Agric. Econ. - Czech, 2019, 65(2):93-101 | DOI: 10.17221/134/2018-AGRICECON

Firms' profitability from firm-specific factor, environmental turbulence, and macroeconomic: evidence from Taiwan's food industry - A reviewReview

Joe-Ming Lee*,1, Shiu-Wan Hung2, Chiao-Ming Li2
1 Department of Applied Economics, Fo Guang University, Jiaosi Shiang, Taiwan
2 Department of Business Administration, National Central University, Jung-li City, Taoyuan, Taiwan

After a series of shocking domestic food safety scandals in the past few years, environmental concerns have risen in the eyes of the public. The aim of this paper is to analyse the relationships among firm performance, customer capital, R&D innovation, structural capital, firm asset, environmental turbulence, and the macroeconomy by using the panel data model on Taiwanese food industry firms during 2010-2016 and by examining the results of the multiple regime panel smooth transition regression (MR-PSTR) model. The findings show that environmental turbulence and the misery index have a negative relationship on firms' performance, while there is a positive relationship between customer capital and firm performance. However, under high environmental turbulence, customer capital and firm performance are negatively related, meaning that a firm's marketing promotion will be ineffective. This study recommends that the food industry establish a high degree of trust from society and consumers. It is also important for the food industry to establishes a positive attitude towards quality requirements.

Keywords: environmental turbulence; misery index; multiple regime panel smooth transition regression (MR-PSTR) model; structural capital

Published: February 28, 2019  Show citation

ACS AIP APA ASA Harvard Chicago Chicago Notes IEEE ISO690 MLA NLM Turabian Vancouver
Lee J, Hung S, Li C. Firms' profitability from firm-specific factor, environmental turbulence, and macroeconomic: evidence from Taiwan's food industry - A review. Agric. Econ. - Czech. 2019;65(2):93-101. doi: 10.17221/134/2018-AGRICECON.
Share...
Download citation
  • BibTeX (.bib)
  • Bookends (.ris)
  • EasyBib (.ris)
  • EndNote (.enw)
  • EndNote 8 (.xml)
  • ISI WoS (.isi)
  • Medlars (.medlars)
  • Mendeley (.ris)
  • MODS (.xml)
  • Papers (.ris)
  • RefWorks (.txt)
  • RefManager (.ris)
  • RIS (.ris)
  • MS Word (.xml)
  • Zotero (.ris)
    • Open full article

    References

    1. Baba M., Mahmood R., Halipah A. (2017): The moderating role of environmental turbulence on the relationship between organizational learning and firm innovativeness. International Journal of Management Research and Reviews, 7: 148.
    2. Dess G.G., Beard D.W. (1984): Dimension of organizational task environment. Administrative Science Quarterly, 29: 268-279. Go to original source...
    3. Ek R., Guerin S. (2011): Is there a right level of working capital? Journal of Corporate Treasury Management, 4.
    4. Fama E.F., Jensen M.C. (1983): Separation of ownership and control. The Journal of Law and Economics, 26: 301-325. Go to original source...
    5. González A., Teräsvirta T., van Dijk D.V. (2005): Panel smooth transition regression models. Working Paper Series in Economics and Finance: Stockholm School of Economics No. 604.
    6. Gourio F., Rudanko L. (2014): Customer capital. Review of Economic Studies, 81: 1102-1136. Go to original source...
    7. Granger C.W., Terasvirta T. (1993): Modelling non-linear economic relationships. OUP Catalogue.
    8. Guruswamy D., Marew A. (2017): Determinants of profitability performance of insurance companies: a case study of selected insurance companies in Ethiopia. Journal on Management, 12. Go to original source...
    9. Guiso L., Rustichini A. (2017): Understanding the size and profitability of firms: The role of a biological factor. Research in Economics, 72: 65-85. Go to original source...
    10. Hung K.P., Chou C. (2013): The impact of open innovation on firm performance: The moderating effects of internal R&D and environmental turbulence. Technovation, 33: 368-380. Go to original source...
    11. Im K.S., Pesaran M.H., Shin Y. (2003): Testing for unit roots in heterogeneous panels. Journal of econometrics, 115: 53-74. Go to original source...
    12. John K., Senbet L.W. (1998): Corporate governance and board effectiveness. Journal of Banking Finance, 22: 371-403. Go to original source...
    13. Kim K. (2018): Diminishing returns to R&D investment on innovation in manufacturing SMEs: Do the technological intensity of industry matter? International Journal of Innovation Management, 1850056. Go to original source...
    14. Levin A., Lin C.F., Chu C.S.J. (2002): Unit root tests in panel data: asymptotic and finite-sample properties. Journal of econometrics, 108: 1-24. Go to original source...
    15. Schumpeter J.A. (2000): Entrepreneurship as innovation.
    16. Sung S.Y., Choi J.N., Kang S.C. (2017): Incentive pay and firm performance: moderating roles of procedural justice climate and environmental turbulence. Human Resource Management, 56: 287-305. Go to original source...
    17. Taiwan Economic Journal (TEJ) (2018): Taiwan Economic Journal (TEJ) database. Available at http://www.finasia.biz/ensite/Database/tabid/92/language/en-US/Default.aspx
    18. Wilden R., Gudergan S.P. (2015): The impact of dynamic capabilities on operational marketing and technological capabilities: investigating the role of environmental turbulence. Journal of the Academy of Marketing Science, 43: 181-199. Go to original source...
    19. Welsch H. (2007): Macroeconomics and life satisfaction: Revisiting the "misery index". Journal of Applied Economics, 10: 237. Go to original source...

    This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International (CC BY NC 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.


    Return to the content