Competition principles and policy in the APEC: How to proceed and link with WTO

There is a growing consensus that competition‐oriented policy framework would be instrumental in achieving the Bogor goal of trade and investment liberalization by 2010/2020. As of now, only eight economies have the experience of operating competition policy for more than a decade. Many emerging economies of the APEC have only begun to introduce competition policy. The Auckland APEC Leaders Meeting of 1999 adopted the APEC competition principles. It is a significant step forward, but more hard work lies ahead: the issue of developing specific and concrete work program to implement the competition principles within the APEC and how to put competition policy in the much broader context of a multilateral trading system. The paper maps out a specific strategy to move the competition policy agenda forward at the APEC and how to link to the WTO and identifies the sources of such value‐added and makes a proposal in order to best utilize them.     

Fashion retail forecasting by evolutionary neural networks

Recent literature on nonlinear models has shown that neural networks are versatile tools for forecasting. However, the search for an ideal network structure is a complex task. Evolutionary computation is a promising global search approach for feature and model selection. In this paper, an evolutionary computation approach is proposed in searching for the ideal network structure for a forecasting system. Two years’ apparel sales data are used in the analysis. The optimized neural networks structure for the forecasting of apparel sales is developed. The performances of the models are compared with the basic fully connected neural networks and the traditional forecasting models. We find that the proposed algorithms are useful for fashion retail forecasting, and the performance of it is better than the traditional SARIMA model for products with features of low demand uncertainty and weak seasonal trends. It is applicable for fashion retailers to produce short-term retail forecasting for apparels, which share these features.     

Seven challenges to combining human and automated service

We introduce this special issue by addressing seven key challenges associated with managing hybrid human-automated service systems. These consist of the following:

• 1 What strategic and tactical issues arise when managing hybrid service systems?
• 2 How should the core “value proposition” be set?
• 3 What special considerations arise in the design and implementation phases?
• 4 How can service delivery be managed to identify systemic problems and to address service breakdowns?
• 5 How can communications with clients improve the functioning of service systems?
• 6 What performance measures should be used to monitor process, outputs, client perceptions, and financial outcomes?
• 7 How can we coordinate the various interdisciplinary activities needed to address the previous six issues?

We consider these challenges after first characterizing the historical evolution of service delivery, reviewing some of the literature in the administrative sciences, and proposing a conceptual framework. Copyright © 2009 ASAC. Published by John Wiley & Sons, Ltd.     

Co-Evolution: Law and Institutions in International Ethics Research

Despite the importance of the co-evolution approach in various branches of research, such as strategy, organisation theory, complexity, population ecology, technology and innovation (Lewin et al., 1999; March, 1991), co-evolution has been relatively neglected in international business and ethics research (Madhok and Phene, 2001). The purpose of this article is to show how co-evolution theory provides a theoretical framework within which some issues of ethics research are addressed. Our analysis is in the context of the contrasts between business systems (North, 1990), and in particular the distinction between informal systems and those systems where institutions are formalised in law. This complements the growing research on comparative corporate governance and capitalisms (Chandler and Hikino, 1990; Choi et al., 1999; Whitley, 1994). The synthesis of co-evolution and analysis of divergent institutional environments in ethics research can also complement the globalisation and MNE approaches to international business research.     

Explaining import quality: The role of the income distribution

We examine a generalized version of Flam and Helpman [Flam, H., Helpman, E., 1987. Vertical Product Differentiation and North-South Trade. American Economic Review, 77, 810-822.] in which consumption prices for quality differentiated goods are rising in household income. We provide propositions for aggregating this relationship across heterogenous households to map cross-country differences in income distributions to cross-country differences in import price distributions. The theoretical predictions are examined and confirmed using disaggregated data on prices of traded goods and micro data on household income from the Luxemburg Income Study. Country pairs with more similar income distributions have more similar import price distributions, whether similarity is measured by 1st-4th moment statistics, population and consumption shares within world income and product price quantiles, or income and price dis-similarity indices.     

Ethical Commitment,Financial Performance,and Valuation: An Empirical Investigation of Korean Companies

A variety of stakeholders including investors, corporate managers, customers, suppliers, employees, researchers, and government policy makers have long been interested in the relationship between the financial performance of a corporation and its commitment to business ethics. As a subject of research, the relations between business ethics and corporate valuation has yet to be thoroughly quantified and investigated. This article is an effort to amend this inadequacy by demonstrating a statistically significant association between ethical commitment and corporate valuation measures. Consistent with anecdotal evidence, we have found a significant association between the ethical commitment of Korean companies and their valuation on the Korean stock market. However, the result reveals that the association between ethical commitment and financial performance is not significantly supported. Tae Hee Choi received Ph.D. from the Ohio State University, Ohio, USA. Presently working as Assistant Professor in accounting at the KDI School of Public Policy and Management. Research interests are business ethics, capital market, financial accounting, managerial accounting, and valuation. Jinchul Jung received Ph.D. from Kent State University, Ohio, USA. Presently working as Assistant Professor of Business Administration Department in the College of Business at Chosun University. Research interests are business ethics, family-supportive program, and organizational commitment.     

Platform market competition with endogenous side decisions

This paper develops a framework to analyze platform competition in two‐sided markets in which agents endogenously decide on which side of a platform to join. We characterize the equilibrium pricing structure and perform a comparative statics analysis on how the distribution of agents’ preferences affects the platforms’ profits. We also show that the market equilibrium under profit‐maximizing platforms leads to the first best social surplus, which illustrates the importance of the price mechanism to induce more balanced participation across the two sides. This framework can be applied to analyze market competition for “rental” or “sharing” platforms. In addition, we extend our analysis to consider an initial investment stage, which makes participants the owner of some durable goods to rent out.     

The effect of financial reporting quality on CEO compensation structure: Evidence from accounting comparability

This study examines the effect of accounting comparability on the design of CEO compensation structure. After controlling for firm-specific attributes, we find that accounting comparability is positively associated with CEO equity-based compensation intensity and pay-performance sensitivity. This suggests that the improved comparability increases the usefulness of equity-based compensation and a firm is willing to offer more equity-based compensation contracts to CEOs and increase their pay-performance sensitivity. Further, we find that the impact of comparability on the CEO’s compensation contract increases with information asymmetry, which is consistent with the notion that accounting comparability is a quality of financial reporting that facilitates the use of equity-based compensation in a poor information environment. Our analysis also reveals that the effect of accounting comparability on CEO compensation structure is greater when a firm’s corporate governance is strong, consistent with the complementary relation between comparability and the exiting corporate governance in determining CEO compensation schemes. Overall, our evidence suggests that firms utilize more equity-based compensation as a proportion of total compensation under greater accounting comparability and enhance the alignment between equity-based compensation and firm performance.     

The acculturative stress of host country managers working at MNC subsidiaries: Determinants and effects

This paper introduces the concept of acculturative stress to indicate a distinct psychological difficulty faced by host country managers working at multinational corporation (MNC) subsidiaries. Drawing on the social identity and self-verification theories, we suggest that host country managers are exposed to acculturative stress due to the challenges they face in verifying their national cultural identity. We identify the perceived cultural incongruence and the lower relative standing of host country managers as proximal determinants of acculturative stress and examine its negative impact on their work engagement. The analysis results of a sample of 643 Korean managers working at 60 MNC subsidiaries in Korea support our hypotheses on the determinants and effects of acculturative stress.     

Heterogeneous preferences of green vehicles by vehicle size: Analysis of Seoul case

Although there are several policies for promoting green vehicles, green vehicles have yet to penetrate the market to the extent desired. To attain the goal, a complete understanding of consumers’ preferences of green vehicles is essential. This paper proposes and specifies the fuel-type choice models among conventional gasoline vehicles, hybrid electric vehicles, plug-in hybrid electric vehicles, and electric vehicles by vehicle size using the stated preferences data collected in Seoul, Korea. The results highlight the need to accommodate the correlation between similar alternatives and the unobserved heterogeneity within the context of choosing a green vehicle. The choice probabilities of green vehicles are affected by the relative impacts of the vehicles’ attributes and socio-demographic variables, and both of these variables are affected by the sizes of the vehicles. For compact size and mid-size vehicles, the effects of operating costs were less than those of purchase prices; however, for the subcompact vehicles, the effects of operating cost were greater than those of purchase price. The parameter of operating costs was not statistically significant in the full-size model. With respect to electric vehicles, the availability of fuel stations would be more important in Seoul than in the U.S. These results can also be useful for policy makers in that they provide information about the impact of green vehicles’ attributes on the choice probabilities of green vehicles.