The Effects of Cross‐Functional Integration on Profitability,Process Efficiency,and Asset Productivity

We employ information processing theory (IPT) to posit beneficial impacts of internal integration on firm profitability and its underlying components of process efficiency and asset productivity. We further hypothesize that these effects are greater for firms that operate wider spans of supply chain processes. These expectations are tested with the combination of two different data sources: primary data collected to gauge levels of internal integration, and secondary data collected from financial reports including profitability performance and related financial ratios. The results provide evidence that internal integration mainly affects profits by driving process efficiencies. These efficiencies appear to be especially significant in sales, general, and administrative related costs for firms that have broad process spans. In contrast, the data analysis offers no evidence of a relationship between internal integration and asset productivity. Based on these findings, we point out important implications for the applicability of IPT in explaining the effects of internal integration, and identify a call for action for practitioners. Overall, our study enhances both the rigor and relevance of internal integration research by grounding it in IPT, by utilizing objectively reported financial data, by identifying specific cost benefits, and by studying the impact of process span as an important contingency.     

Time‐Varying Linkage of Possible Safe Haven Assets: A Cross‐Market and Cross‐asset Analysis

This paper contributes to applying the time‐varying symmetrized Joe–Clayton copula to study the dynamic linkage among possible safe haven assets (SHAs) in the major international markets over the past 34 years. We re‐examine four major asset types (long‐term government bonds, equity indices, oil, and gold) and test whether they are qualified individually as a safe haven asset against when paired against each other in a specific market. The empirical analyses indicate that: (1) Government bonds are generally confirmed SHAs. (2) Gold and oil are overwhelming SHAs against government bond across the markets. (3) US and East Asian markets (Japan, Australia and New Zealand) have more SHA options than the other regions against equity index.     

Pricing Multiasset Cross‐Currency Options

This study develops a general pricing method for multiasset cross‐currency options, whose underlying asset consists of multiple different assets, and the evaluation currency is different from the ones used in the most liquid market of each asset; the examples include cross‐currency options, cross‐currency basket options, and cross‐currency average options. Moreover, in practice, fast calibration is necessary in the option markets relevant for the underlying assets and the currency, which is also achieved in this study. © 2012 Wiley Periodicals, Inc. Jrl Fut Mark 34:1–19, 2014     

Cross‐market correlations and transmission of information

We investigate characteristics of cross‐market correlations using daily data from U.S. stock, bond, money, and currency futures markets using a new multivariate GARCH model that permits direct hypothesis testing on conditional correlations. We find evidence that arrival of information in a market affects subsequent cross‐market conditional correlations in the sample period following the stock market crash of 1987, but there is little evidence of such a relationship in the precrash period. In the postcrash period, we also find evidence that the prime rate of interest affects daily correlations between futures returns. Furthermore, we find that conditional correlations between currency futures and other markets decline steeply a few months before the crash and revert to normal dynamics after the crash. © 2002 Wiley Periodicals, Inc. Jrl Fut Mark 22:1059–1082, 2002     

Cross‐commodity analysis and applications to risk management

The understanding of joint asset return distributions is an important ingredient for managing risks of portfolios. Although this is a well‐discussed issue in fixed income and equity markets, it is a challenge for energy commodities. In this study we are concerned with describing the joint return distribution of energy‐related commodities futures, namely power, oil, gas, coal, and carbon. The objective of the study is threefold. First, we conduct a careful analysis of empirical returns and show how the class of multivariate generalized hyperbolic distributions performs in this context. Second, we present how risk measures can be computed for commodity portfolios based on generalized hyperbolic assumptions. And finally, we discuss the implications of our findings for risk management analyzing the exposure of power plants, which represent typical energy portfolios. Our main findings are that risk estimates based on a normal distribution in the context of energy commodities can be statistically improved using generalized hyperbolic distributions. Those distributions are flexible enough to incorporate many characteristics of commodity returns and yield more accurate risk estimates. Our analysis of the market suggests that carbon allowances can be a helpful tool for controlling the risk exposure of a typical energy portfolio representing a power plant. © 2009 Wiley Periodicals, Inc. Jrl Fut Mark 29:197–217, 2009     

Cross‐Border Mergers and Differences in Corporate Governance

We examine whether corporate governance differences affect firm valuation in cross‐border mergers. We find that takeover premiums are decreasing in the quality of the foreign acquirer's home country governance for deals completed with stock, suggesting that the acquirers compensate target shareholders for the resulting exposure to inferior corporate governance regimes. Correspondingly, we find that the acquiring firm stockholders' abnormal returns at the merger announcement are increasing in the quality of corporate governance for stock offers. Finally, we find that foreign acquirers from countries with better corporate governance are more likely to make stock offers.     

Disagreement in a Multi‐Asset Market

This paper provides a simple framework to study the effect of disagreement in a multi‐asset market equilibrium by considering two agents who disagree about expected returns, variances, and correlation of returns of two risky assets. When agents' subjective beliefs are characterized by mean preserving spreads of a benchmark homogeneous belief, we show that the effect of the disagreement does not cancel out in general and the effect in a multi‐asset market can be very different from a single asset market. In particular, the market risk premium can increase and the risk‐free rate can decrease significantly even when the market is overoptimistic and overconfident.     

Cross‐group comparisons: A cautionary note

This article alerts researchers to the importance of factorial invariance in comparative studies. Cross‐group or cross‐national comparisons, without a clear understanding of factorial structures, can result in misleading conclusions regarding compared groups. The types and process of invariance test are discussed. Then, as an empirical illustration, American consumer ethnocentrism toward Japanese products is examined across gender and age. © 2002 Wiley Periodicals, Inc.     

Capital Regulation,Bailout and Banking Asset Correlation

We study the effect of capital regulation on banking asset correlation. Banks are more efficient users of banking assets. This implies that it may be ex post optimal to bail out a failed bank. We show, under Basel 1 capital regulation, that the financial regulator is committed to a mixed bailout strategy in the state of systemic failure, which reduces banks’ incentive to choose highly correlated assets. The mixed strategy is not creditable under mark‐to‐market capital regulation. In the subgame perfect equilibrium, banking asset correlation increases, resulting in a high probability of systemic failure. We then discuss social losses under different capital regulations.     

Cross‐Functional Integration: Concept Clarification and Scale Development

The centrality of cross‐functional integration (CFI) to supply chain theory and practice has long been recognized. Yet researchers continue to struggle with consistently defining or measuring the CFI construct, thus limiting the utility of CFI research. This research develops (1) a comprehensive definition of CFI that synthesizes previous supply chain research and (2) a valid set of scale items that measure the conceptual domain outlined by this definition. The goal is to build a common foundation for extending knowledge on CFI's antecedents and consequences, and ultimately to improve scholars’ ability to guide a broader practitioner community still struggling to achieve integration in their organizations.     

Institutional Distance and Cross‐Border Venture Capital Investment Flows

Cross‐border investments are an increasingly important part of venture capitalists' portfolios. In order to better understand venture capitalists' international investment decisions, we use dyadic pairings of European countries over a 10‐year time span to examine how regulative, normative, and cultural‐cognitive institutional differences are related to cross‐border venture capital investment flows. Results demonstrate that increased normative and cultural‐cognitive distance reduce cross‐border investments, whereas regulative distance shows no relationship. Together, these findings suggest that institutional dimensions do influence venture capital investment decisions and that the type of distance can have differing effects.     

Cross‐modal Interactions between Color and Texture of Food

Color has a profound influence on human perception. Not only does it cause changes in physiological or emotional states, it can shape what is perceived in other sensory modalities. However, the body of research on these “cross‐modal” experiences has predominantly examined color's influence on taste and smell. As such, the aim of this study was to identify the cross‐modal influence of color on the sense of touch. In four experiments involving food products, the cross‐modal interaction between color and texture was found to be automatic, unlearned, and a moderating effect on perceived texture. Furthermore, results indicate a person's haptic predisposition, or “need for touch,” influences their sensitivity to these cross‐modal effects. This research builds on current theory involving color, presents a number of areas for future research, and discusses managerial implications of color–texture cross‐modal interactions.     

Just‐in‐Time Retail Distribution: A Systems Perspective on Cross‐Docking

Cross‐docking is a just‐in‐time strategy for distribution logistics. It is aimed at reducing inventory levels and distribution lead times by creating a seamless flow of products from suppliers to customers. Prior supply chain literature has argued that creating such a seamless product flows requires a holistic view on cross‐docking management, aimed at synchronizing cross‐docking operations at the distribution center with its inbound and outbound network logistics. This paper provides an in‐depth case study illustrating how cross‐docking operations can be managed more holistically in a retail distribution context. A discrete event simulation model has been developed to understand and improve the cross‐docking operations of a large grocery retailer in the Netherlands. The model is used to quantitatively evaluate two proposed changes that exploit opportunities in the design and control of the retailer's distribution network. An extensive real‐world data set is used as input to the model. Overall, the case and simulation results show that a holistic cross‐docking management approach can indeed improve system‐wide performance, which further stresses the importance of making cross‐dock operational decisions making and network decisions together.     

FDI and Growth: What Cross‐country Industry Data Say

The theoretical literature has discussed different channels through which foreign direct investments (FDI) promote host country’s economic growth, but empirical analyses have so far been rather inconclusive. In this paper, exploiting the information of a disaggregated data set on a panel of 14 manufacturing sectors for (a sample of) developed and developing countries over the period 1992–2004, we are able to provide robust evidence on the positive and statistically significant growth effect of FDI in recipient countries. Moreover, we find that this effect is stronger in capital‐intensive and technologically advanced sectors. The growth enhancing effect comes primarily from an increase in total factor productivity (TFP) and from factors accumulation. Our results are robust to the inclusion of other determinants of economic growth and to controlling for potential endogeneity.     

Estimating the Cost‐of‐Equity Capital Using Empirical Asset Pricing Models

Empirical asset pricing models seek to capture characteristic‐based patterns in the cross‐section of average stock returns. I propose a new approach for constructing these models, and investigate its performance with respect to estimating the cost‐of‐equity capital. Using a model that accounts for the cross‐sectional relation between five characteristics and average stock returns, I obtain cost‐of‐equity estimates that outperform those produced by the Fama‐French five‐factor model in out‐of‐sample tests. Because the proposed approach builds directly on standard cross‐sectional regression techniques, it provides complete flexibility in choosing the firm characteristics used to formulate the cost‐of‐equity estimates.     

Cross‐Country Determinants of Early‐Stage Necessity and Opportunity‐Motivated Entrepreneurship: Accounting for Model Uncertainty

Model uncertainty is one of the most pervasive challenges in the social sciences. Cross‐country studies in entrepreneurship have largely ignored this issue. In this paper, we evaluate the robustness of 44 possible determinants of early‐stage opportunity‐motivated entrepreneurship (OME) and necessity‐motivated entrepreneurship (NME) that are broadly classified in four groups: (1) economic variables, (2) formal institutions, (3) cultural values, and (4) legal origins and geography. The results, which are based on a representative world sample of up to 73 countries, suggest that institutional variables associated with the principles of economic freedom are most robustly correlated with OME and NME. Our findings also identify net income inequality and Scandinavian legal origins as weakly robust predictors of both types of entrepreneurial activity. Furthermore, we find that log GDP per capita is only a weakly robust predictor of NME, but not OME. We discuss implications for future research.     

A validation study of the Cross‐Cultural Adaptability Inventory

Despite the claims made about the effectiveness of cross‐cultural training programs, few studies have examined the reliability and validity of the instruments used in these training programs. In this study, the authors examined the factor structure of the Cross‐Cultural Adaptability Inventory (CCAI) via a confirmatory factor analytic approach. A series of confirmatory factor analytic models was tested and applied at the item level to both the CCAI and Goldberg's Big Five Inventory. A confirmatory factor analysis (CFA) model in which a method factor was estimated fits the data significantly better than a model without such a method effect. Further, the method factor suppressed substantive relationships such that the two CCAI factors of Emotional Resilience and Personal Autonomy became significant correlates with self‐reported number of international job assignments after accounting for method variance. Implications for research and practice are discussed.     

Cross‐Functional Integration Revisited: Exploring the Conceptual Elephant

Despite multiple decades of previous research, cross‐functional integration (CFI) remains a poorly understood concept. We argue for definitional clarity to differentiate CFI from other related concepts, such as interfirm integration or supply chain integration. We also argue for theoretical grounding to provide context for understanding the role of CFI within a firm as well as between firms. This article provides a foundation for researchers to move forward in creating a broader understanding of CFI as a focal construct of interest within the supply chain domain.