Ownership structure and golden parachutes: Evidence of credible commitment or incentive alignment?

Using a sample of S & P 500 firms, we find that golden parachutes are associated with concentrated external ownership, less concentrated internal ownership, and non-Delaware incorporation. We find little support that concentrated external owners use golden parachutes as credible commitment devices. The general multivariate results support the incentive alignment hypothesis, and reaffirm the view that golden parachutes are a mechanism used to align managerial and shareholder interests when there is a separation between ownership and control. (JEL G32)     

Materialism, status signaling, and product satisfaction

The consumer satisfaction literature has not, for the mos part, integrated individual values into the product evaluation process. Yet a comprehensive understanding of consumer satisfaction can best be attained by including both consumer and product factors. To demonstrate the usefulness of including individual values, this research focuses on one consumer value, namely, materialism. The authors empirically explore how this individual value is linked to consumers’ evaluations of products they have purchased. Using surveys, the authors collected data from a sample of college students (n=211) and a sample of adults (n=270). Across these two studies, using divergent samples and products, they find consistent evidence that materialism is negatively related to product satisfaction in product categories with high potential for status signaling, but unrelated to product satisfaction in product categories with lower potential for status signaling. The consumption goals that produce these product evaluations are empirically addressed Jeff Wang (jianfeng76@yahoo.com; PhD, City University of Hong Kong) is an assistant professor of marketing in the Faculty of Business at the City University of Hong Kong. This work was conducted when he was a doctoral student of marketing in the Eller College of Management at the University of Arizona. His research interests include social networks and consumer behavior, consumer satisfaction and well-being, materialism and consumption meanings, and consumer interests and public policy issues. His dissertation studies credit card debt as a socially embedded phenomenon and investigates how consumers leverage their interpersonal ties as they accumulate and repay their debt. Melanie Wallendorf (mwallendorf@eller.arizona.edu) is Soldwedel Professor of Marketing in the Eller College of Management at the University of Arizona. She holds an MS in sociology and a PhD in marketing from the University of Pittsburgh. Her articles on the sociocultural aspects of consumption have been published in theJournal of Consumer Research, Journal of Marketing Research, Advertising and Society Review, Addiction, Journal of Macromarketing, andAmerican Behavioral Scientist, among others. Her coauthored article on “The Sacred and Profane in Consumer Behavior” won theJournal of Consumer Research Best Article Award in 1992. Her research has been featured in theWall Street Journal, The Washington Post, The New York Times, American Demographics, andFortune, and has been funded by the Marketing Science Institute, the Arizona Disease Control Research Commission, and the Office of Earth Science at NASA.     

Spouses' materialism: Effects of parenthood status,personality type,and sex

This study responds to a call for broadened conceptualizations of materialism and its role in self-definition (Richins & Dawson, 1992). Data from 202 spouses were analyzed for relationships among materialism, parenthood status, and personality type, defined as spousal warmness or coolness (Csikszentmihalyi & Rochberg-Halton, 1981). Testable hypotheses were based on the concept of object-subject interchangeability (Claxton & Murray, 1994) as a mechanism of self-definition. The hypothesis was supported that cool spouses without children would have the highest materialism score. Total sample materialism scores were related to parenthood status and to several interactions among parenthood status, personality type, and sex of respondent. Analyzed by sex of respondent, men's materialism scores were related to parenthood status and to the interaction between parenthood status and personality type. Women's materialism scores were not related to any independent variables or interactions. Consumer policy implications are discussed.

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Zusammenfassung Materialismus von Ehegatten: Effekte von Elternschaft, Persönlichkeitstyp und Geschlecht Die Studie reagiert auf die Forderung nach einer breiteren Konzeptualisierung der Materialismus-Variable und der Rolle von Materialismus bei der Selbst-Definition. Die Daten stammen von 202 Ehegatten und wurden auf die Beziehungen hin analysiert, die zwischen Materialismus, Elternschaft und Persönlichkeitstyp (definiert als eheliche WÄrme und eheliche Nüchternheit) bestehen. Die Hypothesen basieren auf dem Konzept der Objekt-Subjekt-Austauschbarkeit als Mechanismus der Selbst-Definition. BestÄtigt wurde die Hypothese, da\ nüchterne Ehegatten ohne Kinder den höchsten Materialismuswert haben. Insgesamt waren die Materialismuswerte abhÄngig von der Variable Elternschaft und von mehreren Wechselwirkungen zwischen Elternschaft, Persönlichkeitstyp und Geschlecht des Antwortenden. Eine geschlechtsspezifische Analyse zeigt, da\ die Materialismuswerte der MÄnner mit Elternschaft und mit der Wechselwirkung zwischen Elternschaft und Persönlichkeitstyp verbunden sind. Bei den Materialismuswerten der Frauen zeigte sich keine Beziehung zu einer der unabhÄngigen Variablen oder den Wechselwirkungen. Der Beitrag schlie\t mit einigen verbraucherpolitischen Implikationen.

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The study is based on the first author's dissertation. The authors gratefully acknowledge the assistance of a 1993 summer research grant from East Carolina University, and the reviewers' helpful comments.     

The Performance of Internet Firms Following Their Initial Public Offering

We find that initial returns were more favorable for Internet initial public offerings (IPOs) than non–Internet firm IPOs. Since the demise of the Internet sector, the underpricing of Internet–firm IPOs is not significantly different from other IPOs.
Initial returns of Internet firms are positively and significantly related to underwriter prestige and to pre–IPO market conditions. However, initial returns after the demise of the Internet sector are not significantly related to these characteristics.
The aftermarket performance of Internet firms is initially favorable but weakens over time. Firms that experienced higher initial returns during the strong Internet cycle experience weaker aftermarket performance.     

A Closer Look at the Relation between GARCH and Stochastic Autoregressive Volatility

We show that, for three common SARV models, fitting a minimummean square linear filter is equivalent to fitting a GARCH model.This suggests that GARCH models may be useful for filtering,forecasting, and parameter estimation in stochastic volatilitysettings. To investigate, we use simulations to evaluate howthe three SARV models and their associated GARCH filters performunder controlled conditions and then we use daily currency andequity index returns to evaluate how the models perform in arisk management application. Although the GARCH models produceless precise forecasts than the SARV models in the simulations,it is not clear that the performance differences are large enoughto be economically meaningful. Consistent with this view, wefind that the GARCH and SARV models perform comparably in testsof conditional value-at-risk estimates using the actual data.     

Do specialized board committees impact the transparency of corporate political disclosure? Evidence from S&P 500 companies

This study examines how the specific attributes of one type of voluntary corporate governance mechanism, a specialized political contribution committee, improves the transparency of corporate political disclosure (CPD). The results demonstrate that the existence of a committee that establishes and reviews key political activities and disclosure policies, particularly one composed entirely of outside directors, significantly enhances the transparency of corporate political disclosure, and reveal that an under-studied board committee, the political contribution committee, effectively improves CPD transparency. The results are consistent with agency theory and further support the more generalizable idea that specialized governance mechanisms (e.g., a political contribution committee) and fully independent committees lead to more transparent disclosure. Finally, the results suggest that the existence of a political contribution committee and committee independence are channels to improve CPD transparency. Public-policy makers and regulators seeking to enhance CPD transparency might consider implementing regulations that mandate or recommend these governance mechanisms as best practice.     

Estimating the impact of farmer field schools in sub‐Saharan Africa: the case of cocoa

This study measures the economic impact of the first phase of the Cocoa Livelihood Program (CLP‐I), a current World Cocoa Foundation (WCF) project, sponsored by the Bill and Melinda Gates Foundation and aimed at improving the livelihood of over 200,000 small cocoa producers in sub‐Saharan Africa via training, crop diversification, and farmer‐based organizations. Using data collected from 2,048 pre‐ and post‐CLP‐I interviews of cocoa producers in Ghana, Cote d'Ivoire, Nigeria, and Cameroon, the results show that yield enhancements attributable to CLP‐I are 32%, 34%, 50%, and 62% in Ghana, Côte d'Ivoire, Nigeria, and Cameroon, respectively. Using a total program cost of $151–$200 per beneficiary and estimated annual benefits of $109–$322 per beneficiary over 25 years, the benefit‐cost ratios are estimated to range from $18 to $62 for every dollar spent on human capital development. These results suggest the WCF should endeavor to increase the number of farmers who receive all, not some, of the components of the program. This would not only help ensure that each producer obtains as much human capital as possible from each of the training programs but increases the probability of reaching the CLP goal of doubling the income of cocoa‐growing households.     

Beach safety education for primary school children

Childhood drowning remains a serious public health problem worldwide. The Australian Water Safety Council has set as one of its highest priorities the reduction of drowning deaths in children aged 0–14 years. However, concerns have recently been raised that many students completing primary school still lack the ability to recognize potential aquatic risks, cope with emergencies or assist someone else in danger. In this study, 107 primary school children aged 11–12 completed a one day training programme led by surf lifesaving instructors. Pre, post and eight week follow-up measures showed statistically significant improvements in recognition of the red ‘beach closed’ flag, aquatic safety signs, how to identify a rip current and choosing the safest place to swim at a beach that included a rip current in the picture. Following training students were more willing to provide first aid assistance to family members and friends in an emergency situation. Findings reinforce the value of school-based training that provides a general foundation for aquatic safety, with the caveat that current programmes must be evaluated to ensure their content has a robust prevention focus.     

Creating Shopper Value: Co-Creation Roles,In-Store Self-Service Technology Use,and Value Differentiation

This study examines how retailers can use self-service technologies (SST) to increase shopper satisfaction. Using a survey of 188 consumers of a new self-service kiosk launch within a convenience-store (c-store) setting, we examine how such retailers might influence shopper's perceptions of value by better involving customers in the service delivery experience. Our proposed model links classic service operations and marketing design insights to the service-dominant logic perspective of service value co-creation. We find that shoppers perceive enhanced value creation from the new SST when they feel comfortable in their roles and the surrounding service design supports those roles.