An insight into the specification of the input-output set for DEA-based bank efficiency measurement

Data envelopment analysis (DEA) has become one of the most widely used instruments for measuring bank efficiency. However, its application encounters many problems, which is evidenced by continuous evolvements in the DEA method so far. Our paper addresses the pitfalls of DEA in the context of measuring bank efficiency, with focus on the specification of performance factors. We aim at examining whether the input-output specification for banks in DEA applications is in consistence with the criteria upon which banks make decisions. Four bank behaviour models which are most popularly employed to determine input and output factors in DEA studies—the intermediation approach, production approach, user cost approach and value added approach—are comprehensively discussed and reviewed. The comparative reflection on the bank behaviour models and the standard DEA models shows that the input-output related pitfalls of a DEA application are associated with its implicitly fixed preference structure, flexible weight determination and limited explanatory power. Due to the pitfalls, the conventional DEA models may fail to capture bank behaviours. In such cases, DEA results can hardly reflect the performance in its true sense, i.e. how banks perform against the goals that they decide to pursue. The findings suggest focusing on (DEA-based) performance measurement from a goal-oriented perspective, i.e. from the point of view of multi criteria decision making.     

A welfare analysis of unilateral trade and FDI liberalization

This paper uses a heterogeneous‐firms model to examine the pro‐competitive channel through which FDI affects national welfare. The model shows that the country from which FDI originates experiences a welfare gain following liberalization. However, a counterintuitive finding is that the welfare of the host country deteriorates. This is explained by the production relocation process that leads to an increase in the mass of domestic firms in the source country and a decrease in the host country. The model also confirms that unilateral trade liberalization brings a similar result even in the presence of bilateral FDI flows.     

Intangible capital,volatility shock,and the value premium

This paper extends the canonical, neoclassical investment‐based asset‐pricing model through the incorporation of intangible capital and the formulation of a joint productivity distribution with economic uncertainty shocks at the firm level. The distinctive evolutionary dynamics of intangible capital as opposed to that of physical capital mitigate the negative impact of temporary uncertainty shock on production and serve well to explain the value premium with modest assumptions. The value premium is unconditionally positive, but the realized value spread plummets to negative after major transient second‐moment shocks, for example, the Loma Prieta Earthquake and the 9/11 terrorist attack.     

Do managers withhold bad news from credit rating agencies?

Research documents that managers, on average, withhold bad news and emphasize good news in their public disclosures. We ask whether the same is true in their private communications with credit rating agencies. We study how rating agencies anticipate and react to public information events as a function of their access to rated firms’ private information. We show that, in terms of ratings downgrades, rating agencies exhibit relatively more anticipation and less reaction to negative (compared to positive) public information events when they have more access to private information. Our results are strongest when firms are most optimistic in their public disclosures and are not due to rating agencies focusing their efforts on downside risk. Overall, we find consistent evidence that rated firms provide less optimistic information to rating agencies in their private communications and that this information is reflected in credit ratings.

     

A content analysis of television food advertising to children: comparing low and general‐nutrition food

Television food advertisements targeted at children were content analysed. Data were collected on four major children's cable television channels in the United States aired during the hours of 3 p.m. to 7 p.m. over the period of 23 August to 5 September 2012. Based on the Elaboration Likelihood Model of persuasion, the study identified a variety of persuasive appeals with central and peripheral cues in the child‐targeted food commercials. Further, it investigated how the central and peripheral cues in the appeals were differently associated with low‐nutrition and general‐nutrition food commercials. Overall, the findings showed that general‐nutrition food commercials used persuasive appeals with central cues more frequently than low‐nutrition food commercials. Theoretical, practical and regulatory implications are discussed.     

When the going gets tough,ads become straightforward but multi-appealed: The influence of the recession on financial services advertising appeals

Although many scholars and researchers have contributed to the sizeable literature on the relationship between advertising and society, few have examined economic circumstances as a meaningful force shaping advertising. This study provides the empirical evidence that changes in economic conditions, the recession in particular, can transform advertising appeals. The analysis of 1488 financial services ads placed in two popular US magazines showed that the patterns of appeals have turned to direct assertive styles in the wake of the economic crisis of the period 2008–2009. At the same time, however, ads during this recession period have used a far wider variety of strategic and tactical appeals than those in pre-recession era.     

Growth of the Korean semiconductor industry and its competitive strategy in the world market

This paper examines the growth process by which the semiconductor industry in Korea has developed, the reasons for its remarkable growth, and the competitive strategy it has recently been pursuing to maintain its competitive edge in the world semiconductor market. The Korean semiconductor industry started from off-assembly by foreign firms in the mid-1960s and has progressed to self-development of 4M dynamic random access memory and mass production of various frontier very large scale integrated circuits, going, in turn, through embryonic, transitional, take-off and expansion, and self-supportive stages. The possession of skilled, inexpensive human resources, the given size of the domestic market, the strong commitment of entrepreneurs with large investment capability, private firms' appropriate selection and expansion of suitable business scope for its technological capability, and aggressive investment in research and development (R&D) and production facilities, together with government subsidies in R&D and manpower training and coordination of collaborative research among private firms, have facilitated the growth of the Korean semiconductor industry and enhanced its competitive position in the world semiconductor market.