How does customer recognition affect service provision?

We examine how channel members’ ability to recognize repeat and new customers affects service provision, profits, and welfare. In decentralized channels, when only retailers can recognize customers, customer recognition increases service levels. However, in centralized channels or decentralized channels when both manufacturers and retailers can recognize customers, customer recognition reduces (increases) service levels if service investment persists (diminishes) sufficiently over time. Moreover, in centralized channels, customer recognition reduces firm profits and consumer surplus, whereas in decentralized channels, when manufacturers and retailers can recognize customers, customer recognition increases channel members’ profits but decreases consumer surplus.     

How does perceived firm innovativeness affect the consumer?

We present a broad-based, consumer-centric view of innovation—referred to as “perceived firm innovativeness” (PFI). PFI is conceptualized as the consumer's perception of an enduring firm capability that results in novel, creative, and impactful ideas and solutions. We develop and validate a PFI scale and show that PFI impacts consumer loyalty via two processing routes: a functional-cognitive route and an affective-experiential route. Our results indicate that a firm needs to consider consumer perceptions of the firm as a whole, and not just new products and technologies, and take into account a functional-cognitive perspective as well as consumer emotions and experiences.     

How does the EU non-financial directive affect the assurance market?

The objective of this paper was to determine the impact produced by Directive 2014/95/EU on companies’ decisions regarding the assurance of non-financial information statements and the quality parameters under which this service is contracted. Following an analysis based on institutional theory, the results obtained for the reports issued by an international sample of 600 multinational companies in the period 2011–2018 show that the institutional pressures associated with this Directive contributed to an expansion of the assurance market, although they had only a moderate impact on the contractual conditions of the service. Complementary analyses suggest that the adoption of a limited scope in these assurance services may reflect the conservative outlook of auditors, as providers whose service is favoured in the new scenario. Additionally, we find that the influence of this legal framework is different in the United Kingdom from that in the other European countries. The research contributes to the literature by offering a novel understanding of the behaviour of assurance providers and of the quality of the service obtained.     

How does working capital management affect the profitability of Spanish SMEs?

This paper analyzes the relation between working capital management and profitability for small and medium-sized enterprises (SMEs) by controlling for unobservable heterogeneity and possible endogeneity. Unlike previous studies, we examine a non-linear relation between these two variables. Our results show that there is a non-monotonic (concave) relationship between working capital level and firm profitability, which indicates that SMEs have an optimal working capital level that maximizes their profitability. In addition, a robustness check of our results confirms that firms?? profitability decreases as they move away from their optimal level.     

Carbon information on vegetables: How does it affect the buying process?

Information on the climate impact of a food product has practically not been communicated in Germany, even though it could provide important acknowledgement of producers’ actions in low‐carbon production. So far, carbon labelling has predominantly been discussed without taking into account German consumers’ opinions (proven by empirical data) on this issue, even though involving the consumer in the considerations of a Carbon Label is essential for its success. Especially the question, if information on the product carbon footprint is a considerable factor within the search process of a purchase decision, was of special interest in this work. To answer these questions, we analysed consumers’ information‐seeking behaviour using an information display matrix (IDM) experiment with 232 participants. The IDM is a process tracing technique which allows to track the information search in a buying process. Our results show that basically the place of origin is the most important criterion for the purchase decision, followed by price and production method (conventional/organic). In contrast, the sustainability information (i.e., carbon footprint and water consumption) are at a low level of importance. Comparing two locally produced products with the help of a multinominal logistic regression‐model, it seems that the group of consumers preferring organic products is influenced in the purchase decision by the carbon footprint information. In summary it can be stated that although some people may be basically interested in carbon labelling of fresh food, the purchase decision would probably be hardly influenced by a carbon label on vegetables at present. The majority of people are more concerned about factors like origin and price so that Carbon Labelling would only be a viable option for a small group of consumers.     

How does FX liquidity affect the relationship between foreign ownership and stock liquidity?

This study investigates the roles foreign investors play in a representative emerging market, focusing on the relationship between foreign ownership and stock market liquidity as well as this relationship's response to foreign exchange (FX) liquidity. Our analyses yield three main results. First, the bid–ask spread and price impact of stock trades decrease along with foreign ownership, supporting the view that foreign investors tend to improve stock liquidity. Second, foreign ownership decreases along with a decline in FX liquidity, suggesting that foreign investors care about FX liquidity when determining their stock holdings. Third, stock liquidity increases continuously along with foreign ownership as FX liquidity decreases. Overall, this study's evidence indicates that foreign investors, as liquidity providers, can play a positive role in an emerging economy even when FX liquidity declines.     

How does new business formation affect regional development? Introduction to the special issue

This paper gives an overview of the empirical research on the effects of new business formation on regional development and introduces the contributions to this special issue. The effects of new businesses on regional development emerge over a longer time-period of up to ten years. A main focus of the contributions to this special issue is on the distribution of these effects over time and on the magnitude of the overall effect. While the basic pattern found for the different countries and regions is quite similar, the magnitude of the overall effect can be different and may even be negative. There are strong indications, that the type of entrants plays an important role in this respect.

Do retail alliances enhance customer experience? Examining the relationship between alliance value and customer satisfaction with the alliance

Abstract

This article evaluates the role of customers in the alliance equation. Using a combination of survey and experimental data, we investigate the role of value offered by retail alliances on customer satisfaction with the alliance. We find that customer value plays a mediating role in the relationship between customer experience with the alliance and customer satisfaction with the alliance. Results also show that the nature of this relationship differs based on the type of value offered by the alliance. Cognitive processing plays a more significant role when the alliance is of a functional nature, while affect plays a more significant role when the retail alliance is of a hedonic nature.     

How situational circumstances modify the effects of frontline employees’ competences on customer satisfaction with the store

This article aims to analyze whether the effectiveness of frontline employees' competences (task and interaction) at managing customer satisfaction with the store differ depending on situational circumstances, specifically, on type of query (consultation vs. assistance) and store crowding. A qualitative study was used to investigate the importance of these two situational circumstances in sales encounters. Subsequently, the hypotheses were tested by a quantitative study based on a survey of 575 customers about their shopping experience. The findings indicate that the effect of frontline employees’ task competence on customer satisfaction increases when the store is crowded, while the effect of interaction competence is stronger in relation to consultation queries than to assistance queries. Important theoretical and practical implications for frontline employees and store managers are outlined.     

How does CSR disclosure affect dividend payments in emerging markets?

This article examines the nexus between corporate social responsibility disclosures (CSRD) and dividend payout decisions in the context of emerging markets. Using hand-collected sample of listed firms from India, China, Indonesia, Pakistan, Malaysia, Korea, Turkey, and Russia over the period 2010–2018, our results show that CSR disclosures exert a negative impact on corporate dividend payments. Further, this effect is more prevalent for firms having higher institutional ownership. However, the results remain unaffected by the differences in legal origin i.e. civil law or common law, of the sample countries. Further, our main results are supported by a number of sensitivity tests, including reduced sample size, alternative dividend payment measures, and estimation techniques.     

How does employee development affect turnover intention? Exploring alternative relationships

This study explores alternative relationships between perceived investment in employee development (PIED) and turnover intention by including affective commitment, perceived internal employability, and perceived external employability as potential mediators. Data were collected through a structured survey from 337 employees working in two large companies in Italy. The factorial validity and dimensionality of the latent constructs studied were evaluated in a confirmatory factor analysis framework, and the mediation hypotheses were tested in a full structural equation model. Results show that the overall effect of PIED on turnover intention is negative and almost fully mediated by external employability and affective commitment, whereas the path through internal employability is not supported. More specifically, PIED increases commitment, which in turn limits the likelihood of turnover. In addition, although perceived external employability is positively associated with turnover intention, PIED seems to reduce this effect by negatively affecting employee perceptions of their marketability in the labour market. The study supports the assumptions of social exchange theory in explaining turnover behaviour as a consequence of employee development support. Contextually, it questions the existence of the employability paradox because it does not reveal either a retention path via perceived internal employability or a turnover risk via perceived external employability.     

Do customer participation and cognitive ability influence satisfaction?

Under some circumstances, increased customer participation can enhance customer satisfaction. However, the precise mechanism by which participation might increase satisfaction has not been explored in the literature. This paper considers whether a customer’s cognitive ability might affect the relationship between participation and satisfaction. A causal model has been developed to examine the potential interactive effects of participation and cognitive ability on satisfaction, and a simple quantitative model has been proposed to simulate these effects. The results of both a numerical simulation analysis and a quantitative analysis of case study data indicate a significant main effect of cognitive ability on satisfaction. Additionally, an interactive effect has been observed, whereby higher cognitive ability results in higher satisfaction, given a minimum degree of customer participation in the service. Among this study’s implications is that customers with different cognitive abilities should have different degrees of participation that act to maximize their satisfaction.     

“How does customer perception of salespeople influence the relationship? A study in an emerging economy”

Sales and sales force management is a complex activity that largely determines a company's commercial success. Customer perception of the salespeople in terms of expertise, trust, interaction, and risk can drive the establishment of long-lasting ties, making customer portfolio management profitable in the long-term. Yet to date, while much work has been done on company-customer relational issues, very few studies have taken customer perception of salespeople as their reference. Moreover, most existing studies have taken western countries and developed economies as their reference of analysis.The present study, in contrast, provides an analysis of an emerging economy context, Peru. Using a sample of more than 400 consumers and structural equations analysis, this article presents a model based on the Social Exchange Theory. The final part of the study presents the theoretical discussion together with key implications and recommendations for management.     

Commitment,satisfaction, and customer loyalty: a theoretical explanation of the ‘satisfaction trap’

This paper examines the relationship between satisfaction and customer loyalty and the moderating effects of affective and calculative commitment. The results suggest that while customer loyalty increases monotonically with the enhancement of satisfaction, the marginal effect of satisfaction on customer loyalty actually decreases. Calculative commitment positively moderates the curvilinear relationship of satisfaction and customer loyalty, i.e. enhancing calculative commitment could intensify the relationship between satisfaction and customer loyalty. Affective commitment has no significant moderating effect on the relationship of satisfaction and customer loyalty, but it can directly enhance the customer loyalty. The research findings can help us to explain the phenomenon of the ‘satisfaction trap’.     

How do bankruptcy laws affect entrepreneurship development around the world?

How do bankruptcy laws as formal institutions affect entrepreneurship development around the world? Do entrepreneur-friendly bankruptcy laws encourage more entrepreneurship development at a societal level? We posit that if bankrupt entrepreneurs are excessively punished for failure, they may give up potentially high-return but inherently high-risk opportunities to start new businesses. Amassing a cross-country database from 29 countries spanning 19 years (1990-2008), we find that lenient, entrepreneur-friendly bankruptcy laws are significantly correlated with the level of entrepreneurship development as measured by the rate of new firm entry.     

How does regulatory monitoring of cause marketing affect firm behavior and donations to charity?

Cause marketing (CM) typically involves for-profit firms donating part of their sales revenue to a charity, with the hope that this will increase their revenue. We argue that it is important for a regulator to monitor firms’ CM activities, and to assess how differences in the enforcement of CM laws impact the CM practice by firms. Our analytical model uses a Stackelberg leader–follower game that endogenizes the regulator’s decision to enforce CM. The firm then decides whether to truthfully declare or overstate the amount it contributes to charity (and if overstate: by how much). We find the following results in equilibrium under different conditions: (i) CM campaigns are a win–win–win situation – they increase profit for the firm while being truthful, generate larger donations for the charity, and generate a cause marketing surplus for the regulator, resulting in doing well while doing good, (ii) the best response of the firm is to be strategic, even when the regulator is strict with monitoring, (iii) the regulator itself decides not to monitor CM, even though it knows that this results in untruthful behavior by firms. When we endogenize the extent of overstatement, we find that the firm tends to be strategic by overstating donation percentage, whether the regulator is strict or not. As the proportion of unsophisticated consumers (who believe a firm’s claims, whether truthful or not) increases, the donation proportion decreases in general, and the overstatement level increases when the regulator is lenient and decreases when the regulator is strict. In equilibrium, the regulator is strict if the market size is large, and lenient otherwise. A survey with consumers supports key modeling assumptions regarding consumers' lack of knowledge of CM laws.     

How does the added new online channel impact the supporting advertising expenditure?

This research addresses the strategic effect of a newly added online channel on a manufacturer’s supportive advertising expenditure once a manufacturer opts to open an online channel to compete with its retailer. We first study the manufacturer–traditional retailer supply chain and consider three different scenarios: (1) product is less compatible with the online channel than with the traditional channel; (2) product is more compatible with the online channel than with the traditional channel; (3) product has the same compatibility with the online channel as with the traditional channel. Our results show that the added online channel significantly impacts the manufacturer’s investment in supportive advertising. Depending on the different product categories, the impact of the newly added online channel on the supportive advertising expenditure also will be different. Furthermore, we extend our model to study the manufacturer–online retailer supply chain and investigate the effect of that added online channel on the manufacturer’s supportive advertising to the online retailer. Based on our results, the manufacturer can utilize our findings to improve its decision-making when it plans to open an online channel to improve its product distribution.