When and Why Do Takeovers Lead to Fraud?

This paper develops a model explaining how acquisitions of controlling block ownership can facilitate post‐takeover fraud by new managers when investor protection is poor. Based on disclosures of embezzlement or breach of fiduciary duty in Korean firms, we find that the probability of explicit looting in takeover targets is 13%, almost five times as large as a matched sample of non‐targets. Post‐takeover frauds are primarily driven by transfers of minority blocks, while the corresponding probability in majority acquisitions is statistically indistinguishable from the non‐targets. These findings may explain why minority acquisitions of controlling blocks are popular under poor investor protection.     

What Do Deviations from Covered Interest Parity and Higher FX Hedging Costs Mean for Asia?

Open Economies Review - Asian countries have high demand for US dollars and are sensitive to US dollar funding costs. An important, but often overlooked, component of these costs is the basis...     

Cultural Differences in Online Community Motivations: Exploring Korean Automobile Online Brand Communities (KAOBCs) and American Automobile Online Brand Communities (AAOBCs)

To gain a better understanding of online brand communities, this study has examined why people joined in online brand communities and whether there were some differences in the motivations of Internet users based on different cultures. Open-ended questions were asked to the community members from both South Korean Automobile Online Brand Communities (KAOBC) and American Automobile Online Brand Communities (AAOBC) in the first stage and then generated and utilized an online survey for the study. The study found that KAOBC members tended to have a stronger social network, business, and communication motivations than AAOBC members. As a primary motivation, information seeking is the strongest motivation for members of both KAOBC and AAOBC. They had a similar level of information motivation.     

Sustainable Urban Landscaping: Consumer Preferences and Willingness to Pay for Turfgrass Fertilizers

Residential lawns provide diverse benefits, including social (e.g., enhancing humans’ physical and psychological well‐being), economic (e.g., increasing real estate values), and environmental (e.g., supporting local ecosystems) benefits. However, improper lawn fertilizer applications can cause adverse environmental consequences, such as excessive chemical runoff into adjoining watersheds leading to water contamination. Currently, the importance of eco‐friendly fertilizers to homeowners has not been assessed. This study uses a discrete choice experiment to test whether eco‐friendly fertilizer attributes influence homeowners’ preferences for sustainable landscape management. The findings show that eco‐friendly fertilizer attributes positively influence homeowners’ preferences and willingness to pay, supporting the premise that the promotion of eco‐friendly fertilizer features could improve local ecosystems through increased adaptation. Furthermore, this study tests whether certain fertilizer attributes influence homeowners’ preferences in states with and without fertilizer restrictions. Since the regulatory environment affects homeowners’ preferences for sustainable landscaping, this study compares the results between regulated and unregulated states. The findings reveal that homeowners are more likely to use and are willing to pay higher premiums for sustainable fertilizers in states with residential fertilization regulations. This suggests that with strict fertilizer ordinances, homeowners are more geared toward eco‐friendly landscaping options and that related educational programs should be made available. Les pelouses résidentielles offrent divers avantages, incluant les avantages sociaux (comme la valorisation du bien‐être physique et psychologique humain), économiques (comme la valeur immobilière), et environnementaux (comme l'appui des écosystèmes locaux). La mauvaise application des fertilisants a parfois des conséquences environnementales négatives comme le ruissellement chimique excessif dans les bassins hydrographiques attenants menant à la contamination des sources d'eau. En raison de l'importance des fertilisants respectueux de l'environnement pour la protection de ce dernier, cette étude emploie une expérience avec choix discrets pour évaluer si les attributs écologiques des fertilisants influencent les préférences des consommateurs et leur volonté de payer pour une gestion durable de l'aménagement. Les résultats indiquent que les attributs écologiques des fertilisants influencent positivement les préférences des consommateurs et leur volonté de payer, appuyant ainsi la prémisse selon laquelle la promotion des attributs écologiques des fertilisants de gazon pourrait améliorer les écosystèmes locaux. De plus, cette étude évalue l'influence des attributs de certains fertilisants sur les préférences des propriétaires résidentiels dans les états avec et sans restrictions sur l'application des fertilisants. Puisque le cadre règlementaire peut avoir un impact sur les préférences des consommateurs pour une gestion durable de l'aménagement paysager, cette étude compare les prévisions des états avec et sans cadre règlementaire. Les résultats démontrent que les consommateurs sont plus aptes à utiliser, et sont disposés à payer un surplus pour les fertilisants durables dans les états où des règlements concernant l'utilisation de fertilisants résidentiels sont en vigueur, portant donc à croire que les programmes éducatifs concernant l'aménagement paysager respectueux de l'environnement devraient être accompagnés d'ordonnances strictes en matière de fertilisants.     

Demand for fair value accounting: The case of the asset revaluation boom in Korea during the global financial crisis

When the fair value accounting (FVA) option for property, plant, and equipment was introduced in the midst of the global financial crisis, a significant proportion of Korean firms elected FVA. We attribute this unusual boom in asset revaluations to the nation's culture of government intervention and civilian compliance, which was particularly espoused during this period of financial turmoil, and a foreseeable option to switch back to historical cost accounting. We find that among those firms whose debt‐to‐equity ratios are low, public firms opt for the FVA option more often than private firms, suggesting that the need to communicate fair value information with diversified equity holders is more important than the need to do so with creditors. In contrast, among those firms whose debt‐to‐equity ratios are high enough to warrant such unfavorable dispositions as new debt freezes and monitoring by regulators, we find no difference in the FVA choice between private and public firms. These findings imply that during the global financial crisis, private firms that rely heavily on debt financing have a strong incentive to utilize FVA to comply with government guidelines for the debt‐to‐equity ratio and to ease a potential hold‐up problem by influential creditors.     

Identifying changes and trends in Hong Kong outbound tourism

Despite the numerous research endeavors aimed at investigating tourists’ preferences and motivations, it remains very difficult for practitioners to utilize the results of traditional association rule mining methods in tourism management. This research presents a new approach that extends the capability of the association rules technique to contrast targeted association rules with the aim of capturing the changes and trends in outbound tourism. Using datasets collected from five large-scale domestic tourism surveys of Hong Kong residents on outbound pleasure travel, both positive and negative contrasts are identified, thus enabling practitioners and policymakers to make appropriate decisions and develop more appropriate tourism products.     

Materialism,fashion consumers and gender: a cross‐cultural study

The purpose of this study was to examine the relationships among materialism, gender and fashion consumer groups from two countries – one representative of an individualistic culture (US) and one representative of a collectivistic culture (Korea). Participants were 397 students from a university in Korea (n = 221) and a university in the US (n = 176) who completed the questionnaire. The materialism construct showed adequate reliability for participants in both cultures. Fashion change agents scored higher on materialism (centrality and success) than fashion followers. Females scored higher on materialism than males which seemed to be based on higher scores on the centrality subscale. Participants from the US and Korea differed on all three subscales of materialism with US participants scoring higher on centrality but lower on success and happiness than Korean participants. The findings of this study provide valuable implications for fashion marketers and retailers in Korea and US. The findings are limited to Korean and US consumers and cannot be generalized to other cultures. This paper fills a gap in the literature by comparing materialistic values between genders and fashion consumer groups in an individualistic culture (US) and a collectivistic culture (Korea).     

Vacaciones y licencias en países desarrollados: los Estados Unidos a la zaga en cuanto a equilibrio entre vida profesional y vida familiar

Los autores comparan las normativas sobre vacaciones y licencias susceptibles de facilitar el equilibrio entre vida profesional y familiar de Australia, Canadá, República de Corea, Estados Unidos, Europa occidental y Japón utilizando un índice compuesto para clasificarlas. Los Estados Unidos figuran en último lugar: la concesión de vacaciones anuales al trabajador no es obligatoria y las licencias por motivos familiares se limitan a 12 semanas al año. Este bajo nivel de reglamentación podría deberse, según los autores, a una concepción mercantilista del empleo sumada a la creencia de que empleador y trabajadores tienen idéntica capacidad de negociación, visión no compartida por las demás democracias industrializadas.