This study investigates the link between corporate social responsibility (CSR) and the performance of small and medium enterprises (SMEs) and the mediating role of firm reputation from a developing country perspective. Empirical research was carried out, and data were gathered using a questionnaire from 402 owners/managers of SMEs in Eritrea, a country in East Africa. Smart-Partial Least Squares structural equation modelling was employed. The results showed that CSR significantly influences the performance of SMEs, and this relationship is partially mediated by firm reputation. This research contributes to the knowledge of how CSR activities lead to SMEs’ financial performance. This strengthens prior evidence on the impact of CSR on business performance while also contributing significantly to the literature on the mediating role of reputation between social and financial performance. The application of the relationship to SMEs in developing nations reinforces the originality of this study. It makes substantial contributions to the literature in terms of theory, practice, and policy.

The aim of this study is primarily to demonstrate how earnings quality is an influential determinant of financial flexibility. Secondly, how earnings quality affects financial flexibility. And finally, to provide evidence of the role of corporate governance between earnings quality and financial flexibility composing overall corporate governance index (CG-INDEX). This study considered unbalanced panel data from the year 2007 to 2020 from the database CSMAR yielding 14,088 firm-year observations. This study used liquidity as the proxy of financial flexibility, and also used a comprehensive index of corporate governance constructed by adopting the principal component analysis and STATA has been used for analyzing data. The study used System GMM regression for analysis and controls endogeneity by applying lag financial flexibility as an instrumental variable. The empirical results reveal that poor earnings quality significantly negatively influences the level of corporate financial flexibility. The results also demonstrate that corporate governance can significantly positively moderate the relationship between earnings quality and financial flexibility. This suggests that when the earnings quality is poor, firms are less likely to be financially flexible in holding liquidity. More specifically, firms with poor earnings quality will reduce their financial flexibility of firms; hence, firms need to provide high-quality earnings in order to be more financially flexible. Earnings quality is an important factor, which led the author to examine how earnings quality influences financial flexibility. Under the views of agency theory and positive accounting theory, poor earnings quality is a source of amplified shareholder’s concern of increased informational asymmetry, which may adversely affect the firm’s financial flexibility. Conversely, higher earnings quality reduces the information asymmetry which leads to higher financial flexibility. This study provides a way how to achieve financial flexibility with the assistance of corporate governance which is essential to combat financial crises and smooth business operations successfully.

Purpose: The purpose of this study is to investigate the empirical relationship between family firms and lean innovation (i.e. generating more output with less input) as well as the moderating role of the executive's compensation.Design/methodology/approach: Panel data for ten years (2007–2016) have been collected from the CSMAR database. This study concludes the findings using descriptive statistics, correlation and panel data analysis techniques applying statistical software STATA.Findings: Results show that family firms are not motivated to follow lean innovation strategies until unless the executives are compensated well. We further find that family firms are more likely to pursue a lean innovation strategy, and they demonstrate a superior record of converting R&D inputs as granted patents, and; both input and output innovation are significantly affected by executive compensations. However, this study shows an insignificant negative relationship of propensity to patents with the moderating effects of executive compensation.Research limitations/implications: This research has been conducted on the emerging Chinese market. The study is useful for policymakers and managers to devise such strategies which can make the role of executive's more effective to reduce the agency cost and reap the benefits of innovation input more effectively (Petersen, 2009). Also, family firms are heterogeneous, and the research outcome may be applicable for both advanced and emerging economies.Originality/value: The previous family firm's research paid less attention to the role of the executive's compensation on the relationship of family firms and lean innovation. Moreover, they prioritize insight into how executive's compensation affects different proxies of innovation. This study sheds new light on the paradoxical findings of family firms and lean innovation by analyzing the significant role of executive compensation.

Purpose: This research aims to examine the empirical relationship between earnings quality and financial flexibility, i.e., how information related to earnings affects firms’ cash levels in the emerging economies. Design/Methodology/Approach: To attain the research objectives, we used panel data for 18 years (2000–2017) obtained from the CSMAR database. Statistical software STATA used for data analysis. Descriptive, multiple correlations, and unbalanced panel data analysis are used. Findings: Our empirical results negate the works conducted on the advanced economy showing that information related to earnings (Earnings Quality) is negatively associated with firms’ Financial Flexibility irrespective of firms’ characteristics, i.e., firms with profit or loss and firm’s with R&D or without R&D expenditure. However, the firm’s earnings quality, firm size, cash flows, financial constraints, dividends, and growth are the dominant predictor of financial flexibility. Moreover, the degree of dominance depends on the firm’s specific characteristics. Research Limitations/Implications: This research has been conducted on the emerging Chinese market. For consistent and robust results, this research excluded the financial and other firms that possess different operational and regulatory attributes than the manufacturing firms. The study is useful for policymakers and managers to design their cash levels and avoid the hurdle of external finance or to accelerate their flexibility to raise money from an external source. Originality/Value: Previous research addressed the issue related to cost and benefit, information asymmetry, ownership concentration, and firm’s propensity to cash holdings. A very little research conducted with earnings quality and cash holdings in the developed market (in Europe and the USA), and thus, for the first time, we address the issue of earnings quality and financial flexibility in the emerging economy.

This paper examines which hybridization strategy is more suitable for credit risk assessment in the dynamic financial world.