Electoral uncertainty and financial volatility: Evidence from two‐round presidential races in emerging markets

We study how the predictability and the decisiveness of electoral outcomes affect financial volatility. We argue that traders’ optimal investment strategies depend on their ability to make accurate electoral forecasts and the prospective losses associated with placing a bet on the wrong candidate. Using a triple difference‐in‐difference approach and data from two‐round presidential elections in five Latin American countries between 1999 and 2018, we find that financial volatility is greatest in the days immediately following unpredictable, decisive, elections. Postelectoral volatility also occurs following predictable, indecisive elections. The effect of learning the identity of the winning candidate on financial volatility is null when the election is unpredictable and indecisive, as well as when the election is decisive, but the outcome is predictable. These findings offer insights into investors seeking to hedge price risk around elections. They also have important implications regarding the relationship between public opinion polls and postelectoral financial volatility.     

Jensen's alpha and the market‐timing puzzle

Theory predicts that market‐timing activities bias Jensen's alpha (JA). However, empirical studies have failed to find consistent evidence of this bias. We tackle this puzzle in a nested model analysis and show that the bias contains an exogenous market component that is unrelated to market‐timing skill. In a comprehensive empirical analysis of US mutual funds, we find that the timing‐induced bias in JA is mainly driven by this market component, which is uncorrelated with measured timing activities. Measures of total performance that allow for timing activities are virtually identical to JA, even if timing activities are present in the evaluated fund. Hence, we conclude that JA is a sufficient measure of total performance.     

How and when do prior international experiences lead to global work? A career motivation perspective

While research suggests a link between individuals' prior international experiences and their future participation in global work, we know little about how and the conditions under which this relationship occurs. Drawing on career motivation theory, we conceptualize global identity as a mediator between individuals' density of prior international experiences—defined as the extent to which time spent in culturally novel countries has provided individuals with developmental opportunities—and their global work aspirations, which in turn leads to their global work involvement. Further, this multi-stage mediation model holds mainly when individuals receive positive feedback regarding their intercultural competencies (i.e., cultural intelligence) from their peers. We test our model using a multi-wave multi-source dataset spanning 6 years. We discuss implications for the literatures on prior international experiences and global careers.     

Exploring Value‐Based Management Sophistication: The Role of Potential Economic Benefits and Institutional Influence

The complexity of value‐based management (VBM) is often not captured in empirical research. In particular, potential differences in the extent of VBM implementation are not considered. Firms are predominantly classified dichotomously into either VBM “adopters” or “non‐adopters.” In this study, we aim to fill this gap by introducing a framework to assess differences in the extent of VBM implementation (VBM‐sophistication) based on publicly available data. This approach enables us to study determinants of VBM‐sophistication based on a hand‐collected data set comprising 2,683 firm‐year observations from 16 European countries between 2005 and 2014. Specifically, we investigate (i) whether potential economic benefits associated with VBM implementation lead to a higher level of VBM‐sophistication, and (ii) if this relation is influenced by extra‐organizational institutions (e.g., industry norms). Our results indicate that companies exhibit higher VBM‐sophistication if certain firm characteristics that increase the potential economic benefits of VBM are present. Moreover, our study provides evidence that this effect is enhanced by extra‐organizational institutions that pressure and support firms in realizing the potential benefits of higher VBM‐sophistication.     

When the going gets tough: the influence of expatriate resilience and perceived organizational inclusion climate on work adjustment and turnover intentions

Abstract

Despite the strong evidence for the beneficial influence of resilience for employee stress resistance in domestic settings, the construct has not received much attention in the expatriation literature, where stress is considered a major factor for expatriates’ poor cross-cultural adjustment and turnover. Drawing upon conservation of resources theory, the present study examines resilience as an antecedent of expatriate work adjustment and turnover intentions. Furthermore, this study investigates the moderating role of perceived organizational inclusion climate as a resource-protecting organizational factor. Results from a survey of 175 expatriates in South Korea indicate that resilience is positively related to expatriate work adjustment and that these positive effects are more pronounced when expatriates perceive their organizational climate to be highly inclusive. Furthermore, findings suggest that work adjustment mediates the effects of resilience on turnover intentions and that this mediation is moderated by a perceived organizational inclusion climate. Implications for theory and practice are discussed.     

Are you really doing good things in your boss's eyes? Interactive effects of employee innovative work behavior and leader–member exchange on supervisory performance ratings

Organizations increasingly depend on employee efforts to innovate. However, the quality of relationships between leaders and employees may affect the recognition that employees receive for their innovative work behaviors. Drawing from a social cognition perspective, we tested a model in which leader–member exchange (LMX) moderates the impact of employee innovative work behavior on supervisory ratings of employee performance. Results from two multisource studies combining self, colleague, and supervisor ratings consistently showed that employees receive more favorable performance ratings by engaging in innovative work behavior when they have high‐quality LMX relationships. Moreover, we found that this interactive relationship was mediated by leader perceptions of innovative employee efforts, providing support for a moderated mediation model. Implications for the literatures on performance appraisal, LMX, and innovation are discussed.     

Crafting customer insight: What we can learn from the revival of the vinyl record

The recent resurgence of the vinyl record and the proliferation of so-called craft and artisanal products offer unique opportunities to observe ongoing shifts in the contemporary consumer’s values and attitudes. In this article, we explore such thought-provoking market developments and their implications by contrasting them with the conventional understanding of markets and consumers. This understanding can lead to marketing myopia as it works from the utility-oriented assumption that what ultimately matters for both the company and the customer is cost efficiency and convenience. Against this backdrop, in this article, we discuss how market developments representing the contemporary consumer’s mindset prove valuable in creating customer insight that highlights aspects often obscured by an exaggerated focus on cost efficiency and convenience. We provide an alternative approach to evaluating markets and consumers that encourages companies to build their customer-centric market strategies around questions of context, authenticity, story, and resonance. This will help them narrow the gap between their market offerings and the actual wants and needs of their customer, and consequently allow them to revitalize their market.     

Does entrepreneurial activity matter for economic growth in developing countries? The role of the institutional environment

The discussion on which institutions determine entrepreneurial activity – and the role of institutions in the aggregated output for developing countries – is as yet unresolved. The extant literature about entrepreneurship recognizes new ventures as potential mechanisms for long-term development. Yet, there is a consensus on the lack of evidence, particularly for these countries. Drawing on institutional economics, this article explores the interrelationships among institutional environment, entrepreneurial activity, and economic growth. To this end, we use simultaneous-equation panel data models for a sample of 14 developing countries (78 observations) over the period of 2004–2012. The main findings suggest a causal chain running from institutions to opportunity entrepreneurship, which is linked to the economic growth of emerging economies. In particular, we find that institutional factors – such as the number of procedures to start a new business, private credit coverage ,, and access to communication– influence entrepreneurial activity driven by opportunity. Policy implications for developing countries could be derived in order to enhance their economic performance through entrepreneurial activity.