• Title/Summary/Keyword: Firm Age

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Does Portfolio Quality Influence Financial Sustainability? A Case of Microfinance Institutions in Kenya

  • BITOK, Stephen K.;CHEBOI, Josephat Y.;KEMBOI, Ambrose
    • Asian Journal of Business Environment
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    • v.10 no.1
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    • pp.37-43
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    • 2020
  • Purpose: The purpose of this study was to examine the relationship between portfolio quality and financial sustainability of microfinance institutions in Kenya. Research Design, Data, and Methodology: The analysis was based on a panel dataset of 30 microfinance institutions for the period of 2010 to 2018. Data was obtained from the Microfinance information exchange (MIX) database, and it was analyzed through descriptive and inferential statistics with the aid of STATA. Based on the results of the Hausman test, the study adopted the fixed effect regression model to test the research hypothesis. Results: The study found that portfolio quality had a positive significant effect on financial sustainability of Microfinance institutions in Kenya (β= 0. 211; p-value < 0.05). For the control variables; firm age had a positive effect (β= 0.773; p-value <0.05), while firm size (β= -0. 749; p-value < 0.05) had a negative effect on financial sustainability. Conclusions: The study concluded that portfolio quality has an important influence on the financial sustainability of microfinance institution. The study recommends that managers of microfinance institutions should devise good collection policies to improve portfolio quality while lessening loan default rate. The portfolio quality may improve the overall profitability and enhance investor confidence in their strategic decision-making on refinancing.

Debt Finance among Vietnamese Enterprises: The Influence of Managers' Gender

  • HO, Hoang Lan;DAO, Minh Hoa;PHAN, The Cong
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.9
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    • pp.229-239
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    • 2020
  • This paper examines the impact of gender on access to debt finance among Vietnamese enterprises. The paper investigates data and variables retrieved from the World Bank Enterprise Survey dataset using five Probit models. The regression results suggest that there exist more unfavourable debt financing conditions for women-led firms (WLF), measured as a lower probability of having loan applications fully approved. Firm's age, working sector, and perception of access to finance as a difficulty are found to have explanatory power on the discrimination. More importantly, the perception of debt finance as a difficulty or firms' level of confidence significantly explains the variance of the dependent variable of probability of loan approval, or gender effect would be more pronounced if the firm already has a low level of confidence. The paper also contributes in testing for the gender effect on Vietnamese enterprises from different sectors and scale, unlike other prior research papers focusing on specific sectors and/or small and medium enterprises only. The findings are highly useful for Vietnamese credit institutions to set out a specific business policy to attract more WLFs and help promoting gender equality in the working environment, especially in debt financing, which is often neglected in existing regulation and policy frameworks.

Factors Affecting Financial Risk: Evidence from Listed Enterprises in Vietnam

  • DANG, Hang Thu;PHAN, Duong Thuy;NGUYEN, Ha Thi;HOANG, Le Hong Thi
    • The Journal of Asian Finance, Economics and Business
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    • v.7 no.9
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    • pp.11-18
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    • 2020
  • This paper analyzes factors affecting enterprise's financial risk listed on the Vietnam stock market. The panel data of research sample includes 524 non-financial listed enterprises on the Vietnam stock market for a period of eleven years, from 2009 to 2019. The Generalized Least Square (GLS) is employed to address econometric issues and to improve the accuracy of the regression coefficients. In this research, financial risk is measured by the Alexander Bathory model. Debt structure, Solvency, Profitability, Operational ability, Capital structure are independent variables in the study. Firm Size, firm age, growth rate are control variables. The model results show that in order to prevent and limit financial risk for enterprises listed on the Vietnam Stock Market, attention should be paid to variables reflecting Liability structure ratio, Quick Ratio, Return on Assets, Total asset turnover, Accounts receivable turnover, Net assets ratio and Fixed assets ratio. The empirical results show that there are differences in the impact of these factors on the financial risk in state-owned enterprises and non-state enterprises listed on the Vietnam stock market. The findings of this article are useful for business administrators, helping business managers make the right financial decisions to improve the efficiency of financial risk management in enterprises.

Corporate Social Responsibility and Firm Performance: the Moderating Role of Top Management Team Characteristics and Heterogeneity

  • Meng, La-Mei;Byun, Hae-Young
    • Asia-Pacific Journal of Business
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    • v.12 no.2
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    • pp.39-60
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    • 2021
  • Purpose - The purpose of this paper is exploring whether the characteristics and heterogeneity of the TMT play a moderating role in CSR and corporate value or not. Design/methodology/approach - The literature research method includes collecting, organizing, and analyzing the literature on the characteristics and heterogeneity of the TMT, the effect of corporate social responsibility (CSR), and corporate value. We analyze the contributions and limitations in existing research, grasp the current research status, and develop the research content of this article. The empirical analysis method is based on the data of Chinese A-share listed companies from 2001 to 2017. This allows us to study the moderating effect of the characteristics and heterogeneity of the TMT on CSR and corporate value. Findings - The TMT age, education degree, overseas background, and compensation have a positive moderating effect on CSR and corporate market value. The comprehensive heterogeneity of the TMT also has a positive effect on CSR and financial performance. Research implications or Originality - The research on the relationship between CSR and corporate value is still inconclusive. Some results have found a positive relationship, while others show a negative relationship. Studies exist that report mixed findings as well. This study has attempted to clarify this problem by adding potentially missing variables related on the TMT characteristics and heterogeneity, investigating causality effects.

Factors Influencing Innovation Capability and Operational Performance: A Case Study of Power Generation Fields in Vietnam

  • NGUYEN, To Tam;LE-ANH, Tuan;NGUYEN, Thi Xuan Hoa
    • The Journal of Asian Finance, Economics and Business
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    • v.9 no.5
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    • pp.541-552
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    • 2022
  • This research examines the effects of organizational learning and network involvement, as well as many contextual factors, on power generation businesses' innovation capability and operational success in Vietnam. This research also aims to attest to the moderating roles of top management support and company age, and firm possession type in the power generation industry. This study applied the exploratory factor analysis (EFA) and PLS-SEM approach for data analysis. In this research, we have tested hypotheses with data collected from 132 top managers and other key personnel from power generation companies in Vietnam. The results also attest to the moderating role of top management support on the two relationships between organizational learning - innovation capability and network involvement - innovation capability. Another important finding is that the company age has a negative impact on operational performance but shows a positive moderating role in the relationship between innovation capability and operational performance. This study highlights the central roles of organizational learning and innovation capability in impacting the organizational performance of power generation companies. These companies play a key role in supporting the development of industries in practice. This research also emphasizes the moderating roles of top management support and company age and possession type in practice.

The Effects of the workforce Age Structure on Productivity or Labor Costs (사업체 근로자의 연령구성이 생산성과 인건비에 미치는 영향)

  • Kim, Ki-Min
    • Management & Information Systems Review
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    • v.37 no.1
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    • pp.123-138
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    • 2018
  • In this paper, we use panel dataset from Korean linked worker-firm to analyse the effects of the workforce age structure on the productivity or labor costs. We measure 'labor productivity' as added value per capita, 'cost of labor' as labor cost per capita and estimate a dynamic panel model to study the effects of the workforce age structure on the productivity or labor costs. Empirical analysis results show that the workforce age structure is positively related to productivity and labor costs, but only up to the aged of 35-39. That is, we find that an increase in the proportion of younger workers or elder workers rather than the aged 35-39 has a negative effect on productivity and labor cost. In particular, the difference between the estimation coefficient of productivity and labor cost when the share of workers aged 50 or older is increased instead of the aged 35-39 is higher than the difference between the estimation coefficient of productivity and labor cost when the share of workers aged 30 or younger is increased instead of the aged 35-39. Our results exhibit that it is reasonable for firms to worry about declining productivity of elderly workers, whereas firms already used older workers efficiently, such as by adjusting their labor costs.

Structural Adjustment of Domestic Firms in the Era of Market Liberalization (시장개방(市場開放)과 국내기업(國內企業)의 구조조정(構造調整))

  • Seong, So-mi
    • KDI Journal of Economic Policy
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    • v.13 no.4
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    • pp.91-116
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    • 1991
  • Market liberalization progressing simultaneously with high and rapidly rising domestic wages has created an adverse business environment for domestic firms. Korean firms are losing their international competitiveness in comparison to firms from LDC(Less Developed Countries) in low-tech industries. In high-tech industries, domestic firms without government protection (which is impossible due to the liberalization policy and the current international status of the Korean economy) are in a disadvantaged position relative to firms from advanced countries. This paper examines the division of roles between the private sector and the government in order to achieve a successful structural adjustment, which has become the impending industrial policy issue caused by high domestic wages, on the one hand, and the opening of domestic markets, on the other. The micro foundation of the economy-wide structural adjustment is actually the restructuring of business portfolios at the firm level. The firm-level business restructuring means that firms in low-value-added businesses or with declining market niches establish new major businesses in higher value-added segments or growing market niches. The adjustment of the business structure at the firm level can only be accomplished by accumulating firm-specific managerial assets necessary to establish a new business structure. This can be done through learning-by-doing in the whole system of management, including research and development, manufacturing, and marketing. Therefore, the voluntary cooperation among the people in the company is essential for making the cost of the learning process lower than that at the competing companies. Hence, firms that attempt to restructure their major businesses need to induce corporate-wide participation through innovations in organization and management, encourage innovative corporate culture, and maintain cooperative labor unions. Policy discussions on structural adjustments usually regard firms as a black box behind a few macro variables. But in reality, firm activities are not flows of materials but relationships among human resources. The growth potential of companies are embodied in the human resources of the firm; the balance of interest among stockholders, managers, and workers of the company' brings the accumulation of the company's core competencies. Therefore, policymakers and economists shoud change their old concept of the firm as a technological black box which produces a marketable commodities. Firms should be regarded as coalitions of interest groups such as stockholders, managers, and workers. Consequently the discussion on the structural adjustment both at the macroeconomic level and the firm level should be based on this new paradigm of understanding firms. The government's role in reducing the cost of structural adjustment and supporting should the creation of new industries emphasize the following: First, government must promote the competition in domestic markets by revising laws related to antitrust policy, bankruptcy, and the promotion of small and medium-sized companies. General consensus on the limitations of government intervention and the merit of deregulation should be sought among policymakers and people in the business world. In the age of internationalization, nation-specific competitive advantages cannot be exclusively in favor of domestic firms. The international competitiveness of a domestic firm derives from the firm-specific core competencies which can be accumulated by internal investment and organization of the firm. Second, government must build up a solid infrastructure of production factors including capital, technology, manpower, and information. Structural adjustment often entails bankruptcies and partial waste of resources. However, it is desirable for the government not to try to sustain marginal businesses, but to support the diversification or restructuring of businesses by assisting in factor creation. Institutional support for venture businesses needs to be improved, especially in the financing system since many investment projects in venture businesses are highly risky, even though they are very promising. The proportion of low-value added production processes and declining industries should be reduced by promoting foreign direct investment and factory automation. Moreover, one cannot over-emphasize the importance of future-oriented labor policies to be based on the new paradigm of understanding firm activities. The old laws and instititutions related to labor unions need to be reformed. Third, government must improve the regimes related to money, banking, and the tax system to change business practices dependent on government protection or undesirable in view of the evolution of the Korean economy as a whole. To prevent rational business decisions from contradicting to the interest of the economy as a whole, government should influence the business environment, not the business itself.

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The moderating effect of Korean fashion SMEs' company age and size on the relationship between management ownership and company financial growth (패션기업의 경영자 기업지배력이 기업 재무성장성에 미치는 영향 - 한국 중소기업의 규모와 기업업력의 조절효과를 중심으로 -)

  • Yoon, Namhee;Kim, Ji-Yeon
    • The Research Journal of the Costume Culture
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    • v.24 no.2
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    • pp.248-262
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    • 2016
  • Most Korean companies in the fashion industry are SMEs, and the role of the CEO and management ownership is important for enhancing the firm's competence and developing strategies. The study aims to examine the effect of management ownership on company financial growth. In particular, the study focuses on the moderating effect of company age and size on Korean fashion SMEs' financial outcomes. Financial data based on company financial statements from 2012 to 2014 was collected by the Data Analysis, Retrieval and Transfer System of Korea's Financial Supervisory Service. A total of 295 companies' (domestic fashion businesses) data was analyzed by the bootstrap method. The median sales value in the financial year 2014 was 47,492,403,958 KRW, and the company size was divided by it. The companies were in business for an average of 20 years. According to the results, the management ownership had a negative effect on Compound Annual Growth Rate (CAGR) for the three-years, and the relationship between the two variables was moderated by company age. Additionally, the interaction effect of management ownership and company age on 3-CAGR was also moderated by company size. When the companies had spent only a few years in business, a negative effect of management ownership for small firms and a positive effect of management ownership on financial growth for medium firms were found. These results suggest that small companies starting business need to manage their company governance structure to make flexible decisions, and after retaining financial growth, the companies can expand their businesses based on strong ownership.

Developmental Changes of Static Standing Balance and Sensory Organization in Children (정상아동의 정적 균형과 감각통합의 발달)

  • An, Mi-Hee;Yi, Chung-Hwi
    • Physical Therapy Korea
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    • v.15 no.3
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    • pp.1-7
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    • 2008
  • Multi-sensory systems, including the visual, somatosensory, and vestibular ones, are involved in maintaining standing balance. The organization of these sensory systems is as important as the efficiency of each individual system in maintaining optimal balance. The purpose of the present experiment was to investigate the developmental changes in static standing balance and sensory organization under altered sensory conditions. This study involved 64 children (from 4 to 15 years of age) and 17 young adults. The children were divided into four age groups: 4~6, 7~9, 10~12, and 13~15 years. Static standing balance was assessed with the one-leg standing test under four different sensory conditions: the children stood on a firm surface with (1) eyes open or (2) closed, and they stood on a foam surface with eyes (3) open or (4) closed. In balancing ability, the age groups exhibited significant differences. The function of sensory organization for balance control was poorer for the children than for the young adults. The functional efficiency of the somatosensory system of the children aged 7~9 years was at the young adults' level, and the visual function of the children aged 10~12 years had also reached the young adults' level. However, the functional efficiency of the vestibular system of children was significantly lower than that of the young adults, even at the age of 15 years. This may indicate that sensory organization and standing balance are still developing after the age of 15 years.

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A Study on the Effect of Social Enterprises Characterics on Financial and Social Performance (사회적기업의 특성이 재무적 성과와 사회적 성과에 미치는 영향: CEO 특성을 중심으로)

  • Hwang, Sooo-Young;Kim, Yong-Duck
    • 한국벤처창업학회:학술대회논문집
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    • 2018.11a
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    • pp.165-175
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    • 2018
  • Since the 1997 financial crisis, large scale unemployment and poverty have become serious, and public and social job creation projects have been carried out. However, with the limitations of low-wage and short-term jobs, the need for long-term and high quality jobs gradually began to attract attention. In recent years, social enterprises have grown both quantitatively and qualitatively and interest in social enterprises has increased. And also it is interested in the determinants of success and failure of social enterprises in the academic field. In this study, we examined the effects of social enterprise characteristics on financial and social performance, and we analyzed empirically by using social enterprises registered in the Korea Social Enterprise Agency. The financial performance of the social enterprise is measured by the net income ratio, operating income ratio, and the return on asset. The social performance of the social enterprise is measured by total number of workers and the employment rate of the vulnerable social groups. The characteristics of the social enterprise include the CEO characteristics (gender, age, experience in operating the social enterprise), the firm size, and the elapsed time of the authentication. The results of the empirical analysis are as follows. First, as a result of analysis for the effect on financial performance, we found that the financial performance have a statistically significant positive relationship with firm size, organizational form, government subsidies and capital adequacy ratio. And it is found that the social performance have a statistically significant negative relationship with CEO age, credit debt dependence. Second, as a result of analysis for the effect on social performance, we foumd that total number of workers have a significant positive relationships with CEO gender, CEO age, and firm size, government subsidies, while total number of workers have a significant negative relationship with certification type and industry dummy. On the other hand, the employment rate of the vulnerable social groups have a siginificant positive relationship with CEO gender and certification type and It have not statistically significant relationship with the government subsidies and the firm size.

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