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- Family firm’s heterogeneity and firm riskPublication . Lisboa, Inês; Miralles-Quirós, Maria del MarThe behavioral agency theory suggests that family firms present less risk than non-family firms to protect their socioemotional wealth. Most studies analyzing this field focus on the bank sector or the US economy. This study aims to examine whether there are differences in risk between family and non-family firms using Portuguese listed firms during fourteen years. Moreover we provide new evidence taking into account firms’ heterogeneities. Family and non-family firms are not homogeneous groups and the firm’s growth opportunities, age and size can be moderators of the relationship between family control and firm risk. We also analyze the effect on risk of family control using family ownership and the F-PEC scale. Our overall results strongly evidence that firms’ heterogeneities play an important role in firm’s risk exposure. These findings are relevant for institutional and individual investors as well as for the professional managers of these firms.
- Impact of financial crisis and family control on earnings management of Portuguese listed firmsPublication . Lisboa, InêsAccounting information is used to evaluate the firm’s financial performance. Although, firms may have incentives to engage in earnings management, misleading all stakeholders. This study aims to analyse earnings management behaviours of Portuguese listed firms. Both accrual-based and real activities of earnings management are analysed to draw an overall picture of earnings management’ strategies. Most studies focused only in discretionary accruals as a proxy for earnings management, since cash flow-based earnings management is more difficult to detect. Although both strategies can be complementary instead of substituting. Moreover, the impact of financial crisis, family control, and firm characteristics is taken into account. Previous literature found that 2008 crisis had impact on earnings management as firms want to meet debt covenants and investors’ expectations. Moreover, family firms also impact the magnitude of earnings management. While some researchers found a negative relationship since managers are highly controlled, others found the opposite relationship because the family may want to maximize their own wealth. Analysing 51 listed firms, from 2003 till 2015, results show that firms engage more in earnings management during crisis, when the firm’s financial situation is less stable. In addition, accrual-based earnings management is higher in family firms than in non-family ones, suggesting less quality of information in the first group. Due to less control of family firms, the family may expropriate minority investors’ wealth to increase personal benefits. Finally, the impact of firms’ characteristics on earnings management depends on the proxy of earning management analysed, suggesting that firms use accrual or real-activities earnings management depending on its purposes.
- Do firms in revitalization engage in earnings management: The Portuguese casePublication . Lisboa, InêsPurpose: This paper analyses earnings management of firms in revitalization. We aim to verify differences in discretionary accruals between firms that are still in activity and the others. Moreover, we study which determinants impact earnings management and if results depend on the firm’ situation. Methodology: The sample covers Portuguese firms that enter in 2012 in the special revitalization program. The sample period covers the period from 2011 till 2017. First the Kothari et al. (2005) model was used to calculate discretionary accruals. Then, we propose a model with seven determinants to explain earnings management. Findings: Results show that distress firms engage in earnings management. Firms that are still in activity use upward accruals strategy, while firms that went to bankruptcy use downward one. Moreover, determinants related with leverage, return, the sign of net income, size and age are relevant to explain earnings management of firms that went to bankruptcy. To solvent firms, only age is statistically significant to explain discretionary accrual. Finally, we show that more than half of the firms that look for this program went to failure in the years after. Practical implications: Our work giver relevant information to the government about the revitalization program success. Moreover, it calls attention for the need of legislation to limit earnings management to demotivate firms to engage in these practices. Originality: Studies analyzing the impact of revitalization programs in earnings management are scarce, and the existing ones only analyze differences before and after solvency problems.
- The Impact of Macroeconomic Factors on the Hotel Industry Through the Financial Leverage Trends: The Portuguese CasePublication . Santos, Luís Lima; Gomes, Conceição; Lisboa, InêsThis chapter aims to understand the historical trends of hotel industry financial leverage, and to analyse the impact of macroeconomic factors on it. Therefore, managers can understand the impact of cyclical factors on capital structure and can act in advance to minimize additional costs or financial problems. Moreover, it intends to propose an analysis model to be used by managers and shareholders to control the effect of financial leverage over their companies. This analysis model can help managers to know the impact of the chosen financing sources on shareholders’ return and whether there is a change in the financial leverage effect. Results highlight that the perception of financial leverage by hotel managers is crucial in crisis situations, such as pandemics and natural disasters, which demands new challenges to companies.
- Editorial: A cross-disciplinary approach to the business strategy researchPublication . Lisboa, InêsThe pandemic situation caused by COVID-19 had a great impact on all countries, not only regarding economies, but also the way to do business and the way of living.
- Does earnings quality impact firms’ performance? The case of Portuguese SMEs from the mold sectorPublication . Duarte, Ana Filipa; Lisboa, Inês; Carreira, PedroPurpose: This work aims to study the impact of earnings quality on firms’ financial performance. Design/methodology/approach: An unbalanced panel data of 237 small and medium-sized Portuguese companies from the mold industry, using 2010-2018 yearly data was analyzed. While most studies focus only on earnings management when assessing earnings quality, in this study six proxies for earnings quality are used, namely accruals quality (a proxy for earnings management), earnings persistence, earnings predictability, earnings smoothness, earnings timeliness, and earnings conservatism. Moreover, two proxies of financial performance are considered, the return on assets and the economic value added. An econometric model was estimated using either a fixed-effects or a random-effects specification to account for the individual firm-specific effects and ensure heteroscedasticity corrected estimates. Findings: The results show that managers must be concerned with the quality of reported earnings, as it can affect positively firms’ financial performance, especially regarding accruals quality. Persistence, predictability, smoothness, timeliness, and conservatism are shown not to exert significant influence on financial performance in the sample. Research limitations/implications: This work contributes not only as a literature review on these thematic but also to firms’ managers and stakeholders, who have information that helps them select strategies that guarantee earnings quality and improve firms’ financial performance. Originality/value: We proposed an econometric model that studies the relationship between earnings quality (using several proxies for it) and financial performance that can be applied to all companies.
- Ownership structure and performance: evidence from PortugalPublication . Lisboa, Inês; Esperança, José PauloThis paper provides new evidence on the impact of ownership over performance in small dimension markets. Analyzing the Portuguese firms we confirm the monitoring effect. Unlike previous studies, we also confirm the expropriation effect to low levels of ownership concentration. These results suggest that the free rider problem between the manager and the principal is significant in countries with small financial markets.
- Does ownership influence performance? Evidence from EuropePublication . Lisboa, InêsWe provide new evidence on the impact of ownership over firm performance, using a panel data of 853 corporate firms from 9 Continental European countries from 2000 to 2004. We confirm that owner-manager is significantly better performer than professional manager, due to the convergence effect. Moreover, this impact was found to be much more significant than ownership, whose link with performance could not be established. Additionally, ownership structure is not an endogenous variable as it does not vary in order to maximize the firm’s performance, remaining relatively stable over time. Finally, we find evidence of several country and industry effects.
- The impact of family control on firm performance: evidence from Portugal and SpainPublication . Miralles-Marcelo, José Luís; Miralles-Quirós, Maria del Mar; Lisboa, InêsThis study aims to assess performance differences between family and non-family firms, taking into account the Portuguese and the Spanish stock markets. We provide new evidence for this field since we take into account the heterogeneity among family firms. Our thesis is that the leadership of family firms, and the firm's size and age are moderators of the relationship between family control and firm performance. Using a panel data methodology, our main results show that family firms, especially the smaller and older, exhibit at least the same performance as non-family firms. Based on the results of the study, who manages the family firm does matter through influence on a firm's risk exposure and financial performance. These findings are consistent with the behavioral agency perspective: the family's desire to maintain socio-emotional wealth, and also to assure the firm's performance and survival. This study makes several theoretical and methodological contributions.
- The Productivity Puzzle in Cultural Tourism at Regional LevelPublication . Santos, Eleonora; Lisboa, Inês; Moreira, Jacinta; Ribeiro, NeuzaThe distribution of labour productivity of tourism firms across regions has not received considerable attention until now. To address this concern, an empirical analysis at firm level is used to calculate the labour productivity across seven Portuguese NUTS II regions. Using data from 2,866 firms’ financial reports obtained from SABI database, over four years, this paper analyses the regional inequalities and its consequences in terms of economic and tourism development. The findings show that, at the national level, the mean labour productivity has increased around 1.9% on average, from 2015 to 2017 and dropped 3.9% in 2018. At the regional level, the results suggest that firm performance regarding productivity is not related to the dynamics observed in neighbouring regions but to the resources and conditions available in each region separately. Such results confirm the assumption of spatial inequality in the distribution of labour productivity among cultural tourism firms. The results presented in the article can be of significant use to further understand the productivity dimension of tourism production at regional level. Finally, by identifying the areas where tourism management need to be improved, this paper provides suggestions on measures to increase regional productivity, and thus, regional competitiveness.