Search Results (330)

Grounded in stakeholder and social categorisation theories, this study addresses the limited European evidence regarding how board composition and functioning drive corporate equality—a multidimensional construct encompassing diversity, inclusion and people development. We examined the effects of seven board characteristics—gender diversity, the proportion of non-executive directors, tenure, size, cultural diversity, meeting attendance and remuneration structure—corporate equality and its three constituent pillars. Our analysis drew on a panel of 1797 firm–year observations from the Euro Stoxx 300 (2012–2023), extracted from Refinitiv Eikon, using OLS, fixed-effects and random-effects models selected via the Hausman test and AIC/BIC criteria, with firm-level controls and year- and industry-fixed effects. The results demonstrate that gender diversity, non-executive participation and regular meeting attendance are positively associated with corporate equality, particularly its diversity and inclusion dimensions, whilst tenure has no significant effect. Board size affects only people development; cultural diversity enhances the diversity pillar but diminishes the people development pillar; and remuneration schemes are negatively associated with overall equality. The principal contribution involves operationalising ‘corporate equality’ as a multidimensional construct within the European context and identifying differential effects across pillars. These findings offer practical guidance for regulators and organisations seeking to align board composition and governance practices with inclusion objectives, emphasising the importance of gender diversity, independent directors, consistent meeting participation and remuneration policies aligned with social objectives. Full article

This study examines sustainability reporting practices (2010–2023) of emerging markets’ companies cross-listed in London as Global Depositary Receipts (GDRs). Despite the voluntary nature of sustainability reporting, all examined companies issued a corporate social responsibility (CSR) report. Additionally, 90 percent of companies hired an external auditor to provide assurance for CSR disclosure. Further, 99 percent of examined GDRs relied on the Global Reporting Initiative guidelines when preparing CSR reports, and 90 percent had a sustainability committee. Overall, cross-listed companies demonstrated an impressive level of CSR reporting. However, the gender diversity or independence of the board of directors is unrelated to the extent of CSR disclosure. Next, sustainability reporting scores are associated with lower liquidity position and are negatively related to reported earnings. This evidence supports the agency theory perspective in that executives of GDR cross-listed companies may use enhanced CSR reporting practices to divert attention from poor financial performance. The findings stand in contrast to previously documented results for New York cross-listed firms and have implications for regulators and global investors of European stock exchanges. Full article

The European Union’s Cohesion Policy is a key instrument designed to reduce disparities among regions and promote sustainable, inclusive growth across Europe. In the context of the green and digital transitions, understanding how Cohesion Policy funds affect innovation is crucial to effective policy design. This study examines the impact of these funds on firm-level innovation in three domains: digital, green, and combined digital–green innovation. Using firm-level data and econometric models, our analysis uncovers a strong and statistically significant positive effect of Cohesion Policy funding on digital innovation. The impact on green innovation alone is positive but weaker and only marginally significant. Innovations that are both digital and green benefit from Cohesion Policy significantly, highlighting the potential of integrated innovation strategies. Full article

This paper examines the relationship between ESG ratings, as a subset of criteria and a tool for assessing sustainability, and firm performance in Southern European economies. It focuses on publicly listed large-cap companies in Portugal, Italy, Greece, and Spain. By analyzing a sample of 110 firms over a four-year period and applying Ohlson’s valuation model, we evaluate how ESG scores influence these companies’ performance. Our findings indicate that the social dimension is positive and statistically significant, suggesting that investors in Southern Europe increasingly prioritize value social responsibility initiatives as they aim to identify and manage ESG risks. In contrast, the Environmental and Governance components do not show statistical significance. The “polluting dummy” variable is positive and significant at the 1% level, indicating a valuation premium for high-emission firms, possibly reflecting investors’ preference for financial stability in economically volatile environments. The baseline model yields an R² of approximately 10%, consistent with expectations given the multifactor nature of stock prices. The study contributes to the sustainability literature by highlighting the nuanced and region-specific role that ESG factors play in market valuation. We discuss limitations related to the regional scope, rating methodologies, and model specification, and offer suggestions for future research. Full article

This study aims to investigate the determinants of labour productivity across European non-financial entities using aggregated data from the Bank for the Accounts of Companies Harmonized (BACH) database. Focusing on six European Union countries (Belgium, France, Italy, Portugal, Poland, and Spain). Annual information from 2010 to 2023 is used (the last available year), including three size classes (small, medium-sized and larger entities) per division (two-digit code) by year and by country, totalling 14,188 observations. The combination of sectors and class sizes varies from 191 to 208 by country. It uses gross value added per employee as a proxy for labour productivity. Using a fixed-effects estimator and panel data regression techniques, the analysis reveals that labour productivity explanatory factors, particularly firm size, profitability, financialisation, leverage, and tangibility, have heterogeneous and sometimes contradictory effects across countries, sectors, and size classes. Larger firms generally tend to have higher levels of labour productivity, although this feature is not consistent among countries. Size and profitability more consistently exert a strong positive influence, whereas financialisation and leverage typically show negative or nonlinear effects. The results highlight the structural diversity of the European corporate landscape and challenge the adequacy of one-size-fits-all policy measures, contributing to the literature on productivity and offering further insights to policymakers by integrating cross-sectional, sectoral, and size-specific perspectives on labour efficiency within the EU context. Full article

Bankruptcy prediction in Slovakia’s industrial manufacturing sector is vital due to its significant role in the national economy. This study aims to develop a predictive model for forecasting corporate bankruptcy within the industrial manufacturing sector in Slovakia. The novelty of this study lies in developing a model tailored to crisis conditions, validated using COVID-19 data, and adapted to the Central European context for greater accuracy and relevance. The model is constructed using financial data extracted from the Orbis database, based on company financial statements from 2020 and 2021, and encompasses firms of various sizes. Employing backwards binary logistic regression, five statistically significant predictors were identified, enabling the model to forecast impending bankruptcy with a one-year lead time. The model was trained on a sample of 1305 companies and achieves an overall prediction accuracy of 83.78%, with an AUC (Area Under the Curve) value of 91.7%, indicating strong discriminative power. The resulting model demonstrates robust predictive capability and may serve as a practical decision-support tool for managers, investors, creditors, and other stakeholders assessing the financial health of firms. Full article

This study analyzes how sectoral stock volatility in the GCC region responds to global financial uncertainty shocks originating from the U.S. (CBOE VIX), Europe (VSTOXX-50), Bitcoin investors’ Sentiment Indices (BSI), and disaggregated global Financial Stress Indicators (FSI) by using both the “Frequency” and “Time” domain TVP-VAR based connectivity approaches. The “Time” and “Frequency” domain TVP-VAR results indicate that the Energy, Financials, Materials and REIT sectors experience the highest shock spillover from the U.S. and European equity market uncertainty (VIX and VSTOXX-50) for the overall and long-term investment horizons. Whereas, all the five disaggregated global financial stress indicators and BSI transmit higher shocks spillovers towards the sectoral stock conditional volatility of Energy and Materials sectors for the overall and long-term investment horizons. Furthermore, the “Frequency” domain TVP-VAR approach shows that overall shocks spillovers are higher in long-term and intensified during the COVID-19 period. The Energy, Materials, and REIT sectors’ high sensitivity to U.S.VIX and Euro.VSTOXX-50 shocks calls for sector-specific hedging—such as sectors remain least susceptibility to long-term U.S. and European equity risk shocks such as Utility. Over the long-term and overall investment horizons, the Energy and Material sectors’ position as the main shock recipient from all five global financial stress components and the BSI underscores its role as a volatility hub. Policymakers should enforce stress tests and capital buffers for energy and material focused firms, while proactive liquidity management and commodity hedging are vital during global financial stress and BSI spikes to limit funding and operational risks. Full article

Early survival is critical for sustainable startups to deliver environmental and social value, yet evidence on its predictors is limited. Drawing on resource-based and institutional perspectives, this study examines 140 university-affiliated green startups from 24 European countries in the “Stage Two” finals (2021–2023). Exploratory logistic regression links survival to financing structure, sustainable business-model archetypes, and public visibility. Non-equity grants and awards emerge as the strongest predictor, with equity capital and a Crunchbase profile adding smaller benefits. Economic-value archetypes outperform purely environmental or social ones, while technology-intensive B2B firms show the highest resilience. By combining resource sufficiency with legitimacy signaling, the study advances sustainable entrepreneurship theory and offers practical levers: mission-aligned grants, credible digital footprints, and archetype-specific funding strategies to support founders, investors, and policymakers in strengthening Europe’s sustainability-driven startup ecosystem. Full article

The European Union’s objective of climate neutrality by 2050 requires a profound transformation of national power systems. In Poland, this transition involves reducing coal-based generation and expanding variable renewable energy sources (VRES), particularly wind and solar. Between 2020 and 2025, onshore wind capacity increased from 5.9 GW to nearly 11 GW, and solar from 1.6 GW to over 22 GW, while peak electricity demand in 2024 exceeded 28 GW. Although VRES- are essential for decarbonization, their variability poses challenges for system adequacy. This study assessed the adequacy contribution of onshore wind and solar power plants using capacity credit as a key indicator. Two approaches were applied: a deterministic Load Duration Curve (LDC) method and probabilistic methods—Effective Load Carrying Capability (ELCC) and Equivalent Firm Capacity (EFC)—based on historical data from 2021–2024. The results show that capacity credits for onshore wind ranged from 8.08% to 17.27%, and for solar from 1.82% to 6.60%, depending on the method and year. Despite the presence of 1.7 GW of pumped storage and 4.4 GW of battery storage contracted in the capacity market, the relatively low VRES capacity credits underline the continued need for flexible, dispatchable generation. The findings highlight the importance of accurate capacity credit estimation to guide investment in renewables, storage, and backup capacity, thereby supporting a secure and reliable energy transition in Poland. Full article

This study analyzes how environmental, social and governance (ESG) factors affect the valuation of listed companies in Central Europe. It therefore validates the financial incentives for corporates in this region to embark on or continue with sustainable business models. It discusses the theoretical foundations of the impact of ESG factors on company value, examining both firm- and investor-centered approaches. The empirical section analyzes the main market valuation indicators based on earnings per share, book value, enterprise value and EBITDA for all companies listed on stock exchanges in the region for which Sustainalytics ESG risk ratings were calculated. The econometric modeling uses the generalized least squares method. The research evidences that companies with strong ESG risk ratings, reflecting sustainable business models, trade at a premium vs. their ESG-weaker peers. This suggests that investors place significant value on sustainability and effective ESG risk management practices. Additionally, this study reveals a non-linear relationship between ESG ratings and market valuations. While investors may show less differentiation among companies with low ESG risk, they impose substantial penalties on those with poor ESG management. From a practical perspective, the findings support investing in ESG risk management and corporate governance as effective strategies to raise company valuation and generate financial benefits for shareholders. The study also indicates that ESG ratings can be applied in forecasting company valuations, which is an important consideration for investors. This study makes an original contribution by providing insights focused on Central European markets, where empirical research on sustainability standards remains in the early stages of development. Full article

Currently, corporate social responsibility and environmental/social/governance topics are gaining more relevance in business and finance. Attention to corporate diversity in boards and the workforce is included in this trend. Although most studies focus on executive boards and objective scores, the perception of diversity by employees and its rankability are not fully understood or researched. In this paper, we analyze corporate diversity rankings from the perspective of predictive and prescriptive analytics. Inside predictive analytics, the perceived diversity of a sample of 350 European diversity leader companies is predicted by using three different feature sets (raw financial data, ratios and objective diversity variables) and three machine learning algorithms (K Nearest Neighbors, Logistic Regression, Decision Tree). The best performing algorithm is the Decision Tree, and all three feature sets outperform one random dummy algorithm; the best performing set is the financial ratios set. Inside prescriptive analytics, several rankings involving American companies are intersected and compared in three exercises (studying diversity categorization, ethnic origin and comparing diversity with other unrelated metrics). From these, global rankings were built to search for the best possible agreement among the rankings. These results with both predictive and prescriptive analytics encourage managers to strategize and include diversity in management, as well as employ new technologies in their decision-making processes. Full article

Small and medium-sized enterprises (SMEs) constitute the backbone of the EU economy, yet their uneven digital transformation raises challenges for competitiveness and territorial cohesion. This article examines the organizational and spatial aspects of SME digitalization across the European Union using Flash Eurobarometer 486 data and latent class analysis (LCA) combined with Bayesian multilevel multinomial regression. The results reveal four SME digitalization profiles—Digitally Conservative Backbone; Partially Digital and Upgrading; Digitally Advanced and Diversified; and Focused Digital Integrators—reflecting diverse adoption patterns of key technologies such as AI, big data and cloud computing. Digitalization is shaped by organizational factors (firm size, value chain integration, digital barriers) and territorial factors (urbanity, border proximity, national digital infrastructure as measured by the Digital Economy and Society Index, DESI). Contrary to linear modernization assumptions, digital adoption follows geographically embedded trajectories, with sectoral uptake occurring even in low-DESI or non-urban regions. These results challenge core–periphery models and highlight the significance of place-based innovation networks. The study contributes to modernization theory and regional innovation systems by showing that digital inequalities exist not only between countries but also within regions and among adoption profiles, emphasizing the need for nuanced, multi-level digital policy approaches across Europe. Full article

This study investigates the relationship between corporate reporting practices and the value relevance of accounting information by analyzing 100 publicly listed non-financial European firms between 2015 and 2019. Drawing on the Ohlson valuation framework, the analysis combines random effects with Driscoll–Kraay standard errors and System GMM estimations to assess the role of financial and non-financial disclosures. Materiality and stakeholder engagement were scored through content analysis of corporate reports, while ESG performance data were obtained from Refinitiv Eikon. The results show that financial fundamentals remain the most robust determinants of firm value, consistent with Ohlson’s model. Among qualitative disclosures, materiality demonstrates a strong and statistically significant positive association with market value in the random effects specification, while stakeholder engagement and ESG scores do not attain statistical significance. In the dynamic panel model, lagged market value is highly significant, confirming the persistence of valuation, while the effect of materiality and stakeholder engagement diminishes. Interaction models further indicate that materiality strengthens the relevance of earnings but reduces the role of book value, underscoring its selective contribution. Overall, the findings provide partial support for the claim that Integrated Reporting enhances the value relevance of accounting information. It suggests that the usefulness of IR depends less on adoption per se and more on the quality and substance of disclosures, particularly the integration of financial material ESG issues into corporate reporting. This highlights IR’s potential to improve transparency, accountability, and investor decision making, thereby contributing to more effective capital market outcomes. Full article

This study investigates the determinants of customers’ perception of business model innovation (BMI) and its impact on customer satisfaction (CS), customer loyalty (CL), and firm sustainability (FS) within Ecuadorian family economic groups (EFEGs). It also examines the moderating role of perceived BMI in the relationships between CS, CL, and FS. Data were collected through an online survey yielding 342 valid responses, using a structured instrument that included socio-demographic variables, perceived EFEG characteristics, and nine validated constructs. Reliability and validity were corroborated through exploratory and confirmatory factor analyses, while structural equation modeling (SEM) and multiple regression analyses were employed to test the proposed relationships. The results reveal that socially responsible consumption (SRC), technological/digital customer skills (TCS), value creation innovativeness (VCrI), value proposition innovativeness (VPI), and value capture innovativeness (VCI) significantly influence customers’ perception of BMI. In turn, BMI positively influences CS, CL, and FS, and moderates the relationships between CS and FS, and CL and FS, though it does not significantly moderate the CS–CL relationship. These findings are consistent with previous research on European family firms, emphasizing the relevance of innovation capabilities, entrepreneurial orientation, and socioemotional wealth in enhancing adaptability and performance in family-owned businesses. This study contributes novel empirical evidence on BMI in the context of an emerging economy dominated by family firms. It underscores BMI as a dynamic capability crucial for fostering customer engagement, improving competitiveness, and ensuring long-term sustainability. Managerial implications suggest that EFEG managers should prioritize digital integration, service innovation, and transparency to strengthen customer trust and loyalty. Future research should broaden the scope to include other Latin American contexts, integrate internal organizational perspectives, and explore intergenerational dynamics and digital transformation processes to deepen understanding of BMI in family business ecosystems. Full article

This paper examines the internationalization dynamics of the Turkish HVAC industry in Germany through a qualitative design based on 24 semi-structured interviews with senior executives. The analysis demonstrates that conformity with EU and German standards, product quality, and continuous innovation are decisive drivers of international expansion. At the same time, economic volatility and regulatory complexity constitute major constraints. Organizational capabilities—particularly internationally experienced managers, R&D capacity, and strategic partnerships—are shown to enhance firms’ competitiveness. Furthermore, diaspora networks provide relational capital that facilitates trust and market embeddedness. The study contributes to international business literature by identifying critical success factors for Turkish HVAC firms in a highly competitive European context. Full article