Mutual commitment to support exchange: relation‐specific IT system as a substitute for managerial hierarchy

This paper examines the effects of information technology (IT) on the governance of vertically related firms. We propose that a highly relation‐specific IT system in inter‐firm transactions plays a key role in the resulting inter‐firm governance as a mutual sunk‐cost commitment, in terms of leading to both less vertical integration (i.e., a change in governance mode as a first‐order effect) and a smaller number of suppliers (i.e., a change within a governance mode as a second‐order effect). As a result, this highly relation‐specific IT system (bilateral investment) can be an alternative governance mode of electronic integration that acts as a substitute for managerial hierarchy and vertical financial ownership. From a strategic management perspective, this paper provides transaction costs and resource‐based explanations on IT systems' impact on the organizational boundary decision and its impact on the likelihood of the firm achieving sustainable competitive advantage. Copyright © 2006 John Wiley & Sons, Ltd.     

Toward the development of an integrative framework of subsidiary success: A synthesis of the process and contingency models with the strategic reference points theory

The purpose of this article is to integrate the process and contingency models with the Strategic Reference Points (SRP) theory in the context of international marketing decisions for subsidiary success. The SRP theory suggests that strategy and structure of organizations, and their subsequent performance, can be influenced by management's choice of SRPs. From the review of the literature on the contingency, process, and SRP theories, the authors develop two interrelated theoretical models, the Target Market Similarity Continuum (TMSC) model and the Target Market Strategic Reference Points (TMSRP) model. Based on the TMSC model, it is proposed that as the economies of scale in marketing activities increase, (1) the positive relationship between target market similarity and a standardized marketing strategy will become stronger and (2) the positive relationship between target market similarity and a centralized marketing structure will become stronger. Based on the TMSRP model, it is also proposed that (1) active interactions between target market similarity, strategy, and structure facilitate the establishment of internal and external SRPs and (2) active interactions with established SRPs will improve subsidiary performance. © 2006 Wiley Periodicals, Inc.     

Specialist participation and limit orders

We present a market microstructure model to examine specialist's strategic participation decisions in a security market where there are noise traders, limit order traders, an insider and a specialist. We argue that the specialist's participation rate depends on the depth of the limit book and its uncertainty. In particular, the specialist has incentives to trade against the market trend when the limit book depth is low and to trade with the market trend when the depth is high. Moreover, the specialist's participation rate is positively related to the limit book depth uncertainty and the asset price volatility, but is negative related to the average trading volume. We also discuss the specialist's participation strategies under the NYSE regulation that prohibits the specialist from trading with the market trend.     

Substitution between Mobile and Fixed Telephones in Korea

The stock of mobile telephones has surpassed fixed phones in Korea. Presently, the density is more than 60 of every 100 inhabitants. Thus, the potential for mobile telephones to become a substitute for, and directly compete with fixed telephones, has become evident. The aim of this paper is to examine the impact of rapid growth in mobile telephones on the access demand for traditional fixed telephones. The study shows that a 1% increase in the number of mobile telephones results in a reduction of 0.10–0.18% in new fixed connections and a 0.14–0.22% increase in fixed disconnections. The empirical analysis is carried out with Korean regional panel data for the period 1991–1998. The study is relevant to several important public policy issues.     

Accounting Choices: Variation in Managerial Opportunism

This study focuses on variation in managers' accounting choices given motivations to use accounting accruals opportunistically. Prior research identifies a number of motivations arising from accounting–based contracts that encourage opportunistic reporting by managers. However, prior research implicitly assumes all managers respond identically to the same contractual motivations. This study identifies variation in managers' responses to contractual motivations involving accruals that is related to managers' stewardship of corporate assets. Evidence shows that modeling how managers use corporate assets enhances the explanation of their accounting choices given motivations to (a) use accruals opportunistically, and (b) to smooth income via accruals. Managers with high ratings on judicious use of corporate assets are less responsive to motivations to use accruals opportunistically, and to smooth income via accruals, than managers with low ratings. This evidence suggests that not all managers are equally opportunistic, and that modeling this factor helps explain cross–sectional differences in managers' accounting choices.     

Work motivation and social communication among public managers

This article tests hypotheses about the effects of two types of work motivation (i.e. intrinsic motivation and extrinsic motivation) and four types of social communication on three important work dispositions (i.e. job involvement, red tape, and perceived organizational effectiveness) among 790 managers employed in public agencies in the states of Illinois and Georgia. The results show that intrinsic motivation is significantly associated with public managers' job involvement, perceptions of red tape, and organizational effectiveness. Also, certain types of organizational communication and mentoring socialization are closely related to the outcomes. The results of cross-interaction effects between motivation and communications on outcome variables support the SDT prediction that when public managers are more involved with different types of social communication behaviors, the relationship between extrinsic motivation and three outcome variables becomes more pronounced. That is, communication in public agencies provides more autonomy and discretion for extrinsically motivated public managers, thus leading to more positive organizational dispositions.     

Theory‐based approach to factors affecting ethical consumption

The main objective of this study is to introduce and validate a new model of ethical consumption intention with the aim of identifying salient factors that influence consumer's attitude and purchase intention towards ethical products. For this purpose, this study introduces an extended model of the theory of reasoned action, which embraces the emotional component (positive anticipated affection) and socially oriented value component (altruism), as predictors of ethical consumption attitude and intention. Using a questionnaire‐based survey, the data were collected from 343 respondents who had previously purchased ethical products. The result showed that ethical obligation, self‐identity and altruism were positively related to consumer attitude towards ethical consumption. Also, ethical obligation and altruism were found to positively influence ethical consumption intention. Further, attitude and positive‐anticipated affection positively affected ethical consumption intention.     

Investment Decisions,Debt Renegotiation Friction,and Agency Conflicts

This paper investigates how investment decisions are influenced by the possibility of debt renegotiation failure and shareholder–debtholder conflicts by extending the Sundaresan and Wang (2007) model. We find that the difference in investment thresholds due to agency conflicts decreases as shareholders’ bargaining power increases. We also show that as the probability of renegotiation friction is lower, the investment threshold is lower, which is consistent with the empirical result of Favara et al. (2017).     

Expectations and Macro-Housing Interactions in a Small Open Economy: Evidence from Korea

Open Economies Review - This paper studies the interaction between the housing sector and the macroeconomic environment in Korea. Besides serving as a typical small open economy, Korea provides an...