Impacts of International Greenfield Investment on Firm Valuation

Our study examines the announcement effects of 343 international greenfield investments by 289 U.S. firms for their impact on shareholder wealth. This paper develops five hypotheses based on the positive‐multinational‐network hypothesis. The evidence indicates that market reactions to announcements by firms entering developing countries are more favorable than those entering developed countries. In addition, the results show that the wealth effect for firms entering a host country for the first time is greater than for those that are already operating within the country. As for the long run, greenfield firms have shown improvement in their operating performance and stock performance. Copyright © 2012 ASAC. Published by John Wiley & Sons, Ltd.     

Theory for an age of crisis: seeing money as an organizational process

The worldwide financial crisis and the need to understand the conditions leading up to it and the associated responses highlight the importance of money in organizations. Yet, money is undertheorized in management theory and considered uninteresting or “inert” (Mitchel & Mickel, 1999 ). In contrast, related social sciences and organizational practices provide rich insights into the socially contingent and expressive qualities of money. This paper proposes a new multidimensional framework for analyzing money as a social construct and suggests how it can be used to theorize and research the collapse of financial markets and the Great Recession. Copyright © 2011 ASAC. Published by John Wiley & Sons, Ltd.     

The Role of Firms in Resilient Systems: A Multi‐Level Framework

In this paper, we articulate a multi‐level resilience‐based framework explaining how firms facilitate stronger system‐level resilience. The framework stresses the importance of firm interdependence, describing how pooled versus sequential/reciprocal patterns of interdependence influence the resilience antecedents of diversity, slack, and redundancy. We argue that the inter‐firm practices of self‐governance and supply chain collaboration function to maintain resilience antecedents at more moderate and effective levels. This work builds on prior resilience research that has remained focused on either firm or system levels of analysis by stressing the value of firm interdependence as an important contingency for effective system resilience. Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

When do MNCs fail to learn from prior failure experience?

Do multinational corporations (MNCs) learn from their prior failures in international joint ventures (IJVs)? When does decision makers’ cognitive inability hinder MNCs from learning through their prior failure experiences? In the context of IJV survival in subsequent IJV entries, this study compares predictions made from two distinct theoretical perspectives, both of which belong to the behavioural school in strategy literature. According to the performance feedback perspective, MNCs may effectively learn from their prior failure experiences gained in familiar decision‐making contexts. On the other hand, according to the cognitive bias perspective, MNCs may not be able to effectively learn from their prior failure experiences if they inaccurately interpret the causes of their prior failures. The results provide partial support for the notion that MNC decision makers may not be able to effectively learn from their prior failures because of their cognitive biases. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Retrospective research into accidents

Abstract

In retrospective research into accidents, a victim's or spectator's account of what happened may differ from what actually occurred, as a consequence of memory processes. It seems that, due to limited time and money resources, current insights in retrospective research are not always fully employed in accident research. This paper demonstrates how existing insights into the collection of retrospective data can be incorporated in accident research, and illustrates how this actually works out in practice.

A review of the literature shows that various precautions can be taken to minimize the influences of memory processes. These precautions have been included in the development of a method of accident investigation. Accidents (n=42) were studied in a video-recorded reconstruction on the site, followed by an open interview using a checklist. The accident data have been examined with respect to indications for bias. The findings show that the demonstrations may differ from the unknown actual occurrences, for example, because people were still wearing bandages at the time of investigation on the site. Interference by video- and sound-recordings appears to be limited. Analysis of within-subject differences in repeated demonstrations of the accident shows that more than half of the subjects display differences in the three demonstrations.

The limitations and benefits of the method developed are discussed in relation to conventional methods of accident research, such as mail questionnaires and telephone interviews. The paper concludes with a plea for the inclusion of empirical analyses or at least a discussion of possible bias in findings from accident research.     

Deceiving Our Minds: A Qualitative Exploration of the Money Illusion in Post-redenomination Ghana

The current study is a qualitative exploration of the presence of the money illusion in the lived experiences of Ghanaian adult consumers after a currency redenomination. The results indicated that a switch from the old currency to the new currency had implications for self-worth determination, trivialization of price increases, changes in spending behaviour, and changes in the extent of benevolence. All these changes were related to the tendency to make judgments based on the nominal value of an amount of money, rather than its real value; the judgment bias is known as the money illusion.     

How absorptive capacity moderates the value of firm innovativeness in turbulent markets

Drawing on the complementarity perspective and contingent resource‐based theory, this study develops a moderated moderation framework to investigate how absorptive capacity moderates the value of firm innovativeness under market turbulence. The results of the survey data from 402 firms reveal that the efficacy of firm innovativeness is not universal but simultaneously contingent on absorptive capacity and market turbulence. Furthermore, absorptive capacity does not always enhance the value of firm innovativeness; the positive moderating effect of absorptive capacity manifests itself only when market turbulence is relatively high. These findings also highlight that change in customer needs is a key factor affecting the complementarity of relevant resources and capabilities. Thus, this study contributes to advances in theory and has new practical implications. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Business Forecasting of Double‐trend Time Series: An Improved PLS‐based Time‐varying Weight Combination Approach

Business forecasting with double‐trend time series (long‐term trends and seasonal volatility) has been challenging due to its complexity. Neither a single time series model nor a fixed‐weight combination approach can fully capture the comprehensive information. We address this issue by proposing an improved partial least squares (PLS) based time‐varying weight combination approach. The proposed method can handle the relations both between the single models involved and between single models and time ordering with time‐varying weights. The test on 20 simulated datasets demonstrates the better and more robust performance of the method. We also apply it to three real datasets. The results show that our approach represents a significant improvement over the existing methods in terms of data fitness and prediction accuracy. Copyright © 2017 ASAC. Published by John Wiley & Sons, Ltd.     

Synergy between R&D and advertising on shareholder value: Does firm size matter?

Using the hierarchical linear model, we examine whether R&D and advertising and their synergy influence firm value. We also investigate whether firm size moderates the market value effects of R&D, advertising, and the synergistic effect of R&D and advertising on firm value. We find that R&D and the synergy between R&D and advertising have significant positive effects on shareholder value. Moreover, we find that the effects of R&D and advertising are significantly higher in large firms than small firms, while the synergistic effect is significantly positive in small firms but not in large firms. These results offer important insight for executives on the implications of resource allocation on R&D and advertising expenditures to create firm value. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

Financial models with defaultable numéraires

Financial models are studied where each asset may potentially lose value relative to any other. Conditioning on nondevaluation, each asset can serve as proper numéraire and classical valuation rules can be formulated. It is shown when and how these local valuation rules can be aggregated to obtain global arbitrage‐free valuation formulas.     

Can Mobile Money Help Firms Mitigate the Problem of Access to Finance in Eastern sub-Saharan Africa?

ABSTRACT

Mobile money is a mobile-phone-based financial tool that can transfer money safely and quickly across a wide geographical area. Mobile money has transformed the way businesses in Eastern sub-Saharan Africa operate. Nowadays, banks team up with mobile-money-service providers and pay interest on deposits and grant loans based on financial transactions in mobile-money accounts. In this paper, these recent developments are investigated in order to determine whether the adoption of mobile money by firms can actually help them mitigate the vexing problem of access to finance. To answer this question, the World Bank’s Enterprise Surveys Program data set for the year 2013 is used, thus making the study applicable to the present time. The results obtained, after controlling for a large number of firm-level characteristics and using a newly introduced measure to identify access-to-finance status of the firms, indicate that firms which use mobile money are more likely to obtain loans or lines of credit. Further analysis shows that the firms that use mobile money are more productive than other firms in the region.     

What does employee ownership effectiveness look like? The case of a Canadian‐based firm

Drawing on agency theory, we explore how 30 employees defined ownership effectiveness in a 100 % employee‐owned Canadian‐based firm. Using a qualitative case‐study, remarkable similarities were found in the factors employees themselves believed contributed most to ownership effectiveness. Despite differences in job roles, employees emphasized confidence in the ownership program, participative decision‐making, ownership identity, and their organization as a family unit. In light of these findings, we discuss how a broader conceptualization of employee ownership effectiveness can be applied for a more comprehensive understanding of how such programs may develop and manifest. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.     

Does a money‐is‐all attitude cause alienation? A cross‐cultural comparison of Korea,the US and Sweden

Money is increasingly being attributed more value in society, although a money‐is‐all attitude decreases social relationships and increases alienation in modern, industrialized societies. This research investigated the influence of this money‐is‐all attitude on alienation based on a cross‐cultural comparison of Korea, the US and Sweden. The money‐is‐all attitude was defined as a perspective in which money is regarded as an indicator of achievement or success. Self‐administered online surveys were conducted with consumers ranging between the ages of 20 to 49 in Korea, the US and Sweden. The money‐is‐all attitude and alienation seemed to be more pervasive in Korea than in the US or Sweden. The money‐is‐all attitude was the factor with the strongest influence on alienation when controlling for socio‐demographic factors. Furthermore, participation in sports activities was an important factor in decreasing alienation levels. The findings of this research imply that materialistic ways of thinking increase alienation and that money cannot contribute to human happiness and well‐being. In addition, active participation in social activities can decrease alienation. The research results suggest that a materialistic, money‐is‐all attitude negatively influences alienation across cultures; in addition, in the US, an affluent consumption‐based country, the money‐is‐all attitude had more explanatory power for alienation than in Sweden and Korea. A change in values to overcome the money‐is‐all attitude is required and the concepts of sufficiency and mindfulness are suggested as alternative life perspectives for the pursuit of well‐being.     

Is cognitive bias really present in analyst forecasts? The role of investor sentiment

This paper analyses four key markets within the European context. In this context, where the level of analyst coverage is lower than in the US setting, we aim to ascertain whether the origin of optimism in analyst forecasts in these markets is mainly strategic or whether it also contains an element of cognitive bias. Despite the fact that forecast errors lack the explanatory power to account for a significant percentage of the relationship between market sentiment and future stock returns, our new tests based on selection bias (SB1 and SB2), in conjunction with an analysis of abnormal trading volume, confirm the presence of both cognitive bias and strategic behaviour in analyst forecasts. This shows that, although regulation can reduce analyst optimism bias, the benefits are constrained by the fact that optimism bias is partly associated with cognitive bias.     

Toward A New Model For Firm Internationalization: Conservative,Predictable, and Pacemaker Companies and Markets

Through this article we develop a new model for the internationalization of firms, called the Conservative, Predictable and Pacemaker (CPP) model, for extending research in the domain of international business. The main purpose is to provide a new typology that can be used as a theoretical lens for future research and to motivate researchers to think beyond the established models, which are repeatedly used in many studies. This article is based on primary data collected from firms in the information technology sector in Puerto Rico. The CPP model may be useful for industry analysis and research dealing with the growth and internationalization of firms across industries and countries. © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

An information processing review of the subjective value of money and prices

This article draws on current and classical psychological theories of consumer behavior to review current findings in the psychology and economics literature on the subjective value of money, using an information processing framework. Consumers subjectively value both prices and money. That is, consumers value an identical economic value as a price or as a sum of money differently depending on their individual characteristics, price presentation characteristics, monetary form characteristics, and the consumer context due to subjectivity in their: Perception (biases in assessing the subjective value of money and prices); Inferences (whether consumers use price information to make other judgments); affect (the feelings and emotions associated with spending and saving); memory (errors and biases in recall of money and prices); and information integration (the manner in which consumers integrate costs and benefits to make decisions of whether, when, how much, and what to spend on).     

Why do firms hold so much cash? An innovation explanation

Theory holds that knowledge has positive economic consequences. While US corporations defend record high level cash holdings citing the precautionary motive in response to changing firm characteristics, I find that knowledge‐based innovation can partially explain these changes. Using distance to the nearest research university as a measure of knowledge intensity, I show that knowledge‐intensive firms hold more cash, even after controlling for firm R&D. Moreover, knowledge‐intensive firms exhibit higher marginal value of cash and save more cash from cash flows than their less knowledge‐intensive counterparts. Overall, the precautionary motive appears to dominate the agency motive, with the effect of knowledge on cash holdings strengthening over time. Copyright © 2014 ASAC. Published by John Wiley & Sons, Ltd.     

Inequality and endogenous trade policy outcomes

An enduring puzzle in international economics is why trade interventions are biased in favor of import-competing rather than export sectors and therefore restrict trade. In this paper, we show that if the government's objective reflects a concern for inequality then trade policy generally exhibits an anti-trade bias. Importantly, under neutral assumptions, the mechanism that we analyze generates the anti-trade bias independently of whether factors are specific or mobile across sectors. The mechanism also generates an anti-trade bias between large countries even after they sign reciprocal trade agreements that eliminate any terms-of-trade motivation for the use of trade protection.     

Student vs. faculty perspectives on quality instruction: Gender bias, “hotness,” and “easiness” in evaluating teaching

This article systematically examines differences between student and faculty perspectives on quality instruction, using local data for a regional university's college of business matched to RateMyProfessors.com evaluations. Particular attention is focused on gender bias, “hotness,” and “easiness.” In addition to documenting a student bias or preference in favor of male faculty, this article also shows how students and faculty have different views of “easiness” and “hotness.” For this college, students value “easiness” while faculty penalize it; however “hotness” has no measurable effect on faculty in this study.     

Meta-analysis selection bias in marketing research

The tendency of meta-analytic authors to select particular studies is called selection bias. Selection bias can affect the strength of the meta-analytic estimate and the attention that scholars devote to the results. This research is, in effect, a meta-analysis of the effect sizes reported or calculated from 94 meta-analysis studies of various topics in marketing research. The analysis reveals that estimates depend on the publication status of the included studies. The greater the percentage of studies that were published in academic journals vs. non-published studies, the greater is the size of the meta-effects, and the more published studies from leading journals the meta-analysis includes, the stronger the effect size. The meta-analytic effect size is a mediator for the influence of both the ratio of unpublished studies and the ratio of studies from leading journals on the probability of a meta-analysis to be published in a leading journal, which increases the number of citations to a meta-analysis. The findings of this study have several implications for meta-analysts, editors, reviewers and the marketing community on how to conduct and read current and future meta-analysis in marketing research.