Asymmetric Information,Auditing Commitment,and Economic Growth

We analyze in this paper the growth and welfare consequences stemming from the lack of auditing commitment in a credit market with costly state verification. By studying two endogenous growth models, one of which allows lenders to commit to costly auditing strategies, whereas the other does not, we show that the inability to commit serves as a source of informational friction that results in more stringent contractual terms, which, in turn, result in lower capital accumulation, growth, and welfare. From the policy perspective, our analysis suggests a new micro‐economic channel through which institutional failings hinder economic growth and social welfare.     

International Business Research: Coauthorship Patterns and Quality

The authors investigate published international business research in four international business journals over a 10‐year period, 1995–2004: (a) patterns of coauthorship across regions, and (b) the relation between coauthorship patterns and the quality of international business (IB) articles. A cross‐region coauthorship enhances the quality of an article, suggesting that international collaboration creates synergy in IB research. The authors do not see any positive correlation between alphabetical ordering of coauthor names in multiauthored articles and article quality—a result that is contrary to some evidence in other disciplines. Finally, international management articles appear to be more frequently cited than articles in other IB research areas.     

Clustering of cultural industries in Chinese cities

This study is the first empirical research on understanding the determinants of the concentration of cultural industries (CIs) in cities in China. What factors of the urban environment are important for attracting the location of CIs? How is the development of CIs in a city influenced by its neighbouring cities and its early development? To answer these questions, three types of spatial panel models – the spatial lag model, the spatial error model and the spatial dynamic panel model – are employed using the urban statistics for China from 2003 to 2009. Human capital, diversified industrial structure and transportation and communication infrastructure are significant factors contributing to the development of CIs. The empirical findings reveal the presence of positive spatial spillovers among cities, which suggests that promoting CIs in one city benefits other cities. Also, the evidence suggests the presence of temporal spillovers, implying that the early concentration of CIs in a city tends to attract more CIs in that city.     

Examining professionals’ identification in the workplace: The roles of organizational prestige,work-unit prestige,and professional status

Drawing on social identity theory, we hypothesize that professionals develop their organizational and work-unit identifications through organizational prestige and work-unit prestige respectively. We further hypothesize that professional status negatively interacts with organizational prestige and work-unit prestige to affect the development of their organizational and work-unit identifications from the perspectives of self-enhancement and uncertainty reduction. A two-phase survey on 386 hospital nurses in central China provides general support for the hypotheses. Implications for theory and practice are discussed.     

Charity Retailing in the United Kingdom: A Managerial Capabilities Perspective

Nonprofit organizations are venturing into commercial activities due to the intense competition for the limited government funds and declining availability of donor funds for third‐sector organizations that address social problems. Charity retailing, a popular choice of commercial activity for nonprofit organization, has filled vacant premises in the high streets of the small towns and suburbs of large cities in the United Kingdom. Successful charity retail operation requires distinctive capabilities necessary to manage organizations' resources in commercial environment. Using 60 in‐depth elite interviews, we introduce the concept of managerial capabilities for charity retailing. Research propositions and management implications are discussed.     

Simple Trading Rules and the Market for Internet Stocks

We investigate the profitability of moving average trading rules for Internet stocks based on the Dow Jones Internet Composite Index. Consistent with previous studies e.g. Brock et al. (1992), returns after buy signals exceed returns after sell signals. The average buy–sell spread is large and significant even after accounting for transaction costs. Bootstrap simulations based on a version of the dynamic CAPM show that the model is able to replicate the pattern of buy and sell returns. Simulated buy–sell spreads amount on average to more than 39% of the actual spread. However, actual profits are still too large to be explained in terms of risk compensation.     

Governmental responses mitigating the impact of COVID-19 on small and medium-sized enterprises and the case for insolvency law reforms in Hong Kong

The COVID-19 crisis has triggered unprecedented governmental responses around the world to mitigate the effects of the pandemic, with particular attention being given to small and medium-sized enterprises (SMEs). Governments around the world have implemented economic measures in the form of direct subsidies or government-guaranteed loans, and legislated to provide mandatory relief from contractual obligations. In addition, increasing recognition of the limitations of insolvency regime in addressing the crisis for SMEs prompted many jurisdictions to change their laws. However, consistent with its free market principles, Hong Kong has only adopted economic measures and has provided limited contractual relief in favour of SME tenants. There is no SME-specific insolvency law nor is the Hong Kong government currently considering any such law reform. This article reviews the need for a temporary insolvency regime to cater to distressed but economically viable SMEs restructure their debts. Drawing on a set of interviews with Hong Kong SME owners, this author finds that they are often unaware of how insolvency law operates, their unsecured creditors are apathetic, and bankruptcy stigmatism is high. Based on a review of the frameworks in the other advanced common law jurisdictions such as the United States, Australia and Singapore, a recommendation for a simplified restructuring and liquidation framework is developed. The process is designed to be simplified and expedited and it incentivises early negotiations with creditors.     

The market distortion effects of mortgage tightening and transaction taxes: Evidence from Hong Kong residential resale market

By using transaction-level data, we study if two popular policies intended to cool an overheated housing market would serve their intended purposes. We found both mortgage tightening and Special Stamp Duties (SSD) actually led to higher starter home prices in Hong Kong. Mortgage tightening shifted the demand for bigger homes to that for smaller ones. The SSD that applies to resales within a specified period of the original purchase lowered turnover across the housing market. The decline in turnover is, as expected, sharpest for small flats, implying a dramatic shrinkage in second-hand supply of such homes, driving their prices up. We also found transactions bunching as many homes are held till the SSD is no longer applicable, indicating lock-in effects. Relative to those that are not subject to the SSD, the prices of properties subject to the levy are found to be lower by 6.8%.