When and Why Do Takeovers Lead to Fraud?

This paper develops a model explaining how acquisitions of controlling block ownership can facilitate post‐takeover fraud by new managers when investor protection is poor. Based on disclosures of embezzlement or breach of fiduciary duty in Korean firms, we find that the probability of explicit looting in takeover targets is 13%, almost five times as large as a matched sample of non‐targets. Post‐takeover frauds are primarily driven by transfers of minority blocks, while the corresponding probability in majority acquisitions is statistically indistinguishable from the non‐targets. These findings may explain why minority acquisitions of controlling blocks are popular under poor investor protection.     

Traders’ choice between limit and market orders: evidence from NYSE stocks

In this paper, we examine a trader's order choice between market and limit orders using a sample of orders submitted through NYSE SuperDot. We find that traders place more limit orders relative to market orders when: (1) the spread is large, (2) the order size is large, and (3) they expect high transitory price volatility. A rise in informational volatility appears neither to increase nor decrease the placement of limit orders. We also find that a rise in lagged price volatility decreases the size of spread, which is driven by the increase in the placement of limit orders.     

‘Double marginalization’ problems: evidence from the Korean fixed-to-mobile service market

In this paper, examination of the possibility of a ‘double marginalization’ problem existing in the Korean telecommunication industry is conducted and suggestions are made for the provision of a new scheme to eliminate this possibility by changing the pricing system for fixed-to-mobile calls. Based on five key economic characteristics in the Korean mobile market, a simple model for double marginalization in the telecommunication market is introduced. Evidence was found to suggest that a double marginalization problem is likely to exist within Korea's telecommunication industry as it is presently structured, and that this problem is further likely to have an adverse effect on the industry by inflating the price of fixed-to-mobile calls. Two alternatives are proposed to effectively remedy this double marginalization issue. It is also shown that prices of fixed-to-mobile calls could be lowered by changing the caller pays principle into a receiver pays principle.     

How does sales force automation influence relationship quality and performance? The mediating roles of learning and selling behaviors

Sales force automation (SFA) technologies are increasingly used to support customer relationship management strategies. However, previous studies have reported mixed results about the performances of SFA technologies. Therefore, this study seeks to further examine the impact of SFA usage on both customer relationship quality and sales performance. Additionally, the mediating roles of learning and adaptive selling behaviors on the outcomes of SFA usage are investigated. The results highlight the mediating role of salesperson learning and adaptive selling behaviors in the SFA usage and sales performance relationship. Especially noteworthy is the impact of learning through adaptive selling on those outcome variables. Implications for SFA research and practice that may further improve our understanding of this increasingly relevant topic are also offered.     

Financial Integration in Asset and Liability Holdings in East Asia

In this article, we examine the evolution of intra-East Asian financial integration from 2001 to 2013. Most existing studies on this topic look primarily at asset holdings; we examine liability holdings as well. Using the International Monetary Fund’s Coordinated Portfolio Investment Survey data for equities, long-term debt, and short-term debt, our analysis generally supports the conventional wisdom that East Asian countries are more financially integrated with global financial centers than they are with each other. This is true for both asset holdings and liabilities and is confirmed by an econometric analysis based on financial gravity equations. However, the gap between global integration and regional integration has narrowed for asset holdings over time but not for liability holdings. The results of additional econometric analysis indicate that diversification of liability holdings can mitigate financial instability due to global financial shocks. More precisely, diversification was associated with smaller exchange rate depreciation during the quantitative easing taper tantrum of 2013. These results point to a possible benefit from strengthening regional financial integration. Deeper regional integration would reduce dependence on global financial markets for funding and hence vulnerability to global shocks.     

Corruption,soundness of the banking sector,and economic growth: A cross-country study

This paper explores the impact of corruption on both the banking sector and economic growth; we determine the impact using 76 macroeconomic data from various countries over the period 2002–2004. The results of various cross-sectional regressions provide substantial evidence that corruption significantly aggravates the problems with bad loans in the banking sector. In this study, we also find some evidence of a new channel through which corruption lowers economic growth: Corruption distorts the allocation of bank funds from normal projects to bad projects, which decreases the quality of private investments, hence it decreases economic growth.