Does external finance pressure affect corporate disclosure of Chinese non-state-owned enterprises?

We examine whether external finance pressure influences information disclosure of Chinese non-state-owned enterprises (NSOEs), which are often entrepreneurial firms. Existing Chinese stock exchange regulations stipulate that firms need to meet certain earnings performance criteria to qualify for rights issue or avoid delisting. These regulatory criteria create pressures for firms in need for external equity financing to manipulate earnings in order to meet and beat the performance targets. To examine this, we exploit an exogenous event of Chinese accounting standards change in 2007, when firms are given greater accounting disclosure discretion. Following this change, we find evidence consistent with increased earnings manipulation among NSOEs that barely meet these performance targets. This effect is also more pronounced among such NSOEs with weaker political connections, which increases their dependence on the capital market for external financing. Our findings have policy implications for the financing of NSOEs and entrepreneurial firms in emerging economies.     

An optimal multiple stopping approach to infrastructure investment decisions

The energy and material processing industries are traditionally characterized by very large-scale physical capital that is custom-built with long lead times and long lifetimes. However, recent technological advancement in low-cost automation has made possible the parallel operation of large numbers of small-scale and modular production units. Amenable to mass-production, these units can be more rapidly deployed but they are also likely to have a much quicker turnover. Such a paradigm shift motivates the analysis of the combined effect of lead time and lifetime on infrastructure investment decisions. In order to value the underlying real option, we introduce an optimal multiple stopping approach that accounts for operational flexibility, delay induced by lead time, and multiple (finite/infinite) future investment opportunities. We provide an analytical characterization of the firm׳s value function and optimal stopping rule. This leads us to develop an iterative numerical scheme, and examine how the investment decisions depend on lead time and lifetime, as well as other parameters. Furthermore, our model can be used to analyze the critical investment cost that makes small-scale (short lead time, short lifetime) alternatives competitive with traditional large-scale infrastructure.     

京沪高铁对主要站点旅游流时空分布影响

交通是影响旅游流时空分布的最主要因素之一。文章以京沪高铁线为例,运用旅游场理论和社会网络分析方法,比较京沪高铁开通前后9个主要高铁站点的旅游流时空分布变化特征。研究表明:高铁开通强化了北京、上海和南京等重要旅游客源地和目的地的领先地位,呈现出高铁旅游流的"马太效应";高铁促使靠近重要旅游目的地的竞争处于劣势的旅游地旅游流呈现"过道效应";高铁促使空间距离临近的两个城市的旅游流呈现"同城效应";高铁提升原本缺乏区位优势的旅游资源型站点的可进入性,同时对区域核心城市的交通依赖程度明显下降;高铁的时空压缩效应缩短旅途时间,可实现小长假的远程旅游,双休日的中程旅游,一定程度上避免了中远程旅游对黄金周的依赖,从而缓解出游时间的集中性,提高了旅游质量。     

Size and support ratings of US banks

We examine whether Fitch support ratings of US banks depend on bank size. Using quarterly data for the period 2004:Q4 to 2012:Q4 and controlling for several factors that make large and small banks different, we find that bank size is positively related to support ratings. However, the effect is non-linear in line with the ‘too-big-to-rescue’ hypothesis. After the failure of Lehman Brothers and the passing of Dodd-Frank the relation between size and potential support has become stronger.     

Differentiability of von Neumann–Morgenstern utility functions

This paper studies necessary and sufficient preference-based conditions for differentiability of risk averse (prudent, or temperate) von Neumann–Morgenstern utility functions. The very idea to devise those conditions is based on the reverse claim of an old observation by Arrow that a risk-averse expected-utility maximizer will always accept a sufficiently small stake in any positive expected-value bet if her von Neumann–Morgenstern utility function is differentiable.     

What all-cash companies tell us about IPOs and acquisitions

We examine the IPOs of and acquisitions made by special purpose acquisition corporations (SPACs). This unique sample provides a perspective on these two corporate events unencumbered by much of the typical confounding information. We find the IPO gross spreads of these simple firms similar to the spreads accompanying the IPOs of much more complex firms. This result is consistent with illogically sticky spreads. We find acquirer announcement returns roughly triple that of typical acquisitions. Since these returns disproportionately reflect the valuation split between acquirer and target, they suggest that the lower returns of typical acquisitions stem from overestimating synergies and/or new information regarding the bidder.     

First-time buyers' subjective knowledge and the attribute preferences of Chinese car buyers

This research focuses on the subjective knowledge of first time buyers (FTBs hereafter) and how it influences their preference attributes in a market, more specifically, the emerging Chinese car market. Previous research has considered the difference in the subjective knowledge of a product between owners and non-owners but does not account that some non-owners have stronger intentions to make a purchase. Yet, the impact of the purchase goal of FTBs on their subjective knowledge remains unexplained. This research demonstrates that the effect of the purchase goal on subjective knowledge is moderated by product ownership. Specifically, the findings show that the purchase goal only affects the level of subjective knowledge of FTB but not those of potential repurchasing buyers. Furthermore, when segmenting potential FTBs on the basis of their subjective knowledge, the segment of potential FTBs with higher subjective knowledge display similar attribute preferences to owners, while the preference differences are observed when segmenting potential buyers into owners and non-owners. From a managerial perspective, the findings of the research demonstrate the value of using subjective knowledge for consumer segmentation when targeting car buyers.     

Endogenous information revelation in a competitive credit market and credit crunch

In this paper, we propose a new mechanism able to explain the occurrence of credit crunches. Considering a credit market with an asymmetry of information between borrowers and lenders, we assume that borrowers have to pay a cost to reveal information on the quality of their project. They decide to be transparent if it is necessary for getting a loan or for paying a lower interest rate. Two types of competitive equilibria may exist: an opaque equilibrium in which all projects receive funding without revealing information; a transparent one in which only the best projects reveal information and receive funding. It is also possible to get multiple equilibria. Incorporating this microeconomic mechanism in an OLG model, the economy may experience fluctuations due to the change of regime, and indeterminacy may occur.     

“I’ll wait for him”: Understanding when female shoppers prefer working with gay male sales associates

This article explores an under-researched area in retailing; namely, straight female shoppers’ preferences for working with gay male sales associates. Study 1 employs qualitative methodology to show that female shoppers often prefer working with gay male sales associates when they are older or heavier than female sales associates. Study 2 employs experimental methodology to show that female shoppers desire to work with gay male associates more than their straight male counterparts when they are purchasing merchandise requiring non-sexual intimacy, such as apparel and cosmetics. The results should help retailers understand why many female shoppers willingly, and comfortably, work with gay male sales associates and the role of gay associates in various retail departments.     

Predicting high consumer-brand identification and high repurchase: Necessary and sufficient conditions

The objective of this paper is to explore the necessary and sufficient conditions to obtain high consumer-brand identification (CBI) and high repurchase intentions (Rep). Different from most business research on CBI and Rep that is based on symmetric thinking, this paper uses asymmetric analytics and performs fuzzy set qualitative comparative analysis. The findings show that (1) although it is possible to identify the necessary conditions for very high consumer-brand identification and very high repurchase intentions, no combination of conditions is sufficient to achieve these outcomes; (2) affective drivers have more importance than cognitive drivers for obtaining high CBI; (3) the configuration solutions for high CBI include at least two antecedents; (4) high CBI is a sufficient but not necessary condition for high Rep; (5) high Rep can also be achieved if brand-self similarity and brand identity occur; and (6) memorable brand experiences alone may be enough to obtain high Rep.