Making a first impression as a start-up: Strategies to overcome low initial trust perceptions in digital innovation adoption

High failure rates of digital innovations by start-ups indicate that consumers' initial trust perceptions are make-or-break for their survival. Hence, start-ups have to design adequate business models to manage consumers' initial trust perceptions of digital innovations. Five experiments explore how start-ups can signal trustworthiness in order to overcome low initial trust perceptions and boost adoption. We find three specific design strategies of start-ups' digital business models – customer ratings, benefit communication, and revenue model – to be effective to overcome low initial trust perceptions and to increase adoption of digital innovations. The findings demonstrate that initial trust serves as a critical mediator in the relationship between these design strategies and consumers' adoption intentions. Additionally, the chosen revenue model has differential effects on privacy concerns, which mediate the relationship between revenue model and initial trust. The present empirical insights help start-ups to craft business model design strategies for successful digital innovation launch.     

International business and human rights: A research agenda

The discussion on business responsibilities for human rights is thriving – although, surprisingly, predominantly outside of the International Business (IB) field. This article introduces business and human rights (BHR) as a research area with great potential for IB scholars. IB scholarship has much to offer when it comes to better understanding the relation between multinational enterprises (MNEs) and human rights. BHR, on the other hand, is a field that can no longer be ignored by IB research if the field is to remain at the forefront of scholarship in globalization-related issues concerning MNEs. Therefore, this perspective article aims at providing guidance to IB scholars interested in engaging in BHR research by tracing common themes and overlaps, and outlining a research agenda that addresses some of the research gaps and open questions in both fields.     

Bouncing back from a sudden-onset extreme event: exploring retail enterprises’ resilience capacity

ABSTRACT

A feature of recent decades has been the sudden and unexpected occurrence of catastrophic events seriously affecting people and territories. From an economic viewpoint, this has led scholars to pay increasing attention to factors and determinants taking enterprises face-to-face with extreme and catastrophic events, through the resilience lens. In this context, this study aims to contribute to the literature on resilience to natural disasters which is currently still limited in the business and management fields, both theoretically and empirically. This is particularly true as regards retailing, despite the key role played by retail in the aftermath and recovery periods following on from sudden-onset extreme events such as earthquakes.

The 2012 Emilia earthquake is a case in point with which to explore small retail enterprises’ resilience to sudden-onset disasters. Specifically, our empirical research consisted of administering a structured questionnaire to a sample of small retail enterprises which experienced an earthquake. The unit of analysis adopted was the retail enterprise. Data was processed applying Covariance-Based Structural Equation Modeling (CB-SEM). The structural model aims to verify the impact of sales capabilities, market orientation and networking capabilities on the resilience capacity of retail enterprises affected by an extreme event, controlling for certain financial indicators such as suppliers’ payment timeframes and the use of debt capital, as well as respondent age and gender. The findings show that all the antecedents analysed exert a significant and positive effect on small retail enterprises’ resilience capacity and ability to bounce back from natural disasters. Moreover, suppliers’ payment timeframes showed a direct relationship with retail enterprises’ resilience capacity, with lower use of debt capital equalling higher retail business resilience. Age and gender do not exert any significant effect. Scientific, managerial and public policy implications are derived.

Abbreviation: SEM     

The interrelationships between brand and channel choice

We propose a framework for the joint study of the consumer’s decision of where to buy and what to buy. The framework is rooted in utility theory where the utility is for a particular channel/brand combination. The framework contains firm actions, the consumer search process, the choice process, and consumer learning. We develop research questions within each of these areas. We then discuss methodological issues pertaining to the use of experimentation and econometrics. Our framework suggests that brand and channel choices are closely intertwined, and therefore studying them jointly will reveal a deeper understanding of consumer decision making in the modern marketing environment.     

A decomposition formula for option prices in the Heston model and applications to option pricing approximation

By means of classical It? calculus, we decompose option prices as the sum of the classical Black?CScholes formula, with volatility parameter equal to the root-mean-square future average volatility, plus a term due to correlation and a term due to the volatility of the volatility. This decomposition allows us to develop first- and second-order approximation formulas for option prices and implied volatilities in the Heston volatility framework, as well as to study their accuracy for short maturities. Numerical examples are given.     

KNOW YOUR CLIENT! INVESTOR PROFILE AND TAILOR‐MADE ASSET ALLOCATION RECOMMENDATIONS

We study how the investor profile influences the asset allocation recommendations of professional advisors. We find the investor's perceived risk attitude influences more the mix of risky assets, whereas the socioeconomic variables influence more the cash percentage. The recommendations are consistent with a diversification behavior driven by actual asset correlations. These findings support the utility of investor advisory that may help enhance the risk and return trade‐off. The main drawback of the recommendations may consist in the degree of customization that is limited by the small number of investor characteristics actually influencing the asset allocation.     

The effect of spouses' relative education on household time allocation

Does spouses' relative education explain their household's distribution of labor? This paper analyzes the effect of spouses' education on time allocated to housework and paid work. To address endogeneity concerns, I exploit changes in spouses' relative education due to remarriage to identify its effects on their time allocation. I find that when a husband marries a wife with a higher relative education than their previous spouse, his share of time on housework increases while his share of time on paid work decreases. In contrast, I find nonsignificant results when a wife remarries a more educated husband than her previous one. I also find that changes in the spouse's education reduce the probability of a spouse staying at home. These findings show that relative human capital plays a role in household labor distribution and motivates a more gender-neutral division of labor within households due to a more evenly distributed time allocation.     

Opportunities for commercial accommodation in VFR travel

This research explores the extent to which VFR travellers utilise commercial accommodation in the Sunshine Coast, Australia, and profiles the characteristics and behaviours of this particular type of VFR traveller. The research indicated that 26% of the VFRs stayed in commercial accommodation (CVFRs). This closely aligned with research using the same method in a comparative destination, Ballarat, Australia, indicating that 22% of VFRs stayed in commercial accommodation. CVFR travellers occupied similar types of commercial accommodation as non‐VFRs and engaged in similar tourism activities. However, they came from different generating regions and used different sources of information for planning their trip. Copyright © 2009 John Wiley & Sons, Ltd.     

Global Standards and Ethical Stock Indexes: The Case of the Dow Jones Sustainability Stoxx Index

The increased scrutiny of investors regarding the non-financial aspects of corporate performance has placed portfolio managers in the position of having to weigh the benefits of ‘holding the market’ against the cost of having positions in companies that are subsequently found to have questionable business practices. The availability of stock indexes based on sustainability screening makes increasingly viable for institutional investors the transition to a portfolio based on a Socially Responsible Investment (SRI) benchmark at relatively low cost. The increasing share of socially responsible investments may play a role in providing incentives towards a continuous upgrading of sustainability standards to the extent that their performance is not systematically inferior to that of the other funds. This article examines whether these incentives have been so far detectable with particular reference to the Dow Jones Sustainability Stoxx Index (DJSSI) that focuses on the European corporations with the highest CSR scores among those included in the Dow Jones Stoxx 600 Index. The aim of the article is twofold. First, we analyse the performance of the DJSSI over the period 2001–2006 compared to that of the Surrogate Complementary Index (SCI), a new benchmark that includes only the components of the DJ Stoxx 600 that do not belong to the ethical index to evaluate more correctly the size of possible divergent performances. Second, we perform an event study on the same data set to analyse whether the stock market evaluation reacts to the inclusion (deletion) in the DJSSI. In both cases, the results suggest that the evaluation of the CSR performance of a firm is a significant criterion for asset allocation activities.