An ordinal ranking of economic institutions

We provide the first ranking of countries’ economic institutions using an ordinal methodology. Using the five areas of the Fraser Institute’s Economic Freedom of the World (EFW) index, we find that final rankings of a country’s institutions are sensitive to the importance-ordering of Area 1 (Size of Government). When Areas 2–5 are in the most important position, we find that there is no significant difference between the EFW rankings and our rankings. When Area 1 is placed in the most important position, however, a number of European countries with large welfare states but good governance do poorly.     

Concern or apathy: the attitude of the public toward urban air pollution

It is important to understand public attitudes when designing policy instruments to motivate actions. Attitude is partially socially constructed and thus must be studied locally rather than inferred from other settings. This study explored public attitudes toward air pollution among Beijing residents through interviews and thematic analysis. In contrast to previous studies mostly focusing on a certain dimension of attitudes, we attempted to show an initial picture of attitudes in three dimensions, knowledge and belief, perception and concern, and covert and overt behaviors, and identify underlying factors accounting for such attitudes. The results showed that the interviewees largely knew the sources and impacts of air pollution but also demonstrated misunderstandings; half of them perceived air pollution as ‘severe’ and three-fourths of them showed little concern about air pollution; their protective and mitigation responsive behaviors were inadequate. Factors affecting such attitudes, both existing and missing in current literature, were identified. Perceived air pollution is determined by sensory cues and imagination, and mediated by lived experiences and place identity. Lack of concern about air pollution can largely be explained by a feeling of uncontrollability and the crowding effect in competing for attention. This lack is further influenced by the perceived benefits of living in large cities, perceived fairness of the impact across the population, and perceived delay of the health impacts posed by air pollution. Protective behaviors, specifically wearing facemasks, are influenced by perceived severity, vulnerability, efficacy, and barriers. Mitigation behavior, which refers to reducing car use in this case, is discouraged by a lack of feeling responsible and by perceived inconvenience and ineffectiveness. At an academic level, the results of this exploratory study are expected to provide a base for further investigations of factors affecting public attitudes. From a policy perspective, the results should provide information for designing policy instruments to raise awareness and motivate actions to cope with air pollution.     

Implementation of Industrial Process Innovations: Factors, Effects, and Marketing Implications

Recent research concerning industrial process innovations, such as robotics, expert systems, computer-aided design and manufacturing, and decision support systems, calls for greater focus on the early usage activities that often follow the adoption decision. These activities are called implementation. Implementation determines whether buyers realize the full benefits of industrial process innovations. Providers of industrial innovations may be interested in understanding the key factors influencing implementation and the nature of effects. Such knowledge would be useful not only in enhancing implementation but also in devising strategies to build market advantages. To address the knowledge need, we reviewed the large, fragmented body of work on implementation, which is dispersed across many disciplines, including process engineering, information technology, human resources management, and marketing. We then synthesized relevant findings, developing a conceptual framework and deriving propositions describing the effects of key factors on implementation. Finally, to demonstrate the usefulness of the integrated knowledge, we draw some marketing implications, specifically for new product development, market development, and relationship management.     

Angel investor characteristics that determine whether perceived passion leads to higher evaluations of funding potential

Despite interest in understanding the role passion plays in investor decision making, little is known about the conditions under which perceived passion is likely to play a significant role in the funding decision process. We first establish a relationship between perceived passion and evaluations of funding potential, then use affective reactivity as a theoretical framework to explore how several individual characteristics of angel investors impact the relationship between perceived passion and evaluations of funding potential. The results indicate that the relationship is stronger for angel investors who are older, more intuitive, have a high openness personality, or those who are motivated to mentor. Surprisingly, the relationship weakens for angels who are extraverted and those who have a promotion-dominated regulatory focus.     

The price of success: balancing the effects of entrepreneurial commitment,work-family conflict and emotional exhaustion on job satisfaction

This research explores job satisfaction among entrepreneurs to investigate two paths from entrepreneurial commitment to job satisfaction: the direct path and the family path that includes work-family conflict and emotional exhaustion. An empirical study of 232 small and micro firm business owners are used to test the hypotheses seeking to understand which path to job satisfaction has the greatest influence. The results indicate that although being committed to one’s own business increases job satisfaction, emotional exhaustion takes a greater toll. We conclude that negative aspects of entrepreneurship exert an important influence on entrepreneurs’ satisfaction with their job. These findings offer important theoretical and practical implications.

     

Social responsibility and corporate reputation: The case of the Arthur Andersen Enron audit failure

We examine the influence of social responsibility ratings on market returns to Arthur Andersen (AA) clients following the Enron audit failure. Chaney and Philipich (2002) found that AA’s loss of reputation resulted in negative market returns to AA clients following the Enron audit failure. Proponents of social responsibility argue that social responsibility can improve the reputation of the firm, while detractors argue that social responsibility expenditures are a poor use of shareholder money. If social responsibility sends a signal to investors regarding the reputation/ethics of management, social responsibility could mitigate the negative returns to AA clients following the Enron audit failure. Using a matched sample of AA and non-AA firms, we do not find evidence that social responsibility mitigated the negative returns to AA clients following the Enron audit failure. Our results are inconsistent with claims that social responsibility can burnish a firm’s reputation in a time of crisis and with prior research indicating a positive relationship between social responsibility and market value.     

Cluster-based industrialization in China: Financing and performance

China's rapid industrialization despite the lack of a well developed financial system seems to defy the conventional thinking on the role of finance in development. This paper tries to explain the puzzle from the clustering point of view. Based on firm-level data from two recent censuses, we find that within industrial clusters: finer division of labor lowers the capital barriers to entry; closer proximity makes the provision of trade credit among firms easier. With less reliance on external financing, more small firms emerge within clusters, leading to higher levels of export and total factor productivity thanks to the resultant more fierce competition.     

Have ‘European’ and US GAAP measures of income and equity converged under IFRS? Evidence from European companies listed in the US

The EU's adoption of IFRS, combined with the SEC's removal of the US GAAP reconciliation requirement for non‐US registrants reporting under IFRS, signifies a major shift towards the acceptance of global standards. Based on 20‐F reconciliations provided by the population of US listed European companies filing IFRS‐based statements with the SEC in 2005, we examine whether ‘European’ and US GAAP measures of income and equity converged under IFRS. We find that during the period immediately preceding IFRS, for our sample companies, European and US GAAP measures are generally comparable in respect of income and equity. However, as an exception to the latter, we find that UK GAAP yielded significantly lower measures of equity than US GAAP For companies adopting IFRS for the first time in 2005, we find a significant gap between IFRS and US GAAP measures of income, thereby, signifying de facto divergence from US GAAP in regard to income determination. Furthermore, we find that, following IFRS adoption, significant differences with US GAAP equity persisted for companies that previously reported using UK GAAP. Our findings, thus, support critics’ claims that standard‐setters, most notably the IASB and FASB, have more work to do to achieve a sufficient degree of convergence between IFRS and US GAAP that will convince the SEC to require US companies to use IFRS.