Diversification and cash dynamics

Why do diversified firms hold significantly less cash than focused firms? We study this question using a dynamic model of corporate investment, saving, and diversification decisions. We find that investment dynamics are more important in explaining the cash differences than financing frictions. More efficient internal capital markets increase cash differences and are especially valuable when a firm diversifies or refocuses. Contrary to static models, more diverse conglomerates have lower cash differences. Endogenous selection (diversifying firms are larger and have better growth opportunities) accounts for 68% of the cash difference, and the diversification event itself reduces cash holdings by 32%.     

Residents’ support for red tourism in China: The moderating effect of central government

This study proposes and tests a model that incorporates two competing theories of political trust, institutional trust and cultural trust, to examine community support for “red tourism” development. Using data gathered from residents living in close proximity to Jinggangshan Scenic Area in China, this study examines the influence of authoritarian values, particularly as they relate to level of residents’ power, their level of trust in government, and their effects on support for “red tourism.” Findings suggest that trust in central government moderates the relationship between trust in local government and support. Future studies should utilize the institutional trust framework to assess residents’ trust in the local government and the cultural trust framework to assess trust in the central government.     

Hotel customers’ environmentally responsible behavioral intention: Impact of key constructs on decision in green consumerism

Since rapidly growing numbers of customers prefer environmentally responsible products, efforts to “green” hotel operations are becoming increasingly important. The study reported here was designed to investigate guests’ intention formation when selecting an environmentally responsible hotel. The intention was to extend the Model of Goal-directed Behavior (MGB) by integrating several essential variables (environmental awareness, perceived effectiveness, and eco-friendly behavior and reputation) in explicating customers’ eco-friendly behavior. Findings from the measurement model indicated that study variables included a satisfactory level of reliability and validity. Results from the structural modeling revealed that the proposed theoretical framework had a strong ability to anticipate intention; incorporated constructs that played a vital role in hotel guests’ decision formation; and identified attitudes and desires that acted as mediators. The role of established variables in the original MGB was redefined. Our model had superior prediction power over the MGB, accounting for guests’ environmentally friendly buying behavior accurately.     

Can investors of Chinese energy stocks benefit from diversification into commodity futures?

We attempt to evaluate the diversification potential of commodity futures for energy stocks in China. With a variety of copula functions and three risk-based dynamic measures, our results show that even though commodity futures are not helpful in improving the risk-adjusted returns of energy stocks, they can significantly reduce the volatilities and expected-shortfalls of the diversified portfolios. Such diversification benefits are much larger during large market downturns than during normal times. In particular, gold (copper) futures are the most (least) attractive in diversifying risks of energy stocks in most cases. The results also highlight that the non-linear dependence cannot be ignored when estimating the diversification benefits, and more various risk hedging strategies are expected for investors holding energy stocks, especially coal company stocks.     

Drivers of customer decision to visit an environmentally responsible museum: merging the theory of planned behavior and norm activation theory

The main goal of this research was to merge the theory of planned behavior and the norm activation theory into one model and test its applicability in an environmentally responsible museum context. A filed survey was conducted at museums. Structural equation modeling was used to test research hypotheses. Results of the structural model comparisons revealed that the prediction power of our integrated model was superior to that of the theory of planned behavior and the norm activation theory. The proposed relationships among research constructs were generally supported. The mediating role of study variables was established. Additionally, the salient role of personal norm and attitude in generating museum travelers’ pro-environmental intention was identified. Overall, there was a strong support for the proposed theoretical model.     

Innovative restaurants in a mass-tourism city: Evidence from Antalya

This paper is about innovative restaurants in the single-asset (sun-sea-sand) mass-tourism city of Antalya, and focuses on the supply side of the restaurant market. The broader aim of the paper is to show that the mass-tourism city of Antalya is more differentiated than one might expect. The specific aim of the paper is to find out what types of restaurants are more innovative than others and in what types of tourism places in the city they are located. The empirical research is based on interviews with 54 managers and chefs, the results of which are analysed with quantitative methods of relational analysis such as correspondence- and chi-square analysis. The main result of the empirical research is that high-quality restaurants, visited by a mix of locals and tourists, and are located in a specific urban places, are most innovative.     

Customer and Supplier Portfolios: Can Credit Risks be Managed Through Supply Chain Relationships?

While supply chain risk has been the subject of an ever‐increasing amount of research attention, the importance of credit risk has been less studied, at least by supply chain researchers. Yet, there may be risks inherent within a firm's portfolios of supply chain relationships that are manifested in the credit risk of a firm. Moreover, portfolio characteristics may serve as a signal to the external market regarding these risks. While customer and supplier portfolio characteristics may impact the firm's exposure to risks, the specific issue of how portfolio characteristics relate to credit risk has rarely been examined by supply chain scholars. This research bridges extant works in supply chain management and finance to relate supply chain characteristics to a critical reputational outcome, namely credit ratings. In this research, we utilize a sample of firms that recently underwent an initial public offering to empirically examine the theoretical predictions of Resource Dependence Theory regarding the relationships between different supply chain portfolio characteristics and credit risk.     

Structuration theory in accounting research: Applications and applicability

Ever since Giddens’ structuration theory (ST) was introduced into the accounting literature some 25 years ago, it has strengthened its position as one of the major schools of thought used to explore accounting as organizational, social and political phenomena. The purpose of this study is to review how ST has been applied, and can be applied, in this sizeable literature. Overall, the review of some 65 published papers, suggests that not only has ST contributed to challenge the assumptions of ‘inherent and functional’ features of accounting systems per se characterizing mainstream research, but also to develop other alternative theoretical perspectives. However, our review also suggests several limitations. These include that the accounting community has not really worked as a collective to develop a structurationist understanding of accounting practices, and that most researchers remain largely uncritical to ST as a theory. We also find that accounting scholars have not yet developed a mutual understanding of how to interpret ST (i.e. there are conceptual unclarities and even inconsistencies), or how to apply ST methodologically in empirical research. Based on these limitations, and the identification of a number of ‘black spots’ in the literature, we suggest several directions for future scholarly effort.     

Impact of growth strategy on mode of governance in alliances

The aim of this study is to analyse the way in which growth strategies influence the choice of governance mode in corporate alliances. Specifically, the study looks at how expansion, diversification and internationalisation strategies determine choice of joint ventures rather than other types of alliances. To that end, we analysed a sample of 918 alliances among companies from the European Union-15 between 2000 and 2004. The results suggest that companies prefer to set up joint ventures when their strategies are based on expansion and related diversification, whereas they prefer other types of alliances when they follow a strategy of unrelated diversification. Furthermore, in international alliances, it appears that the impact of growth strategy on alliance governance mode is similar for the entire range of companies employed in the sample.