An Explorative Study of Korean Consumer Participation in Virtual Brand Communities in Social Network Sites

ABSTRACT

The importance of virtual brand communities in social network sites has received increasing attention from both academia and industry. In surveying a sample of 333 virtual brand community members in Korean social network sites, the current study provides a baseline understanding of the antecedents and consequences of virtual brand communities. The findings here suggest that members of brand communities have six primary social and psychological motives for engaging in virtual community activities: interpersonal utility, brand loyalty, entertainment seeking, information seeking, incentive seeking, and convenience seeking. Our findings also indicate that members of consumer versus marketer-generated brand communities show both similarities and differences in terms of the extent of community participation and the levels of community commitment, satisfaction, and future intention. Our findings provide useful managerial implications for marketers who want to tap into the huge communication potential of this new marketing communication tool and medium, as they offer insight into the proactive role of consumers in today's marketplace.     

Asymmetric valuation of sustained growth by bond- and equity-holders

Viewing equity as a call option on the firm’s assets with a strike price equal to contractual debt obligations yields an asymmetric prediction on how debt and equity markets view sustained growth. Debt holders are expected to benefit from sustained growth when the default risk is high, while equity holders value such growth when risk is low. Using Altman’s z-score and debt ratings as alternative proxies for the default risk, we document a negative association between bond yield spreads and sustained growth in earnings for firms with high risk only. In sharp contrast, using earnings multiples from returns-earnings regressions as a proxy for equity market rewards, we find that earnings multiples are larger when earnings growth is sustained for the low risk sample only. Decomposing earnings growth into revenue and nonrevenue growth, we find that the debt market rewards for firms with revenue growth are confined to the high risk sample only, while nonrevenue growth firms are not rewarded for either sample. Equity investors value revenue-led earnings growth for low and high risk samples while nonrevenue growth is rewarded for the low risk sample only. Our study adds to our understanding of how changes in firm value from sustained earnings and revenue growth are divided between key providers of capital and how default risk plays an instrumental role in this valuation process.     

Corporate Sustainability and Economic Performance: an Empirical Analysis of a Voluntary Environmental Program in the USA

Voluntary environmental programs (VEPs) are designed based on a win–win approach to environmental protection that reconciles environmental protection and economic performance. Despite the claims about VEPs, there has been an ongoing debate over their efficacy with regard to whether environmental goals are balanced by economic interests on both theoretical and empirical grounds. To resolve this controversy, this paper empirically investigates a public VEP by the US Environmental Protection Agency: Green Lights (GL). For this, the paper constructs a treatment effects regression model to account for the effects of non‐random assignment for GL participants and non‐participants. The proposed model can simultaneously estimate probit models that predict corporate participation in the GL program and linear models that test the extent to which this participation contributes to economic performance. The results indicate significant positive effects of corporate participation in the GL program on economic performance, providing support for the win–win perspective. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Recent Canadian Experience on the Profitability of Insider Trades

Recent Canadian data on large insider transactions showed that abnormal gains accrued to directors and bank directors during a stock market upturn. During a stock market downturn, beneficial owners, senior officers, and bank directors were compensated by more than the risk-adjusted rates of return from sales of stocks of their own companies. Since Baesel and Stein's early study, abnormal gains persisted in spite of the introduction of stiffer penalties on insider trading.     

MANAGERIAL OWNERSHIP CHANGE AND FIRM VALUE: EVIDENCE FROM DUAL-CLASS RECAPITALIZATIONS AND INSIDER TRADING

We explore the relation between managerial ownership and firm value by examining a sample of firms that announce dual-class recapitalizations and the insider trading activity that precedes these announcements. Insider trading activity, unlike recapitalization, requires managers to commit their personal wealth and therefore serves as an indicator of the motivation behind the recapitalization. The recapitalization, in effect, allows managers to magnify the increase in vote ownership that results from insider buying and offsets the decrease in vote ownership that results from insider selling. This study adds to our understanding of dual-class recapitalizations by linking the wealth effects and changes in ownership concentration with ***manager-shareholder agency issues that follow from recapitalization and insider trading activity. Results show a positive relation between the change in firm value and ownership for recapitalizations before the 1984 New York Stock Exchange moratorium on delisting dual-class firms when ownership was high and control was firmly established. Results show a negative relation for recapitalizations since 1984 when ownership levels were lower and voting control was not assured. These results support the notion that more recent recapitalizations entrench managers.     

YIELD STRUCTURE OF TAXABLE VS. NONTAXABLE BONDS

In his 1976 presidential address to the American Finance Association, Miller shows that the equilibrium marginal personal tax rate on riskless bond income is equal to the marginal corporate tax rate. In the presence of risk, he and, subsequently, others suggest that the theoretical equilibrium occurs when the personal tax rate is less than the corporate tax rate. This study investigates empirically these relationships by examining the yield ratio of nontaxable to taxable debt at various risk levels. Both the riskless and risk propositions are confirmed.     

Information and decision making: A search for method and understanding

Despite the emphasis during the 1980s on value for money and the need to increase business efficiency in order to face competitive world markets, exactly how managers search for information for business decisions remains a neglected topic of academic inquiry. In response to this situation, the paper has two purposes. The first is to develop an initial understanding of how information is searched and used in business contexts; the paper describes how participants searched and used accounting information in a relatively unstructured competitive tendering task. Second, it shares the experiences gained from trying to research the topic. A number of experimental design and analysis issues are raised and discussed.     

Debt, taxes, and international equilibrium

This paper employs an extended Miller model to analyze capital structure decisions of individual firms in a two-country setting. Miller equilibria are generally not consistent with an international equilibrium if the tax subsidy of debt differs across countries. The most obvious reason for differential tax subsidies is differences between national corporate tax rates. We also identify differential tax subsidies of debt if inflation rates differ across countries. For both cases we examine the adjustment process from national equilibria to an international equilibrium without and with barriers to international investment. We derive the relationship between the equilibrium yields on debt and equity in the two countries and discuss the Fisher hypothesis that real returns do not depend upon inflation in a two-country Miller world.     

Beyond Self‐Evident: Recognising the Problematic Political Context of Accrual Accounting Adoption in South Korea

This paper responds to a recent call by researchers that we need to move beyond both advocacy of and technical arguments about the value of accrual accounting to more fully recognise the institutional forces, key change agents and the local political fields. We draw on elements of institutional theory and the practice theory of Pierre Bourdieu to explore the ‘problematic’ aspects of institutional forces, key organisational change agents and the local political field associated with the adoption of accrual accounting in the South Korean public sector. We found that accrual accounting was driven by many factors including a local financial scandal, the advocacy of a civil society group and the ambitions and the ideology of key actors. The contribution of this paper is that it shows how the practices of accounting cannot be separated from their political and personal context.