THE VALUE OF EXPERIENTIAL LEARNING BY ORGANIZATIONS: EVIDENCE FROM INTERNATIONAL JOINT VENTURES

We use a sample of international joint venture announcements to test the hypothesis that organizations learn from experience, such that prior learning enhances the value of later ventures. We find that experience with ventures in the same foreign location, as well as experience with international joint ventures in general, is valued by the market. In contrast, experience in the same type of joint venture activity does not add any incremental value. These findings suggest the market recognizes and values some, although not all, forms of organizational learning.     

Inflationary Finance, Capital Controls, and Currency Substitution

This paper studies currency substitution in an environment where agents' inflation tax-evasive demand for foreign money is balanced by the concern for the possibility that the government may impose economy-wide capital controls under which foreign currency transactions are costly. Under the assumption of endogenous beliefs, the results show a persistent demand for foreign money despite efforts by the government to reduce inflation. In addition, the economy can exhibit multiple, Pareto-ranked steady states with different levels of currency substitution. The stability analysis suggests that the economy converges to the inferior steady state, on the "wrong side" of the Laffer curve.     

Saving–investment correlations, capital mobility and crowding out: some further results

This study attempts to reassess the evidence on the degree of capital mobility and crowding out by applying a varying coefficients model to data on 19 OECD countries over the 1971–1999 period. Our period-specific results strongly support the crowding-out effect as well as the low capital mobility argument for this group of countries as a whole. However, the strength of the crowding-out effect appears to weaken and the degree of capital mobility to increase in the 1990s as compared to the 1970s and 1980s. We also classify countries into five groups according to the relative size of the government sector. Our group-specific results indicate that the degree of capital mobility is generally lower and the crowding-out effect generally stronger, in country groups with smaller governments. The differences are especially evident when we compare the group with largest government size with all other groups, those differences between the latter being much more modest. However, significant differences in the country-specific results suggest that it is prudent to be cautious when we draw conclusions about crowding-out and capital mobility for specific countries from the period-wise or group-wise results. This is particularly important in drawing policy implications for specific countries.     

Relationship marketing in consumer markets: Antecedents and consequences

Understanding the motivations of consumers to engage in relationships with marketers is important for both practitioners and marketing scholars. To develop an effective theory of relationship marketing, it is necessary to understand what motivates consumers to reduce their available market choices and engage in a relational market behavior by patronizing the same marketer in subsequent choice situations. This article draws on established consumer behavior literature to suggest that consumers engage in relational market behavior due to personal influences, social influences, and institutional influences. Consumers reduce their available choice and engage in relational market behavior because they want to simplify their buying and consuming tasks, simplify information processing, reduce perceived risks, and maintain cognitive consistency and a state of psychological comfort. They also engage in relational market behavior because of family and social norms, peer group pressures, government mandates, religious tenets, employer influences, and marketer policies. The willingness and ability of both consumers and marketers to engage in relational marketing will lead to greater marketing productivity, unless either consumers or marketers abuse the mutual interdependence and cooperation. He has published more than 200 books and research papers in different areas of marketing. His bookThe Theory of Buyer Behavior (1969) with John A. Howard is a classic in the field. He has recently published two scholarly books:Marketing Theory: Evolution and Evaluation (1988) andConsumption Values and Market Choices (1991). He is on the editorial boards of at least a dozen scholarly journals in marketing, international business, and quantitative methods; he is also series editor ofResearch in Marketing (JAI Press). Prior to joining Emory, he was an associate professor of marketing at XLRI Jamshedpur in India. He received his M.B.A. and Ph.D. from Banaras Hindu University, India. He has authored a number of articles in the area of international marketing, business alliances, and environmental marketing. He is coeditor ofResearch in Marketing (Annual Series, JAI Press) and serves on the editorial review board ofInternational Marketing Review.     

DO SCANDALS TRIGGER GOVERNANCE CHANGES? EVIDENCE FROM OPTION BACKDATING

We examine whether firms charged with backdating option grants make discernible changes to board structure and activity and whether such changes help recoup value losses from the revelation of option backdating. We find that these firms increased board size, reduced duality, and increased board independence. In addition, the boards and the compensation committees of these firms experienced significant increases in meeting frequency. We also find that firms in the same sectors that had not been identified as backdating option grants experienced similar changes in board activity and some elements of board structure. Additional analysis reveals that increases in board size, chief excutive officer turnover, and the meeting frequency of the audit committee are related to buy‐and‐hold abnormal returns in the postscandal period.     

The information content of stock split announcements: Do options matter?

We provide a new test of the informational efficiency of trading in stock options in the context of stock split announcements. These announcements tend to be associated with positive abnormal returns. Our traditional event study results show abnormal returns that are significantly lower for optioned than non-optioned stocks, whether traded on the NYSE, Amex, or Nasdaq. After controlling for market returns, capitalization, book-to-market ratio, and trading volume, we find that the abnormal returns are significantly lower for NYSE/Amex optioned than non-optioned stocks. Although the results for Nasdaq stocks are not as clear, the overall effects tend to be lower after optioning. These findings are consistent with the hypothesis that the prices of optioned stocks embody more information, diminishing the impact of the stock split announcement. They provide new evidence of the beneficial effects of options on their underlying stocks.     

Smallest Meaningful Pay Increases: Field Test,Constructive Replication,and Extension

The authors extend prior literature by examining, in two distinct field settings, smallest meaningful pay increases (SMPIs) in terms of magnitude, behavioral intention, and affective reactions. In Study 1, a two‐wave study of 177 employees of a university medical center in the United States, the authors find stable thresholds of about 5.0 percent for positive reactions to pay increases (magnitude [5.4 percent], behavioral intentions [4.2 percent], and affective reactions [5.6 percent]). In Study 2, a sample of 495 university employees in Finland, the authors also find stable but slightly higher thresholds of about 8 percent for behavioral intentions (8.4 percent) and positive affective reactions (7.2 percent) to pay increases. They also find threshold effects of ?5.7 percent for behavioral intentions and ?5.8 percent for negative affective reactions in response to restricted future pay increases levied in the transition to a new pay system. Discussion of the results centers on pay raise administration and future research regarding implied and direct pay reductions. © 2015 Wiley Periodicals, Inc.