Building capabilities via suppliers' effective management of relationships

This paper is an empirical study identifying the role of a relationship-specific capability of building capabilities through relationships (CBC) when suppliers put efforts into increasing their perceived market effectiveness by managing the effects of relationship quality. The relationship between relationship quality and effectiveness is mediated by CBC. Suppliers in a supply chain form different levels of relationship quality with partners in response to market conditions and industry characteristics. Relationship marketing by suppliers requires a deep understanding of the role of CBC that is developed by a supplier and an effective utilization of CBC to lead an effective relationship to better outcomes. This leads to maximizing of the competitive advantages for suppliers and will help maintain effective relationships.     

Growing into Export Markets: The Impact of Exporting on Firm‐level Investment in Indonesia

This paper documents the impact of exporting on capital accumulation across heterogeneous manufacturing firms in Indonesia. The findings show that entering export markets significantly increases investment behavior during the year of initial entry and for as much as three years after entry. The results imply that the investment rate among new exporters is 37% higher than non‐exporters in the year of entry and 14–26% higher in the three years after entry. Using detailed data on firm ownership, the paper further show that foreign‐owned affiliates invest at systematically higher rates upon entry into export markets. The estimates indicate that domestically owned exporters are potentially credit constrained and suggest that improving credit market access may increase the investment rate among domestic exporters by as much as 40% in the year of entry.     

Influence of customer–firm relationships on customer participation in the service industry

Previous research has focused on relationship value and outcome as ‘consequence variables’ of customer participation (CP). This study examines customer–firm relationships as an ‘antecedent variable’ of CP. Early contact and relationships with customers build confidence in the service encounter and create customer trust, which leads to commitment and improves customer cooperation. Likewise, interaction and relationship building in the service encounter encourage active customer cooperation and participation in the later stages of interaction. This study analyzes the influence of relational antecedent factors affecting customer participation intention, examines the moderating effects of customer relationship proneness, and suggests some theoretical and practical implications.     

Allocation problems among sharing groups

We deal with allocation problems among sharing groups. There are n agents. The agents are divided into several sharing groups. A homogeneous good is allocated among sharing groups rather than among the agents. The good is a private good for sharing groups, and a public good for the members of each sharing group. That is, all of them in the same sharing group can consume it without rivalry. We introduce some allocation rules and axioms. The utilitarian allocation rule and the egalitarian allocation rule are characterized by some axioms.     

An evolutionary perspective on strategic group emergence: a genetic algorithm‐based model

We develop a simulation model to examine conditions under which strategic groups emerge and their performance difference persists. In our model, mobility barriers, strategic interactions among high performers, dynamic capabilities (the mechanisms that allow winners to continue to survive), and boundary of rivalry are put together to derive their joint implications for the evolution of strategic groups. Not surprisingly, our model behavior shows that mobility barriers and strategic interactions play an important role in sustaining intergroup performance difference. However, the extremely high level of mobility barriers is shown to impede the emergence of strategic groups. We also find that dynamic capabilities and boundary of rivalry are as essential as mobility barriers in understanding the emergence and stability of strategic groups. When dynamic capabilities are absent or when rivalry is extended over firms with dissimilar strategies, strategic groups are less likely to exist. These findings can serve as a guideline for empirical research to probe why strategic groups exist sometimes and why they do not at other times. Copyright © 2002 John Wiley & Sons, Ltd.     

Impact of Environmental Performance on Firm Value for Sustainable Investment: Evidence from Large US Firms

This research examines the impact of environmental performance on firm value, applying the event study methodology to Newsweek’s ‘Green Rankings’ announcement of 2012 for large US firms. Specifically, it analyzes the impact of the absolute green score and green rank of firms on their performance in the stock market. We found that investors perceive the announcement as positive news, leading to significant positive standardized cumulative abnormal returns (SCARs). After controlling for industry‐ and firm‐specific effects, we observed that firms with repeated green rankings for enhancing environmental performance showed significantly higher SCARs than those with either reduced or unchanged environmental performance. In addition, the environmental impact score measuring environmental damage from a firm's operational activities was found to be the most influential factor in improving the firm's value. Our findings are beneficial to managers in allocating resources to different types of environmental initiative, and provide valuable insight for sustainable environmental investment. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

FIRM‐LEVEL INVESTMENT AND EXPORT DYNAMICS*

This article characterizes the complementarity between exporting and investment in physical capital. We argue that new investment allows young exporters to grow faster and survive longer in export markets while reducing their vulnerability to productivity or demand shocks across markets. We structurally estimate our model using detailed firm‐level data. We find that the choice of cost structure has a large impact on model performance and the estimated costs of exporting or investment. Using detailed capital and output tariff rates, we quantify the impact of policy change on aggregate export and investment growth.     

Audit Hours and Unit Audit Price of Industry Specialist Auditors: Evidence from Korea

Higher audit fees associated with auditor industry specialization could represent higher unit price charged by industry specialist auditors (ISAs) or the provision of a greater quantity of audit services. This study exploits a field setting in Korea, where the disclosure of audit hours is required in company annual reports, and finds that ISAs charge significantly higher total audit fees but also expend significantly greater audit hours than non‐ISAs. When audit fees and hours are considered together, the unit audit price of ISAs is significantly lower than that of non‐ISAs. This indicates that higher total audit fees associated with ISAs are likely to be attributable to greater audit hours associated with ISAs. However, greater audit hours for ISAs may suggest higher audit quality or may simply indicate that the additional audit work performed by ISAs is conducted by relatively cheaper junior auditors. Our work provides an alternative explanation for the higher total audit fees documented in the previous studies.