International Transfer Pricing for Business Operations in China: Inducements, Regulation and Practice

This paper provides an empirical analysis of international transfer pricing in the People's Republic of China. The examination of the business environment in China reveals a mixed inducement for transfer pricing decisions by foreign investment enterprises (FIEs). The legislation on transfer pricing in China is similar to that of its major trading partners. Competition among local governments for foreign investment, inadequate resources for tax enforcement, and inadequate documentation by taxpayers hinder tax audits on transfer pricing. An analysis of aggregate import and export data does not support the allegation that, in general, FIEs shift profits out of China by over-pricing their imports and under-pricing their exports. However, there was some evidence of outward income-shifting in certain key sectors.     

It's all fair in love,war, and business: Cognitive philosophies in ethical decision making

Exploratory research was undertaken in four locations in the Asia Pacific Rim to investigate the cognitive frameworks used by managers when considering ethical business dilemmas. In addition to culture, gender and organisational dimensions were also studied. Aggregate analysis revealed no significant differences in the cognitive frameworks used by business managers in Hong Kong, Malaysia, New Zealand, and Canada. Of the eight frameworks used in the study four cognitive frameworks appeared to feature predominantly. Utilising the results of regression analysis the most salient cognitive frameworks utilised by managers were identified as; Self Interest, Neutralisation, Justice and Categorial Imperative, with Neutralisation and Self Interest being the most significant among all managers. Religious Conviction and the Light of Day framework (which relates to fear of being exposed) did not feature prominently in the analysis. A few significant differences in the ethical frameworks used by males and females were identified. For males in all four locations Self Interest, Neutralisation and Justice appeared to be dominant frameworks, while considerable variability was seen in the frameworks used by females. Marginally significant differences were observed in the cognitive frameworks used by managers with differing functional responsibilities. Across all locations respondents with general management responsibilities relied predominately on Self Interest, while those with marketing responsibilities utilised Neutralisation. Respondents with an accounting orientation also relied predominately on Neutralisation and Categorial Imperative frameworks. Gael McDonald is currently completing her doctorate at the Institute of Management in the London School of Economics and Political Science. Previously she was an Associate Professor with Asia Pacific International University based in Hong Kong and teaching on their international M.B.A. programs within the Pacific Rim. Miss McDonald has published in Journal of Business Ethics, Journal of Managerial Psychology, Asia Pacific International Journal of Marketing, Management Decision,the International Review of Retail Distribution and Consumer Researchand is an Associate editor of Business Ethics — A European Review.Patrick C. Pak is a Lecturer in Management with the Hong Kong Polytechnic University. He has a diverse interest in management research. His research interests are mainly in the areas of learning organization, organizational control, leadership, organizational change, business ethics and strategic management.     

Vertical and Horizontal Educational Mismatches of Female Graduates in Taiwan

This study considers both vertical and horizontal educational mismatches, with the former referring to overeducation and undereducation, and the latter to the mismatch between college major and job. It is found that the wage premium of the vertical educational match is greater than that of the horizontal educational match. A better vertical match augments the wage premium of an improvement in the horizontal match, and vice versa. The horizontal educational mismatch appears to be an extended scenario of overeducation because graduates from colleges with low rankings have a higher probability of being vertically overeducated as well as horizontally mismatched. Graduates from highly‐ranked colleges are privileged to not only have high earnings but also to have low probabilities for the vertical and horizontal mismatches. These low probabilities indirectly raise their earnings. The indirect effects of academic characteristics on earnings are calculated. The approach we propose provides an insight into how academic characteristics comprehensively influence earnings.     

Exchange Rate Pass-through,Unemployment and Optimal Implementable Monetary Policy Rule for Emerging Economies

Abstract

This paper develops a small open economy model with nominal rigidities and search-matching frictions to study the implications of exchange rate pass-through for monetary policy in emerging countries. I find that, with complete exchange rate pass-through, the optimal policy rule features unemployment targeting as well as inflation targeting. However, the welfare gain from responding to unemployment fluctuations diminishes as the rate of exchange rate pass-through to import prices decreases. With low exchange rate pass-through, the optimal monetary policy is strict inflation targeting.     

Do post-restatement firms care about financial credibility? Evidence from the pre- and post-SOX eras

This study examines whether negative-market-reaction firms in the year following restatement announcements adopt more conservative financial reporting to respond to their financial reporting credibility crisis, especially in the post-SOX era. Using Basu’s (1997) measure of conservatism, we find that negative-market-reaction firms in the year following restatement announcements report their financial statements more conservatively in the post-SOX era, as the market reaction following restatement announcements becomes more severe. We also find that as the negative market restatement reaction becomes more severe, negative-market-reaction firms using a Big N auditor in the year following financial restatements report their financial statements more conservatively in the post-SOX era.     

Knowledge creation and new product performance: the role of creativity

This research is concerned with how knowledge creation influences new product performance through creativity, which includes novelty and appropriateness. The following relationships are examined in our proposed model: (1) the influence of knowledge creation on new product performance; (2) the influence of novelty and appropriateness on new product performance; and (3) the influence of knowledge creation on novelty and appropriateness. A questionnaire was designed and mailed to the sampled Taiwanese manufacturing companies. The analysis results show that knowledge creation helps research and development personnel create novel and appropriate products, which in turn increase new product success. New product performance is affected by both novelty and appropriateness, the former of which has a greater influence. Through additional exploratory analyses, in which socialization, externalization, combination, and internalization are antecedents, we show that socialization's effect on new product performance is fully mediated by novelty and appropriateness, but internalization's influence is only partially mediated. Meantime, the influence of externalization on performance is fully mediated by novelty, but not by appropriateness. Combination has a direct influence on new product performance. Finally, this research provides theoretical and managerial implications based on these results.     

Directional Spillover Effects Between BRICS Stock Markets and Economic Policy Uncertainty

Asia-Pacific Financial Markets - In recent years, researchers have increasingly studied the association between the stock market and economic policy uncertainty (EPU). To have more profound...     

Political considerations in the decision of Chinese SOEs to list in Hong Kong

This paper investigates why Chinese state-owned enterprises (SOEs) with strong political connections (i.e., politically connected firms) are more likely to list overseas than non-politically connected firms. We find that connected firms' post-overseas listing performance is worse than that of non-connected firms. This evidence suggests that connected firms' managers list their firms overseas for private (political) benefits. Consistent with this private benefits explanation, we further find that connected firms' managers are more likely to receive political media coverage or a promotion to a senior government position subsequent to overseas listing than domestic listing.     

Effects of Mood States on Variety Seeking: The Moderating Roles of Personality

Building upon previous research and in an attempt to better understand the influence of mood states on variety‐seeking (VS) tendency, two specific emotional states (sadness and happiness) are discussed. Furthermore, this article proposes that the effects of mood states on VS are moderated by individuals’ differences. In this article, optimum stimulation level, self‐monitoring, and need for cognition are used to examine the moderating effects of this relationship. Consistent with the proposed hypotheses, the results indicate that sad individuals tend to incorporate more VS than happy ones. In addition, the three personality types tested in this article moderate the effects of mood on VS. Finally, suggestions for future research are discussed.