Nada Kobeissi

Corporate Responsiveness to Community Stakeholders Effects of Contextual and Organizational Characteristics

Corporate community responsiveness relates to business activities that are integral parts of a firm’s operations and are designed to benefit the firm through benefiting the local communities. Using data from commercial banks in the United States between 1997 and 2000, the authors measured banks’ corporate community responsiveness by their Community Reinvestment Act (CRA) lending activities and their performance ratings by CRA examiners. The authors developed and tested eight hypotheses on the influence of contextual (community income, minority population, and competition) and organizational (age, profitability, risk, institutional ownership, and mergers and acquisitions) factors on the two measures of corporate community responsiveness. The authors found a negative effect for minority population; a positive effect for banks’ profitability; and partial support for community income, competition, and risk factors. The results show no effects for institutional ownership or mergers and acquisitions. The implications of these results for the instrumental aspect of stakeholder theory are discussed.

Corporate governance, investor protection, and firm performance in MENA countries

The literature on development finance and corporate finance in emerging markets is, to date, primarily focused on the impact of country-level investor protection and differences in legal systems on firm value across countries. This paper extends the literature by investigating the relationship between firm-level governance and performance while controlling for country-level governance and other relevant variables within the context of the Middle East and North Africa (MENA) region. Evidence shows a strong and significant positive relationship between good corporate governance – such as higher investor protection and lower managerial entrenchment – and firm value. We also find that the positive effects of property rights on firm performance are more pronounced for firms with higher managerial entrenchment. In addition, the positive effects of property rights on firm performance are additionally more significant for firms with higher managerial entrenchment and higher cash holding. Finally, the positive effects of property rights on firm performance are additionally more significant for firms with higher managerial entrenchment and lower dividend payout.

Banking structure, marketization and small business development: Regional evidence from China

This paper provides an empirical examination of the regional banking structures in China and their effects on entrepreneurial activity. Using a panel of 27 provinces and four directly controlled municipalities from 1997 through 2008, we find that the presence of large banking institutions negatively correlates with small business development in local markets and that this negative relation is driven mainly by participation of large banks in the short-term loan market. Rural banking institutions, in contrast, are found to promote regional entrepreneurial activity. Moreover, large state banks facilitate small business development in concentrated markets. When we interact measures of banking financing by state banks and rural banking institutions with a set of provincial level marketization indexes, we find that extensive marketization, factor market development, and sophistication of legal frameworks mitigate the negative effect of large state banks on small business development. In provinces with advanced market development, efficient factor markets, and favorable institutional settings, the positive effect of rural banking institutions on small business growth is even stronger. Finally, we present evidence that banks do a better job of promoting regional entrepreneurship when it occurs in conjunction with policies to foster innovation activity and assure protection of intellectual property rights.

Innovations, intellectual protection rights and information technology: an empirical investigation in the MENA region

This paper examines innovation, patents, research and development, intellectual protection, information technology, and other related activities in the Middle East and North Africa regions. The paper primarily focuses on the importance of intellectual property rights, reforms, and information technology in affecting innovation, and finds strong positive associations with regards to quantity as well as the quality of innovations. Additionally, the paper finds support for the role of economic freedom, foreign direct investment, and bank loans in contributing to innovative activities.

The diffusion of a socially responsible innovation: Grameen Bank's credit delivery system

This paper studies an innovative microlending programme that enables the poor to obtain credit without collateral in order to improve their self-employment and socioeconomic opportunities. We identify the theoretical underpinnings of the unique features that made this programme a success and examine characteristics of the environment, organisation and adopters, which facilitated the diffusion of this socially responsible program to approximately 1050 branches of the Grameen Bank in Bangladesh. Finally, we discuss the implications of this programme to alleviate poverty and stimulate the economy in developed countries.

Enforceability of noncompetition agreements and firm innovation: does state regulation matter?

Abstract In this study, we examine how noncompetition agreements and the mobility of human capital – a core asset of any firm – affect innovations of publicly traded firms in the United States. We find that firms in states with stricter noncompetition enforcement have fewer patent applications. We also examine patent forward citations and find that tougher enforcement of such contracts is associated with less innovative patents. Notably, we find that stronger enforcement of noncompetition agreements impedes innovation for firms facing intense industry labor mobility. High-powered, equity-based compensation positively moderates the relationship between noncompetition enforcement and innovation, but only for the quality of innovation.

Corporate social responsibility and financial performance: an analysis of bank community responsibility

This paper investigates the impact of a bank’s community responsibilities on financial performance. It utilises various improved performance measures (short and long run performance, book and market value, labour productivity and overall productivity), as well as a test for causality. The paper finds significant evidence that banks were better off by adhering to their mandated community responsibilities. In fact, banks were more likely to be rewarded with lower cost of capital for both debt and equity. In terms of causality, the paper finds that social and financial performances could be codetermined; however, the relationship between these two variables seemed to be stronger in the direction of social responsibility having an impact on financial performance.

Role of Governance and Institutional Environment in Affecting Cross Border M&As, Alliances and Project Financing: Evidence from Emerging Markets

The growth in foreign activities has attracted numerous investigations on their flow into various regions of the world. The majority of these inquiries however have tended to focus on activities taking place between U.S.A and Europe, NAFTA countries, countries within Eastern and Central Europe, or within Asia-Pacific nations. There is a scarcity of research examining foreign investment activities in the emerging markets of the Middle East and North Africa (MENA) region. The goal of this paper is to void this gap by analyzing the patterns of such activities in this region. It focuses more specifically on components of foreign investment that are not usually included in the traditional measure of FDI, namely cross border M&As, alliances, and project financing. The paper explores the impact of governance and institutional environment in affecting investment activities in the region. It reports a strong association of economic freedom, property rights, and regulations with multiple proxies of foreign investments in the sample countries.