Institutions and preferences in settings of causal complexity: foreign institutional investors and corporate restructuring practices in France

In this article, we illustrate how the interaction between institutional arrangements and the presence of different categories of firm stakeholders with specific preferences provides important insights to understand the conditions under which corporate restructuring practices are introduced. Institutions shape the range of actors' strategic options and mediate the translation of the preferences of firm stakeholders into corporate policies. Nonetheless, strategic choice remains possible since firm stakeholders constitute subgroups with different interests and incentives that influence how they operate in an institutional framework. In particular, we examine under what conditions UK/US-based institutional investors and equity-based compensation incentives are associated with the implementation of asset divestitures and employee layoffs in France. We uncover three key findings. First, the presence of hedge funds and equity-based pay influence the likelihood of French companies undertaking asset divestitures. Second, the impact of hedge funds on employee layoffs is contingent on the ownership structure of firms. Third, layoffs in France are driven by inferior performance – a result that contrasts with the American experience whereby employee layoffs are also used as a strategic mechanism to deal with institutional investors in good times. Our findings demonstrate the importance of the institutional constraints of (national level) employment protection and the moderating effects of ownership structure (firm level) on the strategic and employment policies of French companies.     

Exploring Perceptions of US State Tourism Organizations' Web Advertising Effectiveness

This article adopts, modifies and tests the Interactive Advertising Model as a potential tool for evaluating website advertising effectiveness in US state tourism organizations. The adopted model is referred to in the study as the Modified Interactive Tourism Advertising Model (MITAM). The model is tested using data gathered from an independent evaluation by 31 Korean natives on five state US tourism organization websites. The data are analyzed using confirmatory factor analysis. The study found that the proposed MITAM model should be considered as a tool for improving the advertising effectiveness of travel websites. The article concludes with a discussion on the study findings along with recommendations on how state tourism organizations can improve their website advertising effectiveness.     

Keeping customers shopping in stores: interrelationships among store attributes,shopping enjoyment,and place attachment

Our research purpose was to identify and test variables that contribute to customer's willingness to continue to shop in brick and mortar stores, hereafter referred to as store loyalty. Specifically, we examined interrelationships among store attributes, shopping enjoyment, place attachment, and store loyalty with apparel shoppers. Significant store attributes that predicted shopping enjoyment included atmosphere, price, leisure, design, and service. Shopping enjoyment was a significant predictor of both place attachment and store loyalty. In turn, place attachment was found to be a significant predictor of store loyalty. The implications for store retailing are discussed as well as limitations and areas for future research.     

Competition and investment in telecommunications

This study examines the relationship between competition and investment by Incumbert Local Exchange Carriers (ILECs) in US telecommunications markets. A panel data model and a dynamic panel data model that have not been used in previous studies are applied in this analysis. Results of the panel data model suggest that investment by ILECs is positively related to the market share of Competitive Local Exchange Carriers (CLECs), and negatively to the absolute number of CLECs. However, once the persistence in ILECs’ investment behaviour is controlled for using the dynamic model, our measures of the existing competition from CLECs, at best, have a weak effect on ILECs’ investment. Therefore, while strengthening competition in the telecom sector may be key to restoring telecom investment, it is uncertain that competition spurred by the mandatory sharing policy in this sector stimulates ILECs’ incentives to invest in new infrastructure.     

Budget impact analysis of long acting injection for schizophrenia in Japan

Abstract

Aims: To estimate the budgetary impact of providing additional reimbursement for long acting injections for schizophrenia patients in psychiatric hospital settings in Japan to improve patient outcomes in schizophrenia.

Methods: Budget impact analysis of change in reimbursement policy using a prevalence-based model over a five-year time horizon. The results are reported as net change in expenditure and consequent cost/savings in Japanese yen at the time of analysis.

Results: The budget impact analysis shows that an increase in reimbursement for LAIs could lead to cumulative savings of an estimated 36.6 billion JPY over five years. These savings result from a decrease in hospitalization costs and an increased usage of LAI (assumed to be 10%). Based on the sensitivity analysis, the saving estimates are most sensitive to change in market share of generic and branded oral antipsychotics.

Limitations: Historical data were used to estimate the future costs of drug and hospitalization; however, it is not the best predictor of future, hence a source of potential bias. A good level of treatment adherence with oral antipsychotics was assumed, which is generally not the case; therefore, we might have overestimated the effectiveness of oral atypical antipsychotics. Additionally, the drug cost due to reimbursement might have also been overestimated because in clinical setting, the increase of LAI use may not have reached 10% of the market share. Lastly, patients’ behavior was derived from models, which may have loosely approximated the reality.

Conclusions: An additional reimbursement for the use of LAI in schizophrenia patients is likely to be cost neutral/cost saving and should be considered as a policy option to improve patient outcomes and budget sustainability.     

Remittances and GDP in Jamaica: An ARDL Bounds Testing Approach to Cointegration

Similar to other developing nations, Jamaica’s remittances, specifically inflows, are an important source of income support and foreign exchange earnings. Anecdotally, much has been said about the relationship between remittances and GDP in this country. Yet, less has been established using rigorous statistical inference. We test for unit roots with structural breaks and use the autoregressive distributed lag (ARDL) approach to cointegration to help fill this lacuna in the literature on Jamaica. Using annual data for the 1976–2014 period, we examine the relationship between GDP and remittances, both measured in constant 2010 US dollar terms, as we control for the common determinants of economic growth. The main finding is that GDP and remittances are cointegrated relationship wherein they both reinforce each other positively. This finding is statistically robust as the ARDL models have well-behaved errors and parameters that are generally stable over the period. We discuss policy implications of this finding.     

Japanese Corporate Groupings (Keiretsu) and the Informativeness of Earnings

This paper examines the effect of Japanese corporate groupings, keiretsu , on the informativeness of earnings. Keiretsu firms maintain close financial and personal ties through cross-shareholding, credit holding, interlocking corporate directorates, and various business transactions. We propose that the strong interrelations of the keiretsu ownership structure enhance the informativeness of earnings through efficient monitoring of managerial performance. Our empirical results show that keiretsu firms have higher earnings response coefficients than those of non- keiretsu firms, the earnings response coefficient increases as the strength of the keiretsu relationship increases, and discretionary accruals by keiretsu firms are smaller than discretionary accruals of non- keiretsu firms. All of these results suggest that the monitoring ability of the keiretsu improves the informativeness of earnings.     

The signaling effects associated with convertible debt design

In this paper we investigate whether the terms used in the design of a convertible debt issue act as a signal of the issuing firm's future growth prospects. Our general premise is that convertible debt design terms are interrelated and arranged in a manner that signals asymmetric information to market participants. Empirical tests support our hypothesis, even after controlling for risk, firm size, time-to-maturity, and industry effects. Firms issuing convertible debt that arrange terms to take advantage of relatively better future growth prospects are found to have a relatively lower negative price reaction around the announcement of the offer.     

Performance implications for the relationships among top management leadership,organizational culture,and appraisal practice: testing two theory-based models of organizational learning theory in Japan

The purpose of this study was to examine the interrelationships among top management leadership, organizational culture and human resource (HR) practices, and their associative effects on organizational performance. Based on the theory of organizational learning, we developed and tested two different causal models: (1) a feed-forward learning flow model in which supportive leadership by top management would create a community culture and HR practices within organizations; and (2) a feedback learning flow model in which a community culture would support the practice of supportive leadership by top management and HR practices within a firm. Our structural equation modelling (SEM) results for a sample of 225 Japanese small and medium-sized enterprises (SMEs) in Japan supported the second model, in which the dominance of a community culture within the firm is an antecedent of top management's supportive leadership, which in turn necessitates a performance-based appraisal practice and eventually leads to better organizational performance in terms of objective indicators of turnover and absenteeism rates and workforce productivity. The findings are used to discuss the role of top management leadership in a particular organizational culture from the organizational learning perspective. Limitations and directions for future research are also discussed.     

Which Is the Better Option? Quicker or Cheaper?

Both time and money are valuable scarce resources, but their different characteristics lead to different perceived value in saving time and saving money. The perishability and fixed supply associated with time may enhance its value; however, its inherent nature, difficulty accounting for value of time, infungibility, and perceived slack may weaken its value. Drawing on theories and findings in the domains of temporal and monetary judgment, this research study posits that people usually underappreciate the value of time because the information pertinent to the value of time is less accessible in peoples’ memory compared with monetary value. Hence, prompting people regarding the value of time and the value of money could make their preference for saving time similar to that of saving money. Additionally, people typically expect more time slack than money in the future, thereby discounting their preference for saving time faster than for saving money. The results of a series of experiments support these hypotheses.