Organizational acculturation in foreign subsidiaries

Organizational acculturation refers to the influence of parent organizational culture resulting in change of work values of local employees in foreign subsidiaries. A study of host country national middle managers in Southeast Asia explored the impact of organizational acculturation. In the first phase, the work-related cultural values of managers employed by Swedish subsidiaries in Singapore were compared with those of a control group of managers employed by non-Swedish companies. The second phase investigated the work values of managers in Hong Kong, Singapore, and Thailand, based on Hofstede's four cultural dimensions. The findings clearly indicated that local managers in Swedish subsidiaries had experienced organizational acculturation, as distinct Swedish values had been adopted. However, cultural change did not occur to an equal extent among the three countries nor between different cultural values. Implications of the findings for international human resource management are discussed. © 1993 John Wiley & Sons, Inc.     

An Investigation of the Short‐Run and Long‐Run Stock Returns Surrounding Insurer Rating Changes

We find that stock returns move in the direction of insurer rating changes in the 12‐month period prior to the announcement. There is an additional stock price response following the announcement of a downgrade, but no response to upgrade announcements. The reaction to a downgrade is more pronounced when it involves a smaller insurer, when it spans multiple levels, or when it is a threshold downgrade. Returns are significantly more negative during the 12 months leading up to a downgrade announcement during the financial crisis (2008 and 2009) compared to other sample years.     

Diversification and risk-adjusted performance: A quantile regression approach

The effect of diversification on firm performance has been debated. We reexamine the effect using a sample of 44,248 observations of non-financial US firms for the 1997–2009 period employing the quantile regression approach. Our empirical results show that the effect of diversification on firm performance is not homogeneous across various quantile levels: the diversification discount (premium) shows up in firms with high (low) RoE quantiles. Further, we find that diversification affects firm risk as well. Therefore, we consider a risk-adjusted performance measure and find that both diversification discount and premium disappear, which is consistent with the risk-return trade-off principle.     

Understanding the Antecedents and Consequences of Live Chat Use in Electronic Markets

Online shopping has progressed from having consumers passively browse through the webpages of online stores to having them proactively engage in communication dialogues with the sellers themselves via live chat. Modern-day consumers can now directly contact online sellers and inquire about the products they intend to purchase through the live chat medium available in the webpages of online stores, such as Taobao.com. In this study, the conceptual framework of motivation, opportunity, and ability was extended to understand the antecedents of using live chat and to lengthen such an understanding on one’s eventual intention to transact on the website from the trust-oriented perspective. A total of 222 online consumers of Taobao.com were surveyed, and their responses validated the proposed conceptual model and confirmed the research hypotheses. Results of the investigation indicated that perceived information asymmetry and fears of seller opportunism, encapsulated under motivation dimension, and perceived personal expertise, which manifests ability dimension, significantly influence the use of live chat by consumers. The results further demonstrated that live chat use positively affects the perceived interactivity of consumers, thereby increasing their intention to transact. The influence of live chat use on the perceived interactivity of consumers and its effect on one’s intention to transact online are negatively moderated by the trust of consumers in a seller. The findings contribute to our understanding communication services for e-commerce in general and to the realization of real-time communication technology in particular.     

REAL CONVERGENCE AND PRICE LEVELS: LONG‐TERM TENDENCIES VERSUS SHORT‐TERM PERFORMANCE IN THE ENLARGED EUROPEAN UNION

A cross‐country regression relating the relative price level to the relative GDP level is statistically significant and stable over time. Price and GDP levels for EU member countries tend to gravitate to that line. The conclusion that there is a shorter‐term trade‐off between fast real convergence and low inflation is unwarranted. Higher inflation is not a necessary companion of fast convergence. Giving up national currency, or pegging it to the euro, may prevent real convergence or precipitate divergence. A weak initial price level may be insufficient. While retaining national currency is not risk‐free, it allows a corrective devaluation.     

A hybrid bankruptcy prediction model with dynamic loadings on accounting-ratio-based and market-based information: A binary quantile regression approach

While using the binary quantile regression (BQR) model, we establish a hybrid bankruptcy prediction model with dynamic loadings for both the accounting-ratio-based and market-based information. Using the proposed model, we conduct an empirical study on a dataset comprising of default events during the period from 1996 to 2006. In this study, those firms experienced bankruptcy/liquidation events as defined by the Compustat database are classified as “defaulted” firms, whereas all other firms listed in the Fortune 500 with over a B-rating during the same time period are identified as “survived” firms. The empirical findings of this study are consistent with the following notions. The distance-to-default (DD) variable derived from the market-based model is statistically significant in explaining the observed default events, particularly of those firms with relatively poor credit quality (i.e., high credit risk). Conversely, the z-score obtained with the accounting-ratio-based approach is statistically significant in predicting bankruptcies of firms of relatively good credit quality (i.e., low credit risk). In-sample and out-of-sample bankruptcy prediction tests demonstrated the superior performance of utilizing dynamic loadings rather than constant loadings derived by the conventional logit model.