Determinants of the Confucius Institute establishment

This paper investigates the determinants of the Confucius Institute (CI) establishment. It is shown that FDI, trade, geographical distance, developing country, and English speaking are important factors whereas GDP and population are marginally significant. Overall, CIs are under-represented in a non-English, distant, less wealthy developing country that trades infrequently with China. The results suggest that the CI network will have greater global impacts when new or more CIs are established in non-English speaking developing countries. However, potential mutual benefits between China and these under-representing countries should be preconditions in order to attract CIs in the countries.     

Assertive Environmental Advertising and Reactance: Differences Between South Koreans and Americans

In three studies, the authors show that Americans and South Koreans react differently to environmental advertising campaigns featuring assertive messages that threaten autonomous freedoms. The findings uphold their hypothesis that cultural differences determine whether consumers will show reactance to assertive advertising campaigns. Study 1 demonstrates that Americans are less receptive to an assertive recycling message using imperatives such as should, must, and ought and more receptive to a nonassertive message using could, might, and worth. South Koreans do not show the reactance response. Study 2, an energy-saving campaign, conceptually replicates the findings and further shows that perceived threat to freedom mediates the effects. Study 3 uses a realistic setting (i.e., online magazine) to further support the hypothesis that cultural differences affect attitudes toward assertive messages, but adds perceived politeness as an underlying second mediator.     

To seek variety or uniformity: The role of culture in consumers’ choice in a group setting

One stream of research suggests that individuals in a collectivistic culture tend to follow the others’ choices in a group choice setting (e.g., Markus and Kitayama 1991). Other research, however, suggests that the choices others make have little impact on the individuals’ choices in this cultural context (e.g., Kim and Drolet 2003). The current research attempts to test these competing hypotheses by examining individuals’ choices in group choice contexts (Ariely and Levav 2000). First, comparisons of 517 meal order slips from two local restaurants in Korea with simulated outcomes indicate a profound group-level uniformity seeking in dish selections. Second, our field experiment reveals that members of a collectivist culture tend to follow group members’ choices when group influence is evident. Unlike the previous findings of studies conducted on individuals from Western cultures, selections made in accordance with the cultural norm do not result in the reduction of emotional well-being for the collectivist cultural individuals. Finally, we provide more direct evidence for the hypothesized role of culture by showing that the choices of individuals with collectivistic cultural backgrounds are associated with higher uniformity-seeking tendency compared to those of individualistic cultural backgrounds.     

Recreationists’ Constraints Negotiation Process for Continual Leisure Engagement

Unlike prospective participants with desire for initial participation, current participants are likely to have different interest in habitual leisure engagement from participation itself. Accordingly, they may respond to the effects of leisure constraints differently in order to progress toward a higher level of leisure involvement. This study aims to construct a theoretical framework that demonstrates how diverse components of current participants’ constraints negotiation process are conceptually connected to each other. Study results suggest that different negotiation strategies help current participants adjust their willingness to participate in the activity more frequently. Results also denote that the three dimensions of leisure constraints are differently associated with cognitive negotiation strategies, and commitment plays an important role in promoting the use of negotiation strategies to mitigate current participants’ perception of leisure constraints.     

Price stability through price-level targeting or inflation targeting? A tale of two experiments

Price stability can be attained through price-level or inflation targeting. This paper compares the two monetary policy strategies from both a historical and a theoretical perspective. The Swedish experiment with price-level targeting in the 1930 occurred within a framework that lacked the accountability characteristic of New Zealand's current policy framework for inflation-targeting. Using a simple forward-looking rational expectations framework, we show that price-level targeting offers a better output-inflation variability tradeoff than inflation targeting in the forward-looking New Keynesian framework.     

The Effect of IPO Risks on Auditors’ Decisions: Auditor Designation Case

This study examines the effect of audit risks in the Korean initial public offering (IPO) market on the designated auditors’ decisions. The Korean External Audit Act requires firms to switch from incumbent to new auditors designated by the Securities and Futures Commission after the firm announces a future IPO. This study shows the effects of audit risks by examining if the quality of reported earnings and audit fees significantly differs between IPO‐eligible and IPO‐ineligible firms. Empirical tests first show that discretionary accruals are significantly lower for IPO‐ineligible firms than for IPO‐eligible firms in both the IPO designation period and the following review period. We interpret this result to mean that designated auditors evaluate the IPO‐ineligible (and eventually failed) firms’ listing possibility as low. Second, audit fees are higher for IPO‐ineligible firms in the auditor designation period. This reflects the fact that designated auditors are exposed to future audit risks associated with firms’ post‐IPO financial market troubles if IPO‐ineligible firms attempt to go public. Our study contributes to IPO‐related research by showing the effects of auditors’ risk evaluation on discretionary accruals and audit fees. This study also contributes to accounting policymaking regarding auditor independence.     

Expanding international trade beyond the RTA border: The case of ASEAN's economic diplomacy

We examine the roles of regional trade agreements (RTAs) not only in regionalization processes but also in globalization of trade. Results from various specifications of the gravity equation model confirm that a country can noticeably increase directional trade through diplomatic relations as well as through membership.     

The effects of retail channel integration through the use of information technologies on firm performance

The ability of information technologies (ITs) to integrate activities and offerings across multiple channels offers a promising opportunity for retail firms to enhance their relationship with their customers and firm performance. Consumers value the flexibility to learn about the available offerings, complete their orders and obtain customer service across different channels in a convenient and integrated manner. Therefore, the retail industry has begun to use IT extensively to automate and integrate business processes across their traditional and online channels. This study examines the impacts of the use of IT by retail firms in integrating channel activities for selling to customers. Our research model argues that retail channel integration through IT should enhance the efficiency and innovation of a retail firm. In turn, these improvements should enhance their overall performance. We also propose that the environmental dynamism would moderate the effects of improvements in efficiency and innovation on firm performance. We draw upon recent theories in organizational resource integration and organizational learning to develop our research model and hypotheses. Based on survey data from 125 multichannel retailers in Singapore, we find that retail channel integration through the use of IT allows firms to not only be efficient in delivering the current offerings, but also be innovative in creating future offerings. Further, we find that environmental dynamism does positively moderate the effects of innovation ability on performance. Our results provide managerial insights for firms involved in digital integration not only in the retail sector but also in other service industries. These findings could also serve as a foundation for further research on service operations management for firms with both physical and online operations.     

New Auditors’ Decisions for Released Firms from the Mandatory Auditor Designation Rule: Evidence From South Korea

This study examines the effect of the mandatory designation rule on audit fees charged and audit hours rendered by auditors for firms released from the mandatory auditor designation rule in the Korean audit market. Under the mandatory auditor designation rule, which took effect in 1991, problematic firms are assigned new auditors by the Financial Supervisory Service. Previous studies suggest that this regulation positively affects the quality of audits by promoting auditor independence. Thus, this study hypothesises that firms that have been subjected to mandatory auditor designation improve the quality of their financial reporting, and that auditors hired after the mandatory designation period account for reduced audit risks when determining audit fees and audit hours. This study shows that audit fees and audit hours of firms released from the mandatory auditor designation rule are lower than those of other initial audit engagements. Taken together, this study's findings reinforce the notion that auditors’ perceptions of changes in audit risk yield corresponding changes in the audit fees they charge and audit hours they render.     

Hierarchy and conservatism in the contributions of resources to entrepreneurial activity

This study addresses the relationship between the munificence offered by a country’s proximate institutions in terms of a critical financial resource (informal investments) and human resource (entrepreneurship education) and its early-stage entrepreneurial activity. We also examine how this relationship might be moderated by underlying cultural values. Our main thesis is that the positive effects of resource munificence of proximate institutions on early-stage entrepreneurial activity should be attenuated in countries with a more hierarchical and conservative culture. We test our hypotheses using a multi-source dataset that spans 42 countries.