Frontiers in Management and Business

How does industrial agglomeration affect firm performance of Chinese high and new technology industry?

Qianfei Shu — 2023-05-05

Many researches have discussed the relationship between industrial agglomeration and firm performance. However, the relationship between policy-directed industrial agglomeration in the context of Chinese high and new technology (HNT) industry remains unclear. This study aims to investigate the correlation between industrial agglomeration and China's HNT firm performance by using the two-stage least squares (2SLS) and the system generalized methods of moments (GMM) approaches on account of the panel data of HNT industries in China during 2004-2015. The estimation results revealed that industrial agglomeration has a positive impact on HNT firm performance, including productivity and sales growth. To be specific, by taking advantage of agglomeration effect, foreign-owned firms have demonstrated excellent performance in both labor productivity and sales growth. In contrast, private-owned firms have not performed well in terms of productivity, but have shown sound performance in term of sales growth. Unfortunately, state-owned firms do not benefit from the industrial agglomeration. Moreover, large firms perform better in respect of labor productivity, while small firms experience higher sales growth.

Recent advances in internal control: Soft control overcoming the limits of hard control

Peter Yao Lartey — 2023-03-29

Uncertainties and risks continue to pose a threat to governance and internal control, impeding public sector modernization and essential service delivery. Attempts to develop alternative strategies to meet desired results in highly bureaucratic institutional environments such as the public sector are intensifying because ideas and principles matter. This study advances informal "soft control" as a substitute for formal "hard control" in four dimensions: (a) creates a clear difference between "soft" and "hard" control; (b) designs key determinants of informal "soft" control; (c) limitations of formal "hard" control; and (d) a conceptual framework and hypotheses to support future empirical research and “operationalization” of the proposed constructs. Critical observations imply that the increasing cases of corporate malpractice and consequential non-alignments with best practises in recent times are sufficient evidence to suggest that formal control is incapable of mitigating financial crimes, irregularities, and preventing complex accounting scandals classified as white-collar fraud. The causes of these control failures are attributed to overreliance on "hard control" which primarily works with sanctions and the neglect of informal control mechanisms "soft controls". This condition has limited the ability of auditors to uncover systematic failures of controls that are process-specific, resulting in a partial and incomplete evaluation of internal controls. The study assumed a theoretical approach due to the lack of existing empirical research on “soft control”. However, this observations form a solid theoretical foundation for further discussions. We argue that "tone at the top," informal social control, organisational culture, ethical values, empowerment, and employee competence are effective substitutes for and complements to formal "hard" controls in preventing another Enron.

Research on the export competitiveness of aquatic products and its influencing factors: A case study of Guangdong Province in China

Li Huang — 2023-03-14

Guangdong Province is a major producer of aquatic products in China, but its export has been lack of competitiveness. Based on data of aquatic products in Guangdong Province from 2009 to 2020, this paper analyzes the export competitiveness and influencing factors of aquatic products in Guangdong Province using an extended gravitational model and result show that production factor input and high-quality production management are the core factors to enhance the export competitiveness of aquatic products. The geographical distance of importing countries and GDP per capita have a significant positive impact; The impact of the fisheries industry and construction industry is significantly positive; Whether the exporting country is an APEC has a significant negative impact, indicating that the previous trade agreements have no effect on the improvement of the export competitiveness of aquatic products in Guangdong Province over time. It has no significant impact on fish breeding area, the number of processing enterprises above designated size and the openness of foreign trade. Reducing the density of aquaculture, increasing innovation, strengthening the supervision of aquatic products and improving the supporting facilities of related industries are important measures to improve the export competitiveness of aquatic products in Guangdong Province.

Do doctors work for patients in today's business-mentality world: Looking through consumer choice theory lens?

Akim M. Rahman — 2022-12-26

In the 21^st century world, people mostly behave with business-mentality without considering moral obligations in society. In this behavioral change, service-market, particularly Medical-care service-market is appeared to be vulnerable. Because of supplying medical-care services, the doctor or hospital receives capitation payments, fees-for-services, risk pool settlements, incentive payments or other fees. However, today it is probably the most criticized profession in world-economy country-wise such as Bangladesh. Sometimes doctors here are blamed for requiring unnecessary tests of patients for doctor’s own monetary gains. In some cases, doctors’ efforts are assumed to be connecting with pharmaceutical-products promotion by writing lengthy prescriptions. Some group claims that today doctors spend less time for each patient. All these interactions justify claiming that a patient works for a doctor when the patient visits a doctor for medical-care services. Here the existence of “asymmetric information” dominates the medical-care market where doctor takes advantages in multi-faucets. It causes market inefficiency that creates negative economic externalities – deadweight loss. Improving medical education with special emphasis on ethical aspects and soft skills in communication are considered important in aim to reduce the magnitudes of today’s dilemma of medical-care service-market. Also, strict enforcements of medical-care provisions and ethical code of conduct among all health works can be instrumental. Finally, the answer to the question “Do doctors work for patients or something else, depends on who are asked. But the reflections of today’s medical-care-market in economy of Bangladesh are no deniable, which deserves to be studied further curtailing the magnitudes of the problem.

Black carbon and other pollutants from brickfields country-wise: Impact assessment and policy guidance under welfare analysis

Akim M. Rahman — 2022-11-22

The brick industry in developing world is a vast, coal burning and polluting industry. Nearly 1,500 billion bricks are produced globally each year where 87% are from Asia. China dominates the world in producing bricks using coal combustion and woods as fuels where Australia placed the last. Bangladesh placed the 5^th in the world, and it mostly uses woods as fuels. These industries are owned privately. It is a type of industry that is mostly driven with business mentality without emphasizing the hygiene and health aspects where government laws are barely active in practices where rapid urbanization has been increasing demand of bricks. But, in most cases, this industry uses inefficient and dirty technology that causes environmental externalities. Brick-kilns inject huge volume of effluent gases. It causes depletion of atmospheric O₂ level. Addressing the issue for policy guidance, this study first analyzes the consequences of these externalities in terms of marginal damage (MD) under neoclassical partial equilibrium demand & supply theory. It further analyzes the reasons of disparity between social-cost and private-cost by conventional marginal damage analysis. Findings show that due to gases emission from brickfields, the marginal social-costs are higher than marginal private-cost. In this economic dilemma, brick-kilns are benefiting with the expense of human-society country-wise. As it has been going on, the rises of brick-prices have been causing upward trends of welfare losses where producer surplus is dominating the total surplus. This consequential economic situation has been causing higher deadweight loss year after year. The reason is that the bricks-customers distribute this expenditure away from now more expensive bricks. Now there is an urgency for national policy actions for ensuring cleaner & sustainable brick production. On this aspect, reforestation efforts can be achieved in multi-faucets including brickfields’ charity and govt. policies on planting trees and for motivational efforts inspiring citizens of this country. These motivational efforts can be in multi-faucets: (a) inspiring “birthday celebration by planting trees”, (b) forcing to use green Tech in brick kilns and (c) conducting research in both phases of govt. and academicians where financial supports can be inspirational.

A quantitative approach to risk-driven strategy formulation: A case study introducing a real-options framework

Alberto Bettanti — 2022-11-02

The thesis of this article advocates that a quantitative and analytical approach to the business value vs. risk relationship can effectively support company strategy formulation processes dealing with uncertain business scenarios. Within the grounded theory methodology, a suitable case study was selected among SMEs, and a real-options (RO) framework was applied to address the research question. This inductive-empirical methodology shows that the RO framework, in conjunction with the Montecarlo method, is a valuable tool capable of supporting the best strategy formulation by purposefully connecting risk with business value. Furthermore, it has been demonstrated that the RO framework can maximize business value in markets characterized by deep fundamental uncertainty. This article is of interest to both scholars and practitioners. Strategic thinking research can benefit from the conclusions of this paper by conceptually reinforcing strategy formulation theories based on organizational resource-investment choices exploited through the RO lens. Practitioners can verify the strengths of the RO framework in practice. Moreover, they can adopt the combined use of the RO framework and the Montecarlo method as a leading factor for strategy-setting processes and a trigger for shaping strategic risk management practices within their reference industry.

Pitfalls on strategy execution of an organization: A literature review

Belay Getachew Girma — 2022-07-25

The purpose of this study is to explore the pitfalls on strategy execution of an organization as organizations often unable to meet objectives and most likely fails, and this is normally attributed due to the inefficiency on the strategy implementation process. To address this gap, the research employed a deductive approach with exploratory research design by focusing on qualitative data as a systematic review of theoretical and empirical studies are more vital for this type of research. The study focused on a systematic literature review (SLR) of 22 peer-reviewed theoretical and empirical studies. By using a review and generalization of the existing approaches followed by synthesizing with relevant model portrayed organizations seriously faced a challenge on implementation phase and the inability to properly address the pitfalls on strategy execution process costs a lot especially to senior and top executives as they are primarily responsible for the successful execution of an organization strategy. Hence, organizations shall establish a clear evaluation system and sense of ownership for successful implementation of a strategy. As a future direction the paper also identified that a more in-depth and field work research in an organizations are vital in order to examine and address the challenges on the implementation phase.

Investigating and estimating the size of Shadow Economy by using monetary approach: Case study of Malaysia

Yousaf Ali Khan — 2022-07-12

The purpose of this study is to explore and estimate the size of Shadow Economy of Malaysia. This study used annual Time series data from 1980 to 2018, introduced Lending Interest Rate as additional variable for the first time to estimate the Shadow or dim Economy, and focused on the Currency Demand Approach (CDA) which is the best way of estimation the size of S.E. The results of ARDL, Unit Root Test (ADF) and Bound Test have also generated for the purpose. And this study investigated positive relationship between Currency Circulation to Money Supply Ratio and GDP, Inflation, Interest rate, and Total Tax Revenue through ARDL and estimated the required Shadow Economy, and also explored the Shadow Economy of Malaysia and estimated the size of S.E. Size of tax evasion community has also derived by present research which represent that taxes are not the only measures of Shadow Economy.

Ensuring risk-free e-banking services in Russian-economy: Policy guidance

Akim M. Rahman — 2022-06-21

In today’s e-banking, customers compete for comparative time-saving-options. Banks compete for maximizing profits. But many factors are unpredictable. These are perceived risks factors (PR) that undermines growth trends of e-banking in economy country-wise such as Russia. Bank-deposits, bank-accounts are covered by Deposit Insurance System (DIS) in Russian-economy. However, PR-factors are not covered. It causes abuses. Addressing the dilemma, application of Akim’s model – Voluntary Insurance (VI) as a product can be instrumental attracting more individuals using e-banking. Welfare Analyses are used as guidance for ensuring efficiency-cost or competitive pricing of the VI so that it becomes appealing to both customers and Banks. When bank is an insurance-provider, under asymmetric-information, existence of adverse-selection-group is detected where estimated welfare-cost associated with inefficient pricing created by adverse-selection is small. However, advantageous-selection-group in market results opposite. The findings can be helpful in policy-design ensuring risk-free digital-banking, which can attract policy-practitioners in Russia. Using customers-opinions can facilitate empirical studies.

Venture capital, enterprise performance and accounting information quality - GEM listed companies of China

Javed Pervaiz — 2022-06-16

Aim of this study’s using the GEM listed companies’ data from 2015 to 2019, finding the relationship between venture capital, accounting information quality, and corporate performance. Through empirical analysis found that venture capital participation has a significant role in promoting corporate performance. Results show that higher accounting information quality has a significant role in promoting corporate performance. The characteristics of venture capital have a significant role in regulating the relationship between accounting information quality and corporate performance.