Knight on Religion and Ethics As Agents of Social Change: An Essay to Commemorate the Centennial of Frank H. Knight's Birth

Abstract . A paradigm is developed in this essay based upon Frank H. Knight's thought in order to provide a foundation for analyzing contemporary moral philosophers’efforts to influence public policy. In honor of Knight's 100th birthday in 1985, the role of religious doctrine and ethics in determining social policy is examined in terms of the exegesis which could have been expected of Frank Knight. Knowledge of Knight's views on religion and ethics provides a provocative means of interpreting and evaluating moralism as a force of social change in today's world.     

Labor standards, labor-management bargaining and international rivalry

Using the labor union's bargaining power as an indication of government policy on labor standards issues, we analyze the competition between a domestic (North) firm and a foreign (South) firm, and their relationship with optimal labor standards (LS). First, we show that the optimal level of LS is higher when labor unions are employment-oriented than when they are not. Second, it is higher under free trade than under the optimal tariff system if labor unions are employment-oriented. Third, ‘a race to the bottom’ of LS occurs in the case of wage-oriented unions. Fourth, the North's imposing a tariff to force the Southern government to raise its LS is effective only if the Southern union is wage-oriented. In order to raise Southern LS, both countries may need some deeper form of economic integration, if the North does not want to abandon its free trade system.     

Tests for zero inflation in a bivariate zero‐inflated Poisson model

The score test statistics for testing zero inflation and covariance parameter are proposed in the bivariate zero‐inflated Poisson (BZIP) regression model. The Monte Carlo studies show that the score test and likelihood ratio test for testing zero inflation underestimate the nominal significance level, while the score test for covariance parameter keeps the significance level close to the nominal one. To overcome this nominal level underestimation, we propose a bootstrap method of the score test for the testing problem of zero inflation. An empirical example with covariates is provided to illustrate the results. In addition, score test for zero inflation is also proposed in the BZIP model, which allows a flexible dependence structure using copula.     

Bill-and-keep and the economics of interconnection in next-generation networks

As telecommunications networks are being transformed into all-IP, next-generation networks (NGNs), interconnection is attracting renewed regulatory debate. Next-generation features suggest that interconnection regimes developed for the internet or for traditional telephony networks are unlikely to be suitable in most NGN contexts. Efficient NGN interconnection will take advantage of NGNs’ technical possibilities (e.g., session control), facilitate their operational requirements (e.g., quality-of-service differentiation) and accommodate their service versatility. We discuss the application of alternative interconnection charging models (with a particular focus on bill-and-keep) by applying the main lessons from the interconnection literature in a framework designed for the practical needs of regulators. We show that in NGNs – as well as in other networks – there is no single interconnection charging model that maximizes economic efficiency in all circumstances. Finally, we discuss the implications for regulatory policy towards NGN interconnection.     

"Forced" Adoption of Innovations in Organizations: Consequences and Implications

Once organizations adopt an innovation, they may force various individuals to use it. While researchers have frequently studied perspectives of suppliers and their customers, they have sometimes neglected the important roles of those who must use the innovation when it is provided to them. S. Ram and Hyung-Shik Jung report results of their investigation of organizational members' responses when they are forced to adopt an innovation. The results suggest that even innovative individuals resist the innovation in the context of forced adoption. Product trial and repetitive usage significantly reduce innovation resistance and create favorable post-adoption evaluation (attitude and satisfaction judgments). Individuals who perceive themselves to have technical competence offer less resistance to the innovation. Further, organizational members deal with forced adoption through the use of coping mechanisms such as complaining and seeking peer help.     

Does Alibaba's Magic Work Outside China?

Alibaba was an established e‐commerce giant in the Chinese online retail industry. In 2014, it recorded the world's largest initial public offering (IPO), raising a total of $25 billion. Alibaba's groundbreaking IPO and continuous growth in China had raised speculation on its imminent and potential expansions into other countries including the United States. On the other hand, Amazon and eBay had been leaders in the e‐commerce industry of the United States, arguably the world. This case seeks to weigh the potential success of Alibaba should it choose to expand outside its home country, China, including the United States. This case also helps understand how the Chinese business environment influenced the success of Alibaba, relative to other countries. © 2015 Wiley Periodicals, Inc.     

Equity‐Based Incentives,Risk Aversion,and Merger‐Related Risk‐Taking Behavior

We find that post‐merger equity risk is negatively related to the sensitivity of CEO wealth to stock return volatility (vega), but is concentrated in CEOs with high proportions of options and options that are more in‐the‐money. The probability of industrial diversification also increases in vega. Additional tests show that the decline in post‐merger equity risk results in a significant decrease in shareholder wealth. This decrease is concentrated among firms with CEOs having the highest delta and the highest delta and vega. Our results suggest that the increased convexity provided by option‐based compensation does not necessarily increase risk‐taking behavior by CEOs.     

Does “Vote No” Change Corporate Governance and Firm Value? Evidence from the Shareholder Activism of the Korean National Pension Service

In this paper, we analyze the effect of shareholder activism on firm value through internal corporate governance in an emerging market. We investigate the shareholder activism by the National Pension Service (NPS) of Korea, the fourth-largest pension fund in the world in 2010. We investigate stock price reaction to a “vote no” press announcement and find that the market does not react in the short run, which reaction is inconsistent with the results from developed countries. We also find that firms experiencing “vote no” and improved internal corporate governance have higher firm valuation. Shareholder activism by the NPS is effective in increasing target firm value through improving internal corporate governance.