Herding by foreign investors and emerging market equity returns: Evidence from Korea

This paper studies the effect of herding by foreign investors on stock returns in the Korean market. We conduct both pre and post-liberalization analyses and utilize a three-stage least squares analysis in order to control for the simultaneous relationship. We find evidence of a significant impact of foreign investor herding on stock returns in addition to intra-year positive feedback trading by foreign investors. However, changes in domestic institutional ownership do not have any significant effect on stock returns. In addition, foreign investors tend to buy/sell shares that domestic institutions sell/buy in the herding year.     

Signaling Quality: An Examination of the Effects of Marketing‐ and Nonmarketing‐Controlled Signals on Perceptions of Automotive Brand Quality

When introducing new products to market, firms often leverage marketing signals in an effort to increase perceptions of product quality. While prior research mostly focuses on marketing‐controlled signals that firms can directly influence to affect consumer perceptions of product quality, the proliferation of nonmarketing‐controlled signals in the form of third‐party product reviews introduces a new layer of complexity to a consumer's inference process. Given the fact that propagation of marketing signals and third‐party reviews has made the marketplace more interactive, it is no longer diagnostic to analyze the impact of various quality signals on consumer perceptions, separately. The purpose of this study is twofold. There has been extant research on the individual effects of marketing‐controlled signals on quality perception, but research providing a simultaneous examination of multiple signals is scarce. The first purpose is to examine interaction effects between various marketing signals on consumer perceptions of quality. Firms may be able to control the communication strategy of internal signals (e.g., price, advertising), but third‐party signals are external to the firm, and hence are often perceived as being more credible and less biased than marketing signals. Despite the popularity of third‐party product reviews, there is scarce empirical research about how they impact perceptions in the presence of marketing‐controlled quality signals. Thus, the second purpose is to examine the interaction effects between marketing signals and independent third‐party reviews on perceived product quality. This study advances existing models of market signaling to account for the potential interactions between various types of quality signals. Hypotheses are tested using a longitudinal data set comprising all car brands that have existed in the U.S. automotive industry between 1990 and 2007. The automotive industry provides an ideal context for the analyses as quality is an indispensable yet not easily discernible attribute of cars. Furthermore, consumer perceptions of the quality of new vehicle introductions can have a profound effect on product performance. Data are compiled from various secondary sources, including Harris Interactive's Equitrend, Consumer Reports, and TNS Media Intelligence, among others. Econometric techniques are used to estimate the empirical model. Findings show that effects of quality signals are codependent such that third‐party quality ratings reduce the effectiveness of pricing and advertising, whereas they enhance the credibility of warranty signal. Furthermore, warranty positively interacts with price and advertising. It is also demonstrated that car sales in the previous period and the country of origin of the car brand significantly impact perceived quality. Overall, the research findings can help car manufacturers better understand how their initial product configurations and marketing strategies impact the perception of new vehicle introductions.     

Food aid and food policy in Bangladesh

Bangladesh has now replaced India as the most publicized large scale recipient of food aid, importing 1.67 million tons of food grains, four fifths of which were on concessional terms, in 1977/78 (July to June). Some analysts, extrapolating from the poor performance of the agricultural sector up to the mid 1970s, also project that Bangladesh will be one of the largest importers of foodgrains in a decade's time merely in order to maintain current pitifully inadequate levels of nutrition.¹ Yet so far there has been no open debate or systematic attempt to analyse the impact of food aid on the Bangladesh economy, compared with the controversy and intensive analysis of food aid to India. This article² is intended to demonstrate the seriousness of this gap in the literature. It includes a review of provisional evidence on the role of food aid in the Bangladesh economy during the first quinquennium of ‘planned’ development, 1972/3–1977/8.     

A voice from the silent masses: An exploratory and comparative analysis of noncomplainers

This study used a critical incident survey with both qualitative and quantitative sections to investigate noncomplainers. Noncomplainers are customers who experience service failures but do not voice complaints. The qualitative study (n=149) explored reasons why customers do not complain after experiencing service failures. In the quantitative study (n=530), two kinds of noncomplainers who either (a) received organization-initiated recoveries or(b) exited the encounters without recoveries were compared with three kinds of complaining customers who received (a) satisfactory recoveries, (b) dissatisfactory recoveries, or (c) no recoveries. The five customer groups were compared across repurchase intentions, negative affect, perceived regret, and intentions to engage in negative word of mouth. The results of the comparative analyses challenge existing views of noncomplainers’ repurchase intentions and negative outcome levels. Clay M. Voorhees (voorhees@bus.msu.edu) is an assistant professor of marketing at Michigan State University. His research interests are in the areas of service decision making, consumer complaining behavior, customer equity, and the development and application of innovative research methods to service decision making models. Clay’s research has been published inJournal of the Academy of Marketing Science, Journal of Service Research, andJournal of Services Marketing. Michael (“Mike”) K. Brady (mbrady@cob.fsu.edu) is an associate professor of marketing and director of the doctoral program at Florida State University. His research interests are in the areas of managing the service decision-making process, managing service failure, and the strategic ramifications of branding for service firms. Mike’s research has been published in theJournal of Marketing, Journal of Service Research, Journal of Retailing, Psychology & Marketing, Journal of Business Research, Journal of Services Marketing, International Journal of Service Industry Management, and other outlets. Mike has won both the M. Wayne Delozier Award for Best Conference Paper at the Academy of Marketing Science Conference and the Steven J. Shaw Award for Best Conference Paper at the Society for Marketing Advances Conference. Mike serves on the editorial review boards of theJournal of the Academy of Marketing Science, Journal of Service Research, andJournal of Retailing and was named an Outstanding Reviewer by theJournal of Retailing in 2004. David M. Horowitz (dmh03@fsu.edu) is a marketing doctoral candidate at Florida State University whose interests include services marketing, cognitive anthropology research methods, and marketing and public policy issues. He completed his MBA at San Diego State University and holds a BS in industrial engineering from Stanford University. David’s research has been published in theJournal of the Academy of Marketing Science and the proceedings of national and regional conferences.     

Prices and Price Dispersion on the Web: Evidence from the Online Book Industry

Using data collected between August, 1999, and January, 2000, covering 399 books, we examine pricing by thirty-two online United States-based bookstores. At the aggregate level, we find that both advertising and competitive structure had the predicted effects. More competition led to lower prices and to lower price dispersion. Holding competitive structure constant, more widely advertised items also had lower prices. At the firm level, we observe considerable heterogeneity in behavior. Firms had differentiated (or attempted to differentiate) on dimensions such as brand, price, and selection.     

Retail Strategies on the Web: Price and Non–price Competition in the Online Book Industry

Two conflicting predictions have emerged regarding the effect of low–cost information on price. The first states that all Internet retailers will charge the same low price for mass produced goods. The second states that Internet retailers will differentiate to avoid intense price competition. Using data collected in April 1999 on the prices of 107 books in thirteen online and two physical bookstores, we find similar average prices online and in physical stores and substantial price dispersion online. Analysis of product differentiation yields no clear results. The substantial premium charged by Amazon provides indirect evidence of product differentiation.     

The 1974 and 1984 floods in Bangladesh: From famine to food crisis management

In 1984 Bangladesh suffered the worst monsoon flooding since 1974, the year of famine. The flood losses in production inevitably put severe strain on the food system. The strains were so severe as to be characterized as a ‘food crises’ - a situation in which government resorted to extraordinary measures. The seasonal losses in production for the first three crops of the calendar year 1984 (boro, aus, broadcast aman) were at least a million tonnes. As is now recognized this loss in production also resulted in a drastic reduction in employment for the rural landless, on a conservative estimate 25 million person days. These are circumstances which could have led to famine conditions.