Delegation of Decision Rights and Misreporting: The Roles of Incentive-based Compensation Schemes and Responsibility Rationalization

Our paper examines when and how the delegation of decision rights and incentive-based compensation schemes (two organizational-design choices) and responsibility rationalization affect managers’ misreporting behavior. One hundred and twenty-nine managers from manufacturing firms in the US completed an online survey. Our results suggest that managers’ responsibility rationalization moderates the relationships between the delegation of decision rights and misreporting, and incentive-based compensation schemes and misreporting. Despite our results providing no evidence of a simple mediating role of incentive-based compensation schemes on the relationship between the delegation of decision rights and misreporting, we find support for a moderated-mediation effect. Specifically, our results demonstrate that the indirect effect of the delegation of decision rights on misreporting via incentive-based compensation schemes is conditional on managers’ responsibility rationalization. The theoretical and practical implications of our findings are discussed.     

Shipping the Good Horses Out

The 1964 effect states that when a fixed per‐unit cost is added to two substitutes, the more expensive (higher quality) one becomes relatively cheaper, and, thus, its consumption will increase. When applied to trade in vertically‐differentiated goods, the importing regions demand relatively more high‐quality goods. We examine how this result changes when the importing region is also endowed with the goods. We use a vertically‐differentiated goods model with heterogeneous consumers in which prices are endogenously determined. We show that the importing regions with an endowment have a stronger Alchian‐Allen effect than the regions that are not endowed. We use the auction data of Australian thoroughbred yearlings to empirically test our model and find consistent empirical patterns.     

Explaining import quality: The role of the income distribution

We examine a generalized version of Flam and Helpman [Flam, H., Helpman, E., 1987. Vertical Product Differentiation and North-South Trade. American Economic Review, 77, 810-822.] in which consumption prices for quality differentiated goods are rising in household income. We provide propositions for aggregating this relationship across heterogenous households to map cross-country differences in income distributions to cross-country differences in import price distributions. The theoretical predictions are examined and confirmed using disaggregated data on prices of traded goods and micro data on household income from the Luxemburg Income Study. Country pairs with more similar income distributions have more similar import price distributions, whether similarity is measured by 1st-4th moment statistics, population and consumption shares within world income and product price quantiles, or income and price dis-similarity indices.     

Evaluating user-generated content in social media: an effective approach to encourage greater pro-environmental behavior in tourism?

Appealing to tourists’ intrinsic interest for high-quality tourism environments, and thus encouraging them to act with a greater sense of personal responsibility toward the environment, could be critical to promoting sustainable tourism. Proliferating media channels makes the choice, style and delivery of pro-environmental messages a key issue for tourism marketers and management. Social media has become a recognized important channel for tourism information, with user-generated content (UGC) being more trusted than official channels, yet there is little knowledge about its potential role in activating pro-environmental norms. This study investigates that issue. Focusing on the conjoining aspects of personal and social norms for the first time, we propose a hypothetical model to explain the direct and indirect effects of pro-environmental UGC in activating tourists’ pro-environmental behavioral intentions. Working in a Chinese context, where social media plays an increasing role, the research, using a web-based sample (N = 1043), UGC-linked pro-environmental knowledge and awareness, was found to have a strong role in activating pro-environmental norms, creating a pro-environment online community, and increasing tourists’ level of engagement in pro-environmental social media activity. The study highlights the effectiveness of social media channels with UGC providing persuasive communications able to impact sustainable behaviors.     

Institutional Ownership and Private Equity Placements: Evidence from Chinese Listed Firms

This paper examines the impact of institutional ownership on the performance of private equity placements (PEPs) for listed firms in China. We find that the presence of institutional investors can alleviate the information asymmetries between listed firms and the market. The market reaction to PEP announcements is significantly smaller if there is a higher portion of institutional shareholdings. Long‐term firm operational performance after PEPs is positively correlated with institutional shareholdings. Moreover, we find that the relationship between institutional shareholdings and PEP performance is mainly driven by nonlisted corporate investors and mutual funds. Finally, the relationship between PEP performance and institutional shareholdings is stronger in smaller PEP issuers.     

American and Japanese management practices in their Singapore subsidiaries

Multinational corporations have made significant contributions to the economic growth of Singapore; American and Japanese companies are among those in the forefront. This study is aimed at finding the extent to which US and Japanese companies have transferred and implemented the management practices in their subsidiaries operating in Singapore. Extensive and intensive interviews of a small sample of companies in the electronic/electrical industry reveal that the Japanese are not practising what they do in Japan while the Americans have demonstrated that the transferability of their management practices is feasible and they are workable in Singapore.Joseph M. Putti is an Associate Professor at the School of Management, National University of Singapore. Thomas Chong F.H. is a Production Manager in Union Carbide, Singapore.     

Measuring the development impact of a proposed transportation system

This paper introduces a methodology of measuring economic development impact incident to a proposed transportation system and provides an empirical result of such estimation. As the methodology, a Multi-Regional Variable Input-Output (MRVIO) model is introduced, and as a case study, the proposed Coosa River Navigation project is discussed. The Coosa River project when completed is expected to reduce the cost of shipping commodities from origin to destination, and such reduction in shipping costs will stimulate the economy of the Coosa River Corridor, the Gulf-Coast Region, the Rest of Alabama, and the Remainder of the U.S. The empirical measurement was done in terms of industrial outputs, personal income, and employment of each of 31 industries in four regions in decennial years starting in 1990 and ending in 2039     

Transitional Dynamics and Indeterminacy of Equilibria in an Endogenous Growth Model with a Public Input

The authors analyze an endogenous growth model with economy–wide increasing returns, in which a public input is essential for private production. Within such a framework, it is shown that a continuum of equilibria and global indeterminacy can arise for reasonable parameter values, simply due to the presence of endogenous public policy. This can potentially account for "leapfrogging" or retroceding growth experiences. It is demonstrated how fiscal policy can serve as a selection device among different convergent paths.     

The Impact of Financial Development on Energy Demand: Evidence from China

An autoregressive distributed lag (ARDL) bounds approach and vector error correction model (VECM) are used here to better understand the role of financial development in energy demand in China. Based on data from 1980 to 2014, the ARDL bounds approach yields empirical evidence that confirms the existence of long-run relationships among energy demand per capita, gross domestic product per capita, urbanization, economic structure, and financial development. The VECM framework shows the direction of Granger causality that combines the short run and the long run between the variables. The results suggest a feedback effect between financial development and energy demand per capita in the long run. However, financial development Granger causes per capita energy demand without a feedback effect in the short run. The results of this research may be of great importance for decision makers as they develop policies on energy and economic growth.     

中国对中亚五国农产品出口贸易发展水平研究——基于“一带一路”倡议及灰色关联度分析

本文基于出口贸易规模、出口贸易结构、出口贸易竞争力三方面的描述统计,采用灰色关联度分析方法评价中国对中亚五国农产品出口贸易发展水平。研究发现:中国对中亚五国农产品出口贸易规模呈扩大趋势,出口贸易结构不断优化,贸易潜力巨大,出口贸易竞争力在哈萨克斯坦、吉尔吉斯斯坦、乌兹别克斯坦三国具有比较优势,在塔吉克斯坦、土库曼斯坦两国不具有比较优势;出口贸易发展水平较高,不同时段和时点变化特征明显。因此,中国与中亚五国应积极开展农业经贸合作,优化农业结构和贸易结构,统筹利用国际国内两个市场,不断提高农产品贸易发展水平。