Cross-border exchanges and volatility forecasting

We test for the performance of a series of volatility forecasting models (GARCH 1,1; EGARCH 1,1; CGARCH) in the context of several indices from the two oldest cross-border exchanges (Euronext; OMX). Our findings overall indicate that the EGARCH (1,1) model outperforms the other two, both before and after the outbreak of the global financial crisis. Controlling for the presence of feedback traders, the accuracy of the EGARCH (1,1) model is not affected, something further confirmed for both the pre and post crisis periods. Overall, ARCH effects can be found in the Euronext and OMX indices, with our results further indicating the presence of significant positive feedback trading in several of our tests.     

Keeping Up with the Kardashians: Consumers' Intention to Engage in Cosmetic Surgery

This study examined the predictors of intention to engage in a cosmetic surgery. A convenience sampling approach utilizing a self-administered pen-and-paper and online survey was used to collect 214 responses in Australia. Favorable attitude had a significant positive effect on intention to engage in a cosmetic procedure for female respondents. On the other hand, subjective norms had a significant positive effect on intention to engage in a cosmetic procedure for male respondents. Managerially, findings will help practitioners in the cosmetic surgery industry to implement marketing strategies that target this growing consumer segment.     

The Global Preference for Dividends in Declining Markets

Investors globally prefer dividend‐paying stocks over nondividend‐paying stocks more in declining than in advancing markets, even accounting for firm‐level growth opportunities, size and risk effects. Dividend‐paying stocks outperform nondividend‐paying stocks, from 0.63% (China) to 3.79% (Canada) more per month in declining than in advancing markets. In declining markets, dividend‐paying firms outperform by more than any underperformance in advancing markets. The results are robust across dividend taxation regimes, legal environments, emerging and developed markets, periods prior to and after the 2008 global financial crisis, the exclusion of the dividend declaration month and in respect to segmented or integrated international capital markets.     

Corporate governance,life cycle,and payout precommitment: An emerging market study

We analyze the role of firm‐level corporate governance in determining the precommitment payout policy of emerging market firms and investigate whether there is a precommitment life‐cycle effect. Unlike previous studies of U.S. firms, we find evidence of precommitment only among relatively well‐governed firms, which combine good governance with large dividend payouts to shareholders and large debt‐related repayments to creditors. We also document a strong precommitment life‐cycle effect. Firms in the growth and mature stages of their life cycle tend to use both debt and dividends to precommit to investors, with an increasing proportion of dividends in total payout measures. Our results are robust to an array of control variables, alternate payout proxies, market setting, and firm‐level corporate governance, and it addresses potential endogeneity concerns in the sample.     

Uncertainty of outcome or strengths of teams: an economic analysis of attendance demand for international cricket

A significant body of theoretical literature has argued that popular interest in sporting contests between teams is heavily influenced by how difficult it is to predict the result ex-ante. Empirical research has, however, been unable to reach a consensus on the magnitude of uncertainty of outcome on demand. In this article, we seek to resolve this impasse by distinguishing between uncertainty of outcome in the short run and uncertainty of outcome in the long run. We also show that it is important to control for the independent effect of absolute team strength when testing the uncertainty of outcome hypothesis. Using data on over 380 Test cricket matches played in England, Australia and New Zealand since 1980, we find that short-run uncertainty of outcome has a significant impact on attendance demand and that absolute team strength has better explanatory power for attendance demand than does long-run uncertainty of outcome. Our results suggest some policy implications for the management and organization of international cricket.     

National Emissions Standards,Pollution Havens,and Global Greenhouse Gas Emissions

The present study shows that the availability of “pollution havens” can negate the effect of national legislation that tightens industrial greenhouse gas emission standards. In the perverse case, a unilateral tightening of said standards in Country A (a country with relatively stringent industrial emission standards) causes a representative multinational firm to emit more units of greenhouse gas in its global production. The article highlights the potential perils of unilateral action on environmental issues that are global in nature.     

Does the information content of payout initiations and omissions influence firm risks?

We study the influence on firm risks of NASDAQ and NYSE firm payout initiations and omissions. These payout events can be interpreted as managerial signals of firm financial life-cycle maturation resulting in concomitant changes in firm risks. We remove confounding payout types and we match on the propensity to initiate or omit informed by determinants of payout known to investors in advance. For payout event and matched firms, we apply the difference-in-differences method to estimate the effect of the information content of actual initiations and omissions on firm risks. We find consistent significant declines in total, aggregate systematic, and idiosyncratic firm risks after cash dividend initiations and increases after dividend omissions, but only incidentally after share repurchase initiations and omissions.     

Follow the leader (or not): The influence of peer CEOs’ characteristics on interorganizational imitation

Research Summary: We argue that because charisma and narcissism represent widely held prototypes of effective and ineffective forms of leadership, respectively, the likelihood that a focal firm will imitate the practices of its peer firms is affected by these peer firms’ CEO characteristics. We theorize that peer firm CEO charisma enhances the focal firm’s imitation of peer firms’ behaviors, while peer firm CEO narcissism diminishes it. We further posit that the uncertainty of the context affects these imitation processes: industry dynamism and prior experience in a given strategic domain, respectively, strengthens and dampens focal firms’ susceptibility to these peer CEOs’ attributes. We test and find support for these ideas using a longitudinal sample of Fortune 500 firms in two distinct domains, corporate strategy and corporate social responsibility. Managerial Summary: When companies are uncertain about the costs and benefits of strategic actions this may lead them to imitate the actions of peer companies. But given the uncertainty, the challenge for executives is: which companies to emulate and which to ignore? In a sample of Fortune 500 companies, we find that the charisma or narcissism of a peer company’s CEO positively or negatively influences, respectively, the degree to which the peer company’s strategic actions are imitated. We reason that this is because these particular CEO attributes are widely believed to drive leadership effectiveness or ineffectiveness, respectively. We also find that the effects of these CEO characteristics on imitation are stronger in dynamic industry environments and weaker for companies that already have experience with the given strategy.     

Impact of perceived value on the online purchase intention of base of the pyramid consumers

Despite the voluminous purchasing power of the consumers at the base of the pyramid (BOP), substantial research has not been carried out on their online buying behaviour. This study investigates the factors that trigger the online shopping intention of BOP consumers. We conducted semi-structured in-depth interviews with 52 BOP respondents from India. Our thematic analysis indicates four perceived benefits and five sacrifices influencing BOP consumers' perceived value for online purchases, subsequently determining their adoption behaviour. As a novel contribution to the literature, this study unfolds several unknown factors that motivate/demotivate BOP consumers to buy online using the Value-based Adoption Model (VAM). The findings of this study will help e-commerce marketers enhance BOP consumers' usage intention toward online purchases.