innovation on low carbon product design, competitiveness and economic performance.
Design/methodology/approach
Through a questionnaire-based survey, the data were collected from 69 Indian manufacturing firms and analyzed using a variance-based structural equation modeling (SEM) technique to test the proposed hypotheses.
Findings
The results show that the low carbon product design significantly improves firm's competitiveness and economic performance, and proactive environmental strategy significantly mediates the relationship between low carbon product design and firm's competitiveness.
Practical implications
This study provides a framework for the adoption of low carbon product design. It demonstrates how manufacturing firms can implement environmental friendly product design. It also analyses the contextual factors that ensure a successful low carbon product design.
Originality/value
This article investigates the economic benefit of low carbon product design, thus filling lacuna in existing research.
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Rongbing Huang and James G. Tompkins
The purpose of this paper is to study the role of corporate governance in abnormal returns around announcements of seasoned equity offerings (SEOs) by publicly traded US firms…
Abstract
Purpose
The purpose of this paper is to study the role of corporate governance in abnormal returns around announcements of seasoned equity offerings (SEOs) by publicly traded US firms from 2001 to 2004.
Design/methodology/approach
Cross‐sectional regression analysis was used to determine which variables are important to the market's reaction to the SEO, with a particular focus on corporate governance variables.
Findings
It was found that investors react more positively for firms in which different people hold the CEO and board chairman positions. Limited evidence was found that investor reaction is more positive when the board has a greater representation of outside directors, the CEO has less ownership, and the board is not too large. These findings suggest that investors react more favorably to SEOs by firms with stronger corporate governance mechanisms that reduce adverse selection or agency problems.
Practical implications
This paper's findings are evidence that stronger boards can reduce a firm's cost of raising additional equity capital. Originality/value – There is not believed to be any other published paper that examines the impact of corporate governance mechanisms on the reaction to SEOs with such a comprehensive sample or in post‐Enron periods.
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Rutger Muurling and Thorsten Lehnert
Employee Stock Options are the most widely used incentive compensation tool, and prior research has shown their advantages. However, research among different peer groups…
Abstract
Employee Stock Options are the most widely used incentive compensation tool, and prior research has shown their advantages. However, research among different peer groups, different time frames, different research methodologies, and the constantly changing public opinion prevents unanimous agreements on the various benefits of Employee Stock Options. In this paper we apply a number of research hypotheses tested in recent US studies to a European sample of EuroStoxx 50 companies. Due to the globalisation, the similar accounting regulations and the IT and telecommunications revolu tions, Europe and the United States have grown closer together than ever before and are expected to display similar business practices. This assessment should be especially relevant for the large European companies, which mostly have a dual listing in the United States and are therefore essentially forced to manage according to American practices. How ever, the results differ significantly from the existing US research, providing insufficient grounds to accept previous findings for European companies.
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Sudip Datta, Mai Iskandar-Datta and Vivek Singh
The purpose of this paper is to add an important new dimension to the earnings management literature by establishing a link between idiosyncratic risk and the degree of accrual…
Abstract
Purpose
The purpose of this paper is to add an important new dimension to the earnings management literature by establishing a link between idiosyncratic risk and the degree of accrual management.
Design/methodology/approach
Based on a comprehensive sample of 44,599 firm-year observations during the period spanning 1987-2009, the study offers robust empirical evidence of the importance of firm-specific idiosyncratic volatility as a determinant of earnings manipulation. The authors use standard measures of earnings management and idiosyncratic volatility. The authors test the hypotheses with robust econometrics techniques.
Findings
The authors document a strong positive relationship between idiosyncratic risk and accruals management. Further, the authors find a positive association between residual volatility and discretionary accruals whether accruals are income inflationary or income deflationary. The findings are robust to alternate idiosyncratic risk proxies and variables associated with earnings management.
Originality/value
Overall, the knowledge derived from this study provides additional tools to assess the degree of earnings management by firms, and hence the quality of the financial reporting. Thus the findings will enable standard setters, financial market regulators, analysts, and investors to make more informed legislative, regulatory, resource allocation, and investment decisions.
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Muntazir Hussain, Ramiz Rehman and Usman Bashir
This study investigates the relationship between female CEOs and SMEs’ financing decisions. The study also examined the moderating role of ownership structure (female, foreign…
Abstract
Purpose
This study investigates the relationship between female CEOs and SMEs’ financing decisions. The study also examined the moderating role of ownership structure (female, foreign, and state ownership) in female CEO-SMEs’ financing decisions.
Design/methodology/approach
The study has applied Generalized Least Square (GLS) and Binomial Logistic Regression. The study has used firm-level data from 2,700 Small and Medium Enterprises (SMEs) in the Chinese economy.
Findings
The results suggest that female CEOs use debt financing. However, the financing decision of female CEOs varies if we account for female ownership, foreign ownership, state ownership, firm association with big firms, and the industry in which the firm operates. This study also provides robust evidence that female CEOs utilize debt financing under certain conditions and that female CEOs prefer long-term debt financing to short-term debt financing when considering debt maturity choices.
Originality/value
Recent studies report a negative relationship between female CEOs and financing decisions based on the rationale that females are risk-averse and choose less risky financing compared to their male counterparts. This study posits new evidence that female CEO financing decisions are not always risk averse if we consider female ownership, foreign ownership, state ownership, firm association with big firms, and the industry in which the firm operates. Thus, we contribute to the corporate governance literature, and this study implies a corporate financing policy.
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Subhamita Chakraborty, Prasun Das, Naveen Kumar Kaveti, Partha Protim Chattopadhyay and Shubhabrata Datta
The purpose of this paper is to incorporate prior knowledge in the artificial neural network (ANN) model for the prediction of continuous cooling transformation (CCT) diagram of…
Abstract
Purpose
The purpose of this paper is to incorporate prior knowledge in the artificial neural network (ANN) model for the prediction of continuous cooling transformation (CCT) diagram of steel, so that the model predictions become valid from materials engineering point of view.
Design/methodology/approach
Genetic algorithm (GA) is used in different ways for incorporating system knowledge during training the ANN. In case of training, the ANN in multi-objective optimization mode, with prediction error minimization as one objective and the system knowledge incorporation as the other, the generated Pareto solutions are different ANN models with better performance in at least one objective. To choose a single model for the prediction of steel transformation, different multi-criteria decision-making (MCDM) concepts are employed. To avoid the problem of choosing a single model from the non-dominated Pareto solutions, the training scheme also converted into a single objective optimization problem.
Findings
The prediction results of the models trained in multi and single objective optimization schemes are compared. It is seen that though conversion of the problem to a single objective optimization problem reduces the complexity, the models trained using multi-objective optimization are found to be better for predicting metallurgically justifiable result.
Originality/value
ANN is being used extensively in the complex materials systems like steel. Several works have been done to develop ANN models for the prediction of CCT diagram. But the present work proposes some methods to overcome the inherent problem of data-driven model, and make the prediction viable from the system knowledge.
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The purpose of this paper is to investigate whether a firm’s undertaking of a bond IPO influences the monitoring of the private loans granted to the firm by private lenders. If it…
Abstract
Purpose
The purpose of this paper is to investigate whether a firm’s undertaking of a bond IPO influences the monitoring of the private loans granted to the firm by private lenders. If it does, in which direction the monitoring changes?
Design/methodology/approach
The author uses both univariate and multivariate analyses to test the hypothesis. For the purposes of this research, the author’s primary data sources are LPC Dealscan, which provides data on private loans; Mergent FISD, which provides data on public bond issues; and the Compustat Industrial Annual Database, which provides the required financial data for the sample firms. The author’s sample covers non-financial US firms for the period of 1991-2010. The author’s final sample consists of nearly 23,000 private loans granted to about 5,500 non-financial US firms.
Findings
The major finding of this research is that private lenders increase their degree of monitoring of loans that they extend to a firm after it issues a bond IPO. The results of the two-stage bond IPO anticipation model further strengthen the findings. The evidence suggests that as the firm issues public debt for the first time, private lenders get concerned about the potential increase of agency problems and leverage, and consequently, find it valuable to increase the degree of monitoring of loans. Also, the magnitude of change in monitoring is strongly influenced by the degree of information asymmetry, leverage, profitability, and potential to waste free cash flow.
Originality/value
This paper enhances one’s understanding of the contracting dynamics between private lenders and the firm as it issues in the public debt market. The findings can aid firms anticipate the borrowing conditions they will face if they undertake a bond IPO. Further, the cross-sectional analysis on covenant changes from pre- to post-bond IPO period identifies specific firm characteristics that impact the magnitude of change of covenant intensity and comprehensiveness. As a result, uncertainty regarding post-bond IPO outcomes is reduced for borrowing firms.