Non-Uniform Percentage Brokerage Commissions and Real Estate Market Performance

The effect of non-uniform commissions on the market duration of residential properties is ambiguous. While the broker's search effort is positively related to the size of the percentage commission, so is the seller's reservation price. Each of these relationships imply a time-on-market effect in the opposite direction of the other. A powerful statistical technique, survival regression, is employed to determine which relationship dominates. Because the probability that a property will sell at any given point in time is inversely related to the size of the percentage commission, we conclude that the negative search effects associated with low commission rates are more than offset by the positive reservation price effects.     

Unintended Consequences of Well-Intentioned Policies of South Korea: Lessons for Emerging Economies on Capital Market Liberalisation

While South Korea has achieved remarkable economic and democratic transformation during the past decades, it has suffered from two major economic crises, both of which are essentially liquidity crises. In this regard, the purpose of this study is twofold: one is to review the debates on capital market liberalisation and highlight the dark sides of South Korea’s experience. The other is to explain why South Korea has experienced another crisis in 2008 even though it already experienced the same liquidity crisis in 1997. We highlight the unintended consequences of policies with their own legitimate purposes and provide lessons on capital market liberalisation for emerging economies.     

Injury prevention priority setting based on the National Injury Surveillance data in Korea

For the reduction of injury burden, injury prevention efforts are essential. However, financial, material and human resources are far from sufficient, and this situation necessitates setting priorities for effective injury prevention. Hence, the aim of this study is to prioritise 13 injury mechanisms for prevention of injury using four injury burden criteria. National death certificate, hospital discharge data and emergency data during 2004 were used. According to the 13 most frequent injury mechanisms (ICD-10), mortality priority score, years of potential life lost (YPLL) priority score, morbidity priority score and hospital charge priority score were calculated. Injury mechanisms which were ranked fourth or higher on at least three of the four criteria scores were arranged in rank orders. Traffic crashes ranked highest on all four of the priority criteria for injury prevention followed by fall and poisoning in second and third positions, respectively. Categorised by age groups, in 0-19 year olds, traffic crashes, suffocation and drowning; in 20-59 years, traffic crashes, suffocation and poisoning; and in 60 and over, traffic crashes and fall were shown to be significant injury prevention priority in rank orders. Injury prevention priorities identified from this study could be useful in strategically allocating limited resources and implementing more focused prevention policies in Korea.     

Looking Attractive until You Sell: Earnings Management,Lockup Expiration,and Venture Capitalists

Earnings management occurs when managerial discretion allows managers to influence reported earnings and thus mislead some investors about the underlying economic performance and quality of the firm. This study considers how potential investors may guard against earnings management by observing negative stock price reaction at the lockup expiration period of initial public offering (IPO) firms as a negative signal. Findings from a sample of 160 newly public firms show that earnings management behaviour is stronger in IPO firms backed by venture capitalists (VCs). Moreover, VC reputation negatively moderates this relationship such that IPO firms backed by reputable VCs are less likely to manage earnings, suggesting that reputable VCs serve an auditing function following an IPO. Overall, we provide insights into signalling theory by examining negative signals arising from the behaviour of multiple agents in an IPO firm.     

Do Family Owners Use Firm Hedging Policy to Hedge Personal Undiversified Wealth Risk?

We examine whether family ownership affects the value impact of the operational and financial dimensions of firms’ hedging policies. We show that family firms’ market valuations are higher than those of non‐family firms, consistent with the view that family firms benefit from family owners’ long‐term perspectives and ability to monitor managers. In addition, while both operational and financial hedging policies per se are valuable in non‐family firms, they do not create any value in family firms. These results support the notion that the founding families’ need to hedge the risk of their undiversified personal wealth portfolio leads to suboptimal risk management decisions.     

Management of frontline financial sales personnel

The employee turnover rate within the financial services industry is one of the highest among all industries. Studies demonstrate that a salesperson’s organizational commitment and propensity to leave are impacted by job satisfaction and emotional exhaustion. This study examines the relationships among emotional exhaustion, organizational commitment, propensity to leave and the facets of job satisfaction. Findings support that: (i) financial services salespeople’s propensity to leave is influenced by emotional exhaustion, (ii) emotional exhaustion is mediated by multi-faceted job satisfaction in predicting organizational commitment and (iii) the facets of job satisfaction are, in part, mediated by organizational commitment in predicting propensity to leave.     

Momentum and Foreign Investors: Evidence from the Korean Stock Market

Abstract:

We examine whether the price impact of foreign investors on the Korean stock market from December 2000 to February 2007 generated a momentum phenomenon. In our empirical results, foreigners seem to have exerted a significantly positive impact on prices in “up” markets (periods of positive stock returns), but have had little impact on prices in “down” markets (periods of negative returns). We document that the impact of foreigners’ trades is concentrated in large companies. Most importantly, when the market is in the up state, the returns of stocks of large companies that were positively affected by foreign investors in the previous six-month period continue to increase in the subsequent six-month period. As a result, the subsequent six-month return on a past “winner” stock portfolio is significantly higher than that on a past “loser” stock portfolio. This brings to mind a momentum phenomenon that has been reported not to exist in the Korean stock market.     

The Euro Bias of Bank Assets in the Eurozone

Abstract:

The integration of eurozone financial markets since the advent of the euro in 1999 has been the center of attention in policy debates and academic research. We analyze the bank assets of monetary financial institutions in Germany vis-à-vis nonresidents. The financial institutions of the eurozone countries have tended to invest in assets of other eurozone countries substantially more since the introduction of the euro. The euro effect is especially stronger in the weaker eurozone economies than in the stronger eurozone economies. Furthermore, the impact of the euro has been even greater in securities than in loans. In this paper, we use Bundesbank balance-of-payment statistics to analyze the euro’s effects on the asset portfolios of German banks vis-à-vis nonresidents.     

The Effect of Cross-Channel Price Dis/parity on Ethicality Evaluations and Purchase Intent: The Moderating Role of Price Frame

Using a scenario-based survey with a factorial between-subject experimental design, this study examines the effect of price dis/parity across multiple channels of distribution on customers' ethicality evaluations and purchase intent, with the focus on the moderating role of price frame. Results show that when the varying prices of the disparity policy were all lower than or equal to the uniform price of the parity policy, consumers did not evaluate the disparity policy as significantly less ethical than the parity policy, and were more likely to purchase from the firm with the disparity policy. However, when at least one of the varying prices of the disparity policy was higher than the uniform price of the parity policy, they evaluated the disparity policy as less ethical, and, therefore, were more likely to purchase from the firm with the parity policy, despite price incentives offered by the disparity policy. This finding suggests that the success of a cross-channel price disparity policy depends on the price frame.     

Economic geography in the presence of preferential trade agreements: an empirical analysis of OECD data

In the presence of preferential trade agreements (PTAs), there are two distinct levels of economic geography–global economic geography (GEG) between a PTA bloc and the world and local economic geography (LEG) between a PTA member and its PTA bloc. Using OECD data, we empirically examine whether both types of economic geography can help to explain the international production structure. Our findings provide some support for the importance of distinguishing between LEG and GEG when testing for the presence of economic geography.