Ahmed Bouteska, Taimur Sharif and Mohammad Zoynul Abedin
Given the serious question raised by the subprime of the 2008 global financial crisis over the rising practices of excessive rewarding of executives in the USA and European firms…
Abstract
Purpose
Given the serious question raised by the subprime of the 2008 global financial crisis over the rising practices of excessive rewarding of executives in the USA and European firms, the executive pay-performance nexus has emerged as a popular topic of debate in the contemporary corporate finance research. Conducted mostly on the Anglo-Saxon contexts, research outcomes have been inconclusive and dichotomous. Considering this backdrop, this study aims to investigate the endogenous relationship between executive compensation and risk taking in the context of the USA.
Design/methodology/approach
Using a large sample of non-financial firms from 2010 to 2020 based on panel data and two-stage least square regression. In this study, the riskier corporate decision is measured as book leverage and ratio of R&D expense to total assets. Chief executive officers’ (CEO) experience and age are used as instrumental variables, and these are expected to influence compensation incentives and, hence, affect firm riskiness indirectly. Firm size, return on assets and CEO turnover are reported to affect compensation and corporate decisions, therefore, included as control variables. Given that higher executive compensation is related to riskier corporate decision in firms, this study incorporates total wealth (i.e. accumulated equity related compensation) as an additional proxy of compensation, and this selection is justifiable by the perfect contracting notion of the agency theory.
Findings
The results of this study show a significant positive and increasing nexus among compensation and riskier corporate decisions. Besides, the compensation level proxied through the percentage of each form of compensation in total compensation is very important as greater equity and greater salary diminishes risk taking.
Practical implications
The outcomes of this study have useful implications for firm stakeholders and policymakers.
Originality/value
The level of pay measured by the percentage of each type of compensation in total compensation is of utmost importance as it can increase or decrease risk taking in corporate decisions.
Details
Keywords
Mostaque A. Zebal, Taimur R. Sharif, Jack Crumbly and Anushe Zebal
The purpose of this study was to investigate the role of internal market orientation on the adoption of external market orientation among the retail banks in the United Arab…
Abstract
Purpose
The purpose of this study was to investigate the role of internal market orientation on the adoption of external market orientation among the retail banks in the United Arab Emirates (UAE). This study adds to the previous research regarding external market orientation. It also develops an empirical model on the basis of the results.
Design/methodology/approach
This study used a self-administered structured questionnaire to collect data from the front-line marketing and non-marketing employees from the banks. Data were collected from 98 branches of all the 49 banks that operate in the UAE. Two major emirates of the UAE, namely, Abu Dhabi and Dubai, were considered for data collection. Each bank contributed responses from a minimum of two branches, and 113 completed questionnaires were received out of 196 respondents approached for data collection. The reliability, convergent and discriminant validity issues of the data were assessed, and the results of these confirmed the appropriateness of the data used in this study.
Findings
Direct entry regression and multivariate analysis of variance were used for identifying the conclusions surrounding the hypotheses of the study. The results measured the extent of internal market orientation and employees’ organisational commitment. They both confirmed their positive role on the adoption of external market orientations among the retail banks in the UAE. The results of the study further provided evidence that once an external market orientation focus is adopted, this benefits customer loyalty and satisfaction in addition to overall positive business outcomes for the banks concerned.
Originality/value
The findings of this study support the theoretical arguments of the role of employees and internal market orientation on the adoption of external market orientation. This study further identifies the reason why the adoption of external market orientation is critical for the success of banks.
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Samsul Islam, Mohammad Jasim Uddin, Yangyan Shi, Taimur Sharif and Jashim Uddin Ahmed
A seaport is an essential part of a supply chain, but many ports experience truck shortages, creating pressure for port authorities from shippers who need more trucks that move…
Abstract
Purpose
A seaport is an essential part of a supply chain, but many ports experience truck shortages, creating pressure for port authorities from shippers who need more trucks that move cargo. This study explores and ranks the motives for adopting a truck-sharing concept (where shippers share the same truck for delivery) as a mechanism to improve transport capacity.
Design/methodology/approach
This study adopts a multi-method approach – both interviews and surveys. Interviews are first conducted with shippers to explore truck-sharing usage motives. Next, quantitative surveys of both shippers and carriers are conducted to rank those motives.
Findings
The study identifies five motives (operational efficiency goal, quick transport solution, sustainability policy, convenience-seeking behavior and secure transport process) for truck-sharing, four critical transport attributes (lower charges for freight, distance travelled, full capacity utilization and environmental recognition), four psychological consequences (monetary savings, greater safety, instant availability of trips and clarification of environmental values), and six core values (secure transport process, being careful of money, ease of doing business, sustainability, status in the community and recognition by customers of shippers).
Research limitations/implications
The qualitative results will help researchers better understand how usage motives influence shippers' willingness to share a truck for transport needs. The quantitative results are useful for ranking truck-sharing motives by their importance.
Practical implications
Based on the findings, managers of carriers can categorize shippers according to their specific needs and thereby customize promotions to attract more shippers.
Originality/value
The findings provide the first, exploratory insights into shippers' motives.