What Do Entrepreneurs Pay for Venture Capital Affiliation?

This study empirically evaluates the certification and value‐added roles of reputable venture capitalists (VCs). Using a novel sample of entrepreneurial start‐ups with multiple financing offers, I analyze financing offers made by competing VCs at the first professional round of start‐up funding, holding characteristics of the start‐up fixed. Offers made by VCs with a high reputation are three times more likely to be accepted, and high‐reputation VCs acquire start‐up equity at a 10–14% discount. The evidence suggests that VCs' “extra‐financial” value may be more distinctive than their functionally equivalent financial capital. These extra‐financial services can have financial consequences.     

Optimal delivery service strategy for Internet shopping with time-dependent consumer demand

This study attempts to optimize a delivery service strategy for Internet shopping by considering time-dependent consumer demand, demand–supply interaction and consumer socioeconomic characteristics. A nonlinear mathematical programming model is formulated for solving the optimal number and duration of service cycles for discriminating strategy by maximizing profit subject to demand–supply interaction. An example is employed to demonstrate the application of the model. Results suggest that discriminating service strategy is a better strategy in response to time-dependent consumer demand than uniform strategy. Finally, the proposed model is demonstrated to yield more profit than models that do not consider variations in consumer demand or demand–supply interaction.     

The Nature of Corporate Income Tax Under a Full Imputation Tax Regime: A Test of Functional Fixation

This paper tests two competing hypotheses describing investors' behavior: the efficient market hypothesis and the functional fixation hypothesis. In particular, this study examines how Taiwan's stock market interprets the nature of corporate income tax after the 1998 Tax Reform, which switches from the classical tax system to the integrated tax system. This Tax Reform changes the nature of corporate income tax from a pure operating expense to an individual shareholder's tax credit, but current GAAP still treats it as an operating expense in the income statement. The empirical results show that Taiwan's stock market perceives the change in nature of corporate income tax and responds accordingly.     

The affine styled-facts price dynamics for the natural gas: evidence from daily returns and option prices

This study analyzes affine styled-facts price dynamics of Henry Hub natural gas price by incorporating the price features of jump risk, and seasonality within stochastic volatility framework. Affine styled-facts dynamics has the advantage of being able to incorporate mean reversion (MR), stochastic volatility (SV), seasonality trends (S), and jump diffusion (J) in a standardized inclusive framework. Our main finding is that models that incorporate jumps significantly improve overall out-of-sample option pricing performance. The combined MRSVJS model provides the best fit of both daily gas price returns and the related cross section of option prices. Incorporating seasonal effects tend to provide more stable pricing ability, especially for the long-term option contracts.     

The moderating role of institutional networking in the customer orientation–trust/commitment–performance causal chain in China

This study uncovers the ignored role of institutional environment for marketing strategy and customer relationship management. Hypothesis tests in a sample of Chinese firms find support that channel networking strengthens the customer orientation–customer trust/commitment–firm performance (CTP) causal chain. In addition, the results show that government networking moderates this chain in a non-linear fashion. The CTP linkages are most salient when the firm develops a moderate level, rather than a high or low level of networking ties with government agencies.

Board composition and operational risk events of financial institutions

We investigate the relation between board composition and operational risk events of financial institutions in the period from 1996 to 2010. Drawing from corporate governance literature, we consider the impact of board characteristics on the likelihood of operational risk events. Overall, our findings suggest that board size is negatively and non-linearly associated with the possibility of operational risk events. For the event types of “Clients, Products, and Business Practices,” and “Internal Fraud and External Fraud,” firms with a higher proportion of independent directors are less likely to suffer from fraud or failure to comply with professional obligations to clients. Our results on age and tenure heterogeneity also indicate that having a more diverse board can have an adverse impact on the board monitoring function. These results can shed new light on board demographics and operational risk management in financial institutions.     

The Effects of Outward Foreign Direct Investment on Fixed-Capital Formation at Home: The Roles of Host Location and Industry Characteristics

Abstract

This paper pursues the idea that the relationship between foreign and domestic investments may be not as uniform as many studies suggest. By examining the case of Taiwanese outward foreign direct investment (OFDI), this paper is marked out from existing studies in the following three respects. First, it examines the extent to which the relationship between OFDI and domestic investment varies with the location of investment. Second, this research allows the results to vary between Heckscher–Ohlin (H–O) industries and Schumpeter industries. Finally, its breakdown of data will reveal sub-relationships in the data that up to now have remained hidden within the aggregate relationships reported in most studies. This study suggests that OFDI in China has a positive impact on domestic investment in H–O industries, while OFDI in other countries (OFDIO) has a negative impact on domestic investment in the same industries. These findings are in marked contrast to Schumpeter industries where a positive effect is observed only for OFDIO. Our findings also suggest that the Taiwanese government should design policies to adjust the level of liberalisation for overseas investment through legislation on an industry-by-industry basis in order that OFDI stimulates domestic investment in relevant industries more effectively.     

Identifying Critical Brand Contact Elements of a Tourist Destination: Applications of Kano's Model and the Importance–satisfaction Model

A destination brand comprises brand elements that lead tourists to form a brand impression of a destination. Based on a literature review, this study contributes to a model for exploring tourist destination brand contact experiences. The results from applying Kano's model and the importance–satisfaction model to a specific hot spring destination indicate that four types of contact elements can be identified as having different quality attributes. The contact elements related to staff's service efficiency, attitude and willingness of serving customers are identified as the critical brand contact elements for the tourist destination. Copyright © 2011 John Wiley & Sons, Ltd.     

Advancing consumer neuroscience

In the first decade of consumer neuroscience, strong progress has been made in understanding how neuroscience can inform consumer decision making. Here, we sketch the development of this discipline and compare it to that of the adjacent field of neuroeconomics. We describe three new frontiers for ongoing progress at both theoretical and applied levels. First, the field will broaden its boundaries to include genetics and molecular neuroscience, each of which will provide important new insights into individual differences in decision making. Second, recent advances in computational methods will improve the accuracy and out-of-sample generalizability of predicting decisions from brain activity. Third, sophisticated meta-analyses will help consumer neuroscientists to synthesize the growing body of knowledge, providing evidence for consistency and specificity of brain activations and their reliability as measurements of consumer behavior.