An alternative bivariate zero-inflated negative binomial regression model using a copula

We propose an alternative bivariate zero-inflated negative binomial (BZINB) regression model based on a copula. The empirical result shows that the proposed model performs better than the existing BZINB models in terms of the maximum log-likelihood and the AIC.     

Investment opportunities and dividend omissions

This study examines the market's reaction to dividend omission announcements and finds that if dividends are skipped to preserve cash for good investments, investors do not necessarily regard the omission as negative information. Markets penalize firms for dividend omissions only in the absence of a good stream of investments. In addition, the positive relation between investment opportunity and abnormal stock returns around the announcements is stronger when the level of information asymmetry between management and the rest of the market participants is low. Additional tests reveal that good omitters overcome underperformance faster in the post period. Overall, the results suggest that financial markets interpret differently the information conveyed in the announcement of dividend omission depending on the firm's future prospects.     

CEO career horizon,corporate governance,and real options: The role of economic short‐termism

Research Summary: Combining studies on real options theory and economic short‐termism, we propose that, depending on CEOs’ career horizons, CEOs have heterogeneous interests in strategic flexibility, and thus, have different incentives to make real options investments. We argue that compared to CEOs with longer career horizons, CEOs with shorter career horizons will be less inclined to make real options investments because they may not fully reap the rewards during their tenure. In addition, we argue that long‐term incentives and institutional ownership will mitigate the relationship between CEOs’ career horizons and real options investments. U.S. public firms as an empirical setting produced consistent evidence for our predictions. Our study is the first to theoretically explain and empirically show that a CEO's self‐seeking behavior will impact real options investments. Managerial Summary: This article helps to explain how a CEO's self seeking‐behavior may shape a firm's real option investment, which could result in different level of strategic flexibility. We argue that CEOs with short career horizons have less time to exercise their firms’ real options, which should lower the investments in the firms’ real options portfolios relative to CEOs with long career horizons. We study a sample of U.S. public firms and find strong evidence that a CEO's expected tenure in the firm is positively related to the real options investments at the firm level. We find that this agency issue can be mitigated by adopting appropriate corporate governance mechanisms such as long‐term incentives and institutional investors.     

Ownership Structure and Firm Performance: Evidence from Vietnamese Listed Firms

We examine the effect of ownership structure on firm performance, for firms listed on Vietnamese stock exchanges, using 2744 firm‐year observations over the period from 2007 to 2012. We find a non‐linear relationship between ownership structure and firm performance. State ownership has a convex relationship with firm performance. This paper finds that firm performance increases beyond 28.67 percent level of state ownership. Foreign ownership has a concave relationship with firm performance. We find that firm performance increases with an increase of foreign ownership up to a level of 43 percent and then decreases. Policy makers should encourage foreign ownership and widely dispersed state ownership in firms, which can help improve firm performance.     

Dimensional effects of Korean SME’s entrepreneurial orientation on internationalization and performance: the mediating role of marketing capability

This study examines how three different dimensions of entrepreneurial orientation (proactiveness, innovativeness, and risk-taking) each determine internationalization strategies and enhance international performance among small and medium-sized enterprises (SMEs) through the mediating role of marketing capabilities. An integrative theoretical framework built on international entrepreneurship and a resource-based approach was tested in the context of Korean SMEs. Analyses of 401 survey data collected from Korean exporting SMEs revealed the differential effects of each entrepreneurial orientation and the mediating effect of marketing capability on internationalization strategies and performance. Proactiveness and risk taking appeared to function as significant antecedents of marketing capability. Marketing capability, in turn, significantly decreased internationalization scope and increased the financial performance of Korean SMEs, though it did not influence internationalization scale. This study further confirms that the mediating role of marketing capability in entrepreneurial orientation-performance relationships vary by entrepreneurial orientation dimensions. Taking the direct and indirect roles of the entrepreneurial orientation dimensions together, this study recommends the critical prioritization of risk-taking over proactiveness. It extends previous approaches to the triad of resource–capability–performance. Theoretical contributions and insightful managerial implications are also provided.     

Why do satisfied customers switch? Focus on the restaurant patron variety-seeking orientation and purchase decision involvement

Company efforts to make customers switch from competitive brands to their own or induce them to repurchase their own brands are very important in their marketing activities and in this regard studies of customer variety-seeking orientation and level of involvement in decision making play a crucial role in explaining customers’ product selection activities. The purpose of this study intends to examine interrelationships among customer satisfaction, loyalty, and switching intent in family restaurants and verify the moderating effect of customer variety-seeking orientation and purchase decision involvement. A total of 305 patrons in Korea participated. The results showed a positive relationship between customer satisfaction and loyalty. Participants expressing a high level of satisfaction were more likely to switch restaurants. Whether customers feel loyalty determines their switching intent. There were moderating effects related to customer variety-seeking orientation in the causal relationships between customer loyalty and switching intent. Limitations and future research directions are also discussed.     

The role of brand schemas,information transparency,and source of message on apparel brands' social responsibility communication

In today's complex business environment, apparel brands are communicating about their socially responsible (SR) practices through marketing messages to create a niche for themselves and show their SR efforts. However, SR aspects of products are difficult to verify by consumers. To help brands effectively communicate their SR efforts, this study assessed how consumers process an apparel brand's SR messages based on their prior experiences with that brand (brand schemas). Information transparency on messages and source of messages were tested as external cues to influence consumers' brand schemas and SR message evaluations in a mixed method repeated measures online experiment using a national US consumer sample. Results from regression-based conditional process analyses indicated that increased congruity of consumers' schemas to the fact that brands are SR led to more favorable attitude toward brands' SR messages. Also, presence of high information transparency on SR messages influenced consumers' schemas positively, and in turn, they evaluated messages more favorably. However, consumers were not influenced by whether messages were made by brands or third-party organizations. The study results show the importance of brand schemas and information transparency on apparel brand communications, helping both apparel brands and educators create effective SR-related marketing strategies.     

Microstructure-based manipulation: Strategic behavior and performance of spoofing traders

We examine how investors strategically spoof the stock market by placing orders with little chance of being executed, but which mislead other traders into thinking there is an imbalance in the order book. Using the complete intraday order and trade data of the Korea Exchange (KRX) in a custom data set identifying individual accounts, we find that investors strategically placed spoofing orders which, given the KRX's order-disclosure rule at the time, created the impression of a substantial order book imbalance, with the intent to manipulate subsequent prices. This manipulation, which made use of specific features of the market microstructure, differs from previously studied forms of manipulation based on information or transactions. Roughly half of the spoofing orders were placed in conjunction with day trading. Stocks targeted for manipulation had higher return volatility, lower market capitalization, lower price level, and lower managerial transparency. We also find that spoofing traders achieved substantial extra profits. The frequency of spoofing orders decreased drastically after the KRX altered its order-disclosure rule.     

Inter-industry gender wage gaps by knowledge intensity: discrimination and technology in Korea

A new gender wage gap decomposition methodology is introduced, which does not suffer from identification problems caused by unobserved nondiscriminatory wage structure. The methodology is used to measure the relative size of Korean gender wage gaps, from 1994 to 2000 across industries, differentiated by industrial knowledge intensity, where knowledge intensity is the extent to which industries produce or employ high-technology products. Korea represents an important case study, since it possesses one of the fastest growing knowledge-intensive economies among industrialized countries. Empirical results indicate that over this period, discrimination (the unexplained portion of the gender wage gaps) in Korea was statistically smaller in knowledge-intensive industries than in industries with low knowledge intensity. Also, discrimination was declining on average over the period. This suggests that continued growth in knowledge-intensive industries in Korea may lead to further declines in the overall gender gap.     

A Note on a Conversation with Geoff Harcourt

In this note Geoff Harcourt offers his views, via a face to face interview, on a wide range of issues relating to the discipline of economics. He recalls his time as a student at University of Melbourne, his choice of doctoral study and experiences at University of Cambridge, his original intellectual influences and affiliation, and his contributions to economics. He also discusses how economics have evolved over the years, comments on the current status of economic teaching, research and policy advice in Australia, and makes some recommendations to early career researchers. The note also includes a brief bio sketch of Professor Harcourt.