The firm information environment and capital structure: international evidence

This article investigates the effect of the firm information environment, characterized by the analyst characteristics, on firms’ capital structure choices and whether this effect varies according to country-level institutional environments. Using a comprehensive international data set that covers 19 939 firms across 41 countries between 2000 and 2010, we document two key findings. First, firms with lower analyst coverage, higher forecast dispersion and higher forecast errors have higher leverage. Second, the effect of the firm information environment on corporate leverage is attenuated in countries with stronger governance mechanism and better information transparency. This result suggests that a firm’s information environment is an important factor influencing its capital structure decision and that country-level institutional environments matter to this effect.     

P2P Loans and bank loans,the chicken and the egg,what causes what?: further evidence from a bootstrap panel granger causality test

This study attempts to re-investigate the causal link between bank loans and Peer-to-Peer (P2P) loans from China using data sets from eight areas (i.e., Beijing, Shanghai, Jiangsu, Zhejiang, Shandong, Hubei, Guangdong and Sichuan) over 2014M1-2016M4. We apply a bootstrap panel causality analysis that considers both cross-dependency and heterogeneity across cities. The empirical results indicate a unidirectional Granger causality running from P2P loans to bank loans for Beijing, Shanghai, Zhejiang and Shandong; feedback between P2P loans and bank loads for Jiangsu only and independence for the other three areas (i.e. Hubei, Guangdong and Sichuan).     

Comparison of Bank Profitability in China and the USA

This paper examines and compares the profitability of banks in the USA and China. The USA has the largest market‐based banking system and the financial system of China is still bank‐based. Our analysis indicates that in terms of profitability, banks in China outperformed those in the USA during our study period (2008–2014). Real estate loans had an adverse effect on US bank profitability during the financial crisis and no effect after the crisis but consistently improved the profitability of Chinese banks. Interest margins have no effect on US bank profitability but a consistently positive effect on Chinese banks, confirming that China is a traditional bank‐based economy. Interbank loans have a positive and significant effect on Chinese bank profitability, while interbank domestic loans have a negative effect on US bank profitability. Finally, size had a positive effect on US banks after the financial crisis period, confirming the scale economies of large US banks, but a negative effect on Chinese banks, indicating diseconomies of scale.     

Effect of Cross-Border E-Business Policy on the Export Trade of an Emerging Market: A Dynamic Study of Institutional Support to Cross-Border E-Business at Chinese Pilot Cities

Policies to offer institutional support to cross-border E-business are processed in the development of export at emerging markets. This research estimates the effect of institutional support to cross-border E-business on export trade in an emerging market by a difference-in-difference model. It is found that the institutional support to cross-border E-business at the pilot cities had a positive effect on export trade. Further, a decision tree of predictions to export is developed, based on the cross-border E-business policy and regional economic factors shown to have effect on export, and the complex network of interconnections across the cities in different conditions is revealed. The estimation of probability for export increase based on the effect of cross-border E-business policy is further performed by Bayesian model. This research can be helpful to policy makers and business administrators in understanding the effect of cross-border E-business policies on export at emerging markets.     

Reconciling the paradox of supply-side and demand-side strategies in industrial innovation

Abernathy and Utterback [Abernathy, W.J. & Utterback, J.M., (1978). Patterns of industrial innovation. In Burgelman, R.A., Maidique, M.A. and Wheelwright, S.C., Strategic management of technology and innovation: 149-155. McGraw Hill.] argued that successful firms seek a functional product performance strategy in the early stage of industrial innovation and seek a cost reduction strategy in the late stage. However, Adner and Levinthal [Adner, R. & Levinthal, D., (2001). Demand heterogeneity and technology evolution: Implications for product and process. Management Science, 47(5), 611-628.] argued firms enhance functionality or reduce prices to a level that corresponds to consumer willingness to pay in the early stage, and increase performance at a relatively stable product price (i.e. new strategy they claimed) in the late stage. This study reconciles this paradox of choosing strategies using an integrative framework for theory development. Generated from the framework, a numerical indicator of performance/cost ratio directs firm strategy choices in industrial innovation when an environment changes. This study justifies the popular use of performance/cost ratio in practices as primary criteria to predict the winning dominant standard from a value creation perspective and elucidates an evolution of industrial innovations by using a three-year field study.     

A multidimensional scale of activity attachment for leisure tourists

Although the concept of activity attachment has been studied previously, the existing scales of activity attachment used only a single dimension or did not embody the discussion on behavioral domain. Furthermore, no previous studies have followed rigorous scale development procedures to explore the nature of activity attachment. In an effort to address this gap, this study aims to develop and validate a multidimensional scale of activity attachment for leisure tourists based on attachment theory. First, initial questionnaire items were generated from literature reviews and expert discussions. Second, exploratory factor analysis was conducted and four underlying dimensions were identified: emotion-symbol attachment, functional attachment, word-of-mouth intention attachment, and actual behavior attachment. Third, confirmatory factor analysis was employed and the result showed that the multidimensional activity attachment scale with four dimensions and 18 items has good fit, reliability, and validity. Implications of these findings for practical applications and future research are also provided.     

The weight of the saddened soul: the bidirectionality between physical heaviness and sadness and its implications for sensory marketing

ABSTRACT

Heaviness is a bodily metaphor used to express sadness. Building on embodied cognition theory and metaphor theory, we argue that sadness is grounded in bodily sensation of heaviness, which has important sensory marketing implications for engaging consumer senses to affect consumer decision-making and attitude formation processes. We found support for this metaphorical link between heaviness and sadness across six studies. We showed that carrying a heavy bag saddened individuals and increased the valuation of a teddy bear. Intention to donate to a charity supporting endangered tigers increased when burdened participants watched a sad video about these animals. Conversely, sadness induced physical heaviness and increased preference for an easy-to-maintain sofa. Further, sad individuals disliked an advertisement for a sports drink that figured energy-consuming actions. Our findings inform sensory marketing practice about embedding the bodily sensation of heaviness to induce sadness in marketing communication.     

Innovation and Intellectual Property Rights in a Product‐cycle Model of Skills Accumulation

This paper examines the effects of stronger intellectual property rights protection in the South based on a North–South general‐equilibrium model with foreign direct investment (FDI). Two types of innovation are considered – innovation targeting all products and innovation targeting only imitated products. We show that for both types of innovation, there will be increases in the innovation rate and Northern wage inequality and a decrease in the proportion of Northern unskilled labor if imitation intensity is sufficiently low. As regards the pattern of production, the extent of FDI will increase while the extent of Northern production and Southern production will decrease.