Corporate Resilience in Cancel Culture Times
- Authors: Evgrafova R., Ivashkovskaya I.1, Shorokhova E.1
-
Affiliations:
- HSE University
- Issue: Vol 17, No 4 (2023)
- Pages: 19-37
- Section: New Research
- URL: https://journal-vniispk.ru/2073-0438/article/view/302518
- DOI: https://doi.org/10.17323/j.jcfr.2073-0438.17.4.2023.19-37
- ID: 302518
Cite item
Full Text
Abstract
Corporate resilience has emerged as a prominent focus in international studies, particularly in the context of the COVID-19 pandemic that unfolded in 2019. This attention has been amplified by the structural shifts in the business models of Russian companies, prompted by imposed sanctions, thereby accentuating the need for comprehensive academic exploration of resilience, its driving forces, and adaptive turnaround strategies, especially in the era of cancel culture. Despite the heightened significance of resilience, the drivers underlying it during structural crises remain insufficiently studied. This paper addresses this gap by employing a combination of quantitative methods applied to a sample of publicly traded Russian companies spanning the years 2012 to 2022 (first half), alongside case studies. Our contribution to the literature is manifold. Firstly, our application of Altman’s Z-score model to publicly traded companies unveils the industries with the highest and lowest resilience across the Russian market from a historical perspective. Secondly, we assert that fluctuations in the degree of resilience during turbulent times, as captured by the Z-score, offer a more adequate evaluation compared to popular market-based metrics like total shareholder returns (TSR). Thirdly, our findings reveal that higher credit ratings and state ownership have no evident impact on the degree of resilience. Conversely, the professional background of CEOs is correlated with firm performance and plays a significant role in determining company resilience amid cancel culture challenges.
About the authors
R. Evgrafova
Author for correspondence.
Email: rufina.evgrafova@gmail.com
I. Ivashkovskaya
HSE University
Email: iivashkovskaya@hse.ru
E. Shorokhova
References
- Keenan P., Bixner R., Powell K., et al. Leading change in turbulent times. Boston Consulting Group; 2008. URL: https://www.bcg.com/publications/2008/leading-change-in-turbulent-times (accessed on 17.04.2023)
- Angwin D., McGee J., Sammut-Bonnici T. Turnaround strategy. In: Wiley Encyclopedia of Management; 2015. https://doi.org/10.1002/9781118785317.weom120049 DOI: https://doi.org/10.1002/9781118785317.weom120049
- Lin B., Lee Z., Gibbs L.G. Operational restructuring: reviving an ailing business. Management Decision. 2008;46(4):539-552. https://doi.org/10.1108/00251740810865049 DOI: https://doi.org/10.1108/00251740810865049
- Denis D.J., Kruse T.A. Managerial discipline and corporate restructuring following performance declines. Journal of financial economics. 2000;55(3):391-424. https://doi.org/10.1016/S0304-405X(99)00055-0 DOI: https://doi.org/10.1016/S0304-405X(99)00055-0
- Kam A., Citron D., Muradoglu G. Financial distress resolution in China-Two case studies. Qualitative Research in Financial Markets. 2010;2(2):46-79. https://doi.org/10.1108/17554171011053667 DOI: https://doi.org/10.1108/17554171080000382
- Ashayeri J., Ma N., Sotirov R Supply chain downsizing under bankruptcy: A robust optimization approach. International Journal of Production Economics. 2014;154:1-15. https://doi.org/10.1016/j.ijpe.2014.04.004 DOI: https://doi.org/10.1016/j.ijpe.2014.04.004
- Cheema-Fox A., LaPerla B.R., Wang H., et al. Corporate Resilience and Response to COVID-19. Journal of Applied Co rpor ate Finance. 2021;33(2):24-41. https://doi.org/10.1111/jacf.12457 DOI: https://doi.org/10.1111/jacf.12457
- Milano G., Whately R., Tomlinson B., et al. A Deeper Look at the Return on Purpose: Before and During a Crisis. Journal of Applied Corporate Finance. 2021;33(2):41-50. https://doi.org/10.1111/jacf.12460 DOI: https://doi.org/10.1111/jacf.12460
- Hidayat M., Latief F., Widiawati A. et al. Factors Supporting Business and its Distrubution to Business Resilience In New Normal Era. Journal of Distribution Science. 2021;19(ll):5-15. https://doi.org/10.15722/JDS.19.11.202111.5
- Brand F.S., Blaese R., Weber G., et al. Changes in Corporate Responsibility Management during COVID-19 Crisis and Their Effects on Business Resilience: An Empirical Study of Swiss and German Companies. Sustainability. 2022;14(7):4144. https://doi.org/10.3390/su14074144 DOI: https://doi.org/10.3390/su14074144
- Lins K.V., Servaes H., Tamayo A. Social capital, trust., and firm performance: The value of corporate social responsibility during the financial crisis. The Journal of Finance. 2017;72(4):1785-1824. https://doi.org/10.1111/jofi.12505 DOI: https://doi.org/10.1111/jofi.12505
- Levine R., Lin C., Xie W. Corporate resilience to banking crises: The roles of trust and trade credit. Journal of Financial and Quantitative Analysis. 2018;53(4):1441-1477. https://doi.org/10.1017/S0022109018000224 DOI: https://doi.org/10.1017/S0022109018000224
- Markman G. M., Venzin M. Resilience: Lessons from banks that have braved the economic crisis — And from those that have not. International Business Review. 2014;23(6):1096-1107. https://doi.org/10.1016/j.ibusrev.2014.06.013 DOI: https://doi.org/10.1016/j.ibusrev.2014.06.013
- Sajjad A. The COVID-19 pandemic, social sustainability and global supply chain resilience: A review. Corporate Governance. 2021;21(6):1142-1154. https://doi.org/10.1108/CG-12-2020-0554 DOI: https://doi.org/10.1108/CG-12-2020-0554
- Sarkar P., Ismail M.W.M., Tkachev T. Bridging the supply chain resilience research and practice gaps: pre and post COYID-19 perspectives. Journal of Global Operations and Strategic Sourcing. 2022;15(4):599-627. https://doi.org/10.1108/JGOSS-09-2021-0082 DOI: https://doi.org/10.1108/JGOSS-09-2021-0082
- Tarigan Z.J.H., Siagian H., Jie F. Impact of internal integration, supply chain partnership, supply chain agility, and supply chain resilience on sustainable advantage. Sustainability. 2021;13(10):5460. https://doi.org/10.3390/su13105460 DOI: https://doi.org/10.3390/su13105460
- Rajesh R. On sustainability, resilience, and the sustainable-resilient supply networks. Sustainable Production and Consumption. 2018;15:74-88. https://doi.org/10.1016/j.spc.2018.05.005 DOI: https://doi.org/10.1016/j.spc.2018.05.005
- Yu M. State ownership and firm performance: Empirical evidence from Chinese listed companies. China Journal of Accounting Research. 2013;6(2):75-87. https://doi.org/10.1016/j.cjar.2013.03.003 DOI: https://doi.org/10.1016/j.cjar.2013.03.003
- Pargendler M. The unintended consequences of state ownership: the Brazilian experience. Theoretical Inquiries in Law. 2012;13(2):503-524. https://doi.org/10.1515/1565-3404.1303 DOI: https://doi.org/10.1515/1565-3404.1303
- Tihanyi L., Aguilera R.V., Heugens P., et al. State ownership and political connections. Journal of Management. 2019;45(6):2293-2321. https://doi.org/10.1177/0149206318822113 DOI: https://doi.org/10.1177/0149206318822113
- Abramov A., Radygin A., Entov R. et al. State ownership and efficiency characteristics. Russian Journal of Economics. 2017;3(2):129-157. https://doi.org/10.1016/j.ruje.2017.06.002 DOI: https://doi.org/10.1016/j.ruje.2017.06.002
- Altman E.I., Iwanicz-Drozdowska M., Laitinen E.K., et al. Distressed firm and bankruptcy prediction in an international context: A review and empirical analysis of Altman's Z-score model. Journal of International Financial Management & Accounting. 2014;28(2):131-171. https://doi.org/10.1111/jifm.12053 DOI: https://doi.org/10.2139/ssrn.2536340
- Sudarsanam S., Lai J. Corporate Financial Distress and Turnaround Strategies: An Empirical Analysis. British Journal of Management. 2001;12(3):183-199. https://doi.org/10.1111/1467-8551.00193 DOI: https://doi.org/10.1111/1467-8551.00193
- Klyuchevye trendy i perspektivy razvitiya otraslei rossiiskoi promyshlennosti v usloviyakh geopoliticheskoi turbulentnosti. 2023. (In Russ.) URL: https://assets.kept.ru/upload/pdf/2023/01/ru-trendi-perspektivi-razvitiya-otraslej-promyshlennosti-rossii-analiz-kept.pdf (accessed on 17.04.2023)
- Pasban M., Nojedeh S.H. A Review of the Role of Human Capital in the Organization. Procedia-social and behavioral sciences. 2016;230:249-253. https://doi.org/10.1016/j.sbspro.2016.09.032 DOI: https://doi.org/10.1016/j.sbspro.2016.09.032
- Wilson R.A., Briscoe G. The impact of human capital on economic growth: a review. Luxembourg: EUR-OP; 2004. URL: https://www.cedefop.europa.eu/files/BgR3_Wilson.pdf (accessed on 17.04.2023)
- Altman E.I., Hotchkiss E. Corporate financial Distress: o complete guide to predicting, avoiding, and dealing with bankruptcy. New York: Wiley, 1983. https://doi.org/10.1002/9781118267806 DOI: https://doi.org/10.1002/9781118267806
- Agarwal V., Taffler R. Does Financial Distress Rbsk Drive the Momentum Anomale. Economics. Financial Management. 2008;September 1. doi: 10.1111/J.1755-053X. 2008.00021X
- Bauer J., Agarwal V. Are hazard models superior to traditional bankruptcy prediction approaches? A comprehensive test. Journal of Banking and Finance. 2014;40:432-442. https://doi.org/10.1016/j.jbankfin.2013.12.013 DOI: https://doi.org/10.1016/j.jbankfin.2013.12.013
- Levy C., Mysore M., Sneader K., et al. The Emerging Resilients: Achieving Escape Velocity. McKinsey & Company; 2020. URL: https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/the-emerging-resilients-achieving-escape-velocity (accessed on 17.04.2023)
- Abbas Q., Rashid A. Modeling Bankruptcy Prediction for Non-Financial Firms: The Case of Pakistan. MPRA Paper. 2011:28161. https://doi.org/10.2139/ssrn.1917458 DOI: https://doi.org/10.2139/ssrn.1917458
- Wang Y., Campbell M. Business Failure Prediction for Publicly Listed Companies in China. Joumal of Business & Management. 2010;16(1):75-88. https://doi.org/10.6347/JBM.201001_16(1).0004 DOI: https://doi.org/10.1504/JBM.2010.141180
- Prabowo S.С.B. Analysis on the prediction of bankruptcy of cigarette companies listed in the Indonesia Stock Exchange using altman (z-score) model and zmijewski (x-score) model. Jumal Aplikasi Manajemen. 2019;17(2):254¬260. https://doi.org/10.21776/ub.jam.2019.017.02.08 DOI: https://doi.org/10.21776/ub.jam.2019.017.02.08
- Bhatt S.N. Capital structure and turnaround strategies using altman's Z-score models. Asian Journal of Research in Business Economics and Management. 2012;2(7):102-113.
- Lim L.L.K., Chan С.C.A., Dallimore P. Perceptions of human capital measures: from corporate executives and investors. Journal of Business and Psychology. 2010;25:673-688. https://doi.org/10.1007/s10869-009-9150-0 DOI: https://doi.org/10.1007/s10869-009-9150-0
- De Albuquerque N.R., Vellasco Marley M.M.R., Mun J., et al. Human capital valuation and return of investment on corporate education. Expert Systems with Applications. 2012;39(15):11934-11943. https://doi.org/10.1016/j.eswa.2012.03.002 DOI: https://doi.org/10.1016/j.eswa.2012.03.002
- Bukowitz W.R, Williams R.L., Mactas E.S. Human capital measurement. Research-Technology Management. 2004;47(3):43-49. https://doi.org/10.1080/08956308.2004.11671629 DOI: https://doi.org/10.1080/08956308.2004.11671629
- Altman E. Corporate financial distress and bankruptcy. 3rd ed. New York: Wiley; 1993.
Supplementary files
