Sang M. Lee, Yonghwi Noh, Donghyun Choi and Jin Sung Rha
The purpose of this paper is to investigate the effect of ISO 14001 certification on US public firms’ equity structure regarding whether the typical heavy investment required for…
Abstract
Purpose
The purpose of this paper is to investigate the effect of ISO 14001 certification on US public firms’ equity structure regarding whether the typical heavy investment required for environmental management system is justified in terms of equity risk.
Design/methodology/approach
This study employs the event study methodology and examines the pre- and post-movements of firms’ equity structure around the ISO 14001 certification date. This study investigated 5,189 listed firms in the New York Stock Exchange and National Association of Securities Dealers Automated Quotation and the abnormal performance of firms’ equity structure was measured by using four dependent variables (assets, liabilities, debt ratio (liabilities/equity), and market-to-book ratio of equity).
Findings
The results showed that the adoption of ISO 14001 increased a firm's total assets, liabilities, and debt ratio in the long run, implying that pursuing the certification entails the increase in a firm's size and equity risk. The long-term movement of the market-to-book ratio of equity showed no abnormal performance, while it fluctuated in the short term.
Practical implications
This study suggests that managers should consider the potential risk from a firm's equity structure when they decide to pursue the ISO 14001 certification.
Originality/value
This study is the first effort to investigate the long-term effect of ISO 14001 certification on the firm's equity structure using the event study methodology in the USA.
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Keywords
– The purpose of this paper is to investigate the long-term financial effects of open innovation in the manufacturing industry.
Abstract
Purpose
The purpose of this paper is to investigate the long-term financial effects of open innovation in the manufacturing industry.
Design/methodology/approach
Drawing upon an open innovation literature, this study examined 671 open innovation announcements made by firms listed on the New York Stock Exchange and National Association of Securities Dealers Automated Quotations during 2003-2012. By employing the event study, the long-term financial performances of the firms that announced open innovation were measured using six dependent performance variables (ROA, ROS, Tobin’s Q, Cost ratio, Sales growth, Asset turnover).
Findings
The results indicate that open innovation in the manufacturing industry may lead to long-term improvements in firm profitability, triggering a positive reaction by stockholders. Open innovation also decreased production costs and increased sales volume over the long run. In all, open innovation was found to be beneficial to the firm in terms of profitability, production process improvement, and market benefits.
Originality/value
This paper is the first longitudinal empirical study to investigate the long-term effects of open innovation in terms of US manufacturing financial performance. It contributes to the body of knowledge by complementing previous open innovation studies, which generally focus on context-specific issues.
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Keywords
Sang M. Lee, Jin Sung Rha, Donghyun Choi and Yonghwi Noh
This study aims to empirically investigate the relationship between the directions of pressures affecting green supply chain management (GSCM) and supply chain (SC) performance…
Abstract
Purpose
This study aims to empirically investigate the relationship between the directions of pressures affecting green supply chain management (GSCM) and supply chain (SC) performance.
Design/methodology/approach
This research is based on a survey because there is no archival database providing detailed information on GSC practices and performance. A survey questionnaire was developed to collect research data, based on the GSC literature and a pilot study in the field. The authors developed hypotheses based on two theories: institutional theory and the resource-based view (RBV). Confirmatory factor analysis (CFA) and structural equation modeling (SEM) were used to test the hypotheses with SPSS (16.0) and AMOS (5.0).
Findings
The results confirmed the importance of implementing environmental SC practices to sustain organizations' competitive advantage and performance. Increased SC flexibility helped reduce resources, through decreased cost factors and improved output. Enterprises with environmental SC policies tended to increase SC flexibility and, hence, enhanced profits.
Originality/value
This paper applies organizational theories to GSCM by extending the institutional-versus-internal-pressure construct to the way enterprises implement GSC strategies for sustainable SC.