Capital Flight: China's Experience

We study the empirical determinants of China's capital flight. In addition to the covered interest differential, our empirical exercise includes a rather exhaustive list of macroeconomic variables and a few institutional factors. Overall, our regression exercise shows that China's capital flight is quite well explained by its own history and covered interest differentials. The other possible determinants offer relatively small additional explanatory power. It is also found that China's capital flight responds differently to the components of covered interest differentials and to the positive and negative components of these variables. The response pattern, however, depends on the choice of data frequency. The general impression is that the monthly results are more intuitive than the quarterly ones.     

Does involvement matter in online shopping satisfaction and trust?

Consumer involvement in online shopping can play a moderating role when explaining Web site effect on satisfaction and trust. This study proposes a set of hypotheses based on the Elaboration Likelihood Model (ELM) of persuasion, a conceptual model that explains the formation of individual attitudes that are prompted by central and peripheral cues. The model proposes the use of central signals when the buyer is highly involved and peripheral signals when the buyer is less involved. Nevertheless, the results of this study would suggest that these relationships are not so clearly defined in the case of online buying, which implies that certain assumptions associated with the ELM need to be revised to take the particularities of the online context into account. © 2011 Wiley Periodicals, Inc.     

Investment and the soft budget constraint in China

This paper examines the incentive effects of the soft budget constraint on the investment behavior of firms in general and on the investment-cash flow sensitivity in particular. To this end, we develop a simple model of moral hazard that takes the soft budget constraint into account. Within this moral hazard environment, we show that investment is positively related to the amount of internal funds. We further show that the presence of the soft budget constraint deteriorates the moral hazard problem, thereby making the investment level less sensitive to the amount of internal funds. This is the case irrespective of whether the soft budget constraint renders the firm more or less liquidity constrained. To test the model's empirical implications, we employ data of China's listed companies for the period from 1997 to 2003. We use the share of state ownership as a proxy for the severity of the soft budget constraint. We find strong evidence that firms with larger shares of state ownership exhibit lower investment-cash flow sensitivities than firms with smaller shares of state ownership.     

Terms of trade and economic growth in Japan and Korea: an empirical analysis

This study examines the impact of terms of trade and terms of trade volatility on economic growth in Japan and Korea using time series data. The results of the Johansen (1988) cointegration method show that real gross domestic product (GDP) per capita and terms of trade are jointly determined. Generally, an increase in terms of trade volatility will lead to a decrease in real GDP per capita. An increase in oil price will lead to a decrease in terms of trade. The results of the generalised forecast error variance decompositions show that the important contributors to real GDP per capita are different between Japan and Korea. A favourable and a less volatile terms of trade are important for economic growth.     

谁在“搅乱”电影圈

随着万达院线向上游电影制片渗透．华谊兄弟向下游院线市场迈进。中国民营电影企业面临的产业链失衡问题再次引起关注。但因双方均缺乏对方领域的经验，要想完善这条产业链之路则显得有点“雷声大、雨点小”。     

More than just national cultural distance: Testing new distance scales on FDI in Slovakia

Over the past decade, numerous calls have been made within the international business literature for a broader conceptualization and measurement of non-geographic forms distance amongst countries. One promising response to this call has been a set of psychic distance stimuli scales put forward by Dow, D., & Karunaratna, A. (2006). Developing a multidimensional instrument to measure psychic distance stimuli. Journal of International Business Studies, 37(5), 575–577. However, to date, these new scales have only been tested in one very limited setting – predicting bi-lateral trade flows. This paper extends the generalizability of the Dow and Karunaratna scales by testing their criterion-related validity with respect to three specific foreign direct investment (FDI) issues: predicting market selection, entry mode choice and performance. The results indicate that the Dow and Karunaratna scales are significantly stronger predictors of market selection and FDI performance than the traditional Kogut and Singh index; and that researchers should go beyond using national cultural distance as their sole measure of distance amongst countries. The results for predicting entry mode choice are more ambiguous; however, the authors argue that the ambiguity may reflect the inadequacies of the classic TCE-based approach to predicting entry mode, rather than shortcomings in the measurement of the distance construct.     

Earnings Management and the Long-Run Market Performance of Initial Public Offerings

Issuers of initial public offerings (IPOs) can report earnings in excess of cash flows by taking positive accruals. This paper provides evidence that issuers with unusually high accruals in the IPO year experience poor stock return performance in the three years thereafter. IPO issuers in the most "aggressive" quartile of earnings managers have a three-year aftermarket stock return of approximately 20 percent less than IPO issuers in the most "conservative" quartile. They also issue about 20 percent fewer seasoned equity offerings. These differences are statistically and economically significant in a variety of specifications.     

CSR Policies: Effects on Labour Productivity in Spanish Micro and Small Manufacturing Companies

Journal of Business Ethics - This paper analyses empirical evidence of efforts to enable Spanish micro and small manufacturing companies to boost their labour productivity rates through the...