Luxury shopping in tourism

This study explores the concept of luxury shopping behaviour in tourism and identifies the perceived importance of different types and characteristics of the luxury products and services that tourists buy on vacation, as well as the importance of various shopping venues and destinations for luxury shopping. The study examines the significant differences in luxury purchasing patterns among various types of tourists identified on the basis of the frequency of shopping and the degree of importance attached to shopping. The results show that three groups, infrequent shoppers, sometimes shoppers and frequent shoppers, as well as non‐shoppers, neutral shoppers and great shoppers, significantly differ in their luxury shopping behaviour. The implications of study results and recommendations for future studies are discussed. Copyright © 2009 John Wiley & Sons, Ltd.     

Strategic action and customer mobility: Antecedents and consequences of strategic actions in the Korean mobile telecommunication service industry

This paper investigates the sources and consequences of strategic actions in the Korean mobile telecommunication service industry. Based on competitive dynamics research and an organizational learning perspective, it suggests hypotheses and tests them with monthly data on service providers’ competitive and alliance actions, as well as statistics on monthly subscribers during 2002–2007. We show the positive effects of a firm’s own experience, other firms’ strategic actions, and firms’ alliance tendencies on the likelihood of firm-level competitive action and alliance. We also find that negative performance feedback accelerates the mimetic influence of rival firms’ competitive actions and that positive performance feedback strengthens the momentum effect of a firm’s own alliance experience on the likelihood of alliance. Both competitive actions and alliances appear to influence customer mobility across firms in a complex manner. Based on customer mobility data, this study finds that alliances increase market dynamism, that is, customer mobility. It also shows that competitive actions, in general, serve to effectively attract switching customers from rivals. This study partially answers questions regarding the triggers of competitive actions and alliance activities among mobile telecommunication service providers and their performance consequences.     

Real option analysis for effects of emission permit banking on investment under abatement cost uncertainty

The present paper analyzes the investment effects of emission trading scheme (ETS) when emission permits are bankable and there is technological uncertainty with regard to the abatement cost. A real option model is employed to accommodate irreversibility of investment and cost uncertainty. In the absence of abatement cost uncertainty, a bankable ETS reduces a firm's incentive for environmental investment, because the firm can utilize the banked permits for future compliance which act as substitutes for abatement investment. However, when cost uncertainty is prevalent, investment may reduce the opportunity cost of irreversible investment under the banking system, thereby increasing a firm's investment incentive. The condition is derived under which a bankable ETS provides higher investment incentives than a non-bankable ETS does.     

Development of new technology-based services

In an environment where customers can hardly describe new technology-based services (TBSs) of the future and technological engineers are unlikely to understand how a new technology can work for new services, a guideline to generate ideas for TBS can be utilized to achieve successful service innovation. Thus, this paper aims to develop an ideation framework for TBS. Two methods – the technology tree and the function analysis systems technique – are employed to identify core utilities expected from a new technology. Then a new method, the service encounter value matrix, which is based on morphology analysis and is used for generating potential service ideas, is suggested. Finally, these ideas are evaluated, and only those that are of a high priority according to customers’ expectations of future society are selected. In this study, the framework is applied to telecommunication technology, which is timely and useful for designing future services.     

Generating new service ideas: the use of hybrid innovation tools to reflect functional heterogeneity of services

In many cases, new services are developed based on incremental innovation. Thus, how to identify functional characteristics and how to differentiate new service development are two critical questions. However, previous research has ignored the functional heterogeneity of service when using innovation tools for new service development. In response, we suggest a hybrid approach to differentiating the method of generating new service ideas. A Kano model is first employed to identify whether functional characteristics are core or peripheral, after which different methods are applied for each function. For core functions, a case‐based reasoning approach is used, which focuses on identifying similarity; for peripheral functions, we suggest instead a modified zigzagging approach to identify creative functions. To present the working of proposed approach, we conducted a case study using Appstore application, IreaditNow, and show how to generate alternatives for both core services and peripheral services.     

Managing supplier-retailer relationships: From institutional and task environment perspectives

This study develops an integrated model of managing channel relationships that involves task and institutional environment perspectives. Using survey data from automobile dealers in China, the authors provide empirical evidence to demonstrate the utility of the legitimacy-based institutional environment perspective in clarifying channel relationship issues, which have been considered mostly only from an economic efficiency-based task environment approach. As the institutional environment perspective's factors, imposition asymmetry and bypassing have indirect impacts on trust in supplier and the level of conflict in a channel relationship. As the task environment standpoint's factors, explicit contracts and supplier's transaction-specific investments (TSIs) are posited to have direct effects on trust in supplier and the level of conflict, however, the hypothesized relationship between supplier's TSIs and the level of conflict is not supported. The results also indicate both building a retailer's trust in its supplier and lowering the level of conflict lead to improved relationship performance.     

Relative deprivation of temporary agency workers in the public sector: The role of public service motivation and the possibility of standard employment

Although public service organisations have increasingly relied on nonstandard employees, little research has investigated their work experiences and job attitudes. This paper examines the mechanism by which temporary agency workers' experience of relative deprivation affects their organisational attachment toward their client firm in the public sector. Based on data collected from temporary help agencies working with an international airport in Korea, we found that the perceived likelihood of standard employment mediated the negative relationship of relative deprivation to organisational attachment. Moreover, the indirect relationship of relative deprivation with organisational attachment via perceived likelihood of standard employment was strong and significant among those with high public service motivation but was not significant for those with low public service motivation. We discuss the implications of this study in building a better understanding of relative deprivation and nonstandard work arrangements in the public sector.     

BASEL III Counterparty Risk and Credit Value Adjustment: Impact of the Wrong-way Risk

Abstract

During the financial crisis of 2007 through 2010, BIS estimated that two-thirds of the loss of the financial institutions was due to credit valuation adjustment (CVA). The CVA is the marked-to-market price of credit products which involve counterparties. Hence, in BASEL III, banks are required to capture and allocate CVA capital and wrong-way risk (WWR). In this paper, we show that BASEL III CVA capital charge increases as the credit rating of the counterparty deteriorates. We also show that the extreme WWR can increase the BASEL III CVA charge by 30 times in Davis and Pistorius model.     

Forecasting volatility of futures market: the S&P 500 and FTSE 100 futures using high frequency returns and implied volatility

We show that historical volatility from high frequency returns outperforms implied volatility when standardized returns by historical volatility tends to be normally distributed. For the FTSE 100 futures, we find that historical volatility using high frequency returns outperforms implied volatility in forecasting future volatility. However, we find that implied volatility outperforms historical volatility in forecasting future volatility for the S&P 500 futures. The results also indicate that historical volatility using high frequency returns could be an unbiased forecast for the FTSE 100 futures.     

Modelling information use,image, and perceived risk with intentions to travel to East Asia

This research empirically tested a tourism behaviour model explaining tourists' intentions to vacation for the first time in selected countries extending image research by Baloglu and McCleary [(1999). U.S. international pleasure travelers’ images of four Mediterranean destinations: A comparison of visitors and nonvisitors. Journal of Travel Research, 38(2), 144–152; A model of destination image formation. Annals of Tourism Research, 26(4), 868–897] and more recently Kaplanidou and Vogt [(2007). The interrelationship between sport event and destination image and sport tourists’ behaviors. Journal of Sport & Tourism, 12(3–4), 183–206]. Key factors that remain untested in modelling international travel propensity were identified as: information sources, cognitive and affective destination image, and perceived risk. On-site surveys were conducted in two US metropolitan areas with a purposive convenience sample. Data were analysed with structural equation modelling for three destination countries (China, Japan, and South Korea) so that positioning strategies were illustrated through empirical evidence. Modelling results supported previous research showing that stronger positive cognitive and affective destination images and lower perceived risks for vacationing in a destination positively influenced intentions to travel to the countries of interest. Of greater interest are findings on information usage influencing cognitively held images, particularly cultural experiences, but information use was found not to directly influence the affective component of image. Intent to travel to each of the three countries was heightened by different factors – for China it was affective image, for Japan cognitive image, and South Korea a reduction in perceived risks. Destination marketers can use this model to understand the use of information sources, in general or specific types, to influence cognitive images held and perceived risks associated with a foreign country, and to ultimately modify affective image and intent to visit a destination for the potential first-time visitors.