Why do good employees stay in bad organizations?

Family and work are two of society's most important institutions. It is understandable, then, that some similarities would exist between the two. One unfortunate aspect of such relationships is that families and organizations may be abusive to members. When this occurs in familial relationships, research has identified dynamics that keep people in the abusive situation. We consider here how those same dynamics can occur in abusive organizations to identify factors that keep employees in unhealthy work environments. We then examine intervention techniques and concepts that can be used to enable people to recognize an abusive organization, the long-term damage such organizations can inflict on employees, and ways to assist individuals in exiting an abusive organization setting. Our intention is to create awareness of the harm that can be caused by abusive organizations and provide a framework that will enable people caught in a pattern of organizational abuse to understand their choices and behaviors.     

Why do foreigners invest in the United States?

Why are foreigners willing to invest over $2 trillion per year in the United States? This paper tests various hypotheses and finds that standard portfolio allocation models and diversification motives are poor predictors of foreign holdings of U.S. liabilities. Instead, foreigners hold greater shares of their investment portfolios in the United States if they have less developed financial markets. The magnitude of this effect decreases with income per capita. Countries that trade more with the United States also have greater portfolio shares in U.S. equity and bond markets. These results support recent theoretical work on the role of financial development in sustaining global imbalances and have important implications for whether the United States can continue to attract sufficient financing from abroad without major changes in asset prices and returns, especially in bond markets.     

Why do migrants remit?

This paper examines primary incentives of remitting. Using estimated bilateral data on remittances, this paper demonstrates that a rise in the home (remittance‐receiving) country's gross national income (GNI) per capita leads to fewer remittances and that a rise in the host (remittance‐sending) country's GNI per capita motivates migrants to remit more. Real exchange rates and real interest rates have no effect on remittances. These results indicate that altruism is an important and critical component of motivations behind remittances. However, altruism alone does not appear to be a sufficient explanation of the motivations behind remittances. Other incentives such as loan repayment and investment play a non‐negligible role in this regard as well. The degree of altruism is higher for migrants from developing countries in comparison with migrants from developed countries, and it is higher when we define remittances as “personal transfers” rather than “personal transfers and compensation of employees.” The results of the vector error correction model show if remittances deviate from the equilibrium relationship, they will eventually revert.     

Why do Caucasian advertising models appeal to consumers in Taiwan?

To test the influence of model ethnicity on advertising effectiveness in East Asia, this research proposed a cue-triggered value-expressive model, according to which positive attitudes towards western models help consumers with independent self-concepts express themselves. Western models generated more favourable ad responses (ad credibility, diagnosticity and attitudes), promoted stronger self–brand connections and led to more favourable brand attitudes than did Asian advertising models among independent respondents in Taiwan. In contrast, consumers with interdependent self-concepts did not exhibit such differences. Independent self-concepts also consisted of two sub-dimensions: horizontal individualism focused on the desire to be different, and vertical individualism centred on the desire to be superior. The former dimension accounted for the enhanced effects of western models. Three experiments confirmed that expressing positive attitudes towards these advertising models served value-expressive functions among consumers with uniqueness self-concepts when they read ads promoting products that were publicly (Study 1 and 3) or privately (Study 2) consumed.     

Why do some firms stop exporting?

During economic turbulence, such as those caused by the US-China conflict and COVID-19, sunk cost effect has garnered attention in IB literature. As it becomes increasingly difficult to predict export profits, relying on sunk costs for strategic positioning in export markets appears to be a rational decision. However, few studies quantitatively examined sunk cost effect variations, especially in export-exit decision-making. In our study, we quantified sunk cost effect with respect to export performance and export portfolio, specifically in terms of export-exit probability. Our findings indicate that the export-exit rate due to sunk cost effect is less than 50% only if export volume surpasses a certain threshold. Consequently, we have provided an explanation for why export exits still occur in the presence of high sunk costs. Additionally, we have identified that geographic diversification, up to four destinations, has more synergy with sunk cost effect than product diversification, particularly in volatile environments.     

Why do Firms Purchase Used Assets?

We hypothesize that the increase in expectation about future technological change decreases the likelihood for the purchase of new assets because the change may make the new assets obsolete. To test this hypothesis, we use patents and citations data to represent the expected technological change. We find that the purchases of and the amount spent on used assets increase with the expectation of technological change, while time to completion of the purchase and the number of bids decrease with the increase in expectations about technological change. We exploit industry deregulations to establish identification. In contrast to the literature, we find no empirical support for financial constraint as a reason for purchasing used assets.     

Why do consumers purchase goods and services in the informal economy?

To evaluate critically the dominant discourse that consumers acquiring goods and services in the informal economy are rational economic actors seeking a lower price, the results of a 2007 Eurobarometer survey involving 26,659 face-to-face interviews in 27 European Union member states form the basis for analysis. The finding is that achieving a lower price is the sole motive for just 44% of informal economy purchases, one of several rationales in 28% of transactions, and not a rationale in 28% of acquisitions. Consumers also use the informal economy to circumvent the shortcomings of the formal economy in terms of the availability, speed, and quality of goods and services provision, as well as for social and redistributive reasons, with multilevel mixed-effects logit regression analysis revealing how the prevalence of these rationales significantly varies across populations. The paper concludes by discussing the theoretical and policy implications of the findings.     

Self-employment of older Americans: do recessions matter?

As high unemployment rates linger following the latest recession, job opportunities can be sparse, especially for older workers. This might prompt older Americans to seek out opportunities in self-employment. Alternatively, recession-related decreases in economic activity might make self-employment less attractive. Using the Health and Retirement Study, we find that unemployed respondents are more likely to enter self-employment and that these decisions are clearly affected by recessions, although the effects differ by recession and gender. Unlike men, women’s self-employment decisions are very sensitive to other sources of household income, and women are less likely to become self-employed the deeper the recession.     

Why do people use and recommend m-wallets?

In recent years, mobile wallets (m-wallets), a special form of mobile payment, have garnered much attention in various emerging markets. M-wallets were designed to offer customers swiftness, ease of use, efficiency, effectiveness, transparency, and accessibility. Despite these benefits, usage intentions and adoption of m-wallets in most emerging markets have been low, and they have not received widespread acceptance. Notably, existing research related to intentions to use (IUs) mobile payments has largely focused on developed economies and mobile payments in general. Additionally, few studies have examined intentions to recommend (ITRs), even though researchers have recognized that word-of-mouth is an important driver of consumer behavior. In the present study, we addressed the lack of specific findings on use and recommendation intentions in the context of m-wallets by conducting a large cross-sectional survey of 1256 smartphone users based on diffusion of innovation theory (DOI). Results revealed that relative advantage, compatibility, complexity, and observability were significantly associated with participants' intentions toward m-wallets. However, trialability had no association with participants’ intentions to use and recommend m-wallets to others.     

Why do contracts differ between venture capital types?

The main objective of the present paper is to investigate differences in the design of contracts between venture capitalists and their portfolio firms across venture capital (VC) types. By controlling for selection effects, we focus on contract design differences which reflect differences in corporate governance approaches across VC types. To address this issue, we use a unique, hand-collected German data set consisting of all contractual details of VC investments into 290 entrepreneurial firms in the period 1990–2004. By employing various matching procedures, we show that VC types differ in their corporate governance approach vis-à-vis their portfolio firms. It turns out that independent VCs, when compared to captive VCs, use significantly more contract mechanisms which induce active intervention.     

Why do developing countries resist global trade agreements?

Abstract

Although the Doha Development Round was launched with much promise for developing countries in 2001, the global trade negotiations have collapsed. One of the reasons for the lack of progress in the negotiation is the developed countries' unwillingness to reduce their enormous farm domestic subsidies and massive agricultural trade distortions. The developing countries' economies are characterized by heavy dependence on farm sector, labor-intensive agriculture, and persistent unemployment. Consequently, rich nations' unfair agricultural policies are detrimental to the well-being of poor exporting countries. This study develops a model incorporating developed countries' domestic and trade policies and developing countries' economic characteristics to illustrate the adverse effects of rich countries' policies on poor countries. We show that elimination of developed countries' policies will increase the world prices of agricultural commodities, which will benefit the farm-dependent developing countries.     

Why do patients select a hospital? A conjoint analysis in two German hospitals

Patients decide on where to consume hospital services in Germany. Thus, the understanding of the exact hospital selection criteria and their weights is important. This research reviews the antecedents of hospital selection utilizing the conjoint methodology with regard to six questions. (1) Which are the relevant choice criteria, and (2) what are their weights? (3) Which criteria receive an increased importance in the absence of experience? (4) Do differences between compulsory and privately insured patients, (5) between hospitals with regard to their size, and (6) between female and male patients exist? The relevance and importance of nine pre-selected criteria are determined through two conjoint analyses. Experience is found to be most important followed by referral by general practitioner, certified quality management system, positive press coverage, recommendation by relatives and acquaintances and distance to the hospital. Reception area design and the personnel's friendliness, the website quality and the published quality report are less relevant. Without experience, reception area design, personnel's friendliness and distance to the hospital receive an increased importance. In addition, for some criteria notable discrepancies between female and male patients and between patients with different insurance policies are found.     

Why do boycotts sometimes increase sales? Consumer activism in the age of political polarization

In this article, we argue that the occurrence, trajectory, and impact of consumer activism are in large part driven by the political environment in which firms operate, particularly by their country’s level of polarization and the political makeup of their core customer base. In environments characterized by low levels of political polarization, companies are embroiled in a relatively small number of political controversies, and as a result are rarely the target of consumer activism. Conversely, in highly polarized environments, people’s political sensibilities are easily offended, which leads to a relatively large number of political controversies. These controversies tend to arise along party lines, meaning they elicit a consumer boycott exclusively from one side of the political spectrum. Such partisan boycotts lead people on the other side of the political spectrum to rally around the company at the center of the controversy and to purchase more of its products. Whether a company’s sales end up decreasing or increasing depends on the nature of the issue at the heart of the controversy as well as on the political beliefs of its core customer base. We conclude by describing how companies can successfully navigate this complex interplay between political polarization, consumer activism, and customers’ political preferences.     

Why do firms hold so much cash? An innovation explanation

Theory holds that knowledge has positive economic consequences. While US corporations defend record high level cash holdings citing the precautionary motive in response to changing firm characteristics, I find that knowledge‐based innovation can partially explain these changes. Using distance to the nearest research university as a measure of knowledge intensity, I show that knowledge‐intensive firms hold more cash, even after controlling for firm R&D. Moreover, knowledge‐intensive firms exhibit higher marginal value of cash and save more cash from cash flows than their less knowledge‐intensive counterparts. Overall, the precautionary motive appears to dominate the agency motive, with the effect of knowledge on cash holdings strengthening over time. Copyright © 2014 ASAC. Published by John Wiley & Sons, Ltd.     

Why do over-deviated firms from target leverage undertake foreign acquisitions?

This paper examines how deviation from firms’ target leverage influences their decisions on undertaking foreign acquisitions. Using a sample of 5746 completed bids by UK acquirers from 1987 to 2012, we observe that over-deviated firms are more likely to acquire foreign targets. Consistent with co-insurance theory, we find that over-deviated firms engage in foreign acquisition deals to relieve their financial constraints and to mitigate their financial distress risk. We also note that foreign acquisitions enhance over-deviated firms’ value and performance, measured by Tobin’s q and return on assets (ROA) respectively. These findings support the view that over-deviated firms pursue the most value-enhancing acquisitions. Overall, this paper suggests that co-insurance effects, value creation and performance improvements are the main incentives for over-deviated firms’ involvement in foreign acquisitions.     

Why do most countries set high tax rates on capital?

We consider tax competition in a world with tax bases exhibiting different degrees of mobility, modeled as mobile and immobile capital. An agreement among countries not to give preferential treatment to mobile capital results in an equilibrium where mobile capital is nevertheless taxed relatively lightly. In particular, one or two of the smallest countries, measured by their stocks of immobile capital, choose relatively low tax rates, thereby attracting mobile capital away from the other countries, which are then left to set revenue-maximizing taxes on their immobile capital. This conclusion holds regardless of whether countries choose their tax policies sequentially or simultaneously. In contrast, unrestricted competition for mobile capital results in the preferential treatment of mobile capital by all countries, without cross-country differences in the taxation of mobile capital. Nevertheless our main result is that the non-preferential regime generates larger expected global tax revenue, despite the sizable revenue loss from the emergence of low-tax countries. By extending the analysis to include cross-country differences in productivities, we are able to resurrect a case for preferential regimes, but only if the productivity differences are sufficiently large.     

Why do retail consumers buy green apparel? A knowledge-attitude-behaviour-context perspective

Consumers' increased knowledge and awareness of environmental issues have not translated into a pervasive rise in purchasing green apparel, resulting in a phenomenon known as the ‘attitude-behaviour gap’. The current study seeks to explicate this gap by examining the drivers of green apparel buying behaviour. Towards this end, the study examines the association of environmental knowledge, green trust, and environmental concern with environmental attitude and green apparel buying behaviour. It further investigates the association of labelling desire and labelling satisfaction with this type of buying behaviour as well. In addition, the study uses the theoretical lens of the knowledge-attitude-behaviour model and attitude-behaviour-context theory to anchor its hypotheses. Cross-sectional data from 387 Japanese consumers analysed to test the conceptual model revealed that green trust, environmental attitude, and labelling satisfaction are positively associated with green apparel buying behaviour. Furthermore, green trust, environmental concern, and environmental attitude partially mediate the proposed associations, while age and gender moderate the association between environmental knowledge and environmental concern. The study's empirical insights thus lay the foundation for future research in this area and provide strategically relevant inferences for green apparel marketers and retailers.     

Why do firms delete brands? Insights from a qualitative study

Large consumer goods firms manage and market an assortment of brands and consistently deal with strategic challenges related to brand portfolio management, such as creating or acquiring brands, growing brand equity, managing brands in the portfolio and deleting brands. There is substantial research on several areas of brand portfolio management except in the area of brand deletion. This situation exists despite the fact that deleting weak brands has important implications for a firm and its brand portfolio. Therefore, it is critical to understand why firms delete brands from their portfolios. This research applies a qualitative approach using semi-structured interviews and thematic analysis in the context of firms that adopt a ‘house of brands’ brand architecture and presents findings guided by the strategic decision-making literature.