EXPORT AND HEDGING DECISIONS UNDER CORRELATED REVENUE AND EXCHANGE RATE RISK

This paper examines the behaviour of a competitive exporting firm under joint revenue and exchange rate risk. The firm can trade unbiased currency futures contracts for hedging purposes. We show that neither the separation theorem nor the full‐hedging theorem holds when the revenue shock prevails. If the correlation between the revenue shock and the random spot exchange rate is non‐positive, the firm optimally produces less than the benchmark level when the revenue shock is absent. If, in addition, the firm is prudent, the optimal futures position is an under‐hedge. Finally, we derive sufficient conditions under which the firm's optimal output level is higher in the presence than in the absence of the revenue shock. Operational hedging and financial hedging as such interact in a complicated way to better cope with the multiple sources of uncertainty faced by the firm.     

Competencies of training professionals in the Hong Kong hotel industry

ABSTRACT

This study aims to investigate the competencies of training professionals in the hotel industry in Hong Kong. A survey questionnaire was adopted. Seventeen competencies were derived by factor analysis. Six essential competencies are identified, whereas “people skills and commitment” and “awareness of quality” are the most important competencies, while another 11 competencies are highly preferred. This study provides original criteria for hoteliers and human resources professionals to facilitate the recruitment process and aid training professionals in developing core competencies in hotel industry employees. Theoretical and practical implications of the findings are presented.     

FDI Location and the Relevance of Spatial Linkages: Evidence from Provincial and Industry FDI in China

In this study both aggregate and industry‐level foreign direct investment (FDI) data are employed to investigate the spatial dependence of FDI hosts. The analysis contributes to the existing literature by focusing on the heterogeneous spatial correlation of FDI in different industries. Using more comprehensive FDI data across multiple industries and multiple provinces in China from 1999 to 2007, the results show a significant spatial correlation among provinces. Aggregate FDI tends to be regional trade platform oriented indicating neighboring provinces become competitors for FDI. In contrast, results based on industry‐level provincial FDI show stronger support for vertical or complex vertical FDI.     

Advancing tourism research through multilevel methods: research problem and agenda

Tourism research often encounters social phenomena and research problems that involve multiple levels. However, most researchers assume that the phenomena exist in a single level and perform analyses that do not reflect the hierarchical nature of social dynamics. This article heeds the call from Current Issues in Tourism by illustrating multilevel methods and proposing an agenda for multilevel research. In particular, this article seeks to reconcile the limitations of single-level analysis and to delineate how multilevel methods could be applied in tourism research. It further seeks to advance tourism theories by introducing more complex multilevel design with broader applications in various tourism settings. This article presents two common tourism research scenarios, critiques their limitations, and proposes how multilevel methods could not only address these limitations, but also how they could advance tourism theories. An empirical study is offered to demonstrate multilevel design and analytical techniques.     

The impact of earnings pressure on exploratory innovation

While earnings expectation has been shown to determine a firm’s investment decisions, the knowledge about how such expectation influences a firm’s investment horizon for innovation is still blurred. This study therefore addresses this research issue by examining the relationship between earnings pressure and exploratory innovation while investigating the moderating effects of cross‐rival effect and resource availability. By examining high‐tech industrial firms in S&P 1500 from 2000 to 2012, the results indicate that stock analysts, as information intermediaries between innovation firms and the capital market, impose pressure through earnings forecasts on firms’ exploratory innovation. Our findings also reveal that the earnings pressure‐exploratory innovation relationship can be mitigated when its competitors encounter a higher level of earnings pressure. However, a firm’s financial slack shows less significant association to moderate the earnings pressure‐exploratory innovation relationship. Possible explanations for the results in regard to their theoretical and practical implications are discussed in this study.     

Changes in analysts’ stock recommendations following regulatory action against their brokerage

Review of Accounting Studies - Despite the importance of sell-side analysts in the capital markets, we know little about the effectiveness of routine monitoring of the sell-side industry. We...     

Does reputation of sponsors matter in IPO? Evidence from Hong Kong

Contrary to other markets where underwriters perform a combined role of underwriting and sponsoring in an Initial Public Offering (IPO), IPO issuers in Hong Kong must appoint at least one sponsor in addition to the underwriters. The splitting of the single role of underwriters into two separate ones offers an ideal setting to disentangle the effects of the two roles and to examine which of the two roles—sponsor or underwriter—is more important in explaining IPO underpricing and initial volatility in the Hong Kong equity market. Interestingly, our findings provide supportive evidence that the sponsor reputation does matter in an IPO and it is even more significant than the underwriter reputation in explaining the IPO underpricing phenomenon. Given the recent high-tech fervor, our research goes deeper to examine specifically the role of sponsors on high-tech firms, with results indicating that the reliance on sponsors is higher for traditional issuers than for technology firms. We further discover that sponsors and underwriters are playing substitution roles rather than complementary roles. In order to examine the regulatory policy impact, our research also compares the role of IPO sponsors before and after the launch of the new sponsor regulatory regime in 2013. The empirical findings lend support to our argument that after the launch of the new regulations, public awareness of sponsors is raised, respect towards more reputable sponsor increases, and thus, the role of sponsors becomes more important than before.