Is the environment‐friendly factor attractive to customers when purchasing electric vehicles? Evidence from South Korea

In a bid to reduce greenhouse gas emissions, several countries worldwide are implementing policies to promote electric vehicles (EVs). However, contrary to expectations, the diffusion speed of EVs has been rather slow in South Korea. This study analyzes consumer preferences for the technological and environmental attributes of EVs and derives policy and environmental implications to promote market diffusion of EVs in South Korea. We conduct a choice‐based conjoint survey of 1,008 consumers in South Korea and estimate the consumer utility function using a mixed logit model considering consumer heterogeneity. Based on the consumer utility function, we analyze consumers' willingness‐to‐pay (WTP) for EV attributes such as driving range, charging method, charging time, autonomous driving function, carbon dioxide (CO₂) reduction rate, and purchase price. The results indicate that the current low acceptance of EVs is due to their relatively high price and lack of a battery charging technology that satisfies consumers' expectations of the charging method and time. One interesting finding is that Korean consumers have a relatively higher WTP for the CO₂ reduction rate of EVs than consumers in other countries; however, they do not consider CO₂ reduction over other technological attributes when choosing EVs. This implies that the rate of CO₂ reduction of EVs is not an important factor for South Korean consumers when buying EVs. We also calculate the effect of CO₂ reduction with the market penetration of EVs and find that CO₂ reduction through the diffusion of EVs depends on the country's electricity generation mix.     

Does the cessation of quarterly earnings guidance reduce investors’ short-termism?

The practice of providing quarterly earnings guidance has been criticized for encouraging investors to fixate on short-term earnings and encouraging managerial myopia. Using data from the post–Regulation Fair Disclosure period, we examine whether the cessation of quarterly earnings guidance reduces short-termism among investors. We show that, after guidance cessation, investors in firms that stop quarterly guidance are composed of a larger (smaller) proportion of long-term (short-term) institutions, put more (less) weight on long-term (short-term) earnings in firm valuation, become more (less) sensitive to analysts’ long-term (short-term) earning forecast revisions, and are less likely to dismiss chief executive officers for missing quarterly earnings targets by small amounts, relative to investors in firms that continue to issue quarterly earnings guidance. Our study provides new evidence of the benefit of stopping quarterly earnings guidance, that is, the reduction of short-termism among investors.     

Is earnings management opportunistic or beneficial? An agency theory perspective

Earnings management has been cast into negative light due to the recent corporate scandals and, therefore, is viewed as detrimental to the firm. Enron and Worldcom represent two of the most egregious cases of opportunistic earnings management that led to the largest bankruptcies in U.S. history. However, some argue that earnings management may be beneficial because it improves the information value of earnings by conveying private information to the stockholders and the public. We offer agency theory as a tool to distinguish between the opportunistic and beneficial uses of earnings management. The empirical evidence suggests that firms where earnings management occurs to a larger (less) extent suffer less (more) agency costs. Moreover, a positive relation is documented between firm value and the extent of earnings management. Taken together, the results reveal that earnings management is, on average, not detrimental.     

Evaluating Industrial Relations Systems of OECD Countries from 1993 to 2005: A Two‐Dimensional Approach

This article uses both cross‐sectional and longitudinal methods to evaluate the national industrial relations systems of 30 Organisation for Economic Co‐operation and Development (OECD) countries from 1993 to 2005. We adopt a pluralistic view of industrial relations that gives equal weight to efficiency and equity, along with a general systems model consisting of input, process and output. We rank each country in terms of a combined score of efficiency and equity. We find that the 30 OECD countries can be separated into three distinct groups (high on both equity and efficiency; high on efficiency but low on equity; moderate on equity and low on efficiency), and that these groups exhibit considerable stability over time.     

The timing of prepayment: A theoretical analysis

This article develops the analytical methods necessary to determine the prepayment patterns of a mortgage contract. The most obvious measure of how many years a mortgage is likely to last is the expected time to termination. It is this measure that we most fully explore. However, since the method employed is able to characterize the probability of prepayment in any given time period, the means is provided to determine any measure of the time to termination.     

An analysis of factors improving technology roadmap credibility: A communications theory assessment of roadmapping processes

In recent years, many industrial firms have been able to use roadmapping as an effective process methodology for projecting future technology and for coordinating technology planning and strategy. Firms potentially realize a number of benefits in deploying technology roadmapping (TRM) processes. Roadmaps provide information identifying which new technologies will meet firms' future product demands, allowing companies to leverage R&D investments through choosing appropriately out of a range of alternative technologies. Moreover, the roadmapping process serves an important communication tool helping to bring about consensus among roadmap developers, as well as between participants brought in during the development process, who may communicate their understanding of shared corporate goals through the roadmap. However, there are few conceptual accounts or case studies have made the argument that roadmapping processes may be used effectively as communication tools. This paper, therefore, seeks to elaborate a theoretical foundation for identifying the factors that must be considered in setting up a roadmap and for analyzing the effect of these factors on technology roadmap credibility as perceived by its users. Based on the survey results of 120 different R&D units, this empirical study found that firms need to explore further how they can enable frequent interactions between the TRM development team and TRM participants. A high level of interaction will improve the credibility of a TRM, with communication channels selected by the organization also positively affecting TRM credibility.     

Predicting FDI inflows: Exploring a nonlinear relationship between peace years,oil wealth,and the rule of law

Despite previous studies investigating the impacts of various factors such as peace years, natural resources, and the rule of law on foreign direct investment (FDI), empirical findings remain inconclusive. Therefore, this study investigates the interplay between these factors in shaping host country conditions that facilitate FDI inflows. Using generalized additive models, we examine the simultaneous effects of peace years, oil wealth, and the rule of law on FDI inflows in a sample of non-OECD countries from 1970 to 2009. Our results reveal that established peace is a critical factor in attracting FDI inflows for both oil-exporting and non-oil-exporting countries. However, the effects of the rule of law vary depending on oil wealth. Oil-exporting countries receive more FDI inflows when they have a weak rather than a strong rule of law, while non-oil-exporting countries tend to receive more foreign investments when they have a moderately strong rule of law. We argue that countries with oil wealth combined with a moderately weak rule of law provide an environment that is conducive to multinational corporations (MNCs) in extractive industries seeking monopoly rents. Conversely, countries without oil wealth should create stable yet efficient environments that protect property rights and promote labor market flexibility to appeal to non-resource-seeking MNCs.     

The Effects of Tariffs and Export Subsidies on Entry Barriers and Investment

This paper explains the effects of unilateral tariffs and export subsidies on entry decisions in an imperfectly competitive industry, and suggests that carefully targeted trade policies play a strategic role in shifting the industry structure and the terms of subsequent competition. The model provides a new justification for tariffs which is different from the traditional infant industry argument; the tariff affects foreign firms' reactions as well as those of the domestic firms. [410]     

Inflation targeting and real exchange rates: A bias correction approach

This paper examines whether inflation targeting (IT) influences purchasing power parity (PPP) by a bias correction approach under cross-sectional dependence. The recursive mean adjustment (RMA) method proposed by So and Shin (1999) and Shin and So (2001) is employed to correct a downward bias in half-life estimates of real exchange rates. More importantly, the empirical results show that IT lowers variability of real exchange rates and plays an important role in providing favorable evidence for long-run PPP.     

Technical innovation and 3.5 mobile phone generation: Lessons from Korea

In 1996, the Korean mobile communication market was the first in the world to commercialize the code division multiple access (CDMA). Since then, the voice-based mobile phone market has continued to grow and has now reached near saturation. Having recognized the potential of the mobile data service as a new source of profit, telecommunication operators are scrambling to evolve 3.5 generation (3.5G) technology in order to lead market competition. Recently, the Korean 3.5G mobile telecom market has faced stiff competition from CDMA-based EVDO Rev.A and global system for mobile telecommunications (GSM)-based high-speed downlink packet access (HSDPA). In addition, the world's first wireless LAN-based wireless broadband internet (WiBro) service was commercialized in June, 2006. This paper reviews the current status of the 3.5G technology and analyzes the service standardization strategies from the viewpoint of technological evolutions. This paper also suggests implications for Korea's specific circumstances where different mobile telecom technologies complement and compete with one another. Korea's experiences may serve as important lessons for other countries or operators who try to introduce the 3G and look beyond mobile telecom technologies.