Does information risk affect the implied cost of equity capital? An analysis of PIN and adjusted PIN

Using a unique dataset of Korean listed companies for which trade initiators are correctly identifiable, we estimate bias-free PIN (probability of informed trading) that is no longer subject to the trade misspecification problem and test whether it is related to expected returns. Unlike prior studies, we find that bias-free AdjPIN, the adjusted PIN purged of a liquidity component, is positively related to implied cost of equity. Our findings suggest that the errors in PIN variables hamper a proper identification of PIN pricing in prior studies.     

Psychological antecedents and risk on attitudes toward e-customization

Consumers can experience relatively low prices with the dramatic diffusion of online shopping even with customized products, which are commonly more expensive than regular products, due to unique functions of customized product order processes in online environments. This paper investigates how two psychological antecedents, (1) need for uniqueness and (2) status aspiration, can influence consumers' attitude with regard to forming procedures toward e-customized products and how perceived risk, another psychological factor, on purchasing e-customized products plays a role of moderating factor. A self-administered online survey of 321 Japanese consumers is conducted to examine a proposed conceptual model with Structural Equation Modeling (SEM). The analysis using results indicates that the need for uniqueness directly impacts on attitude toward e-customized products while it mediates the effect of status aspiration. A multi-group analysis to test a moderating effect of the perceived risk on purchasing e-customized products highlights the significant effects of psychological factors. The result also provides potential guidelines to e-tailors on possibility of segmenting markets as well as promoting their customized products using these psychological criteria of their target consumers.     

An Empirical Analysis of Triple Bottom-Line Reporting and its Determinants: Evidence from the United States and Japan

This paper investigates triple bottom‐line (TBL) disclosures of 50 of the largest US and Japanese companies. Twenty disclosure criteria were developed for each of the TBL disclosure areas: economic, social, and environmental. Disclosure information was examined in annual reports, stand‐alone reports, and special website reports. Regression analysis was used to examine empirically the determinants of TBL disclosure practice. Our results indicate that, for total TBL disclosure (combining economic, social, and environmental categories), the extent of reporting is higher for firms with larger size, lower profitability, lower liquidity, and for firms with membership in the manufacturing industry. Further analysis indicates that the results for the total TBL disclosure are primarily driven by non‐economic disclosures. We also find that the extent of overall TBL reporting is higher for Japanese firms, with environmental disclosure being the key driver. This result could be attributed to the differences in national cultures, the regulatory environment, and other institutional factors between the United States and Japan.     

ERM crisis in retrospect: What if a European central bank had been in existence before 1992?

This paper explores whether policy coordination or a single monetary policy implemented earlier would have kept the U.K. in the process of European monetary integration. On the basis of the pre-ERM crisis empirics by Douven and Plasmans (1996), a counterfactual game simulation approach is used, and five scenarios are established for comparison with the actual historical records. The final answer is negative.     

Negative externalities on property values resulting from water impairment: The case of the Pigeon River Watershed

The objective of this research was to determine whether willingness to bear the negative externality from water quality impairment differs between those who do and those who do not receive economic benefit from the impairment source. Differences were tested using a hedonic analysis of ambient water quality in two discrete housing markets in the Pigeon River Watershed, which have been polluted by the operation of a paper mill. The results suggest that North Carolina residents residing in subwatersheds with impaired portions of the Pigeon River, who experience economic benefit from the paper mill in addition to its harmful effects on water quality, do perceive the pollution as a negative externality. In contrast, the effects of both the degraded river and its contributing streams on property values are perceived as negative externalities by watershed residents in Tennessee who experience only harmful effects from the pollution. Differences in willingness to bear the water-impairment externality were not indicated by variables representing view of and proximity to impaired water bodies. The results suggest that the perception of water quality to which property owners implicitly apply value should be considered when establishing water-quality regulations.     

Estimating demand curve in the Korean VoIP telecommunications market

The VoIP (Voice over Internet Protocol) market in Korea is showing rapid growth since domestic carriers initiated the service in 2006. These carriers are now seeking new revenue sources from various convergence services and are increasing investment into VoIP. In particular, local exchange carriers (LECs), formerly reluctant to invest in technologies that would cannibalize their local telephone revenue, have started to invest in VoIP, in recognition of the current convergence of media and the telecommunications industry, as well as in the face of intensifying competition. In this study, we determined that VoIP call rates and landline telephony call rates were the most important factors affecting VoIP call demand, in addition to network externality. We also verified that landline telephony is no longer a supplement to VoIP, but rather, a substitute that has considerable influence on VoIP call demand. Empirical evidence is expected to be considered in policy decision making on current issues in the IT industry, such as access prices or competitiveness assessment. The current empirical analysis on the Korean VoIP industry and the adherence to lessons learned from policy enforcement should provide valuable information to countries seeking to develop their own VoIP industries, as well as to businesses developing new strategies based on the VoIP market.     

Technology evaluation in Taiwan's technology industries: Strategies, trajectories, and innovations

Technology evaluation, as an organizational process, is the essential ability to comprehend the values of technologies very soon after they emerge. Meanwhile, the technology evaluation process is inevitably influenced by the firm's industrial context, such as its technological trajectory. This study defines technology evaluation strategy in terms of the processes, methods, and participants involved, and uses this definition as a taxonomy to explore different types of technology evaluation strategies. A survey on the technological industries is conducted to explore types of technology evaluation strategies and their relationships with the advantages of different types of innovation under the effects of different technological trajectories. The survey identifies four types of technology evaluation strategies, namely, those of the flexible executive strategist, the emergent executive intuitionist, the deliberate quantitative strategist, and the deliberate consensual strategist, are identified. This study has found that certain types of technology evaluation strategies have better innovation performances than the others. The patterns of technological trajectories are also found to influence a firm's technology evaluation strategy and the advantages of certain types of innovations. The established explanations of the relationships among the technological trajectory, innovation type, and technology evaluation strategies may guide technology businesses to develop a better technology evaluation capability. The theoretical framework developed in this research enriches the strategic management literature with a new taxonomy for technology evaluation strategies.     

Investment opportunities and dividend omissions

This study examines the market's reaction to dividend omission announcements and finds that if dividends are skipped to preserve cash for good investments, investors do not necessarily regard the omission as negative information. Markets penalize firms for dividend omissions only in the absence of a good stream of investments. In addition, the positive relation between investment opportunity and abnormal stock returns around the announcements is stronger when the level of information asymmetry between management and the rest of the market participants is low. Additional tests reveal that good omitters overcome underperformance faster in the post period. Overall, the results suggest that financial markets interpret differently the information conveyed in the announcement of dividend omission depending on the firm's future prospects.     

Effects of mentoring functions on receivers' organizational citizenship behavior in a Chinese context: A two-study investigation

This research examines the relationship between mentoring functions received by employees and their organizational citizenship behavior (OCB), and the moderating effects of perceived quality relationships with mentoring function providers in China. Results of Study 1 from a sample of 385 supervisor-subordinate dyads reveal that role modeling received by protégés positively relates to their OCB, and perceived mentoring relationship quality moderates the association between career support received and protégés' OCB. Moreover, nonprotégés and protégés who receive high levels of overall mentoring functions perform more OCB than protégés who receive low levels of mentoring functions. Results of Study 2 from 258 supervisor-subordinate dyads show that role modeling received by subordinates positively relates to their OCB directed at individuals (OCBI) and at the organization (OCBO) while career support received positively relates to OCBO. Additionally, leader-member exchange moderates the linkages of role modeling with OCBI and OCBO.     

Deriving joint space positioning maps from consumer preference ratings

Joint space multidimensional scaling maps are often utilized for positioning analyses and are estimated on survey samples of consumer preferences, choices, considerations, or intentions so as to provide a concise spatial depiction of the competitive landscape including relevant dimensions or attributes, competing brands, and consumers in the same joint space representation. Care has to be given concerning the underlying scale properties of such survey data so as not to distort the resulting joint space positioning map. We present a new joint space multidimensional scaling procedure for positioning analyses for displaying the structure in such survey data when such common ordered successive category measurement scales such as Likert, Edwards, semantic differential, etc., are employed. We present the technical details of this stochastic ordered preference multidimensional scaling vector model as well as the maximum likelihood estimation-based algorithm devised for parameter estimation. Favorable comparisons are made with several existent multidimensional scaling methods in representing the internal structure for such data in marketing positioning studies. An actual commercial positioning application concerning large sports utility vehicles consideration to buy judgments is presented with predictive validation comparisons with other multidimensional scaling joint space procedures.