Institutional trading and stock resiliency: Evidence from the 2007–2009 financial crisis

We examine the impact of institutional trading on stock resiliency during the financial crisis of 2007–2009. We show that buy-side institutions have different exposure to liquidity factors based on their trading style. Liquidity supplying institutions absorb the long-term order imbalances in the market and are critical to recovery patterns after a liquidity shock. We show that these liquidity suppliers withdraw from risky securities during the crisis and their participation does not recover for an extended period of time. The illiquidity of specific stocks is significantly affected by institutional trading patterns; participation by liquidity supplying institutions can ameliorate illiquidity, while participation by liquidity demanding institutions can exacerbate illiquidity. Our results provide guidance on why some stocks take longer to recover in a crisis.     

Leveraging Virtual Attribute Experience in Video Games to Improve Brand Recall and Learning

This article extends the concept of virtual direct experience (VDE) from a product to an attribute as video gamers can virtually experience an attribute within a gaming environment. Using a 2 (VAE: present versus absent) x 2 (order of brand presentation: first or second) between subjects experimental design, we find that associating a brand with virtual attribute experience (VAE) by exposing consumers to the brand name and the virtual experience simultaneously has a positive effect on brand recall, brand extension acceptance, overall attitude, and purchase intention. In addition, our results demonstrate a significant interaction between VAE and telepresence on brand recall.     

Contextual and Competitive Interference: Inhibition or Facilitation?

Existing literature has found two sources of advertising interference, competitive and contextual, that decrease the effectiveness of an ad in a cluttered environment. However, to date, the negative impact of competitive and contextual interference has been examined independently. This research explores advertising effectiveness when these sources exist concurrently. Contrary to the supposition concerning the additive effects of both sources of interference when simultaneously present, our findings indicate that viewing ads for the same product category with similar executional elements leads to the dissipation of interference effects (Study 1). Consistent with the process rationale, when a product-brand cue (versus a picture cue) is provided, this novel effect disappears (Study 2). The implications of these findings for advertising are highlighted in the discussion section.     

Job autonomy, trust in leadership, and continuous improvement: An empirical study in health care

This research examines the influence of autonomy in day-to-day work on commitment of frontline employees to continuous improvement. Our hypothesized model links the job characteristics theory of work design that associates job autonomy with responsibility for outcomes, and the total quality management perspective that advocates empowering employees in order to generate commitment to continuous improvement. Further, as leadership is known to have a role in shaping job behaviors, and is considered important for the success of total quality management, the influence of trust in leadership on the relationship between job autonomy and commitment to continuous improvement is also examined. We test our hypotheses on data collected from individual employees working for an outpatient health care organization that is applying lean principles for managing and improving work processes. Based on our results, we present implications for organizations implementing continuous improvement initiatives such as lean, particularly in service environments such as health care.     

Comparing the resource‐based and relational views: knowledge transfer and spillover in vertical alliances

We compare resource‐based and relational perspectives to examine competitive advantages within the context of vertical learning alliances. Previous research has shown that through such alliances suppliers acquire knowledge to forge new capabilities and attain performance improvements. We ask whether such improvements are exclusive to the learning partnership, or are available in other average partnerships of this supplier. We posit that the extent to which such performance improvements are partnership exclusive depends on whether the newly forged capabilities lie entirely within the supplier firm's boundaries, or at the learning dyad level. As such, we untie two forms of performance improvements arising from learning dyads. While the resource‐based view helps explain the performance gains learning suppliers deploy across average partners, the relational view reveals the additional performance edge that remains exclusive to the learning partnership. Based on empirical evidence from a survey of 253 suppliers to the equipment industry, we find that partnership exclusive performance (i.e., ‘relational performance’), the true source of learning dyads' competitive advantage, is a function of suppliers acquiring know‐how within the dyad, developing dyad‐specific assets and capabilities, and structuring buyer‐supplier relational governance mechanisms. We discuss implications for research and practice. Copyright © 2008 John Wiley & Sons, Ltd.     

Targeted advertising as a signal

This study presents a signaling model of advertising for horizontally differentiated products. The central ingredients of the model are two important characteristics of advertising—targeting, and noisy information content. The theory yields interesting results about the informational role of targeted advertising, and its consequences. First, targeting can itself serve as a signal on product attributes. Second, the effectiveness of targeting depends not only on firms knowing consumer preferences, but on consumers knowing that firms know this. This creates a distinction between strategies of targeting and personalization. Third, the effectiveness of targeting in equilibrium may (far) exceed the information contained directly in the targeted message. Fourth, information content is not, however, superfluous. Specifically, when ads contain no information, a targeting equilibrium does not exist. Together, these results reveal how advertising conveys information both through the content of the message and the firm’s choice of advertising medium. Furthermore, the model is robust to the various critiques of prior work on ads-as-signals: namely, that ad content is irrelevant, ad exposure is unnecessary, and the choice of ads as signals is inherently arbitrary.

Challenges and opportunities in high-dimensional choice data analyses

Modern businesses routinely capture data on millions of observations across subjects, brand SKUs, time periods, predictor variables, and store locations, thereby generating massive high-dimensional datasets. For example, Netflix has choice data on billions of movies selected, user ratings, and geodemographic characteristics. Similar datasets emerge in retailing with potential use of RFIDs, online auctions (e.g., eBay), social networking sites (e.g., mySpace), product reviews (e.g., ePinion), customer relationship marketing, internet commerce, and mobile marketing. We envision massive databases as four-way VAST matrix arrays of Variables?×?Alternatives?×?Subjects?×?Time where at least one dimension is very large. Predictive choice modeling of such massive databases poses novel computational and modeling issues, and the negligence of academic research to address them will result in a disconnect from the marketing practice and an impoverishment of marketing theory. To address these issues, we discuss and identify the challenges and opportunities for both practicing and academic marketers. Thus, we offer an impetus for advancing research in this nascent area and fostering collaboration across scientific disciplines to improve the practice of marketing in information-rich environment.     

Share Repurchase Offers and Liquidity: An Examination of Temporary and Permanent Effects

Open-market repurchase programs do not allow for precise estimates of share buy-back intensity to measure liquidity effects. To circumvent the uncertainty surrounding the quantity and timing of shares truly acquired in repurchase programs and to measure their long-term impact, we examine Dutch auctions and fixed-price tender offers. We investigate both the temporary and permanent liquidity effects of share repurchase programs and find that the improvement in liquidity is transitory and limited to the tender period when the firm's offer to repurchase shares is outstanding. Improvements in liquidity over longer intervals appear to be the result of an overall price improvement and a reduction in volatility rather than the result of structural change in market dynamics.     

Asset divestiture following horizontal acquisitions: a dynamic view

Business acquisition, resource redeployment, and asset divestiture are elements of a dynamic process in which firms change their businesses by recombining internal and external resources. Analyzing 253 horizontal acquisitions, we show that post‐acquisition resource redeployment leads to asset divestiture from the business that receives the redeployed resources, but not from the business that contributes the new resources. Consistent with scale economies rationales, we find that strategic similarity also leads to greater asset divestiture from the target firms. Many theoretical perspectives are skeptical about the positive rationale for acquisitions and many of these believe that asset divestiture is evidence of acquisition failure. Our arguments and analysis help refine the accepted wisdom. In particular, the pattern of resource redeployment and asset divestiture in our analysis suggests that acquisitions provide a means of reconfiguring the structure of resources within firms and that asset divestiture is a logical consequence of this reconfiguration process. Copyright © 2001 John Wiley & Sons, Ltd.     

Specialist: The firm or the individual?: Empirical evidence from the options markets

This paper investigates the role of the individual specialist vis-à-vis that of the specialist firm on the quality of markets. While previous studies have not denied the importance of the individual, they have focused exclusively on the performance of the specialist firm. This study is the first empirical test of the specialist as an individual and his influence on market quality. By implication, it tests whether the firm is the appropriate level of analysis. Within specialist firms, we find significant differences in quoting behavior while the evidence on execution quality is mixed. Some firms are able to design an effective mechanism that enforces uniformity in goals of the members of the firm. Considering that exchanges are unable to impose such uniform performance, these firms appear to have better incentive or penalty systems in place. However, the existence of other firms where significant differences in execution quality exist, presents a challenge to policy makers, as differences in execution quality within a firm indicate that the disclosure of market quality needs to be at the post-level, not just at the firm level.