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Indices, firm identity and performance: implications from the European financial services

Indices, firm identity and performance: implications from the European financial services Purpose – The purpose of this paper is to examine and analyze the significant qualitative factors that affect the financial performance of financial firms. The authors argue that those factors can be used as “indices of identity” or external cues that help financial firms enhance their relative position in the marketplace. This can be done by focusing on the indices that are highly and positively associated with financial performance measures. This is a practical approach since the financial products are characterized by intrinsic intangibility. Design/methodology/approach – The researchers empirically test this framework in a sample of the European banking industry. The methodology utilizes the benefits of the “content analysis,” that focuses on the critical observed elements of firm identity as published in the most recognized publications. The indices of identity examined in this paper are reputation for clients, age, CEO, size, country of origin, geographic spread, and profits. Measures of financial performance include: return on assets, non‐performing loans/total loans, shareholder equity/total assets and deposits/total assets. Findings – The results show that indices of identity are positively related to corporate financial performance and thus can effectively help firms be well recognized by other actors in the marketplace. Originality/value – The paper contributes to the literature in two ways. First, the paper shows how firm's indices of identity can be quantified through the use of content analysis. Second, the paper creates an association between the indices of identity and financial performance. This association offers a quantitative approach that shows the possibilities of overcoming the problems of intangibility in the marketplace. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png European Business Review Emerald Publishing

Indices, firm identity and performance: implications from the European financial services

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References (92)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0955-534X
DOI
10.1108/09555341111158146
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine and analyze the significant qualitative factors that affect the financial performance of financial firms. The authors argue that those factors can be used as “indices of identity” or external cues that help financial firms enhance their relative position in the marketplace. This can be done by focusing on the indices that are highly and positively associated with financial performance measures. This is a practical approach since the financial products are characterized by intrinsic intangibility. Design/methodology/approach – The researchers empirically test this framework in a sample of the European banking industry. The methodology utilizes the benefits of the “content analysis,” that focuses on the critical observed elements of firm identity as published in the most recognized publications. The indices of identity examined in this paper are reputation for clients, age, CEO, size, country of origin, geographic spread, and profits. Measures of financial performance include: return on assets, non‐performing loans/total loans, shareholder equity/total assets and deposits/total assets. Findings – The results show that indices of identity are positively related to corporate financial performance and thus can effectively help firms be well recognized by other actors in the marketplace. Originality/value – The paper contributes to the literature in two ways. First, the paper shows how firm's indices of identity can be quantified through the use of content analysis. Second, the paper creates an association between the indices of identity and financial performance. This association offers a quantitative approach that shows the possibilities of overcoming the problems of intangibility in the marketplace.

Journal

European Business Review – Emerald Publishing

Published: Aug 30, 2011

Keywords: Europe; Strategic group identity; Indices; Strategic reference point; Banking industry; Financial performance

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