Downside Risk and Investment Choice

This paper develops an optimal investment strategy for individuals concerned with avoiding the possibility of realizing returns below a predetermined target level within a prescribed period of time. Assuming a Brownian motion process, a model is developed which allows computation of the exact probability of failure. The algorithm and associated comparative statics with respect to the mean and standard deviation of returns, target return, time horizon, and risk-free rate of return are likely to have many useful practical applications.     

What Accounts for the Differences in Rent-Price Ratio and Turnover Rate? A Search-and-Matching Approach

We build an on-the-house search model and show that two frequently used metrics for the housing market, the rent-to-price ratio (or rental yield) and the turnover rate, are jointly determined in equilibrium. We, therefore, estimate a simultaneous equations system on matched sale-rental pairs, as a housing unit cannot be owner-occupied and renter-occupied at the same time. We confirm that a higher turnover rate is associated with a lower rental yield. We also identify a form of “dichotomy” in empirical determinants of rental yields and turnover rates at the estate level: the demographic structure and past returns affect an estate’s turnover rate, while popularity, human capital, mortgage burdens, and long-run rent growth determine its rental yield. The robustness of our results is established through a series of tests. Our popularity index for 130 estates in Hong Kong, estate rankings, and the brand premia of major real estate developers may carry independent interests.     

An investigation of social media data during a product recall scandal

As social media has become an important part of modern daily life, users often share product opinions online and these tend to spike when large companies undergo crises. This paper investigates customer online responses to a large company crisis by uncovering hidden insights in social media comments and presents a framework for handling social media data and crisis management. Analysis of textual Facebook data from users responding to the 2013 horsemeat scandal is presented. In this study, we used a novel comprehensive data analysis framework alongside a text-mining framework to objectively classify and understand customer perceptions during this horsemeat scandal. This framework provides an effective approach for investigating customer perception during a company crisis and measures the effectiveness of crisis management practices which the company has adopted. Our analyses show that social media can provide important insights into customer behaviour during crisis communications.     

Forecasting volatility in the Singapore stock market

Volatility forecasting is a major area in the pricing of derivative securities, such as stock and index options. In this paper, we compare three methods of forecasting volatility. These are the naive method based on historical sample variance, the exponentially weighted moving average (EWMA) method, and the generalised autoregressive conditional heteroscedasticity (GARCH) model. Out-of-sample forecasts of monthly return variances generated by these three methods are compared. The results strongly favour the EWMA method.The authors are from the Department of Economics and Statistics, National University of Singapore and the Government of Singapore Investment Corporation respectively. The views expressed in this paper are entirely personal, and do not represent those of any institution.     

The Effects of Attitudinal and Demographic Factors on Intention to Buy Pirated CDs: The Case of Chinese Consumers

This study examines the impact of attitude toward piracy on intention to buy pirated CDs using Chinese samples. Attitude toward piracy is measured by a multi-item scale that has been shown to have a consistent factor structure with four distinct components, namely, social cost of piracy, anti-big business attitude, social benefit of dissemination, and ethical belief. Our findings reveal that social benefit of dissemination and anti-big business attitude have a positive relationship with intention to buy pirated CDs while social cost of piracy and ethical belief have a negative relationship. Among these components, ethical belief tends to most strongly predict intention to buy pirated CDs. Demographic variables such as gender and age also help explain the respondents' intention to buy pirated CDs. In addition, those respondents with experience of buying pirated CDs would tend to be more likely to buy pirated CDs than those without such experience. The results are discussed with a view to helping copyright businesses to effectively suppress piracy, and directions for future research are suggested.     

Creating a scale for assessing socially sustainable tourism

As destinations absorb ever increasing number of visitors, destination managers become progressively more concerned about the longer term viability of tourism from a resident's perspective. However, few studies have examined the application of real-time social sustainability within tourism, particularly how to measure impacts on social sustainability. This study outlines the development of a valid and reliable scale – the Scale of Social Sustainability (SSS) – for tourism that provides an assessment of social sustainability in destination settings. A 10-step procedure was developed drawing upon the related literature. A telephone poll-based survey generated 1839 valid responses from Hong Kong residents. Hong Kong's growing popularity as a destination provides a rich array of host–guest conflict situations. Dimensionality was identified using exploratory and confirmatory factor analyses. Construct validity, reliability, and stability were assessed, and found good, showing that the scale could be used by other destinations worldwide. The theoretical and managerial implications of the scale are discussed, including options for annual surveys giving policy-makers alerts before situations worsen. Detailed host resident viewpoints and the large scale of the survey can help local residents be informed about tourism development and better involved in the policy formation process.     

Tourism planning requirements from a private sector perspective: the case of Hong Kong

Government’s role in tourism planning has shifted from control to consultation, and many governments have adopted economic planning that move the responsibility for investment in infrastructure from the public to the private sector. In Hong Kong, the government has not articulated a clear tourism policy to guide tourism development but continues to assume responsibility for significant tourism infrastructure investment. This paper considers the views of the private sector towards tourism planning in Hong Kong, which gravitate towards the need for a formalized planning. The tourism sector supports the interventionist policies that have been a characteristic of the government’s relationship to the tourism industry in the past, believes that the current approach to planning needs to be replaced by a formal planning process, and that there is a need to include community groups in the policy determination process. The insights gained from the case of Hong Kong may serve as a reference for other destinations.     

Modeling no-shows,cancellations, overbooking,and walk-ins in restaurant revenue management

Few studies have examined overbooking in the restaurant industry. The authors observed the business situation in a restaurant in Hong Kong over 2 years, noted how demand exceeded supply on a regular basis, and analyzed the reservation data. The reservation data were used to estimate the no-show/cancellation probability and walk-ins for lunch and dinner on different days of the week, to illustrate the model, and to arrive at the optimal booking limits. A conceptual model was developed which would take into consideration the business situation, no-shows, cancellations, and walk-ins to determine the booking limit for maximizing the expected total revenue.     

When and why does transformational leadership influence employee creativity? The roles of personal control and creative personality

This study develops and tests a model of the underlying mechanisms linking transformational leadership and employee creativity using a sample of 240 matched middle‐level manager and front‐line supervisor dyads from a large foreign joint‐venture company in China. We propose that personal control and employee creative personality serve as a unique psychological mechanism and an important boundary condition to simultaneously influence the relationship between transformational leadership and employee creativity. Results of moderated‐mediation analyses provided support for our conceptual model, showing that transformational leadership was positively related to personal control, which also had a positive impact on employee creativity. Furthermore, creative personality was found to moderate the relationship between transformational leadership and personal control, which in turn, mediated the joint effect on employee creativity. Findings of this study provide insights into the research on leadership development and work design in HRM, which can inform human resource managers to design effective strategies and systems that can increase employees' creativity.