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Abnormal changes in the level of performance metrics for the full sample. Panel A: Abnormal Change in the Level of ROA
Source publication
This article focuses on an important and emergent standard for sustainable operations management: the Forest Stewardship Council (FSC) certification. Unlike similar certifications, its focus is on the entire upstream supply chain, reflecting the criticality of supply chain management to ensure sustainable products. We investigate the financial impa...
Contexts in source publication
Context 1
... then present our results contingent on the hypothesized factors of supply chain position and pre-certification to ISO 14001. Table 4 presents the full sample results for abnormal changes in the level of ROA (Panel A), Tobin's q (Panel B), and Sales Growth (Panel C) on a quarterly basis, for both of our matching methods. Given that our baseline period to establish control firms is Quarter −2, we consider the five quarterly changes beginning with the change from Quarter −1 to Quarter 0 and continuing through the change from Quarter +3 to Quarter +4. ...
Context 2
... major observation of the data in Table 4 is that, regardless of matching method or measure, we see only a scattering of significant results. Strong significant results would be indicated by general agreement in sign and significance for both matching methods and across the mean, median, and percent positive measures for a particular time period. ...
Citations
... To overcome this obstacle, it is necessary to explore more case studies (indepth) with expertise participant observation and interviews with representatives of the parties in a qualitative method (Teitelbaum & Wyatt, 2013;Duchelle et al., 2014;Narasimhan et al., 2015;Romero & Putz, 2018;Alves et al., 2019;Ehrenberg-Azcárate & Peña-Claros, 2020). Qualitative case study approaches are perfect for gaining a good understanding of the system because they provide a detailed description of research results. ...
... Berock & Ongolo, 2019;Castka & Corbett, 2016;Cubbage et al., 2009;Hain & Ahas, 2007;Kulyasova, 2013;Narasimhan et al., 2015;Paluš et al., 2018;Sansalvador & Brotons, 2020;Ahmet Tolunay & Türkoglu, 2014;Tricallotis et al., 2019;Wibowo et al., 2019) Law compliance(Bieri & Nygren, 2011;Cerutti et al., 2017;Kalonga & Kulindwa, 2017;Tricallotis et al., 2018;Tsanga et al., 2014) New markets and sales increaseBerock & Ongolo, 2019;Carlson & Palmer, 2016;Narasimhan et al., 2015;Paluš et al., 2018;Tricallotis et al., 2018) Price premiumDuchelle et al., 2014;S. Eriksson & Hammer, 2006;Kalonga & Kulindwa, 2017;Nebel et al., 2005;Paluš et al., 2018;Tham et al., 2021) ...
... Berock & Ongolo, 2019;Castka & Corbett, 2016;Cubbage et al., 2009;Hain & Ahas, 2007;Kulyasova, 2013;Narasimhan et al., 2015;Paluš et al., 2018;Sansalvador & Brotons, 2020;Ahmet Tolunay & Türkoglu, 2014;Tricallotis et al., 2019;Wibowo et al., 2019) Law compliance(Bieri & Nygren, 2011;Cerutti et al., 2017;Kalonga & Kulindwa, 2017;Tricallotis et al., 2018;Tsanga et al., 2014) New markets and sales increaseBerock & Ongolo, 2019;Carlson & Palmer, 2016;Narasimhan et al., 2015;Paluš et al., 2018;Tricallotis et al., 2018) Price premiumDuchelle et al., 2014;S. Eriksson & Hammer, 2006;Kalonga & Kulindwa, 2017;Nebel et al., 2005;Paluš et al., 2018;Tham et al., 2021) ...
Objective and Methodology: Many studies have been published since the creation of the Forest Stewardship Council (FSC) to better understand this certification. Through a systematic review of the literature in 2022, this article aims to identify business entities motivations, benefits, and challenges of FSC certification. Through the definition of some inclusion criteria (Scientific Articles; Specific subject areas; FSC, or Forest Stewardship Council, appears in the title, abstract, and/or keywords; FSC means “Forest Stewardship Council”; FSC benefits and challenges), this study reviews a total of 74 publications from 2005 to 2022 from five different data bases (Scopus, Science Direct, Wiley Online Library; Springer Link; Web of Science). More than one author helped with the selection of papers to remove the risk of bias. Results: As main results, the motivations for deployments of the FSC certification are linked to economic issues as well as potential benefits. However, FSC still has several challenges to overcome, such as: high cost, lack of price premium, investment return, and financial dependency in the case of small producers. Social benefits and challenges were also mapped. Such results are directly linked to the type of methodology used in each paper. Originality: As a conclusion, many field studies still need to be developed due to the superiority of documentary research based on audit reports. Although this kind of document has several advantages, some disadvantages are also detected. This paper provides an overview of the FSC directing future research interested in the theme.
... As underlined by Drover et al. (2018), a signal must be costly to be reliable. Signal costs significantly influence signal efficacy, given that more costly signals are less likely to be misleading and thus are more reliable (Narasimhan et al., 2015). In addition, it is suggested that the efficacy of a signal can be improved when it is more observable to receivers, and the external signaling environment can significantly affect signal observability and thus the efficacy of the signal (Lam, 2018). ...
... In addition, it is suggested that the efficacy of a signal can be improved when it is more observable to receivers, and the external signaling environment can significantly affect signal observability and thus the efficacy of the signal (Lam, 2018). Moreover, as noted by Narasimhan et al. (2015), the efficacy of the signal can be heightened when it can offer more new information to the receivers. ...
... We speculate that the stock market reaction to metaverse implementation is stronger for smaller firms than for larger firms. Specifically, based on signaling theory (Narasimhan et al., 2015), we contend that for smaller firms, the announcement of metaverse implementation provides more novel information for investors. This can enhance the efficacy of the signal and thus lead to a greater stock market reaction. ...
Purpose
The metaverse has garnered increasing attention from researchers and practitioners, yet numerous firms remain hesitant to invest in it due to ongoing debates about its potential financial benefits. Therefore, it is crucial to analyze how the implementation of metaverse initiatives affects firms’ stock market value – an area that remains underexplored in the existing literature. Additionally, there is a significant lack of research on the contingency factors that shape the stock market reaction, leaving a noticeable gap in managerial guidance on the timing and benefits of investments in the metaverse. To narrow these gaps, we examine whether and when the implementation of metaverse initiatives enhances firms’ stock market value.
Design/methodology/approach
Based on 73 metaverse implementation announcements disclosed by Chinese listed firms during January 2021–August 2023, we employ an event study approach to test the hypotheses.
Findings
We find that metaverse implementation announcements elicit a positive stock market reaction. Moreover, the stock market reaction is stronger for technology-focused announcements and smaller firms, or when public attention to the metaverse is higher. Nevertheless, firms’ growth prospects do not significantly alter the stock market reaction.
Originality/value
This study extends the nascent literature on the metaverse by applying signaling theory to offer novel insights into the signaling effect of metaverse implementation announcements on stock market value and the boundary conditions under which the effectiveness of the signal varies. Besides, it provides managers with important implications regarding how to tailor the investment and information disclosure strategies of the metaverse to more effectively enhance firms’ stock market value.
... • Higher consumers WTP for certified products. (Aguilar and Vlosky, 2007;Bozza et al., 2022;Deniz, 2023;Germain and Penfield, 2010;Ferioli et al., 2022;Fernandes Martins et al., 2022;Fizaine et al., 2018;Gassler and Spiller, 2018;Giam et al., 2016;Ibanez and Laye, 2017;Morone et al., 2021;Narasimhan et al., 2015;Samad et al., 2021;Panico et al., 2022;Richartz and Abdulai, 2022;Ruan et al., 2022;Silva et al., 2018;Wassmann et al., 2023) Neutral economic impact ...
... GSCF integrates elements of green development on the basis of SCF, addressing both the financing constraints and the issue of green development of SMEs (see Yang, 2020). Scholars have proposed that GSCF is a new financing method for FIs to promote the long-term development of green supply chains (see Narasimhan et al., 2015), which can solve the financing difficulties caused by enterprise emission reduction activities (see Kayser, 2016). With the gradual development of GSCF, scholars have begun to pay attention to the influencing factors of the development of GSCF. ...
Similar to traditional supply chain finance (SCF) models, green supply chain finance (GSCF) also faces issues such as information asymmetry and heavy reliance on the creditworthiness of transaction parties. Under the influence of internet ideology, cracking down on traditional GSCF financing issues and transitioning from interpersonal trust to digital trust has become an inevitable trend. Achieving real-time, transparent, correlated, and traceable digital trust, digital technology (DT) platforms provide a solution. Based on the background of "Green Carbon Chain Pass" bill discounting financing business in the GSCF model of “Jian Dan Hui (JDH) platform”, game models are constructed involving small and medium-sized enterprises (SMEs), financial institutions (FIs), and core enterprises (CEs) in traditional model and after accessing the platform, based on game theory and considering the uncertainty in the decision-making process. The key factors influencing the strategic choices of the players and the impact mechanism of DT empowering the development of GSCF are explored. MATLAB software is used for simulation experiments. The results show that the cost of business operation, bill maturity values, discount rate, and losses caused by CEs not pay as agreed are important factors affecting the strategic choices of SMEs, FIs, and CEs; Accessing digital platform makes it easier to satisfy the conditions for the tripartite game to evolve into an ideal stable state; Splitting the value of supply chain bills by accessing digital platform can promote business cooperation between FIs and SMEs; The platform, relying on blockchain technology, encourages CEs to pay bills as agreed by increasing default losses; The platform relies on green ratings to motivate SMEs to apply for discounting financing through differentiated financing rates, while promoting their green management; Accessing to digital platform brings efficiency improvements and credit rewards, both of which encourage the three players to choose active financing strategies.
... The receivers are the outsiders who lack the "privileged perspective" about the firm due to the information asymmetry. The extant literature in operations management has considered various categories of receivers, such as customers [19], [20], supply chain partners [21], and investors [22]. ...
The purpose of this article is to study the signaling potential of “supplier awards” in creating shareholder value for the award-giving and the award-receiving firm. We use event study methodology with supplier awards as events that signal mutually beneficial buyer–supplier relationship (BSR) efforts to estimate the firm value generated from these efforts. Supplier awards, apart from being a supplier development (SD) activity in themselves, are also a signal of a mutually beneficial relationship between a buyer and a supplier. This article performs a deep study by investigating the impact of traits, such as award exclusivity and award satiation, on the efficacy of supplier awards as a signaling mechanism. We find that shareholders of firms that give awards (buyers) and those of firms that receive awards (suppliers) react positively to such events, thereby establishing the signaling potential of supplier awards that signal the mutually beneficial BSR and SD efforts. We find that a more exclusive award has a higher positive impact on the buyer's shareholders. We also find that there is a higher impact on the supplier's market value when that supplier receives awards less frequently. This article pioneers a study of interorganizational awards that considers traits, such as exclusivity and award satiation, that are not frequently studied in extant research.
... This theory mainly involves three crucial ingredients, i.e. the signaler, the signal and the receiver. Firms' practices or initiatives can be viewed as signals which convey critical information of them (i.e. the signalers) to their stakeholders (i.e. the receivers) in the market (Narasimhan et al., 2015). The signals from the signalers can effectively mitigate information asymmetry in market transactions . ...
... Signal costs represent the expenditure of sending signals (e.g. the implementation costs of firm-specific activities). Moreover, researchers have underscored that when a signal can provide more new information for the receivers, its efficacy can be enhanced (Narasimhan et al., 2015). ...
... For instance, Shou et al. (2020) and Xu et al. (2020) have suggested that the engagement in corporate social responsibility (CSR) activities is a positive signal delivered to their suppliers, which helps buyer firms obtain more financial support. Lam (2018) and Narasimhan et al. (2015) consider sustainable OM practices as a key signal which can affect signal receivers' willingness to provide financial support and thus lower the signaler's financial risk and improve profitability. Consistent with these OM studies, in this study, we consider a firm's servitization as an important signal which may convey two conflicting messages to its suppliers: stronger buyer-supplier relationships in the firm's supply chain and higher operational risks. ...
Purpose
The aim of this study is to empirically test the link between servitization and trade credit in manufacturing firms as well as the boundary conditions of this link.
Design/methodology/approach
Using a unique dataset of 4,974 observations covering 838 manufacturing firms publicly listed in the United States during 1990–2020, this study examines the impact of servitization on trade credit and the moderating impacts of financial slack and service relatedness based on fixed-effect regression models.
Findings
The authors find that servitization shows a U -shaped relationship with trade credit. Besides, financial slack negatively moderates this U -shaped relationship whereas service relatedness has no significant impact on this relationship.
Originality/value
This paper is the first to empirically verify the influence of servitization on trade credit in manufacturing firms based on longitudinal secondary data and signaling theory. The research findings can provide several important theoretical and managerial implications for scholars and practitioners in operations management.
... In this context, we assess if the economic motivations of PEFCcertified companies materialize in practice using the case study of Spain (Zubizarreta et al., 2021). Specifically, we focus on the impacts of PEFC certification on financial performance by analysing "economic profitability" and "variation in turnover" variables, following similar studies in the field of forest certification and the ISO (International Organization for Standardization) standards (Michal et al., 2019;Halalisan et al., 2019;Narasimhan et al., 2015;Dick et al., 2008;Heras-Saizarbitoria and Arana, 2011). We apply a longitudinal methodology that measures the levels of financial performance before and after certification accounting for the so-called "treatment effect" and "selection effect" . ...
... Several studies concluded that certified companies benefit from market access yet do not obtain a higher economic return in terms of a price premium. Evidence of such impacts exists in Europe (e.g., Dias et al., 2013;Halalisan et al., 2013;Hirschberger, 2005;Gulbrandsen, 2005), South America (e.g., Ebeling and Yasué, 2009;Tricallotis et al., 2018;Barbosa de Lima et al., 2009;Araujo et al., 2009), North America (e.g., Butterfield et al., 2005;Narasimhan et al., 2015;Wilson et al., 2001;George et al., 2022) and Africa (Frey et al., 2021). ...
... The results show that an important motivation of PEFC certified companies to increase competitiveness has not (yet) materialized in practice. These results differ from the results obtained in previous studies based on the evaluation of questionnaires or structured interviews with company managers (Nebel et al., 2005;Wang et al., 2005;Cashore et al., 2006;Ebeling and Yasué, 2009;Moore et al., 2012;Narasimhan et al., 2015;Burivalova et al., 2017;Paluš et al., 2018a). Through such qualitative methodologies, obtaining generalizable evidence regarding the impact of forest certification on business financial performance is challenging because the results may have a particular bias, as has been mentioned in different studies that have analysed other standards (Wayhan et al., 2002;Wayhan and Balderson, 2007;Heras et al., 2002). ...
Forest certification has become a strategic instrument for businesses, particularly for accessing sensitive environmental markets and within sustainability commitments. This trend is also visible in Spain, where PEFC (Program for the Endorsement of Forest Certification) certification has increased by 91% in the past five years. However, there is a weak understanding of the certification impacts at the level of companies, especially when it comes to economic impacts. This study applies a longitudinal methodology to measure financial performance before and after obtaining PEFC-certification in Spain by analysing treatment and selection effects. The results show significant differences in economic profitability and turnover between certified and non-certified companies prior to certification. However, these differences are not significant in subsequent periods. Therefore, we could not confirm a treatment effect between forest certification and improved financial performance. Instead, we find a positive selection effect: companies with better financial performance have a greater propensity for certification, as has been previously detected for standards such as ISO 9001/14001. Compared to previous studies that predominantly assess economic impacts qualitatively, we use economic-financial data to avoid possible distortion emerging from perceptions and opinions. The main contribution of this study lies in the quantitative assessment of the impacts of forest certification on economic profitability and turnover.
... Souza et al. (2015) contend that this has to be evaluated by the affected stakeholders themselves. Enticott and Walker (2008) propose measuring sustainability performance by asking stakeholder groups about their perception of a certain activity or impact, such as customers (Lemke and Luzio, 2014;Mardani et al., 2017;Tarne et al., 2019), for example, about their perceived value of Forestry Stewardship Council certification (Narasimhan et al., 2015). Other authors use, for example, employee satisfaction as a measure of social or environmental performance (Iribarren et al., 2016;Staniškienė and Stankevičiūtė, 2018). ...
Current approaches for measuring and assessing contributions of companies and their products to sustainability largely focus on reducing negative impacts. However, becoming “less bad” still means having adverse impacts on the environment. Various authors have therefore called for investigating how positive contributions can be made to further sustainable development. This systematic literature review explores how positive contributions to sustainability have been discussed in the environmental management literature dealing with sustainability performance measurement and assessment. Our review of 328 publications reveals an understanding of positive contributions to sustainability that is a mostly implicit or vague use. Inductive analysis, however, reveals three distinct understandings – an operationalization, a stakeholder and a transformation perspective – each of which is embedded in a different theoretical frame, namely decision, stakeholder and transition theory. These perspectives have so far been discussed separately in the literature. By drawing on theoretical foundations of performance measurement, we propose an integrated understanding of positive contributions to sustainability: A positive sustainability contribution has the goal of bringing about a sustainability transformation, considers the environmental, economic and social context through stakeholder participation, and is operationalized to facilitate decision-making and the implementation of effective sustainability measures. A clear definition is of key importance for both research and practice to both reduce negative and increase positive contributions to sustainable development.
... Overall, our hypotheses on contextual factors are based on the Contingency Theory, which postulates that there is no best way to manage a company as strategies and actions depend upon the situation of the firm, both in terms of internal and external factors (Donaldson, 2001). The theory has been applied also to other standards (e.g., Orzes et al., 2017;Narasimhan et al., 2015) to explain the different performance effects resulting from the attainment of a certification in different contexts. ...
Although protecting information is the key challenge in a business environment characterized by increasing digitalization and connectivity, the impact of firms' investments in information security on their financial performance is unclear. In this paper, we focus on ISO/IEC 27001 (i.e., the most renowned norm in the field and the fourth most widespread ISO standard) and analyze the relationship between the attainment of the certification and firms' financial performance. We developed a set of theory-grounded hypotheses and tested them through a long-term event study complemented by an ordinary least squares regression on a dataset of 143 US-listed companies. The results indicate that the ISO/IEC 27001 certification is associated with improvements in profitability, labor productivity, and (partially) sales performance. The impact appears affected by the level of internationalization of the certified firm. The study contributes to the scientific debate on information security and certifications by developing the first large-scale empirical investigation based on secondary data on the financial implications of ISO/IEC 27001. Moreover, we further deepen the current knowledge on the effects of international management standards on firms' performance thus enabling comparisons with other major management system standards.
... The receivers are the "outsiders who lack information about the organization in question but would like to receive this information" (Connelly et al., 2011). Operations management literature has examined receivers such as customers (Ba et al., 2020;Duan et al., 2021;Lins et al., 2020;Rao et al., 2018;Ray et al., 2011;Wallenburg et al., 2021), buying firms (Cheng et al., 2020;Mena et al., 2020), purchasing managers (Yan et al., 2020), and investors (Jiang et al., 2007;Kim & Wagner, 2020;Narasimhan et al., 2015). In our study, we consider investors as the receivers of the signals. ...
... Whereas mostly the signaler (i.e., the firm) would like to convey positive messages (Kim & Youm, 2017), some actions can convey negative messages. Positive signals observed in OM literature include implementation of ERP systems (Hendricks et al., 2007), outsourcing decisions (Jiang et al., 2007), forest stewardship council certification (Narasimhan et al., 2015), return time leniency (Rao et al., 2018), product packaging (Wallenburg et al., 2021), supplier monitoring activities (Duan et al., 2021), or adoption of ISO 26000 standards (Moratis, 2016). Negative signals include supply chain disruptions (Hendricks & Singhal, 2005a;Hendricks et al., 2020;Jacobs & Singhal, 2017), corruption risks (Kim & Wagner, 2020), or product recall (Mukherjee et al., 2021;Zhao et al., 2013). ...
We examine the role of firm‐initiated social media communication using Twitter in mitigating the negative impact of large‐scale disruptions, such as the Covid‐19 pandemic, on the shareholder value of firms. We develop our hypotheses using signaling theory and test them using data collected from Twitter and Bloomberg®. Our data set consists of 121,988 firm‐generated tweets from 467 S&P 500 firms collected in March 2020 at the time of the lockdown announcement in the United States. We find that frequent and relevant communication reduces latency and increases the observability of messages, preserving a firm's shareholder value. We also find that a positive outlook and extent of interest from stakeholders results in preserving shareholder value. On average, firms lost about 1.08% of their market value per day (about 9.72% during the 9‐day period around the lockdown announcement). Our study contributes to the extant literature in three ways: (1) adds to the literature on disruptions–shareholder value by considering large‐scale disruptions such as the Covid‐19 pandemic, (2) highlights informational and communication elements of risk management strategy, and (3) adds to the growing body of literature on Twitter by considering firm‐generated tweets. The results of our study are of importance to managers as well. For instance, firms tweeted about 57 times per week, and each additional tweet could preserve about $5.85 million of a firm's market valuation, on average. Also, it is not enough that the firms took appropriate actions during a large‐scale disruption; they also need to communicate their actions and its implications to their stakeholders effectively. These results can help managers devise their Twitter communication strategy during large‐scale disruptions.
