Acceptance of buyout offers in the face of downsizing: empirical evidence from the Korean electronics industry

Using a sample of 812 employees in a major Korean electronics company, this study examines the predictors of acceptance of buyout incentives. As in the retirement research, the results here suggest that employees are more likely to accept buyouts the larger the size of the incentive, the older they are at the time of the offer and the poorer their health. However, in contrast to early retirement research, the results here suggest that it is the better performers, those whose spouses are still in the workforce and those who have already declined previous incentives who are most likely to accept buyout incentives in early and mid-career. This study also highlights five differences between American-based and Korean-based firms in their use of early buyout offers. Korean employees were more likely to accept buyout offers the higher their salary, while in the US salary and acceptance of such offers are typically inversely related. Also, while US firms focus on buyout incentives for older workers, Korean firms will often target workers in their thirties and forties. Korean firms typically offer one-time, lump-sum bonuses as departure incentives, whereas American firms are more likely to add years of age and/or service in calculating pension benefits. While US firms often offer some type of part-time employment contract to their early retirees, Korean firms often prohibit this arrangement. Finally, compared to the US, the greater stigma associated with interfirm mobility in Korea cuts against the acceptances of these offers.     

The customer consequences of returns in online retailing: An empirical analysis

Pressure continues to build on the operations management function to facilitate system and firm level benefits. In the online marketplace, one area of growing interest is that of product returns. Though commonly viewed as a cost center from an operations perspective, operations’ actions have the potential to strongly influence future customer buying behavior in several ways. Using an archival database of actual purchase and returns history provided by a moderately sized online retailer, this study examines the relationship between a customer's experience of product returns, and subsequent shopping behavior. Employing transaction cost, consumer risk, and procedural justice theories, we demonstrate that the returns management process, rather than being regarded as an afterthought to the production and deployment of goods, can significantly and positively influence repurchase behavior. Additionally, we provide evidence that certain customers should be considered for prioritization in the returns process. We suggest ways through which operations managers can take care in discharging their responsibilities in this area – to make returns processing more than simply a “necessary cost of doing business” rather, using it to their advantage in engendering repeat and increased purchase behavior.     

Institutions and public investment: an empirical analysis

This paper investigates the effect of institutional quality on the levels, volatility and quality of public investment. Our findings suggest an inverse relationship between public investment levels and institutional quality, supporting the idea that governments use public investment as a vehicle for rent seeking. We also find that lower quality of governance increases the volatility of public investment. Finally, we provide some tentative evidence of a positive relationship between institutional quality and the quality of infrastructure. Policymakers who aim to reduce infrastructure needs through capital spending should take measures to strengthen institutional capacity to manage public investments.     

Federal investment impact: An empirical benefit-cost evaluation

This paper attempts to evaluate the impacts of a Corps of Engineers multimillion dollar channelization project authorized in 1948 upon a regional economy in an economic depressed area in the western part of Tennessee.Using a cost/benefit approach, this paper analyzes some major benefits and costs of the project such as flood control, land utilization, regional economic development and recreational losses. On a reach-by-reach basis this paper illustrates how tangible benefits and costs are measured empirically with available hydrological, historical, economic and other statistics. Alternatives such as reservoir building and channel clean-out are considered together with the proposed channelization work. Problems on intangibles and externalities are also delineated.The most interesting findings of this study are not those pertaining to the successes and failures of the benefit-cost approach. Rather, they are the insights into which differences between social and private considerations, joint and separated projects, authorized and not proposed alternatives, current and future choices, etc., can be enlightened. The importance of this empirical study hinges upon its results highlighting the conflicts between efficiency in resource allocation and the equality in income distribution.     

Corporate environmental policy and abnormal stock price returns: An empirical investigation

This paper examines the correlation between the excess stock market returns and the adoption of an environmental protocol by companies. The underlying hypothesis that I test is whether evidence of the adoption of environmental policy, prosecution by an environmental agency or the routinized training of staff in environmental protocols, which proxies for the willingness of managers to invest for the long term, is associated with superior economic returns to shareholders. I find that both the adoption of an environmental policy and prosecution for breach of environment standards have significant explanatory power in an analysis of excess returns. Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment     

An empirical model of mainframe computer investment

This paper introduces a dynamic model of investment decisions in mainframe computer systems. I estimate and test the model using detailed micro data from a company in the telecommunications industry. The model accounts for ‘technological depreciation’ which distinguishes computers from other investment goods where physical depreciation is typically a key factor underlying replacement investment decisions. The company increased its installed mainframe computer capacity by over 30‐fold over the 10‐year sample period. Part of this growth was undoubtedly due to the huge increase in performance and the corresponding drop in the per unit cost of processing capacity of mainframes, a consequence of ‘Moore's law’. However, there was also tremendous growth in the need for computers for billing, account processing and other tasks, due to the rapid growth in the telecommunications industry over this same time period. I estimate the unknown parameters of the investment model using a nonlinear least squares–nested fixed‐point algorithm (NLS‐NFXP), which solves the Bellman equation underlying the dynamic model of investment and replacement of mainframe computers by nonlinear least squares. I demonstrate that it is feasible to estimate this model on an ordinary PC, whereas standard discretization approaches to solving the firm's optimal investment policy might not even be feasible using supercomputers. I show that the estimated model fits the data very well, and accurately captures the large growth in installed mainframe capacity, the timing and magnitude of replacement investment, as well as periodic upgrades of existing mainframe units. I use the model to decompose how much of the 30‐fold increase in mainframe computer capacity is due to ‘Moore's law’ (i.e. the huge drop in the unit cost of installed mainframe capacity), and how much is due to the growth in demand for services of mainframes, due to the rapid growth in demand for telecommunications services (particularly cell phone accounts) by the firm's customers. Copyright © 2010 John Wiley & Sons, Ltd.     

Volatility analysis of precious metals returns and oil returns: An ICSS approach

This study examines volatility persistence on precious metals returns taking into account oil returns and the three world major stock equity indices (Dow Jones Industrial, FTSE 100, and Nikkei 225) using daily data over the sample period January 1995 to May 2008; the aim is to analyze market relationships before the global financial crisis. We first determine when large changes in the volatility of each market returns occur by identifying major global events that would increase fluctuations in these markets. The Iterated Cumulative Sums of Squares (ICSS) algorithm was used to identify the existence of structural breaks or sudden changes in the variance of returns. In each market the standardized residuals were obtained through the GARCH(1,1) mean equation. Our main results identify a clear relationship between precious metals returns and oil returns, while the interaction between precious metals and stock returns seems to be an independent one in the case of gold with mixed results for silver and platinum. In relation to volatility persistence, the results show clear evidence of high volatility persistence between these markets, especially during times when markets were affected by excessive volatility due to economic and financial shocks.     

An empirical analysis of linear aggregation problems: The case of investment behavior in Japanese firms

Some economists have analysed empirically linear aggregation problems from various view-points and get results which seem to justify the use of aggregated data. However, some were based on only one experiment. Using more experiments we shall analyse empirically two important aggregation problems for the case of the investment behavior of firms. In contrast to earlier studies, our results indicate that the aggregation biases of macroparameters are rather large and the explanatory power of the macroequations is not necessarily higher than that of a sum of microequations.     

Political events and the foreign direct investment decision: An empirical examination

This study investigates the impact of political events on US manufacturing direct investment in Latin America. The relationship between foreign direct investment and political events (and economic factors) is examined through regression analysis of pooled time-series (21 years) and cross-sectional (8 countries) data. In contrast to previous studies using an econometric approach, this study finds that political events do affect direct investment decisions. Specifically, both intra-nation and inter-nation conflict and co-operation have an impact on US direct investment decisions concerning Latin American countries. In addition, the host country's market size and market growth affect these decisions by US multinational firms.     

The effect of human capital on occupational health and safety investment: An empirical analysis of Spanish firms

This paper analyses how firms' human capital influences their investments in occupational health and safety (OHS). We argue that the incentive to protect workers by investing in OHS is a function of the stock of human capital. The empirical analysis was based on data from the official Working Conditions Spanish Survey on OHS management. Our sample was restricted to 1,472 firms from the manufacturing and construction industries. Our results show that firms that place more emphasis on training and have a multiskilled and innovative workforce invest more in OHS. However, having technological and design skills has no impact on the investment in OHS, presumably because these skills are widely available in the labour market. Finally, the analysis suggests that some abilities such as problem solving may be affected by informational asymmetries and therefore firms may suboptimally invest in protecting these capabilities.     

An empirical analysis of the impact of banking regulations on sustainable financial inclusion in the CEMAC region

Based on a panel analysis of six countries over the period 2004–2018, this study examines the impact of financial regulation on sustainable financial inclusion (FI) in the Central African Economic and Monetary Community (CEMAC) region. Using different approaches to estimate FI, we ?nd that banking regulation has a positive impact on FI. In particular, our ?ndings suggest that regulations for monitoring entry into the financial sector, external reporting and audits, and deposit insurance contribute sustainably to an increase in FI. In addition, banking regulations help the region to attract foreign direct investment and boost economic growth. An important policy implication of this paper is that CEMAC regulators should enhance synergy with mobile telephone network providers to promote digital FI, as it offers a low-cost option for promoting FI, especially for people living in areas underserved by mainstream financial institutions.     

Deposit insurance and banking system risk: Some empirical evidence

This paper examines the effect of federal deposit insurance on the riskiness of the commercial banking system. It is generally acknowledged that a system affixed rate deposit insurance creates incentives for banks to increase their risk-taking activities. Yet very little empirical evidence exists confirming or refuting this supposition. The coefficient of variation of bank profits and the standard deviation of profits are used as measures of bank risk. How these measures of bank risk are affected by deposit insurance coverage, and other variables thought to affect bank risk, is examined. Deposit insurance is found to have a statistically significant positive effect on bank risk. This result provides empirical support for the FDIC Improvement Act requirement of risk related deposit insurance premiums starting January 1994.     

Donor lifetime value: An empirical analysis

The successful quantification in monetary terms of the value of a donor to a voluntary organisation is absolutely essential to the subsequent development of fundraising strategy. The question most voluntary organisations have failed to address, however, is how best to calculate this value. Many fundraisers continue to examine value historically, looking at the total amounts given to date. Such an approach fundamentally ignores the future or lifetime potential of a given charity donor and can lead to the development of contact strategies that are wholly inappropriate given the worth of that individual. It is the purpose of this paper to calculate the lifetime value (LTV) of various categories of donor and to explain how charities might use such information to inform the development of their fundraising strategy.     

Family management,family succession,and R&D investment: An empirical study

Using data from the statements issued by A-share family firms listed on Chinese stock markets between 2008 and 2019, this paper explores the impacts of family management and family succession on R&D investment. We draw on the perspective of restricted and extended socioemotional wealth and differentiate exploitative R&D and explorative R&D in a detailed study. The study finds that the proportion of family members among board members or senior executives and the kinship of the CEO or chair of the board of directors have different effects on R&D investment, indicating that a diversity exists in how family members identify their role within the company. Furthermore, the participation of the controller’s children in the enterprise can promote explorative R&D investment instead of exploitative R&D, but only during the process of intergenerational succession. The findings differ from prior research in calling attention to the facts that the impact of family management is not always homogeneous owing to the dispersion of family members into different positions, and it can be misleading to conclude that R&D investment is more conservative in family businesses without considering the structure of R&D investment.

     

Risk aversion and business cycles: An empirical analysis

Unlike investors, who tend to maintain highly-diversified portfolios, private entrepreneurs usually lack access to complete risk-pooling for idiosyncratic risks, thus more directly internalize the cost of volatility. Risk aversion, however, modifies the optimal contract between entrepreneurs and lenders by incorporating the risk premium that entrepreneurs demand for the uninsurable risk: the private equity premium. Consequently, real shocks tend to be amplified as changes in entrepreneurs’ net worth affect the private equity premium and so the rental rate of capital, investment and output. This theoretical framework suggests that economies where the private entrepreneurial sector is a relatively larger, and therefore more vulnerable to uninsurable risk, all else equal, should present higher volatility. I test this prediction by (1) conducting a simple reduced-form analysis that shows that output volatility is negatively associated with the relative importance of the corporate vs. the privately-held sector; and (2) estimating the model's structural parameters. Intuitively, countries where private entrepreneurs are predominant and so risk aversion is likely to impose stronger impacts, positive risk aversion coefficients should be found. Results suggest that risk aversion is empirically more relevant for economies like Argentina, Brazil, Chile, Korea, Mexico and Thailand than for Canada, France, Germany, the U.K. and the U.S.     

Job location and the journey-to-work: An empirical analysis

In this paper we present and estimate a single equation model designed to explain the job-location behaviour of individuals living in a multi-centered metropolitan area. We test the model separately for heads of households and non-heads of households, as well as for the total working population, in order to isolate differences in commuting behaviour between primary and secondary wage earners. The relationships are estimated from 1971 Census, cross-section data using least squares multiple regression.The results of the location equation indicate that wage gradient variables are important determinants of job location for heads of households. On the other hand, non-heads are rather insensitive to the wage gradient. Rather, contrary to the decisions of heads, the job-location choices of non-heads are strongly influenced by socio-economic attributes, notably occupation, family size and age. Clearly, job-location decisions of primary wage earners (usually the household heads) are influenced by earnings-maximizing considerations while secondary earners (non-heads in general) put more weight on other socio-economic factors. The results also suggest that there is a hidden cost associated with uneven directional growth in the Toronto CMA. It is suggestive that urban planning strategies should reflect consideration of the greater desire or need for accessibility on the part of secondary wage earners (non-heads) and the need to balance residential and job opportunities at the extending margin of the urban area.     

Trade,competitiveness and investment: an empirical assessment

ABSTRACT

The Eurozone crisis has exposed several weaknesses of the European Monetary Union economies. This paper aims to assess the impact on external competitiveness of an expansionary capital stock policy that could contribute to reduce the trade balance asymmetries within the EU and help European exporters to recover their competitive role in international markets. A policy action to increase capital stock accumulation through investment in selected European countries could generate a double dividend: increasing both price and nonprice competitiveness, so stimulating their competitive position as exporters, and consolidating the growth path of EU economy. The analysis employs a bilateral trade model built at INFORUM with several distinguishing characteristics: a comprehensive bilateral data set, econometric estimation of key parameters, and emphasis on sectoral details. Our findings show that a capital stock increase is effective in narrowing trade imbalances within EU. Heterogeneous effects are estimated for commodities in China and the US.     

我国投资基金选股与择时能力的实证研究

文章选择了比较成熟的单因素T-M模型和H-M模型,对2004年1月1日～2007年11月31日间194个交易周的10只基金进行业绩评价,考察证券投资基金是否在我国这种弱式有效的市场上表现出良好的选股与择时能力。结果表明,除个别基金外,我国基金整体不具备择时能力,虽具有一定的选股能力,但表现并不显著。     

Retailer-manufacturer price and profit relationships along the advertising life cycle: An empirical examination

Competitive intra-channel forces are an important factor to the success (or failure) of newly introduced brands. The present study offers an extended theoretical framework of the advertising life-cycle concept, which illuminates the changes in the manufacturer-retailer balance of power within the marketing channel along the development path of new brands. The theoretical conclusions are then tested against a unique data set. The empirical findings confirm the prediction that dynamic competitive elements will change the intra-channel pricing balance.     

Designing vendor evaluation systems: An empirical analysis

Companies today are increasing efforts to develop their vendor evaluation system (VES) to qualify and select the best suppliers, monitor their performance and foster continuous improvement. VES lies at the intersection of three disciplines: purchasing management, supply chain management, and performance management. The extant literature especially focuses on vendor rating tools from a mathematical modeling standpoint, whereas firms are mostly concerned with guidelines necessary to design and implement an effective VES. The present study develops an encompassing research framework to investigate VES by means of thirteen case studies. In particular, the paper investigates VES design in terms of strategic alignment, process configuration and execution, as well as corresponding benefits and costs, exploring how the combination of the previous elements determines company satisfaction. Three groups of VESs are identified, leading to different levels of satisfaction.