Low price guarantees as signals of lowest price: The moderating role of perceived price dispersion

This article presents two experimental studies examining the effects of a low price guarantee on consumers’ pre-purchase evaluations and behavioral intentions. The authors first examine how the effects of a low price guarantee are moderated by consumer perception of market price dispersion. The results show that low price guarantee effects are likely to be attenuated when consumers perceive market price dispersion for a product to be high. The second study shows that higher levels of penalty can help restore a low price guarantee's effectiveness. Specifically, a low price guarantee with progressively higher levels of penalty leads to incrementally more favorable effects on key consumer outcomes when perceived price dispersion is high. Interestingly, penalty level has no such incremental benefit in case of low perceived price dispersion. Theoretical and managerial implications of the authors’ findings, the limitations of the studies, and future research opportunities are discussed.     

The effects of corporate social responsibility and price on consumer responses

This experiment examined the influence of corporate social responsibility and price on consumer responses. Scenarios were created to manipulate corporate social responsibility and price across two domains (environment and philanthropy). Results from a national sample of adults indicate that corporate social responsibility in both domains had a positive impact on evaluation of the company and purchase intent. Furthermore, in the environmental domain corporate social responsibility affected purchase intent more strongly than price did.     

资本结构与股权结构:公司融资的制度决定

本文调查了756家上市公司的2003年的横截面数据,考察了股权结构对资本结构的制度影响。本文的经验结果显示,国家股比例较高的公司伴随着显著较低的负债率,更倾向于权益融资;法人股比例和流通股比例较高的公司则更倾向于债务融资(其中流通股比例较高的公司倾向性最强)。本文还发现,公司融资行为还受企业规模、资产结构、盈利能力和成长性的显著影响。     

Corporate governance,ownership and firm value: Drivers of ownership as a good corporate governance mechanism

This study analyses the role of ownership as a good corporate governance mechanism. We study cross-national differences between companies with different level of investor protection. In addition, we account for the type of owner (young family vs. non-young family businesses) and the owner’s relationship with a second significant shareholder (monitoring vs. collusion). When the main owner has effective control over the firm (i.e., absolute control or less than absolute control but without the control of a second significant shareholder), the relation between ownership concentration and firm value is U-shaped. Our findings also suggest that the conflicts between majority and minority shareholders are weaker for companies with higher investor protection and young family-owned businesses.     

The influence of family ownership dispersion on debt level in privately held firms

The aim of this article is to investigate the financing behavior of privately held firms along the dispersion of family ownership. Drawing on the socio-emotional wealth perspective, we argue that debt levels are contingent on the degree of ownership dispersion among family members. Based on a sample of 2451 observations, in a 10-year time frame, our results reveal the existence of an inverted U-shaped relationship between debt level and intra-family ownership dispersion. We demonstrate that this relationship is moderated by the generational involvement that inverts it in later generations.     

The speed of stock price adjustment to corporate announcements: Insights from Turkey

The market reaction speeds to the news flow are currently measured at the millisecond level in developed markets. We investigate, using a unique setting from Turkey, whether the market reaction speeds in less sophisticated markets are on par with those of developed markets. We find that market reaction times to corporate announcements are slower than documented in recent studies, although markets react to positive news more quickly than negative news. When high-frequency traders are more active in the market prior to announcements, the speed of price adjustment is slower. Finally, we find sizable profit opportunities for investors following event-driven strategies.     

Pricing, price dispersion, and information: The discount brokerage industry

The paper provides an empirical analysis of the pricing behavior of firms within the discount brokerage industry, with emphasis on testing the role of costly information in affecting prices. Several empirical tests are performed that indicate that prices in this industry respond in ways hypothesized by theoretical models of markets operating under conditions of imperfect information. The industry is characterized by a wide degree of price dispersion that does not appear to simply reflect quality differences among firms. In addition, the variance of prices across geographic markets is associated with variables that theoretically should affect the levels of consumer information in those markets.     

The growth and performance of franchise systems: Company versus franchisee ownership

Theory has argued that there is a life cycle of development for franchise organizations that involves a growth in control and profitability of the company through a “managed” redistribution in the quality and quantity of company-owned establishments. This study tests these hypotheses using time series data (1969–1980) for 17 different business areas and a linear statistical model involving an interaction term. Although certain business areas exhibit behavior consistent with theory, there is no evidence that comprehensive ownership and/or performance differentials have emerged that favor company-owned establishments.     

The effect of corporate philanthropy on corporate performance of Chinese family firms: The moderating role of religious atmosphere

Drawing on sustainable family business theory and stakeholder theory, this study explores how corporate philanthropy affects corporate performance with the consideration of the moderating effects of religious atmosphere. Based on data of Chinese 534 listed family firms, the results show that corporate philanthropy is positively associated with corporate financial performance (CFP) and corporate social performance (CSP). Moreover, religious atmosphere negatively moderates the relationship between corporate philanthropy and CFP, but positively moderates the relationship between corporate philanthropy and CSP. Our findings provide systemic understandings of family firms' CFP and CSP by drawing important insights of corporate philanthropy and religious atmosphere.     

Market information and price dispersion: Unlisted stocks and NASDAQ

Two methodologically distinct tests strongly support the hypothesis that the extent of price dispersion in a market is an economic decision based on the costs and benefits of price information. In the markets for unlisted common stocks, the implementation of the NASDAQ system was a discrete event that raised the marginal value and reduced the marginal cost of price information. A controlled comparison of dispersion before and since NASDAQ shows that NASDAQ reduced dispersion among price quotations by one-quarter to one-third. In the underlying cross-sectional regression for unlisted stocks, the estimated parameters also support the hypothesis.     

Institutional ownership of stock and dimensions of corporate social performance: An empirical examination

Collectively, institutions own an increasing proportion of outstanding corporate equities. As an emergent force in shaping corporate America, the linkages between institutional ownership and corporate social performance (CSP) require empirical examination. Not only do corporate policy makers need to know those areas where social performance may lure or inhibit capital infusions, lawmakers also need a better understanding of the social forces guiding corporate policy. As anticipated, this study found a positive relationship between the amount of institutional ownership of corporate stock and a company's social responsiveness as measured by the representation of women on its board of directors; however, no statistically significant relationship with social responsibility as measured by charitable giving was found. The exemplar of social issues management — compliance with the Sullivan principles — showed an unexpected, negative relationship with the level of institutional ownership.Betty S. Coffey's research interests are in the area of strategic management, organizational change, and social issues.Gerald E. Fryxell is Assistant Professor of Management at the University of Tennessee, Knoxville. His current research interests are in the area of corporate culture, innovation, and strategic management.     

Facing global economic crisis: Foreign sales,ownership groups,and corporate value

This study extends the research on internationalization to a new organizational context – emerging market firms (EMF), and a new time context – global economic crisis. We propose a U-shaped relationship between foreign sales intensity and firm value for EMFs during global economic crisis. Further, we distinguish between EMFs’ relational owners (i.e., business groups) and transactional owners (i.e., institutional investors) to investigate their different moderating effects. We find empirical support for our hypotheses using a sample of Chinese firms during the global economic crisis in 2008. Moreover, we provide research and practice implications.     

The effect of ownership concentration and composition on dividends: Evidence from Latin America

We analyze a unique data set of publicly traded firms based in six Latin American countries to study the joint effect of ownership concentration and composition on dividend policy. We find that when ownership concentration is high and the largest investor is identified as an individual, firms tend to pay fewer dividends consistent with individual investors extracting benefits from minority shareholders. However, if the largest shareholder is based in a common law country, the dividend paid is significantly higher. Finally, greater ownership by the second largest shareholder decreases firm dividends suggesting the monitoring role of a large shareholder.     

The relative impact of corporate reputation on consumer choice: beyond a halo effect

ABSTRACT

Previous work suggests that corporate reputation generates a ‘halo effect’ where products from companies with better reputations are more likely to be chosen. We argue that corporate reputation plays a more expansive role, proposing that consumers will be less price-sensitive to offerings endorsed by companies with good reputations and that it moderates the marginal utility of product features with high clarity. We also propose that an individual’s knowledge of a company increases the likelihood its products will be purchased. Using a choice model incorporating an individual SEM-based reputation measure, we find support for these hypothesised effects in the context of television choices. The results suggest that corporate reputation warrants more attention by marketing managers to increase preferences for their products through these mechanisms.     

Shareholders versus stakeholders: corporate mission statements and investor returns

This paper seeks to discover whether companies that adopt a stakeholder approach, and thereby demonstrate a wider remit of corporate responsibility, provide inferior returns to those that embrace the shareholder value approach. To classify approaches, mission statements were analysed, the final sample comprising 32 shareholder oriented companies and 48 stakeholder oriented companies. To assess performance both accounting–based and market–based measures were used. A number of moderating variables were taken into account: systematic (beta) risk, gearing (long–term debt to total long–term finance), tax ratios, and firm size. ANOVA and Kruskall–Wallis tests revealed that mission orientation did not affect performance, whether in terms of stock returns or excess returns. Neither were accounting returns on equity different overall, although shareholder oriented companies experienced wider variations in this measure. A number of multiple regressions were also performed. However, the mission dummy was not found to be a significant variable.     

Retailer's decoy strategy versus consumers' reference price effect in a retailer-Stackelberg supply chain

Decoy strategy for bundling is an important marketing option because it can reflect the behavior resulting from consumers' reference price effect. This paper develops a game-theoretic model of a dyadic supply chain to study the joint decisions on pricing and decoy strategies in the presence of consumers' reference price effect. The retailer chooses one of the decoy strategies (phantom decoy-mixed bundling, decoy-mixed bundling) and selling prices to maximize her profit. Our study shows that: under both decoy strategies, the retailer and the manufacturer benefit from consumers' low reference price effect; however, the high reference price effect hurts their profits.