Agricultural policy regime change assessment: Austrian accession to the European union

Policy regime change evaluation involves assessing what would have been had the policy not changed. In this paper, we empirically assess the impact on Austrian pig producers of the 1995 decision of Austria to join the European Union. Applying a recently developed Hausman–Wu-Type cointegration test, we confirm the existence of a cointegrating relationship between Austrian and EU pig prices series. This relationship is used to forecast the counterfactual time path of prices. Within an expected utility framework, we compute the Austrian producer’s willingness to pay to remain under the pre-accession policy. Accounting for the dual income and insurance effects, we found producers to have been under-compensated. Conventional welfare measures which do not include the insurance component would significantly underestimate the total welfare impact.     

Equity market liberalization and corporate governance

Equity market liberalizations open up domestic stock markets to foreign investors. A puzzle in the literature is why developing countries exhibit relatively small financial impacts associated with liberalizations. We use cross-firm variation in corporate governance at the time of the official liberalization of the equity market in Korea to test whether governance can explain the extent to which firms benefit when countries liberalize. The results show that better-governed firms experience significantly greater stock price increases upon equity market liberalization. Following the liberalization in Korea, foreign ownership in firms with strong corporate governance was significantly higher than that in firms with weak governance. Better-governed firms also exhibit higher rates of physical capital accumulation after liberalization.     

The profitability of index futures arbitrage: Evidence from bid-ask quotes

Previous studies investigated the profitability of stock index futures based on transaction price data, and could overstate the frequency of arbitrage opportunities and size of arbitrage profits. This article obtains a data base for the Hong Kong index futures and index options market that contains both real-time transaction prices and bid-ask quotes; the article further examines the bias of identifying arbitrage opportunities based on transaction prices. The article finds the percentage of observations violating no-arbitrage bounds is significantly reduced when bid-ask quotes are employed instead of transaction prices. This suggests studies that implement arbitrage strategies based on transaction prices employ prices from the wrong side of the spread. This article finds a relationship between the frequency of violations (evaluated from transaction prices) and the size of bid-ask spreads in the futures and options markets. This phenomenon indicates that a larger mispricing, which may arise when the bid-ask spread is wider, does not necessarily imply profitable arbitrage opportunity. © 1998 John Wiley & Sons, Inc. Jrl Fut Mark 18:743–763, 1998     

Can Sinful Firms Benefit from Advertising Their CSR Efforts? Adverse Effect of Advertising Sinful Firms’ CSR Engagements on Firm Performance

This study investigates corporate social responsibility (CSR) of sinful firms, which refer to ones that are operating in controversial industries, including the production and distribution of alcohol, tobacco, gambling, adult entertainment, firearm, military, and nuclear power. We attempt to answer two questions in this study: (1) Do these sinful firms actively advertise their CSR engagements compared to non-sinful firms? And (2) do their advertising efforts really yield increased financial performance? Positing that advertising not only can make sinful firms’ good deeds visible, but also can highlight the contradiction between these firms’ stigma and their prosocial activities, we claim that sinful firms are likely to advertise their CSR engagement to overcome their stigmatized firm image, but these advertising activities will make the firms’ performance vulnerable by inducing skepticism from stakeholders. Using KLD database in conjunction with COMPUSTAT and Center for Research in Security Prices from 1991 to 2010, where 337 firms are involved in the controversial sinful industries, namely tobacco, alcohol, gaming, firearms, military, and nuclear power, we examine the effect of advertising spending of sinful firms’ CSR engagement on performance vulnerability, which is instantiated with idiosyncratic risk. The empirical results indicate that sinful firms increase their advertising expenditure when they engage in CSR programs, but these efforts for advertising CSR tend to increase idiosyncratic risk. This finding indicates that even though sinful firms can benefit from engaging in socially responsible initiatives, advertising their CSR efforts may backfire.     

Corporate social responsibility: An umbrella or a puddle on a rainy day? Evidence surrounding corporate financial misconduct

We examine the way a fraudulent firm's pre‐ and post‐misconduct corporate social responsibility engagement is associated with its stock performance to investigate the reputational role of corporate social responsibility (CSR). In the short term, firms with good CSR performance suffer smaller market penalties upon the revelation of financial wrongdoing, supporting the buffer effect, as opposed to the backfire effect, of a good social image. We also find that the misbehaving firms’ post‐misconduct CSR efforts are negatively associated with delisting probabilities, and positively with stock returns. These findings support the argument that increasing post‐crisis CSR engagement can be an effective remedy for a damaged reputation.     

The Effect of Sequential Structure in Charity Advertising on Message Elaboration and Donation Intention: The Mediating Role of Empathy

Abstract

This study examines how a sadness-happiness sequential structure affects how individuals process a charity advertisement. Cognitive elaboration is measured by capturing eye-movement. A negative-positive sequential structure in the charity advertisement induces individuals to focus on the incoming messages, thus evoking positive emotions and empathy for the needy person. Empathy plays a mediating role by mitigating the negative emotions induced by the negative element of the advertisement. The study’s results demonstrate that a negative-positive sequence in a charity advertisement enhances message elaboration, thus increasing individuals’ receptivity to charity advertising messages.     

Investigating effects of organisational culture and learning on environmental collaboration and performance of Korean exporting firms

This paper presents an empirical study of the effect of organisational culture and learning capability factors on environmental collaboration and performance in green supply chains. A conceptual model and variables were derived from organisational culture, learning, and collaboration theory and tested with Korean exporting firms. Learning capability was found to positively affect environmental collaboration as staff behaviour, attitudes and learning about environmental practices in a focal firm can be increased from suppliers and customers and then disseminated internally. Further, environmental collaboration was found to positively affect environmental performance due to a focal firm sharing these learned capabilities about the environment with other supply chain partners. However, organisational culture was not found to positively affect environmental collaboration. The findings suggest firms can improve environmental capabilities and performance through shared learning with supply chain partners and ensuring they are internally disseminated in the focal organisation.     

The Impact of Information Release on Stock Price Volatility and Trading Volume: The Rights Offering Case

This paper examines whether information released via rights offering announcements induces changes in price volatility and trading volume of underlying stock. The results of this paper provide support for the release of new information via offering announcements and evidence of its effects on price volatility and volume of underlying stock. Specifically, utilization of the announced information by investors is evidenced by greater trading volume following the announcement date than during the pre-announcement period. We interpret this result to mean that informedness dominates consensus. However, stock price volatility decreased from the pre-announcement period to the post-expiration period of rights offerings.     

Audit Hours and Unit Audit Price of Industry Specialist Auditors: Evidence from Korea

Higher audit fees associated with auditor industry specialization could represent higher unit price charged by industry specialist auditors (ISAs) or the provision of a greater quantity of audit services. This study exploits a field setting in Korea, where the disclosure of audit hours is required in company annual reports, and finds that ISAs charge significantly higher total audit fees but also expend significantly greater audit hours than non‐ISAs. When audit fees and hours are considered together, the unit audit price of ISAs is significantly lower than that of non‐ISAs. This indicates that higher total audit fees associated with ISAs are likely to be attributable to greater audit hours associated with ISAs. However, greater audit hours for ISAs may suggest higher audit quality or may simply indicate that the additional audit work performed by ISAs is conducted by relatively cheaper junior auditors. Our work provides an alternative explanation for the higher total audit fees documented in the previous studies.     

Attention-Grabbing Power of Branded vs. Unbranded Packaging

Abstract

The aim of this study is to investigate the impact of branding on consumer attention and the role that gender and product expertise play in shaping consumer preference. An eye-tracking experiment revealed that branded containers and plants attracted consumers’ initial attention and held their attention longer than unbranded containers and plants. Female consumers tend to use brand as a central cue in information processing, while males use brand as a peripheral cue. The presence of branding also influences perceived product attractiveness. This study reinforces the information-seeking theory by providing empirical support for the selectivity model.