Mission Power and Firm Financial Performance

Diego F. Téllez () and Jesus Godoy-Bejarano ()

No 15655, Documentos de Trabajo de Valor Público from Universidad EAFIT

Abstract: We estimate the effect from mission statement on firm financial performance in a sample of Colombian companies. The mission power, a latent variable defined by using tools from word content analysis, is included in a structural equation model to compute its impact across two channels: the profit margin and the assets turnover. Our estimates show that the no-significant impact of mission statement, which is documented in the literature, may be caused by the opposite effect that sales amount induces on both channels. We disentangle both effects and show that the assets turnover dominates which suggest that the mission statement compels good assets management practices.

Keywords: mission statement; financial performance; word content analysis; structural equation model (search for similar items in EconPapers)
Pages: 19
Date: 2017-02-23
New Economics Papers: this item is included in nep-eff
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:col:000122:015655

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