Firm-level political risk, liquidity management, and managerial attributes

Jeon, Chunmi; Mun, Seongjae; Han, Seung Hun

doi:10.1016/j.irfa.2022.102285

Cited by 12 publications

(7 citation statements)

References 46 publications

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“…The negative and significant correlation between liquidity risk and profitability suggests that organizations exposed to high liquidity risk may see their profits drop. This result lines up with prior studies that identified liquidity risks as an important factor affecting a company's financial performance (Chen & Wong, 2001;Hur et al, 2018;Jeon et al, 2022;Li et al, 2011). This highlights the importance of managing liquidity risk to ensure financial stability for companies.…”

Section: Discussionsupporting

confidence: 86%

“…Surprisingly, the research findings demonstrate a negative correlation between liquidity risk and profitability, indicating that organizations exposed to high liquidity risk are more likely to experience a drop in profitability. Previous studies have revealed that organizations that have increased liquidity risk are more inclined to encounter financial issues and a decline in profitability (Dewi et al, 2019;El Sintarini & Djawote, 2018;Hur et al, 2018;Jeon et al, 2022). This emphasizes the significance of proper risk management and liquidity planning for companies to maintain long-term profitability and sustainability.…”

Section: Resultsmentioning

confidence: 99%

“…Liquidity risk is a condition where a company lacks liquidity so it cannot meet its short-term obligations (Jeon et al, 2022;Nurwulandari, 2021). Liquidity risk can arise from various factors, such as poor working capital management, sudden increases in cash demand, or a decrease in credit availability.…”

Section: Liquidity Riskmentioning

confidence: 99%

“…Liquidity risk is a risk that arises when a company is unable to meet its shortterm obligations. This has a significant impact on the company's performance and continuity because it affects the company's ability to make investments, pay suppliers and employees, and meet regulatory requirements (Jeon et al, 2022;Lestan, 2020;Lubis et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

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Relationship between Working Capital Management, Corporate Social Responsibility, Liquidity Risk, and Profitability on the Performance and Sustainability

Heliani

2023

IJBLE

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The objective of this study is to investigate the correlation among working capital management, corporate social responsibility, liquidity risk, profitability, performance, and sustainability in Indonesian manufacturing companies. Data were collected from 150 companies in West Java, Indonesia, and analyzed using the PLS-SEM approach. The analysis results show working capital management, corporate social responsibility, and liquidity risk have a significant positive effect on profitability, which in turn has a positive impact on performance and sustainability. These results support the research and provide insights into the importance of managing working capital, adopting corporate social responsibility practices, and reducing liquidity risk to improve profitability, performance, and sustainability in Indonesian manufacturing companies.

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Section: Discussionsupporting

confidence: 86%

Section: Resultsmentioning

confidence: 99%

Section: Liquidity Riskmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Relationship between Working Capital Management, Corporate Social Responsibility, Liquidity Risk, and Profitability on the Performance and Sustainability

Heliani

2023

IJBLE

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“…Second, signaling theory suggests that enterprises can provide a positive signal to the market while facing climate transition risks (Deng et al, 2023a). Companies may commit to sustainable development to undertake active risk management techniques under climate transition risk.…”

Section: Incentive Effectmentioning

confidence: 99%

The Green Chain: A Carbon Neutral Path from Climate Risk to Environmental, Social and Governance Performance

Zhang,

Mohd Nasir,

Nor-Ahmad

2024

PaperASIA

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Global climate change is increasingly recognized as a critical factor influencing economic performance, thereby making the Environmental, Social, and Governance (ESG) performance of businesses a vital indicator of sustainability. In the context of China's "dual-carbon" objective, this study examines the relationship between climate transition risk and the ESG performance of listed Chinese companies. Utilizing text analysis techniques, this research quantifies the Management Discussion and Analysis (MD&A) sections of annual reports from 2014 to 2019 to extract information on climate transition risks. A multiple regression analysis is then applied to assess the impact of these risks on companies' ESG performance. The findings indicate that climate transition risk has a measurable effect on the ESG performance of enterprises, suggesting its role as an incentive for achieving carbon neutrality. Specifically, the analysis shows that climate transition risk is associated with improvements in certain aspects of ESG performance, including environmental stewardship, social responsibility, and governance quality. Additionally, the study reveals that non-state-owned enterprises, those with diversified business strategies, decentralized management structures, and audits conducted by Big 4 firms, tend to exhibit better ESG performance in the face of climate transition risks. These results demonstrate the nuanced impact of climate transition risk on ESG performance, particularly within the framework of China's carbon reduction goals, and highlight the importance of firm characteristics in moderating this relationship. This evidence provides a foundation for stakeholders, including enterprises, policymakers, and investors, to consider climate transition risks in their efforts to enhance ESG performance.

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