Quality Management Systems Certification: Research Note

Although International Quality Standards 9000 certification is one of the most popular quality assurance systems in the world, its contribution to a firm's value is still a controversial issue. This project re-examines this issue by using stock market reactions to the announcements of the award of certification made by a sample of Hong Kong listed companies, as a proxy for its contribution to a firm's value. The results suggest that on average certification increased a firm's value. However, most of this value increase was incorporated into stock prices before formal announcements were published in newspapers. In addition, the contribution of certification to value was greater in smaller firms than in larger ones. This can be attributed to fewer stock traders and professional analysts following smaller firms.     

Policy Dimensions of Progressive Institutional Change: Lessons from China’s Construction of a Socialist Market Economy

Abstract:

Through a comprehensive review of the progressive institutional change (PIC) literature, I first discuss four possible trajectories of PIC by considering the forces of societal reaction that might frame the path, as well as the scale and scope of the changes. Thus, I pose four questions that need to be asked when related policies are formulated for PIC. To illustrate this method, I scrutinize the evidence from the construction of a socialist market economy by the Chinese government since the 1980s and argue that related policies have successfully promoted PIC from three dimensions: (1) curbing potential conflicts with power groups; (2) promoting a sense of awareness among stakeholders; and (3) minimizing disturbances to the community. Actually, the related changes demonstrate a dynamic “displacement process” for PICs. Despite the success of this sociosystem, it is found that the sustaining of PIC which requires policy factors that enhance instrumental efficiency in the Chinese context will serve as a challenge to the Chinese government ahead.     

An analysis of environmental sustainability in small & medium‐sized enterprises: Patterns and trends

One of the greatest challenges facing the world today is climate change. The need to consistently advance with environmentally sustainable practices in today's businesses is crucial, and businesses are demanded to be more environmentally sustainable every day. This study conducts an analysis of the literature on small and medium‐sized enterprises' (SMEs) environmental sustainability by carefully examining 122 studies from 58 journals published from 2013 to 2019. We investigate the trends in drivers and barriers of sustainability adoption to inform both SMEs managers and policymakers. Our results also classify the reviewed studies on the basis of their methodologies and show the distribution of studies across industry sectors and locations in order to set directions for future research on sustainability practices of SMEs.     

Short Sales and Price Discovery in the Hong Kong Real Estate Market

Indirect real estate (IRE) returns are often shown to lead direct real estate (DRE) returns. Apart from differences in liquidity, transaction costs, and management skills, the DRE market is also less complete than the IRE market—when negative shocks arrive, one can only short IRE (e.g., real estate stocks or REITs), but not DRE. This study investigates if short sales in the IRE market convey any information to the DRE market. Based on high‐frequency (weekly) property price data in Hong Kong from 2000 to 2012, we find that short sales in the IRE market led DRE returns, even after controlling for the lagged IRE returns in a VAR model. This supports an information spillover mechanism in which the DRE market learns private information that is not reflected in IRE returns. The spillover effect, however, weakened after the recent global financial crisis because the increased uncertainty over the credibility of individual firms made short sales more reflective of firm‐specific information than real estate market fundamentals.     

Managing reverse logistics to enhance sustainability of industrial marketing

In this paper, a sustainable industrial marketing framework of latest requirement of green and sustainable operation is proposed. When literatures in strategy, marketing and operation have provided insight about the efficiency of reverse logistics and business value for the customer, the interrelationship is still under explored. This raises the question whether manufacturers could determine ecological friendly strategies to address their customer's environmental conscious needs and design the suitable solution to strike the balance between ecology and economics. Based on the case study of a medical product manufacturer, this study addresses this question by investigating how manufacturers identify the problem of reverse logistics; design and develop of sustainable product and service by enhancing the efficiency of operations, and market competencies that add value to their customers' business processes. Within the strategy for designing for effective reverse logistics, these findings contribute to understand the use of information system and technology for reverse logistics to enhance the customer's business process and provide value-added process for customer retention.     

STATE DEPENDENT PRICING AND BUSINESS CYCLE ASYMMETRIES*

We present a tractable, dynamic general equilibrium model of state‐dependent pricing and study the response of output and prices to monetary policy shocks. We find important nonlinearities in these responses. For empirically relevant shocks, this generates substantially different predictions from time‐dependent pricing. We also find a distinct asymmetry with state‐dependent pricing: Prices respond more to positive shocks than they do to negative shocks. This is due to a strategic linkage between firms in the incentive for price adjustment. Our state‐dependent model can account for business cycle asymmetries in output of the magnitude found in empirical studies.     

Why Do Some Households Save So Little? A Rational Explanation

This paper offers an explanation for the puzzle of low wealth holdings among a significant fraction of the elderly. Instead of invoking irrational, nonrational, or nonoptimal behavior to resolve the puzzle, it is shown that widespread low wealth holdings are consistent with a rational life-cycle model of saving with uncertain lifetime and borrowing constraint. When there is uncertainty about the length of life, it is optimal for some individuals to save little and exhaust their wealth early. The characteristics of these individuals are derived. The simulation results support that the model can account for low wealth holdings as well as early terminal wealth depletion. The analysis also rejects the common perception that uncertain lifetime reduces dissaving. Journal of Economic Literature Classification Numbers: D11, D91, E21, I12, J14.     

Time consistent monetary policy with endogenous price rigidity

I characterize time consistent equilibrium in an economy with price rigidity and an optimizing monetary authority operating under discretion. Firms have the option to increase their frequency of price change, at a cost, in response to higher inflation. Previous studies, which assume a constant degree of price rigidity across inflation regimes, find two time consistent equilibria—one with low inflation, the other with high inflation. In contrast, when price rigidity is endogenous, the high inflation equilibrium ceases to exist. Hence, time consistent equilibrium is unique. This result depends on two features of the analysis: (1) a plausible quantitative specification of the fixed cost of price change, and (2) the presence of an arbitrarily small cost of inflation that is independent of price rigidity.