Browsing by Author "Houqe MN"

Now showing 1 - 7 of 7
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    Business strategy, cash holdings, and dividend payouts
    (John Wiley and Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand., 2023-12) Houqe MN; Monem RM; van Zijl T
    Business strategy's impact on firm cash holdings and dividend payouts has largely remained unexplored. We identify a fundamental and direct link between a firm's business strategy and its cash holdings and dividend payouts. Analysing two large samples of data on US firms over the period 1992–2017, we find strong evidence that prospectors (defenders) are likely to hold more (less) cash and pay less (more) dividends than other firms. Further analysis suggests that prospectors pay dividends less frequently than do defenders. The results are robust to a battery of robustness checks and additional analysis. Overall, the results suggest that identifying a firm's business strategy significantly helps to understand a firm's cash holdings and dividend payout decisions.
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    Impact of business strategy on carbon emissions: Empirical evidence from U.S. firms
    (ERP Environment and John Wiley and Sons Ltd, 2024-05-06) Houqe MN; Abdelfattah T; Zahir-Ul-Hassan MK; Ullah S
    This study examines the nexus between business strategy and carbon emissions by utilising a dataset of U.S. firms from 2007 to 2020. It focuses on two broad types of firms, that is, prospectors and defenders. Regarding carbon emissions, we consider total emissions (Scope 1 & 2), direct emissions (Scope 1) and indirect emissions (Scope 2). The results reveal a significant association between business strategy and total carbon emissions as well as direct carbon emissions. Notably, the results suggest that prospectors, compared to defenders, display higher levels of total and direct carbon emissions. Our findings contribute to the debate on whether prospectors in developed countries mismanage sustainability issues. The study offers valuable insights into the interplay between business strategy and carbon emissions and provides empirical evidence that business strategy is an important determinant of total and direct carbon emissions.
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    Meta-analysis of the impact of financial constraints on firm performance
    (John Wiley and Sons Australia, Ltd on behalf of Accounting and Finance Association of Australia and New Zealand, 2023-06-17) Ahamed FT; Houqe MN; van Zijl T
    A large number of studies have investigated the relationship between financial constraints and firm performance. However, due to heterogeneity in study design factors, such as choice of measures for constraints and performance, control variables, estimation methods and study sample, the empirical results have been mixed. To mitigate this issue, this paper reports a meta-analysis of the association between financial constraints and firm performance. To assess the overall direction of the relationship and the sources of heterogeneity, we apply meta-analytic methods to 26 studies (providing 189 effect sizes) on the association between financial constraints and financial performance in listed companies. Our result shows that, overall, there is a positive relationship between financial constraints and firm performance. In addition, meta-regression results suggest that return on assets (ROA) and return on equity (ROE) as measures of financial performance, and external finance and size as measures of financial constraints, have a significant negative impact on the relationship between financial constraints and firm performance relative to the mean impact on effect size. Similarly, all of North America and Asia as regional differences, control of size and corporate governance as control variables, and journal quality as strength of results, also have a significant negative impact. On the other hand, market value as a measure of financial performance, and the Whited & Wu index as a measure of financial constraints, have significant positive impact relative to the mean impact. Similarly, cross-country and Europe as regional differences, and publication status as strength of results, all have significant positive impact. Given that firm performance is of fundamental importance to investors, this study therefore helps researchers and policymakers to understand the variation in the empirical results on the impact of financial constraints.
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    Moderating effect of carbon accounting systems on strategy and carbon performance: a CDP analysis
    (Springer-Verlag GmbH, 2022-12) Bui B; Houqe MN; Zahir-Ul-Hassan MK
    Carbon emissions bring significant risks and opportunities, and organisations have responded by adopting different strategies and environmental control systems, such as carbon accounting systems (CASs). However, it remains unclear whether a CAS can help reduce emissions, and what role is played by a CAS in the relationship between carbon strategy and carbon performance. Therefore, this paper analyses the strategy-accounting-performance nexus by drawing on 1672 firm-year observations of firms participating in the CDP in 2014 and 2015. The results suggest that the quality of a CAS is influenced by strategic choices; with a proactive carbon strategy being associated with a higher quality CAS. Further, proactive strategies and CASs are found to be associated with carbon savings and emissions reduction. The results indicate a moderating role of CASs on the strategy-performance relationship, with carbon strategy enabling higher carbon savings and lower emissions intensity in the presence of a high-quality CAS. Our findings suggest that formulation of carbon strategies and establishment of carbon measures can drive effective carbon mitigation.
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    Organic versus cosmetic efforts of the quality of carbon reporting by top New Zealand firms. Does market reward or penalise?
    (ERP Environment and John Wiley and Sons Ltd, 2023-01-06) Khan HZ; Houqe MN; Ielemia IK
    This study explores the quality of carbon reporting (QCR) by New Zealand (NZ) firms and its changes over time. It also explores the impact of QCR on the market reputation of firms. Using a sample of 300 company-year observations between 2015 and 2020 from top listed firms of NZ, the study develops a 14-item QCR index. The study finds that the company-level QCR reporting by NZ firms overall is not praiseworthy, as firms need to improve QCR in many aspects (both in-house efforts as well as external reporting). Although QCR has increased over time, firms' QCR efforts cannot be treated completely authentic. Majority of firms in NZ have disclosed unaudited carbon information to investors and other stakeholders. Additionally, our study finds that QCR positively affects the market reputations of firms, and the market behaves accordingly. Specifically, firms' organic carbon efforts are paid-off (through increased market reputation) by the market players and cosmetic/decoupled behaviour is penalised (through decreased market reputation). This study is the first on QCR reporting using a sample of NZ firms and an account of their initiatives towards the carbon emission reduction initiative and related disclosures. The study's findings have policy implications.
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    The Effects of Carbon Emissions and Agency Costs on Firm Performance
    (MDPI AG, 28/03/2022) Houqe MN; Opare S; Zahir-Ul-Hassan MK; Ahmed K
    Carbon emissions and agency costs can have an impact on firms’ financial performance. However, limited attention has been paid to the combined and gradual effects of these two factors on firms’ performance. We explore the separate and combined effects of carbon emissions and agency costs on firms’ financial performance by utilizing data from 2323 US firms that disclosed their environmental information to CDP from 2007 to 2016. The results indicate that firms with higher carbon emissions experience lower performance as the market reacts negatively. Further, firms with both higher carbon emissions and higher agency costs have lower performance. We also investigated year-on-year change in firm performance and found that, keeping agency costs constant, a change in carbon emissions leads to lower performance. Overall, the findings suggest that when the market responds negatively to firms’ environmental decisions, high agency costs exacerbate the adverse effect of high carbon emissions on firm performance.
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    What determines the quality of carbon reporting? A system-oriented theories and corporate governance perspective
    (ERP Environment and John Wiley and Sons Ltd, 2023-09-11) Houqe MN; Khan HZ
    The study examines the determinants of the quality of carbon reporting (QCR) by top listed firms of a developed country. Using a sample of the top 50 listed firms of New Zealand (NZ) sampled over a period of 6 years (2015–2020), the study measured QCR index using 14-items and analysed the data using regression analysis. The study finds that external factors, namely, carbon regulation (Emission Trading Scheme—ETS law), use of a standardised reporting format for non-financial reporting (Global Reporting Initiative, GRI) template, and environmental and social (E&S) performance, all positively influence the QCR. The study also finds that corporate governance attributes namely board diversity (women's representation on the board) and board size positively influence the QCR. Lastly, the study finds that top firms in NZ have many areas of improvement in reporting quality carbon information. The study is the first empirical research on QCR from NZ firms that evidences multiple institutional factors and governance elements as key explanatory factors driving towards making carbon reporting credible and reliable.