Buyer Loyalty in Business Markets: Can the Firm and Salesperson Get What They Truly Desire?

Purpose: Prior literature has acknowledged multi-foci customer loyalties (loyalty to the selling firm and salesperson-owned loyalty) and argued that both entities (selling firms and salespersons) foster customer loyalty through respective loyalty-capturing efforts (relationship investments). However, scholars have not investigated the influences of different types of interfirm relationship-specific investment (RSI) activities and salesperson behaviors (brand-building and guanxi behavior) on customer loyalty to the selling firm and salesperson-owned loyalty, especially their simultaneous (interaction) effects. The current research attempts to address this issue and examines the impacts that RSIs and salesperson behaviors have on customer loyalties.

Methodology/approach: A survey of seller–buyer dyads was conducted to test the proposed theoretical model and hypotheses. Using 192 dyadic data from customers and salespersons in the Chinese business-to-business contexts, this study specifies the direct and interactive effects of sellers’ RSIs and salespersons’ behaviors on customer loyalties.

Findings: Results indicate that selling firms’ loyalty-capturing efforts—property-based and knowledge-based RSIs—have different influences on two types of customer loyalty. Salespersons’ relationship investments—brand-building and guanxi behaviors—also have asymmetric impacts on customer loyalty. Counterintuitively, salespersons’ loyalty-capturing efforts weaken the relationships between firms’ RSIs and customer loyalties.

Originality/value/contribution: This study specifies different types of relationship investments and examines their respective and interactive impacts on two types of customer loyalty—loyalty to the selling firm and salesperson-owned loyalty. The findings indicate that firms’ and salespersons’ efforts may lead to unexpected and unintended effects on multi-foci loyalties. Therefore, the current study enriches our knowledge about multi-foci loyalty management and relationship marketing.

Practical implications: Because firms’ and salespersons’ loyalty-capturing strategies exert positive direct influences on loyalty to the selling firm and salesperson-owned loyalty, both entities may actively leverage relationship investments’ impact on customer loyalty. However, as the interactive effects derived from concurrent loyalty-enhancing activities are negative, firms need to clearly assess the nature and

characteristics of their relationship with buyers and properly design relationship investments and guide salesperson behaviors. Managers should use property-based RSIs as a primary safeguard of customer loyalty to the selling firm. Meanwhile, internal branding and training programs can help salespersons develop brand building behaviors and better understand the potential unintended outcomes that different behaviors may induce. Aligning a branding goal between the firm and salespersons can benefit both parties while avoiding counter-productive outcomes.     

Short Selling Pressure,Stock Price Behavior,and Management Forecast Precision: Evidence from a Natural Experiment

Using a natural experiment (Regulation SHO), we show that short selling pressure and consequent stock price behavior have a causal effect on managers’ voluntary disclosure choices. Specifically, we find that managers respond to a positive exogenous shock to short selling pressure and price sensitivity to bad news by reducing the precision of bad news forecasts. This finding on management forecasts appears to be generalizable to other corporate disclosures. In particular, we find that, in response to increased short selling pressure, managers also reduce the readability (or increase the fuzziness) of bad news annual reports. Overall, our results suggest that maintaining the current level of stock prices is an important consideration in managers’ strategic disclosure decisions.     

Failures to Deliver,Short Sale Constraints,and Stock Overvaluation

Studying a large sample of publicly available data on failures to deliver, we find that stocks reaching threshold levels of failures become significantly overvalued. Where short sale constraints are especially binding, we report extreme overpricing and subsequent reversals. These findings support the overvaluation hypothesis, although the mispricing is likely to be difficult to arbitrage because of extreme shorting costs. In addition, threshold stocks with low short interest become more overvalued than threshold stocks with high short interest. This suggests that the level of short interest reflects supply‐side effects when the examination conditions on the difficulty of borrowing shares.     

Financing obstacles and growth: an analysis for euro area non-financial firms

This paper investigates the determinants of financing obstacles (FOs) and their impact on firm growth. For this purpose, we rely on both balance sheet data and survey data for a sample of non-financial firms in the euro area. The latter allows us to devise a direct measure of the firms’ probability of facing FOs. First, our results indicate that FOs are linked to characteristics such as the age of the firm, its size, its sales level or the sector in which it operates. Second, we find that, though based on few variables, our measure of FOs appears to be relevant in explaining firm growth in four out of the five countries considered; likewise, growth is found to be positively linked to cash flow.     

PORTFOLIO MANAGEMENT WITH CONSTRAINTS

The traditional portfolio selection problem concerns an agent whose objective is to maximize the expected utility of terminal wealth over some horizon. This basic problem can be modified by adding constraints. In this paper we investigate the portfolio selection problem for an investor who desires to outperform some benchmark index with a certain confidence level. The benchmark is chosen to reflect some particular investment objective and it can be either deterministic or stochastic. The optimal strategy for this class of problems can lead to nonconvex constraints raising issues of existence and uniqueness. We solve this optimal portfolio selection problem and investigate the procedure for both deterministic and stochastic benchmarks.     

The Ethics of Professorial Book Selling: Morality, Money and "Black Market" Books

This study used experimental and correlational techniques to examine perceptions that university faculty hold regarding the practice of professorial selling of examination textbooks to wholesalers. Faculty members (n = 236) from 14 universities and community colleges and a wide variety of academic disciplines responded to a web-based survey. We presented hypothetical selling situations to respondents with manipulated variables consisting of solicitation status (unsolicited versus solicited) and use of money (for faculty or for student activities). Both main effects and the interaction effect were significant such that respondents perceived it to be more ethical to sell an examination book when the book was unsolicited and when the money was being used to fund student activities. The variable most correlated with faculty members' beliefs that book selling is ethical and the faculty members' self-reports of whether or not they have engaged in bookselling was how widespread the practice appeared to be on campus. About 30 percent of faculty members sold textbooks over the past year at a dollar value of about $80 per professor. About 38 percent of respondents reported they believed the practice to be generally ethical. Implications for business ethics theory, students' moral development, and advancement of on-campus codes of ethics policies are discussed along with avenues for future research.     

Entrepreneurship and Risk Aversion

Evans and Jovanovic (1989, Journal of Political Economy 97(4), 808–827) find that wealth is an important determinant of business startups due to liquidity constraints. However, Cressy (2000, Economic Letters 66, 235–240) argues that if risk aversion is a negative function of wealth, Evans and Jovanovic’s empirical results could be spurious and the positive effect of wealth could be due to the omission of risk aversion in the regression equation. In other words, according to Cressy, one’s wealth does not have any effect on business startups once the degree of risk aversion is accounted for. This paper attempts to investigate the validity of Cressy’s conjecture. We empirically examine the effect of wealth on the transition into self-employment, while allowing for the effect of risk aversion. Our empirical findings show that Evans and Jovanovic’s (1989) results are robust, i.e., wealth has a positive effect on business startups even allowing for the confounding effects of risk aversion.     

Where Do Financial Constraints Originate from? An Empirical Analysis of Adverse Selection and Moral Hazard in Capital Markets

Despite the voluminous and growing literature on financial constraints, the origins of the constraints are hardly ever empirically analyzed. This paper offers such an analysis. We study, in particular, the empirical prevalence of adverse selection and moral hazard in capital markets using a unique survey data on Finnish small and medium-sized enterprises (SMEs). The survey data suggest that adverse selection is empirically more prevalent than moral hazard in the capital markets that the SMEs face. We also find that of the variables indicating the presence of adverse selection and moral hazard, the former has more explanatory power in regressions modeling the availability of external finance to the SMEs than the latter. Finally, we document that our proxies for adverse selection and moral hazard are inversely related to the age of firms, just like Peter Diamond’s (1989) model predicts.     

An Empirical Investigation of Trade Credit Demand

This paper investigates the motivations for a firm's demand for trade credit. Demand for credit is modelled as a function of transaction costs motivations, financing motivations, operational considerations, seller compliance issues and supplier marketing, whilst controlling for the firm's business environment and for firm characteristics such as size and industry. This paper builds on previous studies by considering a wider range of factors that can affect trade credit demand holistically on a single sample. It appears that the use of trade credit is widespread, and that it is generally perceived as an important short term financing option, although the availability of trade credit is not a major influence on supplier choice. The level of a firm's trade credit demand is found to be significantly influenced by transaction costs, financing, operational issues, marketing activities by suppliers, the firm's investment in trade debtors and firm size.     

我国畜产品产销现状与发展对策分析

本文认为,加入WTO以后,国际市场价格开始对我国畜产品市场发生作用,我国畜牧企业经营规模小、经营效率低等具体问题开始显现;面对我国畜产品消费需求的快速增长,要加快科技进步,发展畜产品加工,做大产业经营规模,构建现代化畜产品市场产销体系,提高畜产品产销效率,增强畜产品市场竞争能力;要推行市场禁入和准入制度,组建畜产品产销行业协会,加强畜产品市场定位和产销研究,积极推动我国畜产品出口,促进我国畜产品产销持续健康发展。