An entrepreneur's choice of venture capitalist or angel-financing: A behavioral game-theoretic approach

We develop a game-theoretic model that analyzes the effects of economic and behavioral characteristics on an entrepreneur's choice of financier (venture capitalist or angel). After the entrepreneur has chosen his financier, the dyad faces double-sided moral hazard problems in the form of ex ante effort-shirking, and ex post project-expropriation. In making his choice of financier, the entrepreneur trades-off the following factors. The venture capitalist has higher value-creating abilities than the angel. However, the entrepreneur anticipates a closer, more empathetic and trusting relationship with the angel. Entrepreneur/angel empathy and trust mitigates the double-sided shirking and expropriation threats. Our model contributes to two strands of venture capitalist research; the entrepreneur's choice of financier in the face of double-sided moral hazard problems, and the effect of behavioral factors, such as empathy and trust, on the creation of ‘relational rents’.     

Mitigating customers’ negative responses to physical presence reduction

Building on the social exchange theory and presumption of a firm's multi-channel strategy as a customer relationship management initiative, three experimental studies show that: (1) reducing physical presence negatively affects customers’ perceived relationship investment and trust and increases their switching intention; (2) to mitigate these negative effects, firms should engage in strategic decisions that benefit customers and are perceived as highly strategic. This research offers new insights suggesting that customers’ appraisals of firms’ strategic decisions influence their switching intention through the sequential operations of perceived relationship investment and trust. These findings are consistent for both services and retail contexts, highlighting the importance of firms engaging in strategies that are deemed to be unfavorable in the eyes of their customers to be perceived as highly committed to maintaining relationships with their customers.     

Socially responsible consumption in Russia: Testing the theory of planned behavior and the moderating role of trust

This paper adopts a multilevel approach to explore how socially responsible consumer behavior (SRCB) is shaped by a combination of micro‐level psychological drivers and specifics of the institutional context in which the behavior is performed. The model first applies the theory of planned behavior (TPB) to test the effects of TPB‐based behavioral predictors on the SRCB. Broad‐scope trust in business (BST) is then applied to the model as a variable that characterizes quality of an informal institutional environment, hypothesizing that BST moderates the relationship between TPB‐based behavioral antecedents and SRCB. The paper is based on a survey of 466 Russian consumers. Data were collected by self‐administered questionnaires completed by students and alumni of a large public university in Moscow. Results show that BST moderates the effects of TPB‐based predictors on SRCB. This implies that consumers who believe that the business is overall trustworthy are more likely to take company’s corporate social responsibility (CSR) into account when making purchasing decisions. This study contributes to the multilevel research on SRCB and CSR and adds to the literature on public trust in business as a nascent area of study. Its findings are especially relevant for companies operating in low‐trust environments, including postsocialist economies.     

Cross‐national assessment of the effects of income level,socialization process,and social conditions on employees’ ethics

Employees often experience ethical dilemmas throughout their service in an organization. This study utilized a multilevel standpoint to address employees’ differences in ethical reasoning. Hierarchical linear modeling was used to analyze responses from 40,485 full‐time employees across 54 countries. Drawing from Durkheim's concepts of the homo duplex, socialization process, and social conditions, this study found a positive relationship between employees’ income level and unethical reasoning. Furthermore, the results indicate that modern social regulation, technological advancement, economic development, and economic change moderate the relationship between income and ethical judgment. The study findings contribute to the Durkheimian model by validating the effects of individual‐ and country‐level factors on employees’ ethicality. Considering that the results contradict Durkheim's initial propositions, another concept and theory are proposed, which may complement Durkheim's arguments. Practical implications for organizations and society are further discussed to reinforce employees’ ethics.     

South Korea’s outward direct investment and its dyadic determinants: Foreign aid,bilateral treaty and economic diplomacy

This study investigates the factors that affect South Korean outward foreign direct investment (FDI) in developing countries. Most previous studies focus on monadic factors and do not consider how and to what extent bilateral relationships between South Korea and the host countries affect the investment decisions of Korean firms. The current study finds that interstate factors such as South Korea's international investment treaties with and official development assistance to host countries have positive effects on FDI to these countries, while presidential visits have strong and statistically significant effects on FDI only in countries located in non-Asian regions, especially the African continent. The findings suggest that the effects of bilateral relations on South Korea's FDI vary depending on the geographic location of the host country.     

Corporate fraud,risk avoidance,and housing investment in China

This study investigates the impact of corporate fraud on household investment choices. We conjecture that by undermining trust in the financial and insurance market, corporate fraud behaviour would decrease households' investment in risky financial assets and increase investment in non-financial assets. Combining data on households' investment behaviour with information on fraudulent activities of listed companies in China, we find that households with more lifetime experience of corporate fraud invest less in stocks and are less likely to purchase private insurance. By contrast, fraud experience increases households' intention to invest in residential real estate. In addition, the impact of corporate fraud is stronger among individuals who pay more attention to economic information, among individuals who have more social interaction, and among individuals in better regulated regions. Furthermore, we find that different types of fraud have differentiated effects on household investment decisions. Our findings indicate that corporate misconduct could generate profound negative externalities on the whole financial system.     

Retail investors and financial advisors: New evidence on trust and advice taking heuristics

This paper investigates factors that influence trust and advice taking among retail investors when consulting with financial advisors and making real-world portfolio decisions. The data reveal that non-expert retail investors trust their advisors a lot. Trust formation appears to be well described by a simple heuristic that relies substantially on the advisor's communication style when deciding how much to trust and delegate investment decisions. Portfolio decisions appear to depend more on investors' perceptions about the investor–advisor relationship than on the risk and return characteristics of investments comprising the portfolio choice set. This evidence supports Pentland's (2008) “honest signals” as a more powerful mechanism underlying investor trust than standard metrics based on past performance. Trust and advice-taking heuristics can be interpreted as well adapted to the environment of the non-profit bank cooperatives in which they are observed, implying that trusting based on simple honest signals, although vulnerable to exploitation, can be interpreted as ecologically rational. Features of the investor's environment typical of non-profit cooperative banks imply that the heuristics investors use can perform rather well without requiring investment experience or financial sophistication, which most investors in our sample are well aware they lack.     

Effects of social media on consumers’ purchase decisions: evidence from Taobao

Given the rapid growth of social media, it is important to understand the effects of social media on consumers’ purchase decisions in the e-commerce environment. However, although some e-commerce sites have started to link themselves to social media to enhance user interactions, previous studies of social media and service management have shed little light on the effects of social media on consumers’ purchase decisions. This study proposes a theoretical research model that includes social media factors, social impact transfer factors, and e-commerce outcome factors. We posit social interaction ties and social media commitment as key elements of social media. An online questionnaire was conducted to test the research model and hypotheses based on survey data collected from Taobao, the largest e-commerce site in China. The analysis results indicate that social interaction ties have significant positive effects on social impact transfer factors and trust in online vendor, whereas they do not directly influence visit intention. Social media commitment plays a crucial role in increasing social impact transfer factors and e-commerce outcomes. The findings reveal the different effects of normative and informational social influences on consumer purchase decisions. Further implications are discussed.     

Multilevel trust in international marketing of healthcare services: A five-country comparative study

PurposeThis research aims to increase understanding on how multilevel trust is developed as well as how trust levels are interconnected and influence international marketing strategy for healthcare services.Design/Methodology/ApproachA comparative case study approach was applied with Elekta, a Swedish firm, operating in Brazil, the Philippines, China, Russia, and Hong Kong.FindingsThe research culminated in a multilevel trust (MLT) model comprised of three levels relating to individuals, company performance, and context.Research implications/limitationsThis study offers a context-based multilevel trust model from a process perspective focusing on healthcare. This model can be tested in other service sectors.Practical implicationsManagers should consider multilevel trust to boost relationships and achieve local acceptance.Originality/ValueThis research contributes to trust theory by constructing a context-based multilevel trust model for international healthcare marketing.     

An integrative approach to relationship marketing,customer value,and customer outcomes in the retail banking industry: a customer-based perspective from Turkey

Given how important it is to provide superior value to customers and to maintain customer loyalty for a sustainable competitive advantage, the aim of this paper is to examine the relationships among relationship marketing components of – trust, competency, commitment, communication, and conflict handling, – relationship investment, relationship quality, perceived customer value, satisfaction and loyalty in an integrated framework in the Turkish retail banking industry. Unlike previous studies, this research extends the literature by analysing affective as well as cognitive dimensions in the same model with a holistic view by simultaneously examining the direct and indirect effects of the related concepts. The distinctive nature of this study is its evaluation of customer satisfaction and loyalty from the perspective of actual consumers. The research model was tested using data collected from 685 retail banking customers by applying structural equation modelling. The findings show that relationship marketing induces loyalty through relationship quality, customer value, and satisfaction, which are mainly provided by trust, communication, and relationship investment. Furthermore, relationship investment and relationship quality are the most important factors in the development of customer value, satisfaction, and loyalty. The emotional value dimension, which captures the affective aspects of perceived value, has the strongest effect on both satisfaction and loyalty.     

The effects of China's aid and trade on its ODI in African countries

This paper examines the effects of China's aid and trade on its overseas direct investment (ODI) in 50 African countries from 2002 to 2013. We find that exports of natural resources significantly increase China's ODI; this suggests that China's ODI is “vertical.” Despite this, the relationship between aid and ODI varies according to different types of aid. Aid invested in social and economic infrastructure raises ODI, and the marginal effect diminishes as aid increases. Aid invested in the productive sector and the government, however, negatively impacts ODI, thereby suggesting that China's aid will crowd out its investment in these countries.     

Digital infrastructure and entrepreneurial action-formation: A multilevel study

This study investigates how country-level digital infrastructure shapes the relationships between the action-formation mechanisms of socio-cognitive traits, i.e., entrepreneurial self-efficacy, fear of failure, and opportunity recognition, and entrepreneurial action. We amalgamate the agent-centric social cognitive theory with the external enabler framework and apply mechanism-based theorizing to explain how access-related mechanisms provided by digital infrastructure influence entrepreneurial action-formation. Based on a multilevel analysis of 344,265 individual-level observations from 46 countries and an additional robustness analysis of 391,119 individuals from 53 countries, we find that an individual's proclivity to starting a new venture is contingent upon the level of the digital infrastructure of a country. The empirical results show that a country's digital infrastructure is an external enabler that moderates the relationship between socio-cognitive traits and entrepreneurial action.     

Multilevel determinants of subsequent FDI in China

Among developing countries, China is the world's largest foreign direct investment (FDI) destination. A significant portion of the FDI in China comes from multinational corporations' (MNCs) subsequent investments of retained earnings or additional capital contribution. However, the characteristics of MNCs' subsequent investment have not been systematically studied. This study attempts to examine MNCs' subsequent investment in China both conceptually and empirically. Conceptually, the study approaches three levels of determinants: firm, location, and international, within an integrated model. Empirically, the study considers whether origin, experience, initial location, and other related factors significantly affect subsequent investment of MNCs after their initial entry into the Chinese market. Through empirical analyses, this study identifies some statistically significant factors around MNCs' subsequent investment decisions in China. © 2008 Wiley Periodicals, Inc.     

Social commerce: Is interpersonal trust formation similar between U.S.A. and Spain?

In social commerce, interpersonal trust when individuals communicate is key among the parties. The main objective of this study is to investigate how the consequent variables, “interpersonal trust” and “users’ intention”, are impacted by the antecedents of trust-building and cultural dimensions when people are engaged in social commerce. The research model is substantiated using data collected in the U.S.A. and Spain. While all the trust-building antecedents have significant positive impact upon trust, there are cultural differences between the countries. The findings can be of interest to global marketing managers and information officers.     

How does social trust affect corporate financial performance? The mediating role of corporate social responsibility

Prior studies assert that social trust may positively influence the economic performance of countries and firms (within those countries). This paper proposes a more nuanced mechanism whereby corporate social responsibility (CSR) mediates the relationship between country-level social trust and firm-level financial performance. Anchored in neo-institutional theory, we theorize that social trust instills norms of trustworthiness and willingness to trust others guiding individual and corporate behaviors. In order to comply with such norms and gain legitimacy, firms in high-trust society are more likely to commit to CSR activities that serve the interests of stakeholders. CSR activities, in turn, can positively influence financial performance by enabling firms to access stakeholders' resources and capabilities and to decrease transactions costs in the stakeholder relationships. We tested our theory by analyzing 9818 firm-year observations across 34 countries, during the 2006 to 2015 period. Our analysis shows the expected CSR mediation in the relationship between social trust and firm-level financial performance. Our findings are robust across different models addressing the concerns of endogeneity, alternative measures, and potential moderators.     

The role of China's aid and ODI in the economic growth of African countries

Has external capital, such as foreign aid and foreign direct investment (FDI), been able to help the economic growth in host countries? Our paper examines the effects of China's aid and its overseas direct investment (ODI) on economic growth in 47 African countries from 2003 to 2013. We find that China's aid has significant positive effects on African economic growth. However, China's ODI plays no major role in African countries' economic growth. In addition, the relationship between aid and growth varies according to the different categories of aid, and its marginal contribution is nonlinear.     

Economic performance over time: Does porter's diamond hold at the national level?

This research examines the conditions that contribute to the performance of countries and their industries in international markets. Building on Porter's dynamic diamond, 1960 and 1985 data on 49 countries are used to develop country-level factors related to national economic performance. Three factors were identified: infrastructure/demand, competitive investment, and education. The analysis considers how these factors are related to gross domestic product, net exports, and foreign direct investment. It also assesses changes over time and differences between industrialized and developing countries. The relationships between the three factors and GDP were substantially the same for both industrialized and developing countries, but not for net exports and foreign direct investment. These findings suggest that the relationships between the factors and national performance have changed over time and that there are important differences between developing and industrialized countries.     

A cross-cultural analysis of ridesharing intentions and compliance with COVID-19 health guidelines: The roles of social trust,fear of COVID-19, and trust-in-God

Ridesharing services such as Uber and Lyft have been substantially affected by the ongoing COVID-19 pandemic. Drawing on social capital theory, the current research investigates how social trust relates to three types of trust in compliance with COVID-19 guidelines and consumers' ridesharing intentions. Analyzing data from two economically and culturally distinct countries, the results suggest that social trust positively affects trust in platform companies' compliance with COVID-19 guidelines (TPC), but not (or to a lesser extent) trust in drivers' (TDC) and other riders (TRC) compliance with COVID-19 guidelines in both the United States and Bangladesh. Importantly, TPC, TDC, and TRC are positively related with consumers' ridesharing intentions in the United States but not in Bangladesh. Furthermore, the analysis reveals two counterintuitive moderating effects of fear of COVID-19 and trust in God. The results provide important insights on factors affecting the ridesharing industry in the context of the COVID-19 pandemic, and they emphasize the importance of considering cultural context in understanding consumers’ intentions to engage in the sharing economy.     

基于信任的移动社交电子商务购买意愿影响因素

近年来,越来越多的个体、商家加入移动社交网络平台开展电子商务活动,对网络零售产生了重要影响。但由于缺乏监管和行业规范的引导,消费者感知风险存在,影响消费者交易行为,且理论研究较少,也不能为此类电子商务模式的发展提供理论指导。信任是电子商务活动的基础,信任对消费者购买意愿产生直接影响,平台可用性、消费者内在特征和行为以及商家会直接或间接影响非移动社交电子商务模式消费者的购买意愿。而在移动社交电子商务中,由于其模式的独特性,以往影响消费者信任的因素已难以有效反映移动社交电子商务消费者的购买意愿。此外,商家通过社群与若干消费者建立不同程度的连接,需要研究连接中强弱关系对消费者购买意愿的影响程度。因此,基于移动社交电子商务的特点假设影响消费者信任和购买意愿的因素,即除系统质量、信息质量、产品质量、服务质量四个影响非移动社交电子商务消费者信任的因素外,还包括社群关系和网购认知这两个影响移动社交电子商务消费者信任的新因素,接下来假设上述因素对消费者感知信任和感知风险两个中介变量存在影响,并进一步影响消费者购买意愿,继而再通过构建结构方程模型进行实证分析。实证结果显示,系统质量、信息质量、产品质量、服务质量均不同程度正向影响消费者感知信任,负向影响感知风险,而社群强弱关系对购买意愿的影响与弱关系理论结论相反,网购认知对增强消费者感知信任作用明显,消除消费者感知风险是增强消费者信任的重要途径。     

Do Retail Foreign Direct Investment Restrictions Affect Retail Channel Structure?

The purpose of this study is to contribute to the existing retail channel structure research by investigating the impact of retail foreign direct investment (FDI) restrictions on retail channel structure as well as the moderating impact of a country's level of economic development on this relationship. Using a panel data set of 79 countries over the period 1999–2012, we show that retail FDI restrictions can influence retail channel structure development and that the relationship between retail FDI restrictions and retail channel structure is moderated by a country's level of economic development.