How do US options traders “smirk” on China? Evidence from FXI options

In this paper, we study the implied volatility smirk (IVS) of options written on the FXI, the Financial Times Stock Exchange/Xinhua China 50 Index exchange-traded fund (ETF). Using the methodology of Zhang and Xiang (2008, Quant Financ, 8, pp. 263–284), we document the empirical characteristics of the level, slope, and curvature of IVS of the FXI options. We find that, on average, IVS becomes steeper and more convex as time to maturity increases. The level and curvature are usually positive, and the slope is negative. We provide evidence that the information in the quantified IV factors has some predictive power for the future monthly FXI ETF returns.     

Do mergers and acquisitions promote trade? Evidence from China

Many studies have shown that mergers and acquisitions (M&A) raise firms' productivity. Few researches investigate whether exporters can enhance export performance after M&A through higher levels of efficiency. Based on detailed information on M&A activities of Chinese firms, China's customs trade data and National Bureau of Statistics surveys, we investigate the causal effect of M&A on trade performance. In particular, the value and the volume of firm exports, product quality, product scope and the number of export destinations have been examined. We find positive and significant effects of M&A on all the examined indicators of export performance. These findings are generally robust to a variety of robustness checks. We further observe that state-owned firms are the least likely to benefit from M&A. We also obtain evidence that firms benefit more from M&A deals if they are targets or merge with foreign firms. Overall, this paper is to our knowledge the first study that uses micro-level data in multiple industries to examine the relationship between M&A and exports of heterogeneous firms. Our results deepen our understanding of the consequences of M&A by suggesting another potential benefit, and hence provide policy implications for merger regulation.     

How do accounting standards and insiders' incentives affect earnings management? Evidence from China

Chinese listed companies recently experienced two important institutional changes: split share structure reform (SSSR) and the mandatory adoption of IFRS-convergent new accounting standards (NAS). We find that the introduction of NAS significantly increased earnings management. Although we do not find evidence that SSSR directly decreased earnings management of the average firm, the increase in earnings management surrounding the introduction of NAS is negatively related to the reduction in non-tradable shares. These results suggest that accounting standards are the more important factor associated with the level of earnings management. Insiders' incentives affect earnings management given a specific set of accounting standards.     

How do emerging debt market participants recognize firm internationalization?Evidence from effects on credit ratings

We explore the firm internationalization's impact on firm credit ratings in emerging economies. Adopting Chinese data from 2009 to 2018, we document that firm internationalization varies negatively with its credit ratings, indicating that emerging debt market participants are risk averse and prioritize the risks involved in firm internationalization endeavors. This association is amplified for firms operating in host countries with lower institutional quality, decreased cultural distance from home countries, and when firms do not hold tax haven subsidiaries. We observe that the main association is consistent when alternative dataset (India, Russia, and Brazil) or proxy (cost of debt) is applied.     

When do domestic alliances help ventures abroad? Direct and moderating effects from a learning perspective

While the importance of strategic alliances for new venture internationalization is well acknowledged, the effect of domestic partners remains less understood. Building on organizational learning theory's vicarious learning arguments, we suggest that internationally experienced domestic partners positively influence new ventures' international intensity. Moreover, acknowledging that ventures may have multiple learning sources, we argue that the effect is more pronounced when substituting for the lack of new ventures' top management teams' international experience, or when complementing the insights about foreign markets received from foreign alliance partners. The analysis of 194 publicly held new ventures largely supports our hypotheses.     

Building a competitive advantage based on transparency: When and why does transparency matter for corporate social responsibility?

Customers today are increasingly demanding transparency from firms. This article discusses the concept of performance transparency and explores when and why transparency plays a key role for a firm’s corporate social responsibility (CSR) effectiveness. In doing so, it addresses consumer skepticism as the logic of the transparency-CSR interaction and presents empirical evidence of the effect. It also discusses key principles for managing performance transparency effectively. Companies should monitor and track performance transparency regularly, initiate consistent transparency practices along with CSR activities, pay attention to the types of information made available, and adapt the transparency practices to the involvement level.     

When do firms benefit from university–industry R&D collaborations? The implications of firm R&D focus on scientific research and technological recombination

Firms' access to academic discoveries through R&D collaborations has been shown to enhance their patent performance. However, increasing both internal and external R&D activities can lead to high knowledge redundancy and coordination costs. This paper examines what kind of R&D focus inside the firm will improve or reduce the benefits of R&D collaborations with universities. Our results show that technological recombination focus strengthens the relationship between university collaborations and patent performance, whereas scientific research focus weakens the relationship. These results also differ between young and old firms, implying that firms may shift their R&D focus according to their collaborative objectives.     

How do economic,cultural, and global-connectedness distances moderate the effect of customers’ experiences on their intention to revisit non-indigenous restaurants? Evidence from Korean restaurants

In this study, we evaluate how the effect of customers' experiences on revisit intention for non-indigenous restaurants can be moderated by economic distance (ED), cultural distance (CD) and global-connectedness distance (GD) between the country of origin for a given non-indigenous restaurant and the customer’s resident country. Surveys were conducted in seven countries across three continents, and the levels of ED, CD and GD between Korea and the seven countries were used as moderators. The findings suggest that the types of food and staff are two elements that should be emphasized in countries that are relatively close to Korea. Conversely, elements like the atmosphere of the restaurant and word of mouth should be emphasized in countries that have greater distances from Korea. Of the three distances considered in the study, GD had the strongest moderating effect on the relationship between customers’ experiences and their intentions to return to the restaurant. As a whole, the results imply that ED, CD and GD are important points of reference when considering prior experience while selecting a target country based on the strength of the restaurant’s experience management.     

When do customers offer firms a “second chance” following a double deviation? The impact of inferred firm motives on customer revenge and reconciliation

The present research develops and tests a theory explaining how customers respond to failed service recoveries (i.e., double deviations). This work offers three novel and important conclusions. First, inferences about a firm's motive (negative vs. positive) mediate the impact of perceptions of the double deviation (i.e., severity, blame, and fairness) on resulting outcomes (i.e., customer anger, desire for revenge, and desire for reconciliation). Second, when inferred motive is positive, desire for reconciliation overwhelms desire for revenge, leading customers to choose more reparatory than retaliatory behaviors. Third, following a double deviation, firms that both compensate and apologize to customers can change customers’ inferred motives from negative to positive, leading customers to desire more reconciliation than revenge, and engage in more reparatory than retaliatory behaviors. These studies demonstrate that, contrary to common wisdom, customers do not always respond negatively to a double deviation, and firms still have a “second chance” following a failed recovery.     

A review of research on outward foreign direct investment from emerging countries,including China: what do we know,how do we know and where should we be heading?

Using the Antecedents, Decisions and Outcomes (ADO) format as an organizing framework, this article gives an overview of the literature on different dimensions and characteristics of outward foreign direct investment (OFDI) by firms from emerging countries. Based on an extensive coverage of studies published over a period of nearly 25 years between 1993 and 2017, we review extant research on this phenomenon from mainly China, as well as other emerging countries. We identify advances and analytical areas of OFDI research and pinpoint the key theories, methodologies, observed characteristics and the variables that have been examined in this growing research literature. Many areas of the above research themes remain underexplored, despite recent significant advancements, and may provide directions for future research.     

Why do consumers purchase biodegradable plastic? The impact of hedonics and environmental motivations on switching intention from synthetic to biodegradable plastic among the young consumers

Human concern for the environment has grown in tandem with recent economic development, particularly in emerging nations. This paradigm change has led Malaysians to pay more attention to synthetic plastics challenges, particularly in Malaysia. This study aims to determine the attitudes of young Malaysian consumers on the usage of biodegradable plastics to minimize the use of synthetic plastic in the country. Generally, two motivations—hedonic and environmental motivations toward switching intention from synthetic to biodegradable plastic among the young consumers were examined in the study. Environmental motivations (environmental concern, environmental knowledge), as well as hedonic motivations (adventurous spirit, novelty-seeking), are used in this study to broaden the theory of consumption value (TCV) into four additional factors that may positively impact the young consumer's attitude and increase switching intention towards biodegradable plastics. The data was collected utilizing an online survey approach and a standardized questionnaire. The data of 386 young Malaysian customers were analyzed using structural equation modelling (SEM) using SmartPLS 3. The study's significant findings indicated that hedonic motivations, environmental motivations, and attitudes all impact switching intentions toward biodegradable plastics. This study also found that attitude is a mediator between hedonic and environmental motivations regarding switching intentions. These findings might aid the government in developing a new policy that encourages residents to adopt biodegradable plastics while also lowering pollution.