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  Year : 2012 (6) |
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| | 2012 | 2012-001(MKTG) | | Junhong Chu |
Nation equity refers to a product’s equity that is associated with its country of origin (COO). It is generalized COO effects which have previously been studied through experiments and surveys and measured by quality perception, product attitude, and purchase intention. We propose a structural equilibrium approach to assessing the additional market power COO offers, monetizing nation equity with product sales data, and computing the price premiums and discounts associated with nation equity. We apply this approach to China’s personal computer market between 1995 and 2008, and find that COO does generate additional market power and affect firm markups. Further, we find nation equity to be pervasive, significant, multidimensional, and changing over time, but there is no simple correspondence between market share and nation equity. We discuss the implications of our modeling approach and our findings for emerging markets in general, and China in particular.
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| | 2012 | 2012-002 (S&P) | | Sea-Jin Chang, Young-Choon Kim & Sangchan Park | This study extends the concept of human capital from a concept focused on economic capital to include cultural and social capital in order to examine their respective impact on job mobility. In doing so, this study demonstrates that managers’ interorganizational mobility is not necessarily boundaryless. Rather, there are “bounds” in their career choices, coming from the utilization of their economic, social, and cultural capital, which have been developed through career trajectories and personal backgrounds. These different kinds of human capital are complementary in nature but differ in their respective impact on a person’s mobility beyond industry and business group boundaries. The data of Korean executives’ career trajectories confirm our conjectures.
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| | 2012 | 2012-003 (S&P) | | Sea-Jin Chang, Young-Choon Kim & Sangchan Park |
The CEO succession literature views changes in top managers as an organization‘s adaptive endeavor to match environmental contingencies. However, little attention has been paid to how dynamic market environments shape the way organizations source CEOs and, more importantly, other executives below the level of CEO in an attempt to resolve skill mismatch caused by such environmental changes. To address these gaps, we explore how changes in the product, capital, and labor markets impact the composition of both CEO and non-CEO executives between external versus internal sources. We demonstrate that intensified competition, stronger capital market control, and the development of external labor markets generally promote external talents, while each distinctive environmental condition has differential influence for CEOs and non-CEO executives respectively.
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| | 2012 | 2012-004 (S&P) | | Ishtiaq Mahmood, Chi-Nien Chung & Will Mitchell |
Business groups are key sources of innovation in emerging market economies, but we understand little about why innovativeness differs across groups and over time. Variation in the density of intra-group buyer-supplier ties, which are common structural linkages among group affiliates, can help explain both cross-sectional and temporal heterogeneity of group innovativeness. We argue that greater buyer-supplier density within a group initially creates combinatorial opportunities that contribute to group innovativeness but ultimately generates combinatorial exhaustion that constrains innovation. Combinatorial exhaustion sets in at lower levels of density as the market environment becomes more developed and the opportunity costs of local search increase. The research introduces a dynamic argument to studies of business group innovation.
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| | 2012 | 2012-005 (S&P) | | Ishtiaq P. Mahmood, Hongjin Zhu & Edward J. Zajac |
While strategy researchers have devoted considerable attention to the role of firm-specific capabilities in the pursuit of competitive advantage, less attention has been directed at how firms obtain these capabilities from outside a firm’s boundaries. In this study, we examine how firms’ multiplex network ties in business groups represent one important source of capability acquisition. Our focus allows us to go beyond the traditional focus on network structure and offer a novel contingency model that specifies how different types of network ties (e.g. buyer-supplier, equity, and director ties), individually and in complementary combination, will differentially affect the process of R&D capability acquisition. We also offer an original analysis of how other aspects of network structure (i.e. network density) in business groups affect the efficacy of network ties on R&D capability. Empirically, we provide an original empirical contribution to the capabilities literature by utilizing a stochastic frontier estimation to rigorously measure firm capabilities, and we demonstrate the value of this approach using longitudinal data on business groups in emerging economies. We close by discussing the implications of our supportive results for future research on firm capabilities, organizational networks, and business groups.
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| | 2012 | 2012-006 (S&P) | | Kulwant Singh, Ishtiaq P. Mahmood & Jinyan Zhu |
We examine how firms restructure during an economy-wide shock and how the institutional environment affects restructuring and its outcomes. We draw primarily from institutional economics and resource-based theory to argue that access to internal and external resources and the extent of firm embeddedness within the institutional environment are key influences on the incidence and outcomes of restructuring. Results show that firms may increase or decrease restructuring during an economy-wide shock depending on their experience with change and adaptation before the shock, their performance during the shock and their affiliation with business groups. In most cases, restructuring during the shock improved performance. Results are consistent with the view that firm characteristics and institutional environments significantly influence restructuring and its outcomes during an economy-wide shock.
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| Year : 2011 (10) |
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| | 2011 | 2011-001 (MO) | | Sangchan Park & Sangmook Yi |
Who initiates change? Prior research has generally focused on an organization’s position in a field as a proxy for institutional embeddedness that influences organizational decisions to change. For instance, central organizations deeply embedded in institutional environment are less likely to innovate. In contrast, we argue that institutional influence assumed to exist in the position varies according to sources that condition the degree of embeddedness. As for the sources, we concentrate on the range and strength of associations that an organization has with its institutional environment. We examine our arguments in a study of the formal incorporation of unconventional medicine into conventional hospitals. Unconventional medicine includes a group of treatment therapies (e.g., acupuncture, therapeutic touch, naturopathy, etc.) whose underlying principles rest uneasily with those of dominant conventional medicine. Analyzing a dataset of 249 hospitals from 1997 to 2007, we find that hospitals with a greater range of associations with institutional environment are more likely to adopt unconventional therapies. The adoption of unconventional therapies is less likely when the strength of associations with institutional environment is greater. Implications for the study of how the embeddedness of agency arises are discussed. | | |
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| | 2011 | 2011-002 (AC) | | Vincent Chen & Bin Miao |
This study empirically examines the cost of capital employed by company management in their asset valuation decisions. Using a sample of cost of capital estimates manually collected from firms’ 10-K filings, we find that several firm characteristics, such as firm age, financial leverage, cash holding, and cash flow volatility, are among the important determinants of firms’ overall cost of capital. Further, management estimates of cost of equity are correlated with firm size, CAPM beta, and momentum, but not with book-to-market ratio or popular estimates derived from market data and valuation models (e.g. PE, PEG, or MPEG ratio). Finally, we find that cost of capital has a significant impact on investment, with 1% increase in cost of capital reducing the firm’s average capital expenditure over the next three years by 7 million. | | |
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| | 2011 | 2011-003 (AC) | | Vincent Y. S. Chen & Feng Gu |
This study examines whether firms’ disclosure about fair value measurement of goodwill impairment increases the transparency of accounting information on goodwill impairment. We focus on disclosure about (1) the specifics on the acquired business and segment affected by goodwill impairment, (2) fair value measurement methodology selected by management for impairment test, and (3) the inputs of fair value measurement used in impairment test. Our evidence indicates that disclosure about goodwill impairment test is useful to investors. Greater disclosure increases the transparency of goodwill impairment reporting and mitigates investors’ concerns about management manipulation in the reporting of goodwill impairment. The level of disclosure is also predictive of firms’ goodwill impairment in the subsequent year. Our evidence thus supports the view that supplemental disclosure enhances the usefulness of fair value-based accounting information. | | |
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| | 2011 | 2011-004 (MO) | | Daniel J. McAllister & Sankalp Chaturvedi |
In the two studies, we re-examine the discretionary nature of organizational citizenship behavior (OCB), and the factors influencing employee decisions about withholding and making citizenship contributions. We show that OCB can be discretionary in nature, and highlight the practical and research implications that follow. | | |
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| | 2011 | 2011-005 (S & P) | | Jane W. Lu, Khee Hong Goh & Jessie Xueji Liang |
This paper aims to investigate the operating performance changes of Chinese firms seeking IPO in an overseas market. It examines the effects of three sets of factors on the post-listing performance changes. Firstly, we argue that operating performance of Chinese firms is contingent on different forms of slack resources and. More specifically, high discretion slack resources, given its characteristics, will be positively associated with operating performance, whereas low discretion slack resources would be negatively related to operating performance. Secondly, this paper will also be examining the relationship between two key aspects of board independence and its relationship with operating performance as the Chinese firms transitioned from private to public firms in an overseas capital market. The two key indicators that will be examined are the proportion of independent directors on the board of directors and CEO duality, which plagues many Chinese firms operating in China. Finally, we examine the relationship between firm’s degree of internationalization and post-listing operating performance. Overseas listing is perceived as an important step of firm’s internationalization process. The degree to which the firm can benefit from overseas listing should depend on its capability obtained from prior internationalization activities.
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| | 2011 | 2011-006 (FN) | | Wenlan Qian | This study shows that taking into consideration heterogeneous investment horizons improves our understanding of price and trading dynamics. I develop an OLG model in which agents have heterogeneous preferences and investment horizons. With transaction costs, short term investors are more sensitive to fundamental shocks and are less likely to own (and trade) in a declining market. The model predicts that the ownership composition contains information about current and future price and trading dynamics. Empirically I find that owners' ex ante holding horizons co-vary negatively with prices, and they also predict future returns, particularly the return component forecastable by macro conditions. | | |
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| | 2011 | 2011-007 (FN) | | Huang Jiekun, Ruth Tan & Jasmine Loo |
This study examines the role of foreign institutional investors in corporate acquisition decisions. We find evidence that is consistent with foreign institutional investors playing a monitoring role and mitigating agency problems in corporate acquisition decisions. The relation is particularly strong among foreign independent institutions, foreign institutions from common-law countries, and for emerging-market acquirers. However, we find little evidence that foreign institutional ownership predicts long-run post-merger stock performance, which suggests that the market is efficient and has incorporated the information at announcement. In addition to preventive monitoring, we document that foreign institutional investors play an active role in corrective monitoring. Evidence indicates that the presence of foreign institutional investors increases the probability that a value-destroying deal is withdrawn, suggesting that they play an active disciplining role in blocking negative-NPV acquisitions. Consistent with our earlier findings, this result is driven mainly by foreign independent institutions and foreign institutions from common-law countries. | | |
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| | 2011 | 2011-008 (FN) | | Truong X. Duong & Felix Meschke |
This study investigates the effect of increased regulatory attention on the propensity of mutual fund managers to engage in illicit trading behavior. A study by Carhart et al. (2002) constituted a quasi-exogenous shock to regulatory enforcement levels because it developed a pumping measure, showed that pumping was prevalent, and prompted regulatory agencies to more vigorously enforce existing securities laws. We exploit this shock in our research design and show that between 1993 and 2001, quarterly mutual fund portfolios are artificially inflated by about 2.2 billion dollars. Portfolio pumping among U.S. mutual funds sharply decreased by about 110 basis points at year-end once the SEC filed fraud charges alleging portfolio pumping against fund managers in June and August of 2001. We further document that cross-sectional variations in pumping activity and the subsequent decreases of pumping vary in accordance with factors predicted by recent theoretical work. In many studies that examine regulatory rule changes, it is assumed that the degree to which existing laws and regulations are enforced before and after the rule change stays constant. Our findings suggest that this assumption is not innocuous since enforcement levels clearly matter in financial markets. | | |
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| | 2011 | 2011-009 (MO) | | Zhaoli Song, Nan Wang, Wendong Li, Richard D. Arvey & Seang Mei Saw |
Behavioral genetic studies have revealed that job satisfaction is heritable. However, little is known about what specific genes may be associated with job satisfaction and if so the mechanisms for such associations. In the present study, the experience-sampling method was used to examine the relationship between the -1438A/G SNP in the serotonin 2A receptor gene (5-HT2A), and momentary job satisfaction. A sample of 206 Chinese Singaporeans reported their momentary experiences of job satisfaction and encountered stressors 4 times per day for a period of one week. The G allele in the -1438A/G SNP was associated with lower mean level of momentary job satisfaction across the week as compared with the A allele. Furthermore, we found that major stressful life events as well as momentary stressors demonstrated the strongest negative relationship with momentary job satisfaction among participants with the G/G genotype. These results suggest that the -1438A/G SNP in the 5-HT2A gene may be one form of genetic architecture that is involved in modulating individuals’ ongoing experience of job satisfaction.
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| | 2011 | 2011-010 (MKTG) | | Ping Xiao, Tat Chan & Chakravarthi Narasimhan |
In many industries such as wireless and internet services the expected consumption level before a consumer chooses a service provider can often be different than the actual realization. In this paper we study the optimality of three-part tariffs, a pricing strategy commonly observed in these industries, when consumers are uncertain about the amount they would consume when they make the choice decisions. We construct a model of a monopolist that faces heterogeneous consumers and explore when three part tariffs would be preferred over all-or-nothing and two-part tariffs. In a stylized framework with two types of consumers we find that without demand uncertainty, all-or-nothing price can be as efficient as three-part tariffs in extracting consumers’ surplus. Meanwhile firm will only serve heavy users when preference ratio is high. With demand uncertainty we find three-part tariffs dominate both all-or-nothing tariffs and two-part tariffs. However firm is still likely to serve both heavy and light users when preference ratio is high. Moreover when demand uncertainty exists, if the preference ratio is not too high, the firm make higher profit. Meanwhile heavy users’ surplus is higher, and light users’ surplus depends on the magnitude of how they are uncertain of their demand. | | |
| Year : 2010 (7) |
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| | 2010 | 2010-001 (AC) | | Michael S. H. Shih |
This study examines how firms’ tendency to manipulate accruals to meet quarterly earnings targets, as measured by abnormal accruals volatility, relates to transient and non-transient institutional shareholdings. Abnormal accruals volatility is found to increase with transient (short-term) institutional shareholdings, but decrease with non-transient (long-term) institutional shareholdings. Robust across Jones-type models commonly used to estimate abnormal accruals, this result is consistent with transient (non-transient) institutional shareholdings putting more (less) pressure on firms to manipulate accruals than individual investors’ shareholdings. The different effects of transient and non-transient shareholdings are likely to be related to differences in investment horizons and trading strategies across institutions: while transient institutions have short investment horizons and trade on short-term earnings news, non-transient institutions have long investment horizons and are insensitive to short term earnings news.
The study also finds that estimated abnormal accruals volatility increases with analyst following, research and development expenditures, and the value-relevance of earnings, but decreases with firm size and the long-term growth rate of earnings.
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| | 2010 | 2010-002 (S & P) | | Young-Choon Kim, Jane W. Lu & Mooweon Rhee | We develop the idea of age dependent interorganizational learning, building on the inherent trade-offs of organizational aging suggested by organizational ecology and learning theories. The core idea is that an organization’s age implies different strengths and weaknesses across its life cycle, and an organization’s experience at a point in its life cycle may pose potential learning opportunities for other organizations operating at different points of their life cycle. We argue that a learning organization’s age distance from its interacting organizations captures the extent to which the value of their experience is complementary to the learning organization, and thus provides a structural condition under which its learning opportunities are bounded. Our empirical analysis of ownership-affiliated Japanese foreign subsidiaries provides strong evidence that survival is enhanced by learning from peers of different ages. The survival-enhancing learning from age difference does not apply equally to all subsidiaries, but is contingent on the age of the learning subsidiary and the relevance of the transferred experience. Our research has implications for interorganizational learning, organizational ecology, and multiunit organizational strategy. | | |
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| | 2010 | 2010-003 (MO) | | Chi-Nien Chung, Young-Choon Kim & Edward Zajac |
We study the influence of foreign institutional investors on corporate governance reform in the context of family governance in emerging economies. Using the sample of the listed Taiwanese firms, we examine the appointment of independent directors between 2002 and 2005. Our findings show that Taiwanese firms responded to pressure of foreign institutional investors when they are weakly controlled by the family or when a firm’s CEO has been exposed to alterative governance models through formal education in the U.S. This finding supports the argument that external pressure of foreign institutional investors alone is not sufficient to realize the changes of traditional governance practices, but is moderated by the strength of family control and the alterative cognition scheme of the key decision-maker. We discuss the implication of our research on institutional change in globalized environments. | | |
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| | 2010 | 2010-004 (MO) | | Zhaoli Song, Yew Kwan Tong & Pei Chuan Wu |
To integrate the literatures on boundary theory and work-family conflict, we propose a new construct describing role behaviors which cross the traditional work-family boundary. We argue that cross boundary behavior will fill a gap in extant empirical research for a behavior-based indicator of work family interface. Conceptually, cross boundary behavior holds promise as a behavioral mediator in established models of work-family conflict, adding to our understanding of causal dynamics. We distinguish cross boundary behavior from parallel and similar constructs in the work-family and associated literatures, and also elaborate on a foundational model for testing the linkages between cross boundary behavior and work-family conflict and facilitation. Finally, implications for theory development and management practice are discussed.
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| | 2010 | 2010-005 (MO) | | Zhaoli Song, Pei Chuan Wu, Yew Kwan Tong & Yongli Wang |
Work can intrude into the family domain across the work-family boundary in the forms of overtime work and working from home. Guided by role theory, identity theory, and boundary theory, the current study examined antecedents and consequence of these two boundary crossing behaviors based on reports from 433 workers. Work overload was found to be positively correlated with overtime work. Role identities and desire for segregation were also found to be significantly correlated with both overtime work and working from home. Overtime work was found to be positively related to work-to-family interference. Our current study has extended the work-family literature by jointly examining both the time and space markers of the work-family boundary.
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| | 2010 | 2010-006 (MKTG) | | Xiuping Li & Dilip Soman |
In this paper, we investigate individuals’ responses to incentive programs (e.g., sale force compensation or consumer loyalty programs) as a function of the structure of the programs. Across two studies in different domains, we demonstrate that a reward program with intermediate rewards even without any economic value motivates people to a greater extent than a reward program without them. More importantly, we find that the intermediate rewards are more effective at motivating desired behavior when participants are at the middle portion of the process.
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| | 2010 | 2010-007 (MKTG) | | Xiuping Li, Qiang Lu & Rohan Miller |
This study examines heterogeneity among consumers with behavioral disorders. In line with goal-systems theory, the authors argue that gambling and other substance dependencies are means of the same goal to self-medicators but competing goals to pure-pleasure seekers. We predict and find that pathological gamblers whose goal is self-medication are more likely to have correlated consumption disorders (e.g., other substance dependencies) than those whose goal is pure pleasure. Moreover, self-medicators demonstrate a positive correlation between the severity of gambling problems and having other substance dependencies; pleasure-seeking gamblers show a negative correlation for the same. Furthermore, because self-medicators can more easily substitute one problem consumption for another for the same goal, they are less likely to commit crimes to facilitate their gambling than pleasure seekers.
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| Year : 2009 (5) |
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| | 2009 | 2009-001 (FN) | | Inmoo Lee, Michael Lemmon, Yan Li & John M. Sequeira |
In this paper, we investigate how changes in the regulatory environment have affected the volume, timing, and profitability of insider trading over the period 1986-2004. Consistent with increased regulatory scrutiny, we find that there has been a steady increase over time in the proportion of trades by insiders that occur right after quarterly earnings announcements, and that more and more firms appear to adopt policies to restrict their insider trading. Despite these changes in the timing of insider transactions, however, we find no evidence that the overall volume or informativeness of insider trading has decreased over time. The results suggest that the information advantage of insiders in general does not arise from superior knowledge of near term earnings, but instead reflects the longer term prospects of the firm.
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| | 2009 | 2009-002 (BP) | | Jane W. Lu & Pek-Hooi Soh |
This research examines how risk and experience shape venture capital firms’ entry decisions from the institutional, learning and networking perspectives. In a sample of 554 venture capital firms and 9077 first investment entry decisions in 88 geographic markets from 1986-2003, the findings show that both risk and experience have inverted-u shaped relationships with the entry of the venture capital firm in a geographic market. Whereas the influence of entry patterns of other firms is negatively correlated with risk and not significantly related to experience, the influence of co-investors is marginally affected by risk positively and experience negatively. While we maintain the premise that institutional rules may substitute for technical criteria, this research sheds new lights on how uncertainty shifts the relative importance of social considerations between influential actors who are distant from the focal firm and those who are directly connected to the focal firm, and on how firm-specific experience actually dampens the social influences of direct partners. | | |
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| | 2009 | 2009-003 (MO) | | Albert C Y Teo & Arthur K C Leong | This study uses a network approach to examine the impact of strategic alliances on organizational performance in the airline industry. The analyses are based on alliance and performance data drawn from the whole population of international airlines over the five-year period, 1998-2002. Results indicate that when an airline’s alliance network is excessively dense, its performance may be adversely affected. Also, excessively deep and intensive alliances may have a negative impact on the partner airlines’ performance. | | |
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| | 2009 | 2009-004 (FN) | | Meijun Qian |
Staleness in measured prices imparts a positive statistical bias and a negative dilution effect on mutual fund performance. First, evaluating performance with nonsynchronous data generates a spurious component of alpha. Second, stale prices create arbitrage opportunities for high-frequency traders whose trades dilute the portfolio returns and hence fund performance. This paper introduces a model that evaluates fund performance while controlling directly for these biases. Empirical tests of the model show that alpha net of these biases is on average positive although not significant and about 40 basis points higher than alpha measured without controlling for the impacts of stale pricing. The difference between the net alpha and the measured alpha consists of three components: a statistical bias, the dilution effect of long-term fund flows, and the dilution effect of arbitrage flows. Whereas the two former are small, the latter is large and widespread in the fund industry.
JEL Classifications: G12, G14.
Key Words: Performance evaluation, stale pricing, timing arbitrage, flows.
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| | 2009 | 2009-005 (FN) | | Nan Li |
This paper develops a two-sector dynamic stochastic general equilibrium model to measure intangible capital stock and studies the implied riskiness of market value of capital. The equilibrium of the economy is characterized by a state-space representation of dynamic system. Kalman filter algorithm is used to produce an estimate of the value of intangible capital stock based on the observed data on macroeconomic variables and asset prices. With modest capital adjustment cost, the model implies that significant amount of intangible capital is accumulated during past 50 years in US economy but the growth of intangible capital in the last decade is not as fast as the estimates of Hall (2001). Variation in intangible capital estimated from aggregate macroeconomic variables, accounts for almost half of the variability in the market-to-book ratio of nonfinancial and nonfarm corporate firms.
Keywords: Intangible capital; Investment-specific technological progress; Tobin’s q; Kalman Filter;
JEL classification: C22; C51; G12; O41 | | |
| Year : 2008 (9) |
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| | 2008 | 2008-001 (DS) | | Thompson S.H. Teo & Shirish C. Srivastava |
From the comparative case study of Passenger Reservation System (PRS) and Freight Operation Information System (FOIS) implementation in Indian Railways (IR), we observe that despite having almost similar technological, organizational, national and other contexts, the implementation progress for the two initiatives are quite different. The traditionally used perspectives in information systems (IS) literature namely, rational economic perspective and intra-organizational power and politics perspective may not adequately explain IS implementations in developing countries. We propose an integrated framework, which in addition to the two traditional perspectives, has symbolism and powerful stakeholder perspective and an intertwined contextualist perspective. This framework is used to analyze and identify the reasons for differences in the implementations of the two IS initiatives (PRS and FOIS) at IR. Our analysis reveals that considering symbolism and powerful stakeholder perspective, which takes into account the influence of extra-organizational stakeholders for IS implementation, helps in explaining many of the unanswered questions. Similarly, our analysis reveals the importance of considering the ‘perspectives’ in relation to their intertwined context. Using the perspectives for analyzing the case without considering the context may provide an incomplete picture. The case also demonstrates that technological symbolism is dynamic and dependent on the ‘emergent context’ leading to an increased importance of different perspectives at different points in time. From the case study, personal and political interests of stakeholders take precedence over the economic rationality of the projects, when there are no ‘survival pressures’. This leads to a greater stress on PRS till 1998 after which the deteriorating financial health of IR causes a significant change in the technological symbolism. IS implementation is started to be seen as a tool for organizational survival, leading to an increased focus on FOIS (the rational economic option). Implications of the results for researchers and practitioners are discussed.
Keywords: Interpretive, Symbolism, Stakeholder, Power and Politics, Passenger, Freight, Indian Railways, Context
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| | 2008 | 2008-002 (F) | | Tim R. Adam, Chitru S. Fernando & Jesus M. Salas |
We examine why firms engage in selective hedging even though prior research has shown that such speculative activities do not generate positive returns. We find that smaller firms speculate more than larger firms. Furthermore, firms with a higher probability of bankruptcy speculate more than firms with a lower probability of bankruptcy. These findings are the opposite of what a theory of selective hedging based on shareholder value maximization would predict, that larger and financially more stable firms are the ones most likely to be successful in selective hedging. Finally, we find that selective hedging is negatively correlated with managerial stock and stock option holdings, contradicting the possibility that convexity in managerial compensation is a motivation for managers to speculate.
JEL Classification: G11; G14; G32; G39
Keywords: Corporate risk management; selective hedging; speculation; managerial compensation; bankruptcy. | | |
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| | 2008 | 2008-003 (F) | | Joseph Y. S. Lim, Ruth S. K. Tan & S. Y. Ow |
This paper seeks to reconcile the financial performance, analysts’ perception and stock market performance of government linked companies. In terms of financial performance, GLCs are able to outperform most companies but not companies of comparable size. In terms of analysts’ perception, the majority do not feel that GLCs have better performance and corporate governance practices compared to non-GLCs. Regression results show that GLC stocks are neither more liquid nor followed by more analysts than non-GLC stocks. More significantly, GLCs are found to have underperformed large non-GLCs in terms of returns.
JEL Classification: G12; G18; G28; G32; G38
Keywords: government linked companies, analysts’ perception, financial performance, control group, corporate governance. | | |
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| | 2008 | 2008-004 (MO) | | Daniel J. McAllister, Issac Lim & Kelvin Pang |
We investigate the substantive overlapping between the concepts of perceived organizational support (POS) and organization-based self esteem (OBSE). Similarities notwithstanding, based upon insight from organizational support and self-consistency theory, we argue that POS should be a stronger predictor (than OBSE) of workplace attitudes (e.g., job satisfaction and commitment), and that OBSE should be a stronger predictor (than POS) of workplace behaviors (e.g., task performance and citizenship behavior). Our findings, based upon integrative insights from a meta-analytic study of the POS and OBSE literatures, are consistent with this understanding. We address the practical and theoretical implications of our findings. | | |
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| | 2008 | 2008-005 (DS) | | Thompson S. H. Teo & Li Jiang |
South Korea is highly successful in transforming its public education with e-learning. This paper proposes that the success of e-learning implementation involves policies and efforts that address and manage both the e-learning technology’s effectiveness and its social legitimacy (appropriateness). Based on a theoretical framework that integrates both effectiveness and legitimacy perspectives, this paper examines the lessons from e-learning implementation in South Korea. Our analysis reveals that South Korea systematically addresses both e-learning effectiveness and legitimacy during its e-learning implementation. E-learning effectiveness is enhanced by building an efficient e-learning infrastructure, continuous standardization effort, and raising public awareness while e-learning legitimacy is gained through establishing a sound regulatory system, applying socially appropriate online pedagogy, and building e-learning communities. The results provide important lessons for other countries that intend to implement e-learning in the educational sector.
Keywords: e-learning, Korea, effectiveness, legitimacy, lessons, implementation | | |
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| | 2008 | 2008-006 (MO) | | Chi-Nien Chung |
Almost all the existing studies about CEO succession and firm performance are conducted in the US. Our study is driven by the lack of research on CEO succession in emerging economies where the institutional contexts diverge significantly from mature markets such the US. We argue that the contexts in emerging economies moderate the effects of three mechanisms-- firm-specific knowledge, social network resources, and information asymmetry--that link CEO succession and firm profitability. By using Taiwanese listed firms as research setting, our results show that CEO succession in general has a negative impact on firm performance in emerging economies where the governance and leadership structure tend to be relatively stable and less market-oriented. Insider successors, including family successors, are positively associated with firm performance while outsider successors are negatively related to profitability. Furthermore, the positive impact of family successors is indistinguishable from that of non-family insider successor. These results reflect insufficiency of many market institutions in emerging markets. Our results not only help advance the CEO succession literature by incorporating the new contexts of emerging economies but also have important implications to family business literature and the emergent literature on the strategies and performance of firms in emerging economies
Keywords: CEO succession, Firm performance, emerging economies, family successors
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| | 2008 | 2008-007 (MKTG) | | Surendra Rajiv, Srinivas Prakhya & Kannan Srinivasan |
A simple model of dynamic brand choice that takes into account the quality uncertainty faced by the consumer and the consequent information value associated with choice is developed in this paper. The model is formulated in a dynamic programming framework using Neumann-Morgenstern expected utility and Bayesian updating rules. The consumer, on each occasion, chooses from the brands available so as to maximize expected utility over a finite horizon based on preferences that are dynamically updated with consumption experience. Preference persistence arises due to the consumer’s uncertainty about quality levels. In uncertain environments, choice experiments can be undertaken to produce information through reduction of uncertainty. Hence, a forward-looking risk-averse consumer could recognize the possibility of current choice leading to modification of future behavior. Prior research has examined dynamic choice in uncertain environments but information value of choice has not been explicitly considered. Also, uncertainty has been incorporated at a category level although brand choice is a function of differences in attributes of brands. In this paper, brands are allowed to vary in the perceived uncertainty associated with quality, resulting in brand-specific information value of choice. Also, brands differ in their ability to influence preferences with consumption experience.
The dynamic model is estimated on scanner panel data using the conditional choice probability (CCP) estimation procedure, proposed by Hotz and Miller [1993], which considerably simplifies the estimation and computation difficulties associated with dynamic models. Results support the hypothesis that the consumer is not perfectly informed and is forward looking. Models that explicitly consider information value and forward looking behaviour fit the data better than myopic models.
Keywords: Quality Uncertainty; Consumer Learning; Expected Utility; Risk-Aversion; Dynamic Choice; Bayesian updating; Information Value; CCP Estimator; Valuation Function | | |
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| | 2008 | 2008-008 (MKTG) | | Surendra Rajic, Prokriti Mukherji & Shantanu Dutta |
In August 1997, the FDA allowed brand specific advertising on TV. Since then Direct-to-Consumer (DTC), as well as total sales of these drugs have gone up substantially. This simultaneous rise in DTC spending and prescription drug sales has resulted in a heated debate among medical practitioners, in the US Congress, and the popular press. One side claims that DTC advertising creates demand for the advertised brand while the other side claims that DTC advertising increases consumer knowledge and information. If DTC advertising is creates demand for a specific brand then price elasticity of demand will decrease while if it informs patients then price elasticity will increase. In this paper we ask whether DTC advertising increase price elasticity or reduce it?
To address this issue we compare price elasticity before and after the 1997 FDA policy change. We build a structural model in order to study the impact of this regime change. In the model we start with an individual’s choice between competing brands and aggregate up to market demand. Using monthly data on four Statins (cholesterol reducing drugs) we test the impact of the FDA’s policy change. We find that DTC advertising increases price elasticity of demand. Thus, our results suggest that DTC advertising seem to be increasing consumer knowledge and information.
Keywords: DTC Advertising; Price elasticity; Pharmaceutical Markets; Structural Econometric Modeling; Choice Models | | |
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| | 2008 | 2008-009 (BP) | | Sai Yayavaram |
This study examines the role of computational complexity in the organization of economic activity. The complexity perspective suggests that the goal of economic organization is to manage the complexity that is associated with achieving coordination between the interdependent components of an economy. To manage this complexity, it is necessary to couple the decision-making across the nodes using a structural approach that involves use of design rules. We discuss how various structural features of economic organization such as scale, scope, organization structure, the hierarchy-market continuum and intermediation increase manageable complexity.
Keywords: Firm Scope; complexity; coupling; interdependence | | |
| Year : 2007 (19) |
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| | 2007 | 2007-001 (DS) | | H. Brian Hwarng |
The tremendous interest and wide applicability of neural computing theories and technology motivate researchers to explore how this class of modeling tools can be effectively applied to statistical process control (SPC). The basic principle of SPC is to signal an out-of-control state when the behavior of critical quality variables in a process is considered statistically abnormal, but also to leave the process intact when no evidence of statistical abnormality is present. Two primary categories of problems are the detection of shifts and the recognition of unnatural patterns from the process monitored. Various process models under independently and identically distributed or autocorrelated, normal or patterned, univariate or multivariate settings are considered. Neural network paradigms, the general modeling process, and performance evaluation are described. We illustrate the use of the approach with data generated from a bivariate autocorrelated process. While the neural network approach is flexible, adaptable, and capable of learning, it is limited by a lack of analytical robustness and the need for intensive data. Nevertheless, the approach enhances process-troubleshooting capabilities and serves as a powerful alternative to the traditional SPC approaches in handling data collected from a dynamic and complex environment.
Keywords: Neural networks, statistical process control, control charts, pattern recognition, average run length, back-propagation, autocorrelation, multivariate | | |
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| | 2007 | 2007-002 (DS) | | H. Brian Hwarng & Yu Wang |
Complex processes with autocorrelated multivariate quality characteristics often exist in business/industry. In this paper, we propose a neural-network based control scheme to simultaneously detect and identify mean shifts in bivariate autocorrelated processes. The preliminary results show that the proposed scheme performs better than the Hotelling T2 chart and the Z chart, and comparably to the MEWMA chart on ARL performance and outperforms the Z chart on source-detection capability when small to moderate shifts are of interest.
Keywords: autocorrelated SPC, neural networks, Hotelling T2 chart, MWEMA chart, Z chart | | |
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| | 2007 | 2007-003 (DS) | | H. Brian Hwarng & Na Xie |
Variability in orders or inventories in supply chain systems are generally thought to be caused by exogenous random factors such as uncertainties in customer demand or lead time., Studies have shown, however, that orders or inventories may exhibit significant variability even if customer demand and lead time are deterministic. In this paper we investigate how this class of variability, chaos, may occur in a multi-level supply chain and offer insights into how to manage relevant supply chain factors to reduce system chaoticity. The supply chain is characterized by the classical beer distribution model with some modifications. We observe the supply chain dynamics under the influence of various factors: demand pattern, ordering policy, information sharing, and lead time. Through proper decision-region formation, the effect of various factors on system chaoticity is investigated using a factorial design. The degree of system chaoticity is quantified using the Lyapunov exponent across all levels of the supply chain. This study shows that, to reduce the degree of chaoticity in the supply chain system, the adjustment parameters for both inventory and supply line discrepancies should be more comparable in magnitude. Counter-intuitively, in certain decision regions, sharing demand information can do more harm than good. Similar to the bullwhip effect observed previously in demand, we discover the phenomenon of “chaoticity-amplification” in inventory across supply chain levels.
Keywords: supply chain management, chaos theory, beer distribution game, system dynamics | | |
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| | 2007 | 2007-004 (FA) | | Y. T. Mak & S. Y. Beh |
A number of academic studies in the U.S. have documented the practice of timing opportunism in the granting of stock options. Recently, one form of timing opportunism, the backdating of stock option grants, has received scrutiny by the U.S. SEC with more than 60 U.S. firms subject to investigation by the SEC for this practice. In this study, we examine if Singapore-listed companies practise timing opportunism in granting stock options. Based on a sample of 128 publicly listed firms making a total of 280 option grants, we find evidence of companies practising timing opportunism in granting stock options. Specifically, companies which have a variable schedule, a single Chairman-cum-CEO, higher managerial ownership and higher percentage of independent directors in the scheme committee are less likely to restrict the extent of timing opportunism. In contrast, government-linked companies are more likely to restrict the extent of timing opportunism. Contrary to expectations, companies with a small board size and a higher percentage of independent directors in the committee administering the stock option scheme are more likely to adopt a variable schedule.
Click here for full paper. | | |
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| | 2007 | 2007-005 (DS) | | James SK Ang & KY Liu |
Most research studies focus on the growth in B2B e-commerce. Few studies on the growth of B2C e-commerce exist. We seek to examine the growth of B2C e-commerce. We first propose an s-curve diffusion model and use the US e-commerce sales data to test its goodness of fit. We then use the model to discuss the B2C e-commerce growth and diffusion in Singapore. Business opportunities and challenges are also discussed.
Keywords: B2C e-commerce; Innovation diffusion; Gompertz model; Singapore economy | | |
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| | 2007 | 2007-006 (DS) | | James SK Ang & KY Liu |
Apart from extensive research that has been conducted on product replacement decision, our research is focusing on product replacement from vendor perspective – product retirement as we defined. We explored the impact of product introduction on product retirement in mainframe computer market. There are interesting findings that counter one’s intuition – higher product introduction rate may not lead to faster product retirement. Contrarily, it has negative impact on product retirement. Our study offers practical implications for vendors in their planning of new product launches and product portfolio, as well as represents an exploratory effort that would lead to a new series of product retirement studies.
Keywords: Mainframe Computer Market; Product Introduction Strategy; Product Retirement
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| | 2007 | 2007-007 (DS) | | James S. K. Ang, Chengxuan Cao & Heng-Qing Ye |
In this paper, we consider the operational level service route planning problem in the container shipping industry. We formulate the multi-period multiple ships service route planning problem as a multi-dimensional multiple knapsack problem (MDMKP). The MDMKP is an optimization model that maximizes the total profit generated by all freight bookings accepted in a multi-period planning horizon for a service route subject to limited available capacity of each ship and the number of available empty containers at ports of call. The two proposed heuristic algorithms can solve large scale problems with tens of thousands of decision variables in a short time. Finally, numerical experiments on a wide range of randomly generated problems are conducted to demonstrate the efficiency of the algorithms.
Keywords: Container shipping industry; Service route planning problem; MDMKP; Heuristic algorithm | | |
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| | 2007 | 2007-008 (DS) | | Ang SKJ, Cao CX & Heng-Qing Ye |
In this paper, we consider the e-booking control problem which includes optimal pricing and capacity allocation. In pricing model, customers may refuse bookings based on their willingness to pay the quoted price. Since customer behavior and characteristics are highly varying and not known in advance, we develop a stochastic pricing model which tracks customer behavior as well as the arrival process to maximize profit. For the multi-period capacity allocation of e-booking control problem, we present a two-stage stochastic mixed integer programming model and a heuristic algorithm. The solution to the model is found by maximizing the expected profit over the possible control decisions under the uncertainty of shipping capacity. Finally, we give numerical experiments demonstrate the efficiency of the algorithm.
Track area: SCM & e-logistics/ Service Operations on the Web.
Keywords: e-booking control, container shipping industry, mathematical programming. | | |
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| | 2007 | 2007-009 (MO) | | N. Rao Kowtha |
Newly recruited engineers entering organizations often experience anxiety and uncertainty with regard to their roles, tasks and career prospects in the organization. Successful adjustment of these newcomers to the role and organization has implications for performance, retention and turnover of valuable knowledge workers. Several socialization tactics are used by organizations to reduce this anxiety and facilitate the new engineer’s adjustment to the role and organization. Although several authors have stressed the importance of socialization for technical professionals, few have investigated how organizations socialize these professionals. The possibility of gender differences in response to organizational influences has also not been investigated. Engineering is often characterized as a male-dominated profession, and gender specific differences in newcomer adjustment might be apparent in such settings. This study investigated the socialization of 135 new engineers using the theoretical framework of organizational socialization tactics. The moderating effects of gender on new engineer adjustment are also examined. Results show that organizational socialization tactics strongly influence newcomer role clarity, workgroup integration and task mastery. These proximal outcomes in turn lead to increased satisfaction and organizational commitment. Gender specific differences are also found with regard to the impact of tactics on outcomes. Implications of the results for practice and theory are discussed. | | |
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| | 2007 | 2007-010 (DS) | | Heng-Qing Ye, Xue-Ming Yuan & Xinxin Liu |
This paper addresses two practical problems from a liner shipping company, i.e., the container flow management problem and the ship deployment problem at the tactical planning level. The joint optimization model, as well as, a sequential model, is formulated to solve the problems. Our results show the company should implement the joint optimization model at the tactical planning level to improve the shipping capacity utilization rather than the sequential model used in the current practice. Repositioning of empty containers is also considered jointly with the loaded container flow at the tactical planning level. Some important managerial insights into the operational and business processes are gained.
Keywords: Container Flow Management, Ship Deployment, Empty Container Repositioning
Click here for full paper. | | |
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| | 2007 | 2007-011 (FA) | | Swee-Sum Lam, Christabel Tan Dun-Lin, Ruth Tan Seow-Kuan & Weidong Zhang |
This study conducts a systematic analysis of the impact of policy reversals on equity values. China is an excellent platform for a study on policy risk as she transitions from a centrally planned economy to a market economy. Flip-flops in policy add uncertainties to an investor’s cash flows. Consistent with our policy risk propositions, we find that policy reversals are accompanied by negative price effects across all stocks in the secondary markets, whether regulated or non regulated, state owned or non state owned, and these persist regardless of the nature of the price sensitive news. And, consistent with our committed government propositions, we find that the Chinese government is committed to learn to build bureaucratic quality; and that Chinese investors are also learning to differentiate between a committed and a populist government.
JEL Classification: G12, G18, G32, G38
Keywords: policy risk, equity values, committed government, organizational learning
Click here for full paper. | | |
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| | 2007 | 2007-012 (FA) | | Seoungpil Ahn |
Using a sample of diversified firms over the period of 1980-2003, we investigate changes in the diversification discount during the two recent merger waves. The time-series patterns of the diversification discount coincide with the merger waves. The average discount is higher when many firms diversify during the waves and it is eliminated as firms in deep discount exit. We document some evidence that is consistent with the endogeneous self-selection hypothesis in the estimation of the average excess value. Nonetheless, we find that the distribution of excess value is meaningful. Deep discounted firms are more likely to reverse their diversification within shorter time periods while the survival of diversification strategies among premium firms and moderate discount firms is unrelated to their excess values. After accounting for value effects, premium firms perform better than focused firms as well as discount firms. We interpret the results as evidence that (1) diversification is good for some firms, but it is not for other firms, and (2) excess value correctly identify these firms successful and unsuccessful in their diversification.
Click here for full paper. | | |
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| | 2007 | 2007-013 (FA) | | Michael S. H. Shih & Xuan Lin Teo |
We investigate in study the possibility that firms manipulate real expenditures to avoid missing earnings benchmarks. We hypothesize that for firms that incur large R&D expenditures, it is no more difficult to manipulate R&D expenditures to avoid missing earnings benchmarks than to manipulate accounting accruals. We argue accounting accruals are manipulated by changing the assumptions and estimates based on which earnings are calculated. Many of these changes would require the consent of the auditor. Manipulations of R&D expenditures are different. They involved no changes in assumptions or estimates, and therefore would not require the consent of the auditor.
We develop a model of normal R&D expenditures based on industry and firm-specific characteristics, from which we estimate abnormal or discretionary R&D expenditures in each firm-quarter. We then compare the mean of estimated discretionary R&D expenditures between firm-quarters in which the consensus analyst earnings forecast is met precisely or beaten narrowly and firm-quarters in which the consensus analyst earnings forecast is missed narrowly. The result is consistent with our prediction. The mean estimated discretionary R&D expenditure is lower in firm-quarters in which the consensus analyst earnings forecast is met precisely or beaten narrowly than in firm-quarters in which the consensus analyst earnings forecast is missed narrowly. | | |
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| | 2007 | 2007-014 (MO) | | Zhaoli Song, Maw-Der Foo, Marilyn A. Uy & Shuhua Sun |
The study examined the stress crossover between unemployed job seekers and their employed spouses using the diary survey method. Three models have been examined using 100 couples for 14 days: the direct crossover model, the mediating crossover model and the spurious model. Results offered support for the direct crossover and spurious models. Negative job search experience of the unemployed spouses was also found positively related to their daily stress. Using the repeated measures design, the study provided a more rigorous test of the dynamic relationship between stress levels between couples.
Click here for full paper. | | |
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| | 2007 | 2007-015 (MO) | | Zhaoli Song, Marilyn A. Uy, Shuhua Zhang & Kan Shi |
This study examined the relationship between job search and stress using the diary method. Three models were tested using 100 unemployed job seekers: a direct causal model (examining the effect of job search on stress), a reversed causal model (assessing the impact of stress on job search), and a common factor model (testing the extent to which daily financial strain accounts for the relationship between job search and stress). Results offered support for both direct and reversed models. The common factor model was not supported. Negative job search experience mediated the direct effect of job search on stress. Using a repeated measures design, the study provides important information about the dynamic relationship between job search and stress.
Click here for full paper. | | |
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| | 2007 | 2007-016 (MO) | | Zhaoli Song, Angeline Lim, Maw-Der Foo & Marilyn Ang Uy |
Social interactions play a part in an individual’s everyday life. Besides being a channel through which information and other resources flow, social interactions also evoke certain affective responses within individuals. This study contributes to social interactions research by examining the role of cognitive appraisals and relationship self-efficacy in relation to affective responses to social interactions. To examine this, we tracked the social interactions and the affective responses of 161 undergraduate students via cell phones over a period of 14 days. Results indicated that relationship self-efficacy moderates the relationship between social interactions and positive moods and cognitive appraisals (pleasant, unpleasant, controllable, and important) mediate the relationship between social interactions and mood.
(110 words)
Keywords: Affect, mood, social interactions, self-efficacy, event sampling methodology
Click here for full paper. | | |
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| | 2007 | 2007-017 (MO) | | Albert C Y Teo & Arthur K C Leong |
This study uses a network approach to examine the impact of strategic alliances on organizational performance in the airline industry. The analyses are based on alliance and performance data drawn from the whole population of international airlines over the five-year period, 1998-2002. Results indicate that when an airline’s alliance network is excessively dense, its performance may be adversely affected. Also, excessively deep and intensive alliances may have a negative impact on the partner airlines’ performance.
Keywords: strategic alliances, organizational performance, airline industry, network centrality, structural holes
Click here for full paper. | | |
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| | 2007 | 2007-018 (F) | | Wenjin Kang & Wee Yong Yeo |
We conduct a comprehensive analysis for the New York Stock Exchange (NYSE) limit order book at both the aggregate market-level and the individual stock-level based on a sample covering all the NYSE ordinary stocks. We provide detailed description of the limit order book and show that it supplies considerable liquidity beyond the best quote posted on the market. We find that at the market-level, volatility is a key factor determining the limit order book’s liquidity provision. When market volatility increases, the book becomes more disperse and the liquidity provided by the limit order book decreases. Past market movements, especially market declines, exert significant impact on the limit order book as well. Our limit order book measures possess significant explanatory and predictive power on other liquidity measures such as bid-ask spread or Amihud illiquidity. The cross-sectional analysis of the individual stock’s limit order book suggests that market volatility and returns only affect the systematic component of the liquidity it provides.
JEL Classification: G19
Keywords: Limit order, Liquidity, Market return, Volatility
Click here for full paper. | | |
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| | 2007 | 2007-019 (F) | | Wee Yong Yeo |
Limit order traders can mitigate non-execution risk by canceling limit orders with low probability of execution and resubmitting them in front of their cancelled orders in the limit order book. Conversely, they can mitigate adverse selection risk by canceling limit orders at risk and resubmitting them further behind in the limit order book. The decision of limit order traders are tracked from limit order submission to cancellation and from cancellation to resubmission. The paper also performs both static and dynamic analyses of factors affecting the risks of limit order trading. The results show that limit order traders are generally more concerned with non-execution risk than adverse selection risk, except when trading in the least active stocks. The paper also shows that nearly 40 percent of all limit orders are cancelled and nearly 70 percent of these limit orders are never resubmitted into the market. In other words, liquidity leakage through order cancellations is rarely replenished by the same traders.
JEL Classification: G19
Keywords: Limit order, Non-execution Risk, Adverse Selection Risk, Cancellation, Resubmission
Click here for full paper. | | |
| Year : 2006 (10) |
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| | 2006 | 2006-001 (DS) | | Thompson S. H. Teo, Shirish C. Srivastava & M. S. Annapoornima |
In this research we study the website content features of top 100 US firms belonging to three industries: banks, business schools and IT companies. Business schools (education) are characterized by ambiguous performance measures whereas banks have long established and clear performance metrics. IT companies represent an industry with dynamic performance measures. The choice of these three industries covers the entire spectrum of industry performance metrics. We analyze the data recorded from 243 websites: 91 IT companies, 67 business schools and 85 banks on the 22 features classified into information and interactive content. Our results show that there is considerable homogeneity in the website structure, features and functionality within each of the industries studied. Inter-industry comparisons of the website features point out significant differences in websites across the three industries. These results posit the emergence of industry specific ‘website norms’. These industry standards or ‘website norms’ vary significantly across the different industries pointing the fact that the ‘industry specific business logic’ is the driving force for the design of websites. Study also shows that bank websites are the most advanced in terms of utilization of website features. The detailed analysis and data for the top US firms for the three industries spells out the website standards for IT companies, business schools and banks in US, which can be fruitfully utilized by organizations in improving their website design.
Keywords: website, content analysis, business school, bank, computer | | |
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| | 2006 | 2006-002 (DS) | | Thompson S. H. Teo & Bing Men |
Research on Knowledge Management (KM), although still in its early stage, has made some progress. This study provides a state-of-the-art overview of research on KM, synthesizes some of the KM frameworks by proposing a classification framework for KM research, and provides insights as to the subfields within KM where research is lacking.
Keywords: Knowledge; Knowledge management; Review | | |
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| | 2006 | 2006-003 (DS) | | Ruey-Lin Hsiao, Se-Hwa Wu & Sheng-Tsung Hou |
The paper examines how individuals make sense of technology and the extent to which they make use of it, an issue known as technology sensemaking. Particularly, this study explores the occasion for technology sensemaking enacted from situated practices, which results in multiple modes of technology appropriation. It is anchored in a field study of the taxi driver’s use of CabLink, which is a GPS (Global Positioning Systems) enabled vehicle dispatching system, implemented by Comfort Taxi Transportation in Singapore. The interpretative analysis of practices situated in different user communities provides an alternative method to investigate how local meanings are ascribed to a familiar technology in the post-adoption period, and assess the possible outcomes of technology use. The findings enhance the theory of technology sensemaking, and suggest practical implications for post technology adoption and global technology transfer.
Keywords: interpretative, technology sensemaking, situated practices, Global Positioning Systems, Comfort Taxi Transportation, CabLink, post technology adoption | | |
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| | 2006 | 2006-004 (BP) | | Partha Chatterjee & Malik Shukayev |
The empirical relationship between the average growth rate and volatility of growth rates, both over time and across countries, has important policy implications, which depend critically on the sign of the relationship. Following Ramey and Ramey (1995) a wide consensus has been building that, in the post WWII data, the correlation is negative. We replicate their result and then find that it is not robust to either the definition of growth rate or the composition of the sample. We show that the use of log difference as growth rates, as in Ramey and Ramey, creates a strong bias towards finding a negative relationship. Further, we exhaustively investigate this relationship for various definitions of growth rates, several datasets, across time, across countries, within groups of countries, and within US. We use different methods and control variables for this inquiry. Our analysis suggests that there is no significant relationship between the two variables in question.
JEL Codes: E32, O40.
Keywords: Volatility; Growth; Fluctuations | | |
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| | 2006 | 2006-005 (DS) | | Jihong Ou, Heng-Qing Ye & Weiyi Ning |
This paper considers an assembly system in which components are produced to stock but the final assembly of the product is made to order. Different components are produced on separate dedicated facilities. The production process for each component is modelled as an exponential make-to-stock queue and the assembly process is assumed instantaneous. Demand arrivals are modelled by a Poisson process. At each demand arrival, if all components have inventory in stock, a unit of the product is assembled to satisfy the demand; otherwise the demand is backordered which accrues penalty cost until it is satisfied. On the other hand components in inventory carry holding costs. The problem is to control the component production, based on the inventory levels of all the components in the system, to minimize the discounted total cost. We prove that the optimal control policy is dynamic in that each component should be produced up to an inventory level dependent on the inventory levels of the other components. Furthermore we show that this level is upper bounded so that production of each component is halted when its inventory reaches an absolutely high level independent of the inventory levels of the other components. We also report numerical examples and in particular observe that even the best static base stock policy can perform infinitely worse than the optimal dynamic policy.
Keywords: Assembly System, Make-to-Stock Queues, Make-to-Order Assembly, Dynamic Optimal Control, Base Stock Policy
Click here for full paper. | | |
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| | 2006 | 2006-006 (MO) | | Ghee Soon Lim |
The present study examined the relationship between group characteristics and group-level organizational citizenship behavior (OCB) and whether group OCB norms played a mediating role in the relationship. We hypothesized that five group characteristics (i.e., task interdependence, goals difficulty, task cohesiveness, social cohesiveness, and communal relationships orientation) would influence group members’ perceptions of helping and initiative norms, which in turn would shape group-level helping and initiative behavior, respectively. We used the structural equation modeling technique to analyze data obtained from 224 work groups in the retail industry and found some support for the mediating roles of group helping and initiative norms, regardless of whether supervisory or members’ ratings were used to operationalize the norms. Implications for practitioners and future research were discussed.
Keywords: Organizational citizenship behavior; group characteristics; group norms. | | |
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| | 2006 | 2006-007 (MO) | | Ghee Soon Lim |
Human resource (HR) practitioners are faced with managing work groups on a daily basis. Understanding how work group culture, such as group norms, emerges thus is of paramount importance to HR practitioners looking for ways to enhance their organizations’ human capital. In the present study, we investigated how five group characteristics impacted on individual perceptions of group norms. Four multi-level sources of influence were identified to simultaneously explain how the group characteristics (i.e., task interdependence, difficulty of group goals, task cohesiveness, social cohesiveness, and communal relationships orientation) might be related to individual-perceived organizational citizenship behavior (OCB) norms. Hierarchical linear modeling (HLM) results based on 747 employees in 224 work groups in the retail sector provided support for three of the four sources. Contradicting popular beliefs, the group-level measures of goals difficulty and task cohesiveness had a negative direct impact on individual-perceived descriptive helping norms. Similarly, the group-level measure of communal relationships orientation had a negative direct impact on individual-perceived descriptive initiative norms. These counterintuitive findings and implications for future research were discussed.
Keywords: Group descriptive OCB norms; multi-level effects; task interdependence; group goals difficulty; task cohesiveness; social cohesiveness; communal relationships orientation. | | |
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| | 2006 | 2006-008 (MO) | | Ghee Soon Lim |
A conceptual distinction was made between individual-perceived and aggregate organizational citizenship behavior (OCB) norms within a group: The former reflects an individual’s internalized perceptions of the group’s OCB norms whereas the latter is a collective measure that may be indicative of situational dynamics shaping overt group OCB. We thus argued that individual-perceived and aggregate OCB norms are distinct sources of influence on an individual’s behavioral choice in a group context. Hierarchical linear modeling (HLM) results based on 747 respondents from 224 small independent retail firms showed that group aggregate helping and initiative norms impacted positively on group helping and initiative behavior, which in turn positively influenced individual helping and initiative behavior, respectively. Group aggregate helping and initiative norms also had a significantly positive direct effect on individual helping and initiative behavior, respectively. Contradicting popular beliefs, individual-perceived helping and initiative norms had a significantly negative effect on individual helping and initiative behavior, respectively. Additionally, the empirical results supported the positive moderating effect of self-monitoring on the link between individual-perceived helping norms and individual helping behavior, but not on the link between individual-perceived initiative norms and individual initiative behavior. Implications for future research were discussed.
Keywords: Aggregate OCB; Organizational citizenship behavior; group norms; individual-perceived norms; self-monitoring. | | |
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| | 2006 | 2006-009 (FA) | | Meijun Qian |
Investors in an open-end mutual fund can vote with their feet by withdrawing assets from or adding assets to the fund. This paper examines the effectiveness of this market monitoring mechanism in relation to the trading scandals erupted in 2003. With a sample of 92 fund families and 10220 funds*classes I find that the probability of being indicted is higher for younger funds, funds whose boards are excessively paid, and funds whose money flow is insensitive to past returns. In funds with higher flow sensitivity, there are less stale pricing and less abnormal flows, implying less opportunistic trading. These findings suggest that investors’ ability to withdraw from or add assets to funds is an effective fund governance mechanism.
JEL classifications: G23, G28.
Keywords: Flow sensitivity, market monitoring, board of directors, trading practice.
Click here for full paper. | | |
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| | 2006 | 2006-010 (BP) | | Nitin Pangarkar, Dietmar W Hutmacher & Avinav Nigam |
After operating for several months under bankruptcy protection, Advanced Tissues Sciences (ATS) was liquidated on 31st March 2003. The company’s bankruptcy and liquidation seemed surprising to many observers in view of its success on several fronts including raising capital (more than $300 mil over a period of 15 years); inventiveness (more than 40 patents); the importance of the technologies it was trying to develop (treatment of burn victims) and ability to attract high profile partners (such as Smith and Nephew and Medtronic). Observers and analysts were left wondering whether the company was a victim of circumstances (delays in product approval due to factors beyond its control) or its own management ineptitude? Had it spread itself too thin by trying to address diverse sectors such as beauty and medical products? Had the numerous joint ventures formed by it sapped management attention and consumed precious financial resources, ultimately leading to bankruptcy? Regardless of the exact causes, it was clear that the events held important lessons for other business executives, especially of high-tech startup companies.
Click here for full paper. | | |
| Year : 2005 (30) |
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| | 2005 | 2005-001 (DS) | | Pek-Hooi Soh & Jane W. Lu |
Integrating institutional and social network perspectives, this study examines the dual forces of institutional influences and network influences on the new market entry decisions of venture capital firms. In a sample of 2,130 venture capital firms and their investments over 1994-2003 in 88 geographic markets, we found support for both influences as the frequencies of entries by both other venture capital firms and co-investors in a geographic market enhance the propensity of focal firm's entry into the same market. Further, firms central in co-investment networks are more likely to enter into new geographic markets. Finally, the centrality of a firm in its co-investment networks weakens institutional influences. These findings show the importance of legitimating signals arising from alternate sources in the institutional environment and how they interact and affect a firm's diversification into new markets.
Click here for full paper. | | |
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| | 2005 | 2005-002 (DS) | | Ruey-Lin Hsiao & Thompson S.H. Teo |
Electronic sourcing (e-sourcing) has been increasingly adopted by companies to reduce procurement costs, compress negotiation cycle times, and enhance access to global supply markets. However, there remains insufficient understanding of why adopters need e-sourcing, what key barriers confront adopters, and whether e-sourcing is aligned with adopters’ existing practices. This study aims to fill this gap. Based on a field study of 24 firms with business operations in Asia, we analyze the issues and challenges of e-sourcing adoption. Our results indicate six major reasons for e-sourcing adoption: to improve operational efficiency; to reduce costs; to comply with company policy; to enhance corporate governance; to manage the supplier base; and to transfer knowledge from market makers. The key concerns of buyers are setup investment costs, organizational inertia, and incompatible corporate policy; while the key concerns of suppliers include fear of competitive bidding, poor public infrastructure, and restrictive government regulations. Both buyers and suppliers emphasize the importance of competence-based trust and integrity-based trust in facilitating the adoption of a third party market maker for e-sourcing activities. The findings also highlight the importance of considering the business context, purchasing content, and sourcing practices when adopting e-sourcing methods. Our aim is to help IS executives, procurement managers, suppliers and market makers to understand better the reasons for e-sourcing adoption, the sources of e-sourcing barriers, and the importance of context in aligning e-sourcing with business needs. They will then be in a better position to mitigate risks and work together to achieve mutual benefits. | | |
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| | 2005 | 2005-003 (MO) | | Ghee S. Lim & Ann Marie Ryan |
Interviewer susceptibility to applicant impression management (IM) tactics is elaborated. Four of the 5 defensive tactics (i.e., excuses, justifications, disclaimers, and self-handicapping) and 2 of the 8 assertive tactics (i.e., entitlement and enhancement) work on the basis of causal attributions and their effects are contingent on the interviewer's locus of control. The remaining defensive tactic (i.e., apologies) and 6 assertive tactics (i.e., ingratiation, intimidation, supplication, blasting, basking, and exemplification) work through a wide variety of other psychological processes, including forgiving, need fulfillment, fear and uncertainty, social virtue of helping, contrast effects, categorical information processing, and moral reasoning. In addition to locus of control, interviewer susceptibility to IM tactics is expected to vary as a function of interviewer willingness to forgive, need for affection and esteem, emotional stability and uncertainty coping, empathy and concern for others, stimulus screening, and cognitive moral development. Implications for research and practice are discussed. | | |
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| | 2005 | 2005-004 (MO) | | Ghee S. Lim & Ann Marie Ryan |
The present path-finding work draws upon cross-cultural and social cognition research to predict interviewer judgmental biases that may arise from interviewer-applicant differences in cultural values. Contrary to expectations, culture-induced interviewer judgmental biases are not unidirectional (i.e., they can be positive or negative) and a number of commonly found individual and situational factors may influence the direction of such biases. No one single culture or cultural value is superior to another and the stronger the interviewer's cultural ethnocentrism, the more likely that interviewer will commit interview judgmental biases. Implications for research and practice are discussed. | | |
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| | 2005 | 2005-005 (MO) | | Ghee S. Lim |
The compositional dynamics of the panel employment interview are elaborated in specific construct terms. Numerous process losses (e.g., conflict, loafing, conformity) may arise when interviewers on an interview panel coalesce and segregate among themselves. Testable propositions revolving around the emergence of interviewer coalescence/segregation and the resultant process losses are formulated to balance the current emphasis on the positive, synergistic effects of using multiple interviewers simultaneously. We conclude that counter-productive forces emanating from within the panel may offset the synergistic effects it can generate. Implications for research and practice are discussed.
Keywords: Compositional dynamics; Group interview; Employment interview; Process loss; Selection validity | | |
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| | 2005 | 2005-006 (MO) | | Ghee S. Lim & Ann Marie Ryan |
A dynamic job applicant evaluation model that can be generalized across all employment interviews is proposed. First, a distinction is made between two levels of applicant evaluation, namely, (1) the measurement of the applicant's qualifications/characteristics by the interviewer (first-order evaluation); and (2) the evaluation of the applicant on nine generic evaluation dimensions by the interviewer (second-order evaluation). Next, a detailed specification of the nature of the second-order evaluation dimensions is presented. We compare and contrast these dimensions and forward testable propositions on their relationships with the first-order applicant qualifications/characteristics and the ensuing suitability conclusion and selection decision. The proposed model includes feedback loops that highlight the dynamic and on-going cognitive activities of the interviewer. Implications for researchers and managers are discussed. | | |
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| | 2005 | 2005-007 (MO) | | Ghee S. Lim & Ann Marie Ryan |
The present paper provides an alternative conceptualization of the psychological effects of the structured employment interview on the interviewer. Our analyses reveal that structured interviewing has more far-reaching consequences for the interviewer than is generally believed. We find that specific components of structured interviewing will directly alter the levels of interviewer self-efficacy, interview face validity, cognitive demand and stress, needs fulfillment (need for cognition/control and cognitive curiosity), task intrinsic motivation, and goal orientation (performance vis-à-vis learning). Components of structured interviewing will indirectly alter the level of interviewer satisfaction with the interview. These direct and indirect effects in turn will impact on the interviewer's performance via altering interviewer task effort and persistence levels. In addition, several individual factors (i.e., stress resilience, job knowledge, need for cognition/control and cognitive curiosity, and growth need strength) are found to moderate the causal linkages between components of structured interviewing and several of the psychological effects. These findings are useful for specifying the boundary conditions of effective structured interviewing. Implications for research and practice are discussed. | | |
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| | 2005 | 2005-008 (MO) | | Ronald Rodgers & Min Deng |
Survey data from 394 Chinese employees and their supervisors were analyzed using structural equation modeling to evaluate the role of trust in supervisor and dispositional trust in social exchange processes. Hypotheses (derived from the norm of reciprocity) that employees’ perceptions of organizational inducements will be directly related to employees’ understanding of their own performance obligations [task and contextual performance] and their intent to leave were not supported, but the hypothesized relationship between employees’ expectations regarding organizational inducements and their recognized performance obligations was supported; as was the hypothesized relationship between perceived inducements and trust in supervisor. Trust in supervisor was found to be moderately related to recognized performance obligations, and strongly related (negatively) to intent to leave. The most intriguing findings relate to the role of dispositional trust. Strong direct relationships were found between dispositional trust and employees’ recognized performance obligations and intent to leave; and dispositional trust was also found to have indirect relationships with recognized performance obligations by way of perceived inducements, expected inducements and trust in supervisor. These findings are interpreted to suggest that uncertainty and ambiguity may undermine social exchange in Chinese organizations unless dispositional trust and dyadic trust (trust in supervisor) are high.
Keywords: social exchange, reciprocity, trust in supervisor, and dispositional trust
Click here for full paper. | | |
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| | 2005 | 2005-009 (DS) | | H. Brian Hwarng |
This paper presents a neural-network based methodology for monitoring process shift in the presence of autocorrelation. The comparative study on AR(1) processes shows that the performance of this neural-network based monitoring scheme is superior to that of SCC, X, EWMA, EWMAST, and ARMAST control charts in most instances investigated. | | |
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| | 2005 | 2005-010 (DS) | | H. Brian Hwarng |
A neural-network based identification system for both mean shift and correlation parameter change is presented. The identifier is trained to detect mean shift and to recognize the presence of autocorrelation. When properly trained, the identifier is capable of simultaneously indicating whether the process change is due to mean shift, correlation change, or both. The result is significant since it provides additional specific information about the process change. Therefore, the result narrows down the scope of the assignable causes and speeds up the troubleshooting process. | | |
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| | 2005 | 2005-011 (DS) | | H. Brian Hwarng |
To identify the source of process shifts under a multivariate setting is a challenging problem. Though some statistical techniques have been proposed, they are limited or restricted in the level of success and ease of use. In this paper, we propose training neural networks to identify the variable(s) which contribute(s) to shifts in a correlated bivariate process. Various network configurations and training strategies were investigated to develop an effective network. The preliminary results show that neural networks have great potential to be quite effective in identifying the true source of shifts in a multivariate environment.
Keywords: Multivariate SPC, bivariate, neural networks, control charts, Hotelling T2 chart
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| | 2005 | 2005-012 (FA) | | Ho Yew-Kee |
This study has four objectives. First, it aims to determine the direction of the bias in earnings forecast (if any) in the Japanese market. Secondly, this study explores different methods of arriving at a representative consensus earnings forecast and tests the relative superiority of one consensus earnings forecast over another. Thirdly, this will be the first paper to examine the possibilities of discontinuities of earnings forecast accuracy and dispersion over time. Finally, this study draws on the numerous studies in the U.S. to identify the different firms’ specific characteristics that may explain the accuracy of earnings forecasts.
The findings of this study for the earnings forecast characteristics of Japanese firms show that the generally accepted consensus forecasts published by I/B/E/S may not be superior to the median earnings forecast for a 90-day period prior to the announcement of the actual earnings and the last available earnings forecast. This reflects the convergent properties of earnings forecast over time. The results of this study are also consistent with those found in the U.S. that analysts are generally optimistic and more so for firms that actually report negative earnings. Finally, the firms’ specific characteristics that are related to forecast errors are very different for firms that report positive earnings from those that report negative earnings. | | |
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| | 2005 | 2005-013 (FA) | | Yew-Kee Ho, Ying-Chen Guo, Y.T. Mak & John M. Sequeira |
In this study, we find a uniquely different pattern of behavior in the predictive ability of the market multiples in Japan as compared to the U.S. The value-to-price ratio VPL is found to outperform VPT in Japan; a result that while consistent with traditional finance theory is, however, contrary to the findings in the U.S. While our findings may suggest myopia in the US, it nevertheless, provides sufficient evidence to reject the proposition that the Japanese stock market is myopic. Interestingly, we also find that the market multiples exhibit differences in predictive ability between two distinct time periods which correspond to changes in the disclosure regime. While VPT was found to have no significant predictive power over the full sample period, VPL however exhibited significant predictive power for middle-term returns in the later sub-period. The predictive ability of D/P changes from long-term returns to medium-term returns in the later sub-period; for E/P, this prevails for both short- and long-term returns in the earlier sub-period, but only holds for short- to medium-term in the later sub-period. For B/M, the predictive ability remains stable between the two sub-periods.
JEL Classification: C31; C32; G14; G15
Keywords: EBO model; time-series analysis; predictability; market multiples | | |
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| | 2005 | 2005-014 (MO) | | Ho-Beng Chia, Dishan Kamdar, Glenn J. Nosworthy & Yue-Wah Chay |
This study investigated the role of self-interest as a moderator of the relationship between individuals’ willingness to engage in Organizational Citizenship Behavior (OCB) and several dispositional variables. These dispositional variables included personality constructs (Agreeableness and Conscientiousness), peer-rated OCB, and self-reported motives for OCB (Prosocial Values, Organizational Concern, and Impression Management). A sample of 310 oil refinery employees completed scales measuring the predictor variables and then responded to a series of vignettes that contained the between-subjects experimental manipulation. The vignettes depicted work situations in which there were either inducements or no inducements to engage in OCB. The results showed highly significant interactions between inducements and personality constructs as well as inducements and motives in predicting willingness to engage in OCB. In general, personality and prosocial values did not predict willingness to engage in OCB when there were no inducements, but they were significant predictors when inducements were offered. In contrast, participants who scored high on impression management were more likely to engage in OCB when no inducements were offered than when there were inducements. These results demonstrate the importance of situational factors in OCB as well as the value of using policy capturing methodology in OCB research. The findings are interpreted in terms of the differing interests individuals may have in OCB-relevant situations and how these interests may interact with specific features of the situation.
Keywords: Organizational Citizenship Behavior; Self-interest; OCB Motives | | |
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| | 2005 | 2005-015 (MO) | | Ho-Beng Chia, Dishan Kamdar, Glenn J. Nosworthy & Yue-Wah Chay |
This experiment found that recognition of knowledge-sharing in an appraisal system had strong effects on employees’ willingness to share knowledge with co-workers and friends. However, these effects were moderated by dispositional factors. Machiavellians responded instrumentally, whereas impression managers’ responses were consistent with a desire to maintain a public image. | | |
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| | 2005 | 2005-016 (MO) | | Ho-Beng Chia, Dishan Kamdar, Glenn J. Nosworthy & Yue-Wah Chay |
This experiment examined the effects of performance appraisal, bonuses and strong ties on the sharing of knowledge among employees. 295 oil refinery employees responded to three vignettes that described opportunities to share information with co-workers that would result in greater productivity. In addition, the employees were given different information about the company’s bonus structure (no bonus, individual based or team based) and appraisal system (knowledge sharing was formally recognized or not). Results of this study support the use of appraisals in conjunction with developing close ties as an effective strategy or a substitute to performance bonuses to enhance knowledge sharing. | | |
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| | 2005 | 2005-017 (MO) | | Ho-Beng Chia, Glenn J. Nosworthy, Dishan Kamdar & Yue-Wah Chay |
We approached the issue of motivating knowledge sharing, an activity of knowledge management, as a form of organizational citizenship behavior (OCB). Using a vignette-based experiment, we found that the presence of incentives was highly effective at increasing employees’ willingness to share work-related knowledge; and that intangible recognition-based incentives were, overall, as effective as tangible pay-based incentives. However, for employees who were high self-monitors, recognition-based incentives were the more effective of the two. Willingness to share knowledge also varied according to who the recipient would be. In the absence of incentives, willingness to share increased with closeness of ties, but this effect was absent in the presence of incentives. These findings highlight the importance of considering motivation and rewards issues when implementing knowledge management systems and in encouraging OCB. | | |
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| | 2005 | 2005-018 (MO) | | Ho-Beng Chia, Glenn J. Nosworthy, Yue-Wah Chay, Siok-Khoong Teo & Winston Sire-Wee Seow |
Two studies investigated the impact of learning and performance goal orientations using a complex investment management task. Study 1 focused on individuals’ willingness to assume risk, the returns obtained, and the returns-to-risk efficiency attained. At the extremely difficult level of three goal levels, individuals high in either learning or performance goal orientation assumed higher risk and achieved higher returns. However, performance goal orientation was negatively associated with return-to-risk efficiency. In Study 2, goal difficulty was kept at the “extremely difficult” level while task complexity was increased over three stages. Participants were given the option to undertake more practice, proceed to more challenging stages, or to quit. Learning orientation was positively associated with taking more practice trials and progressing to more complex stages. Performance goal orientation, however, was not related to these outcomes. | | |
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| | 2005 | 2005-019 (MO) | | Ho-Beng Chia & Kah-Hui Ho |
This study helps us understand how and why goal orientation affects task outcomes. On a unfamiliar, complex, and difficult portfolio management task where participants had the option of performing more trials at the same level, move on to a more complex level, or quit the task. We found that learning goal orientation was positively related to perceived challenge and negatively related to perceived threat, while performance goal orientation was positively related to both. Traditional measures of returns, risk and returns-to-risk efficiency yielded no results. In contrast, with process measures, perceived challenge and perceived threat mediated the relationship between learning goal orientation and persistence; and also the relationships between learning goal and performance goal orientations, and the acceptance of challenge. | | |
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| | 2005 | 2005-20 (MO) | | Ho-Beng Chia & Ruolian Fang |
In the recent works that examined the social influence process in organizational justice perceptions, it is still vague regarding the characteristics of the social ties between employees in the social comparison and social information transmission. Using the social network perspective, we explore how expressive ties (i.e., friendship and social support) and instrumental ties (i.e., work-based relationship) influence employees’ use of different standards of justice (i.e., equity, equality and need) in the distributive justice situation, and their information seeking and provision in the procedural and interactional justice situation. We predicted and found that these two social ties played a unique role in the social comparison and social information transmission. In general, the predictions about expressive ties were supported, whereas not all predictions about instrumental ties were supported. Our findings suggest that understanding the role of the social ties in the social comparison and social information transmission is an essential step to better understand the social influence process in the justice perceptions. | | |
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| | 2005 | 2005-21 (MO) | | Ho-Beng Chia, Maw-Der Foo & Ruolian Fang |
This study examines individuals in a community as defined by their membership in an organization. In such a setting, individuals often make use of their social contacts to make sense of events in the organization. Yet, the organizational justice literature is mostly silent on how these contacts shape information seeking, volunteering, and acceptance. Using a social network perspective, we found that expressive ties were positively related to information seeking, volunteering, and acceptance for both procedural and interactional justice issues. Instrumental ties were related to all dependent variables for procedural justice issues but only related to information seeking for interactional justice issues. The role of ties and networks in information flow is discussed.
Keywords: social networks, procedural and interactional justice, information seeking, volunteering and acceptance | | |
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| | 2005 | 2005-22 (MO) | | Ho-Beng Chia, Yue-Wah Chay & Lai Yen Yen |
We examined the impact of recruitment-selection information on job applicant’s perception of the attractiveness of the organization as a prospective employer. We randomly assigned 272 participants to one of four treatment conditions. The treatment factors were validity and difficulty of the selection test, each with 2 levels. We found that both perceived validity and perceived difficulty were positively related to organizational attractiveness. Perceived procedural and perceived distributive justice partially mediated the relationship between perceived validity and organizational attractiveness. We specifically used an experimental design to delineate the causal relationships among the variables. | | |
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| | 2005 | RPS #2005-23 (MO) | | Ho-Beng Chia, Yue-Wah Chay & Adrian Ng Chuin-Li |
We examined whether perceptions of distributive and procedural justice mediate the relationship between recruitment-selection information and participants’ attraction to an organization as a prospective employer. We randomly assigned 280 participants to one of four treatment conditions. The treatment factors were validity of the selection tests and selectiveness of the hiring policy, each with 2 levels. We found that both perceived validity and perceived selectivity were positively related to organizational attractiveness, and that perceived distributive and procedural justice mediated recruitment-selection information and the organizational attractiveness relationship. | | |
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| | 2005 | 2005-24 (MO) | | Pei-Chuan Wu |
This study examines the relationships between high performance work systems (HPWS) and firm performance using the universal and contingency perspectives. Specifically, it focuses on the moderating effects of HRM values, innovation strategy, and cultural distance on HPWS and firm performance. The findings from a sample of 552 firms from three regions (Hong Kong, Singapore, and Taiwan) indicate partial support for both the universal and contingency approaches. All three moderators have a significant impact on the link between HPWS and perceived performance. On the other hand, country of origin is an important moderator for turnover rate and mobility rate. | | |
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| | 2005 | 2005-25 (MO) | | Maw Der Foo, Angeline Lim & Young Rok Choi |
Drawing from Heilman’s lack of fit model and Stone and Colella’s model of factors affecting the treatment of disabled individuals in organizations, we develop a theoretical model to explain discrimination against open homosexuals in the interview process, and proceed to examine the effects of applicant, job and interviewer characteristics on the interviewer’s decision to hire these applicants. Two focus groups and a survey of hiring personnel were conducted. Survey results using ratings of the likelihood to hire the open homosexual applicant provided some support for the model we developed. Implications for future research in homosexual discrimination, methodology to study sensitive issues such as homosexual discrimination and workplace implications are discussed. | | |
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| | 2005 | 2005-26 (FA) | | Srinivasan Sankaraguruswamy, Wen He & G. Mujtaba Mian |
We document that large and small investors, classified by the size of their trades, respond differently to changes in analysts’ stock recommendations. Large investors follow the advice of only star analysts, and buy (sell) the stocks that such analysts upgrade (downgrade). In contrast, small investors not only are less discriminating between star and non-star analysts, but also buy both the upgraded and the downgraded stocks. The buying activity of small investors on downgrades suggests that they disregard the negative information content of analyst downgrades. We find this to be true even when the downgrade is to a “hold” or a “sell” rating suggesting that this behavior is not driven by the level of the recommendation. Further analyses point towards the bullish market sentiment of the Internet period and short-sale constraints as important determinants of the puzzling response of small investors to downgrades.
JEL Classification: D14, D21, G24
Keywords: Stock Recommendations, Trading, Large investors, Small investors | | |
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| | 2005 | 2005-27 (FA) | | Swee-Sum Lam & Bey-Fen Chng |
Consistent with predictions of agency theory, we find direct evidence that executive stock option grants have value implications for firm performance. This inference is drawn from evaluation of various motivations for the use of such grants in executive compensation: value enhancement, risk taking, tax benefit, signaling and cash conservation. We find consistent evidence for the value enhancement motivation to reduce agency costs. As well, they signal for positive price sensitive information. Our results reject the tax benefit and cash conservation motivations. This finding is robust after controlling for the endogenous character of executive stock option grants and other equity-based grants.
JEL Classification: G32, J33, M52
Keywords: executive stock option grants, compensation, agency theory, firm performance, endogeneity | | |
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| | 2005 | 2005-28 (FA) | | Swee-Sum Lam & Yew-Kee Ho |
This is an exploratory study on the characteristics and performance of firms that choose to grant executive stock options as a strategic compensation practice. According to the push theory of employee ownership, stock options are granted to push employees to create superior financial performance. We find that firms that grant executive stock options offer persistent abnormal firm performance. Firms that grant stock options in lieu of cash compensation do not perform differently in the long run from those that grant stock options as incentives. This finding is consistent with the proposition that the motivation for the use of executive stock options is endogenously determined for any firm given its investment opportunities and technology, risk characteristics and growth options.
JEL Classification: M52, J33, J38
Keywords: agency costs, management contracting, executive stock options, firm characteristics, cash compensation, incentives | | |
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| | 2005 | 2005-29 (FA) | | Swee-Sum Lam & William Wee-Lian Ang |
With increasing globalization, to what extent do stock market returns reflect global or domestic risk factors? We find a significant relationship between stock market returns and the global market risk factor and macroeconomic factors respectively. In particular, global factors offer four times more explanatory power than domestic factors for developed market stock returns. Yet domestic factors are as important as global ones in emerging economies. Our method allows for the proxies of the state variables to be endogenously determined. The relationship between macroeconomy and stock market returns is robust after accounting for the market factor, firm size and book-to-market characteristics.
JEL Classification: E44, G12
Keywords: Globalization, macroeconomic risk factors, global risk factors, domestic risk factors | | |
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| | 2005 | 2005-30 (FA) | | Swee-Sum Lam, Ruth Tan Seow-Kuan & Glenn Wee Tsao-Min |
Policy risk, and not information asymmetry, explains the cross-sectional underpricing of privatized initial public offerings. The issuer governments of high policy-risk issues tend to retain a large equity stake and underprice more, with underpricing increasing in retained equity. While the issuer government’s retained equity is an observable signal for policy risk, we find that the quality of a country’s bureaucratic machinery is a more intuitive and practical measure of policy risk. Policy risk also explains the absence of a systematic relation between the initial returns on privatized and private initial public offerings.
JEL Classification: G12; G18; G24; G28; G32; G38
Keywords: privatization, initial public offerings, underpricing, policy risk, endogeneity. | | |
| Year : 2004 (8) |
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| | 2004 | 2004-001 (MKTG) | | Ah Keng Kau & Kwon Jung |
Culture is a powerful force in regulating human behavior. Although many researchers have sought to understand the influence of culture on consumer behavior, most of their attempts were made in a piecemeal basis (i.e. examining effects of certain aspect of culture on a specific aspect of consumer behavior). Relatively little attempt has been made to develop a general framework of cultural influence on consumer behavior that examines effects of various aspects of culture on various aspects of consumer behaviors at the same time.
In this study, conceptual relationships pertaining to cultural effects on consumer behavior are explored based on Hofstede’s (1980) four dimensions of cultural differences. Various aspects of consumer behaviors are identified and linked to each of the four cultural dimensions, and then propositions which relate the cultural dimensions to the consumer behaviors are developed based on the reviews of their relationships.
Click here for full paper. | | |
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| | 2004 | 2004-002 (FA) | | Renbao Chen, Kie Ann Wong & Fei Li |
This study attempts to study historical development of life insurance industry in China. Trend analysis revealed that the China life insurance industry experienced a period of super-high growth during 1982―1986. The sales growth in terms of premium goes up by more than 100 percent annually. From 1987 till now, China insurance industry experienced a high-speed growth with double-digit growth rate.
In this study we document the historical and legal development of insurance industry in China. We also present the current situation of China insurance market from various respects: growth of China insurance market, market structure, transformation of sales method, the reform of supervisory control, and recent reforms to further open insurance market. Then we make an international comparison in US, Japan, UK and China regarding of insurance laws. We also investigate the macro-economic and demographic determinants on the quantity demand of life insurance using time series data in China. | | |
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| | 2004 | 2004-003 (FA) | | Renbao Chen, Kie Ann Wong & Hui Ping Yu |
Owing to little research has been conducted on the impact of the Asian Financial Crisis on insurance companies in Asia, this paper examines the magnitude to which the Asian Financial Crisis has affected the performance of insurance companies in Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand. First, trend analyses on stock market performance of life insurers and general insurers reveal that the market performance of insurance industry generally mirrors the sentiment of the overall business environment. In addition, insurers’ market performance is largely correlated with the movement of the relevant country’s exchange rate. Consistent with the impact of the Crisis on each country’s overall economy, we find that Hong Kong, Japan and Taiwan insurers are more resilient to the Crisis, Korea and Indonesia insurers exhibit more jittery market performance, but Thailand and Malaysia insurers are most severely affected by the Crisis. However, due to the contagion effect, Singapore insurers are also affected even though it has sound economic fundamentals. Second, the regression results for all countries combined show that the market value, liquidity and return on equity of Asian insurers are more severely affected by the Crisis as compared to their investment and underwriting returns. However, the Crisis does not have a significant impact on their net premiums written, which may be largely attributed to premiums being fixed on a contractual basis for a certain period of time. Furthermore, life insurers are generally more adversely affected by the Crisis than general insurers in terms of their market value and return on equity. Third, the by-country regression results are also consistent with the above conclusions.
In view of the deterioration in several performance measures of Asian insurers due to the Asian Financial Crisis, regulators should take on a more proactive supervisory role in monitoring the solvency position of Asian insurers, especially life insurers. In particular, regulations on liquidity, investment and asset-liability management of insurers should be of paramount importance. | | |
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| | 2004 | 2004-004 (MO) | | Pei-Chuan Wu |
This research investigates whether a high performance work system (HPWS) is directly related to work-related outcomes such as job satisfaction, affective commitment, and continuance commitment. It also tests whether individualized measures of two Chinese cultural values (traditionality and modernity) moderate the relationships between HPWS and work-related outcomes. The findings extend previous research by demonstrating that (1) a high performance work system is positively linked to job satisfaction, affective commitment, and continuance commitment and (2) traditionality moderates both the HPWS – affective commitment and HPWS – continuance commitment linkages. | | |
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