Firm growth type and capital structure persistence

We find that growth type (identified by a two-way sort on firm initial market-to-book ratio and asset tangibility) can parsimoniously predict significantly dispersed and persistently distinct future leverage ratios. Growth type is persistent; growth-type-sorted cross-sections of corporate fundamental variables (such as tangible versus intangible investment style) are also meaningfully persistent. As economic and market conditions improve, low growth type firms are keener to issue new debt than equity, whereas high growth type firms are least likely to issue debt and keenest to issue equity. These findings demonstrate that firms rationally invest and seek financing in a manner compatible with their growth types. Consistent with a generalized Myers–Majluf framework, growth type compatibility enables distinct growth types and hence specifications of market imperfection or informational environments to persist. Growth type is apparently a fundamental factor for capital structure persistence.     

Workplace gossip and frontline employees’ proactive service performance

Managers are interested in promoting frontline employees’ proactive behavior because proactivity is crucial for organizational success. This study examined the link between perceived workplace gossip and employees’ (targets’) proactive service performance by focusing on the mediating role of employees’ harmonious passion and the moderating role of perceived job social support. Using time-lagged survey data from 218 supervisor-subordinate dyads in a commercial bank in China, we found that perceived workplace gossip negatively influences employees’ proactive service performance, and that this relationship is mediated by reduced harmonious passion. In addition, perceived job social support attenuates the negative relationship between perceived workplace gossip and harmonious passion, with harmonious passion having a mediating effect on the relationship between perceived workplace gossip and proactive service performance. These results provide new directions for understanding workplace gossip, harmonious passion, proactive service performance, and job social support. The theoretical and practical implications of our findings are discussed.     

Output price fluctuations,short-run profits and long-run industry size with input market equilibrium effects

Conclusions In this paper, input market equilibrium effects are incorporated into an analysis of output price fluctuations. In particular, it is shown that an increase (decrease) in output price may not necessarily lead to an increase (decrease) in the shortrun profit of a firm operating in a competitive product market. The firm's profit may not necessarily be convex in output price. Hence,ex-post flexibility in production does not guarantee the preference for price instability by risk-neutral firms. Finally, in longrun equilibrium, a mean-preserving spread in output price may increase or reduce the equilibrium number of firms.     

Getting there in a global industry: Impacts on performance of changing international presence

We investigate the effects of increasing and decreasing international presence on market share and survival in the American medical diagnostic imaging equipment industry. Imaging equipment manufacturers possessing international medical operations tend to achieve superior market share and longer survival, but we find that attempting to become an international medical player is risky. Both increasing and decreasing international presence have negative associations with survival, while decreased internationalization is associated with decreased American market share. Brief case studies suggest that the ingredients for success in internationalization may include preparedness, focused management, and learning from international experience.     

Does WTO accession matter for the Chinese textile and clothing industry?

Based on field surveys conducted in Guangdong, Zhejiang andBeijing in 2000 and 2001, this paper argues that accession tothe World Trade Organisation (WTO) by China will create a newcompetitive arena for different categories of textile and clothingfirms located in that country, partly dependent on the sizeand ownership of the firm. From the perspectives of reducingimport tariffs, eliminating export quotas and the regulationson trade disputes, WTO accession does matter for the majorityof Chinese firms in this ‘win–lose’ game.From the perspective of compliance with international standards,this paper argues that accession to the WTO does not reallymatter for some Chinese firms, as they may not survive the intensecompetition prior to 2005, when the effects of the Agreementon Textiles and Clothing materialise.     

The Effect of Advertising on Pharmaceutical Innovation

Although there is much controversy in the economic literature about how advertising affects market competition, little is known about the effect of advertising on product innovation. We examined the relationship between advertising expenditures and the research and development activities of pharmaceutical firms using empirical data from eight therapy areas. This study finds that detailing advertising may have a significant positive effect on the number of new products entering into clinical development. Markets of chronic disease with high levels of detailing advertising were more attractive to pharmaceutical firms. However, the effect of advertising on new product novelty remains inconclusive.     

The Effects of Attitudinal and Demographic Factors on Intention to Buy Pirated CDs: The Case of Chinese Consumers

This study examines the impact of attitude toward piracy on intention to buy pirated CDs using Chinese samples. Attitude toward piracy is measured by a multi-item scale that has been shown to have a consistent factor structure with four distinct components, namely, social cost of piracy, anti-big business attitude, social benefit of dissemination, and ethical belief. Our findings reveal that social benefit of dissemination and anti-big business attitude have a positive relationship with intention to buy pirated CDs while social cost of piracy and ethical belief have a negative relationship. Among these components, ethical belief tends to most strongly predict intention to buy pirated CDs. Demographic variables such as gender and age also help explain the respondents' intention to buy pirated CDs. In addition, those respondents with experience of buying pirated CDs would tend to be more likely to buy pirated CDs than those without such experience. The results are discussed with a view to helping copyright businesses to effectively suppress piracy, and directions for future research are suggested.     

Performance implications of active management of institutional mutual funds

We use information on institutional US mutual funds to examine the performance implications of the decisions they make when actively implementing their investment processes. Our findings show that the success of active fund managers' stock selection decisions is influenced both by the aggressiveness with which they implement their processes and also the style tilts incorporated into their active positions. Our findings provide useful insights into both where one might best look when choosing an active manager and also suggest possible profitable investment strategies.     

Chinese Consumers’ Perception of Corporate Social Responsibility (CSR)

The findings of this article increase our understanding of corporate social responsibility from the consumers’ perspective in a Chinese setting. Based on primary data collected via a self-administered survey in Shanghai and Hong Kong and results of similar studies conducted in Europe and the United States, we provide evidence to show that Chinese consumers are more supportive of CSR. We also show that Carroll’s pyramid of responsibilities can be applied in China. We evaluated the importance placed by Chinese consumers on the four responsibilities of firms – economic, legal, ethical and philanthropic – and find that economic responsibilities are most important while philanthropic responsibilities are of least importance. The nature of these differences is important for firms intending to use corporate social responsibility for strategic purposes.