This research examines the influence of business strategy and intellectual capital on firm performance and bankruptcy risk of Oman's non-financial sector companies.,The data comprises 380 firm-year observations collected from 2015 to 2019 for the non-financial sector companies listed on the Muscat Securities Market. This study measures business strategy using the Miles and Snow typologies and Porter's strategies as alternative measures. The study uses the Granger-causality test to measure the bi-directional causality between independent and dependent variables. The authors use alternative measurements of business strategy and 2SLS/IV estimation to validate the OLS results.,According to the Miles and Snow typologies, most of Oman's non-financial firms were analyzers. The empirical results show a negative relationship between business strategy and return on equity (ROE), suggesting defender-type strategy leads to an increase in firm performance. The OLS results show no influence of A-VAIC on firm performance and Altman-Z score. The structural capital efficiency is positively associated with ROA, and Altman Z score consistent with the hypothesized relationship. The Granger causality test shows no inference of causality between any independent and dependent variables except for Z score and CEE.,The business strategy results from the firm performance and bankruptcy risk models are valuable to the researchers from an emerging market and non-financial companies' perspective. Oman's diversification strategy of its economic activities through non-financial sector companies receives an impetus through the findings of this study. As this study is limited to Oman's non-financial sector companies, future research on business strategy impact can be extended to the financial sector, other GCC, and emerging countries.,The findings of this study contribute to the sparse literature on business strategy in an emerging market like Oman. This study enriches the knowledge of business strategy typologies proposed by Miles and Snow, and Porter. It also contributes to the extant literature on firm performance and bankruptcy risk.

Business strategy, intellectual capital, firm performance, and bankruptcy risk: evidence from Oman's non-financial sector companies

This paper examines empirically the effect of firm-level business strategies on future stock price crash risk and the extent to which equity overvaluation moderates this relation. By exploring the extent to which firms following particular business strategies are more or less likely to experience crash risk, we provide evidence that increases our understanding of the underlying determinants of crash risk. Using a composite strategy score developed by Bentley, Omer and Sharp (2013) and applying two variants of crash risk, we document that firms following innovative business strategies (prospectors) are more prone to future crash risk than defenders. We extend our analysis by examining the moderating role of equity overvaluation and find that prospectors are more prone to equity overvaluation which increases future crash risk.

Business Strategy, Overvalued Equities, and Stock Price Crash Risk

This paper investigates the impact of business strategy on firms’ trade credit policies. We find that firms following an innovation-oriented strategy (prospectors) offer significantly more trade credit to their customers than those following an efficiency-oriented strategy (defenders). Furthermore, by exploiting two exogenous shocks to the supplies of high-skill employees and bank credit, we find that prospectors curtail trade credit in response to the reduction of talent mobility following the adoption of Inevitable Disclosure Doctrine, whereas defenders significantly increase provisions of trade credit following the increase in bank credit supply due to the relaxation in interstate branching regulations. Additional evidence substantiates that prospectors increasing trade credit provisions enjoy higher sales generation efficiency and superior performance. Finally, our supply chain analysis documents that prospectors also receive significantly more trade credit from their suppliers. Collectively, our findings highlight that business strategy is an important yet intrinsic determinant of supply chain financing. 

Does business strategy influence interfirm financing? Evidence from trade credit

Green finance and high-tech innovation can independently contribute to sustainable development, but their combined impact on the mechanism of regional sustainable development requires further exploration. This study constructed a sustainable development index from the perspectives of economic development, ecological environment, and social satisfaction. It empirically analyzes the impact of green finance and high-tech innovation on the sustainable development of the Yangtze River Economic Belt over 21 years. The research findings indicate that a higher level of green finance and high-tech innovation is conducive to regional sustainable development. If either the level of green finance or high-tech innovation is individually low, it will hinder the collective effect of promoting sustainable development and thus impede the overall sustainability of the region's development. Therefore, it is crucial to promote the balanced development of both, and foster their positive interaction, in order to achieving sustainable development in the Yangtze River Economic Belt. 

Do green finance and hi-tech innovation facilitate sustainable development? Evidence from the Yangtze River Economic Belt

Despite increasing attention to the economic consequences of environmental, social, and governance (ESG) performance, its impact on the quantity and quality of corporate green innovation (GI) remains underexplored. This study aims to reveal the impact and underlying mechanisms of ESG performance on corporate GI using a panel dataset of Chinese-listed enterprises. Our results show that ESG performance increases the quantity and quality of corporate GI by 2.72% and 3.20%, respectively. These significant positive effects are consistent across three ESG sub-ratings and a series of robustness tests, such as the instrumental variable (IV) test based on Confucian culture intensity. Mechanism analysis reveals that ESG performance positively affects corporate GI through the resource effect, governance effect, and innovation effect. Additionally, the GI impact of ESG performance is more pronounced in large, young, growing, and mature enterprises, enterprises in clean and low-carbon industries, and those located in key environmental protection (KEP) and two control zones (TCZ) cities. Our evidence provides insights into the informal drivers of corporate GI and the micro-GI effectiveness of ESG performance in emerging markets like China. 

Quantity and quality: The impact of environmental, social, and governance (ESG) performance on corporate green innovation.

How Does Business Strategy Affect Wage Premium? Evidence from China

We examine impacts of environmental regulations and political incentives on firms’ green innovation. By exploiting a natural experiment on reduction of sulfur dioxide (SO2) emissions in China, we show that the environmental regulation significantly enhances firms’ green innovations. For 1% increase in provincial SO2 reduction targets, there is average 1.77% (2.67%) increase in green patent amount (quality). A plausible mechanism driving our findings is that target-based performance evaluation in political promotion may properly motivate local bureaucrats to exert pressures on firms to implement environmentally friendly innovations. However, local bureaucrats’ political turnover and short-term pressures of economic growth negatively moderate our findings. Our findings are more pronounced to state-owned, non-financing constrained firms and firms under eastern provinces or SO2-filled industries. 

Regulations, politics, and firm green innovation

This paper investigates the impact of public attention on analyst visits. To establish causality, we use Hurun Rich List as an exogenous shock to identify the impact of public attention. Using a difference-in-difference approach, we find that public attention significantly enhances the number of analyst visits. This effect is more pronounced among firms with complex information environments and higher future uncertainty. Our findings indicate that public attention affects analyst visits through influencing investor demand for analyst services. Further analysis reveals that analyst visits improve the accuracy of analysts' forecasts. We also find that the rich listing events indirectly leads to policy changes or the introduction of new policies. Overall, our findings highlight the importance of public attention to the firms' information environment. 

Public attention and analyst visits: Evidence from China

ABSTRACT This paper uses the geographic distance between corporate locations and headquarters of credit rating agency as a proxy for corporate private information acknowledged by rating agency, to investigate the effect of corporate private information on its credit ratings. Our samples include the Chinese institutional and corporate bond’s credit ratings from 2008 to 2018. Results indicate the geographic distance is negatively associated with the corporate private information accessed by rating agency, leading to a higher information asymmetry, worse institutional and corporate bonds’ credit rating and lower quality of the rating information content. Results remain solid and significant after controlling for the implicit guarantee of the government, corporate public information, ownership structure and analysts’ skills. We find corporate private information generates more values for corporates whose information environments are more complex, reflected in more business segments and less covered analysts. We also find the open of high-speed railway in China facilitates rating agency’s access to corporate private information, thus reducing the impact of geographic distance, while the lockdown periods of Covid-19 pandemic in China suddenly increase the cost of collecting private information and thus aggravating the distance effect.

Corporate Private Information and Credit Ratings: Evidence from Corporate Geographic Distance

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Papers

How Does Business Strategy Affect Wage Premium? Evidence from China

Regulations, politics, and firm green innovation

Public attention and analyst visits: Evidence from China

Corporate Private Information and Credit Ratings: Evidence from Corporate Geographic Distance