Fan-centric social media: The Xiaomi phenomenon in China

In this highly competitive century, social media offers both opportunities and challenges. The concept of social media is top of mind for many entrepreneurs today. Fans are assuming an increasingly active role in co-creating marketing content with companies and their respective brands. Based on the Xiaomi success story in China, we provide a framework for building the power of the fan base and propose a new fan-centric social media business model. We examine the best practice case study of an emerging company's successful efforts to leverage social media in order to reach an important audience of young consumers. Thereafter, we conclude with several lessons related to the integration of social media into a new firm's operation strategy. We strongly recommend that businesses, and especially startups, make good use of powerful social media to develop a business model with fan demand as the core. This is what we call the ‘fan-centric’ social media business model.     

Short-time work—Some long-run implications

This paper outlines a simple model to examine some long-run implications of short-time work schemes (STWs) on labor market performance and welfare. It is not clear that STWs reduce unemployment as the induced wage push discourages job creation.     

Second thoughts on free riding

We use the strategy method to classify subjects into cooperator types in a large-scale online Public Goods Game and find that free riders spend more time on making their decisions than conditional cooperators and other cooperator types. This result is robust to reversing the framing of the game and is not driven by cognitive ability, confusion, or natural swiftness in responding. Our results suggest that conditional cooperation serves as a norm and that free riders need time to resolve a moral dilemma.     

Estimating SUR system with random coefficients: the unbalanced panel data case

A system of regression equations for analyzing panel data with random heterogeneity in intercepts and coefficients, and unbalanced panel data is considered. A maximum likelihood (ML) procedure for joint estimation of all parameters is described. Since its implementation for numerical computation is complicated, simplified procedures are presented. The simplifications essentially concern the estimation of the covariance matrices of the random coefficients. The application and ‘anatomy’ of the proposed algorithm for modified ML estimation are illustrated by using panel data for output, inputs and costs for 111 manufacturing firms observed up to 22 years.     

Loosely Coupled Results Control in Dutch Municipalities

This paper analyses the implementation of the ‘dual system’ in Dutch municipalities which was part of a package of New Public Management‐reforms. This system was stimulated by Dutch central government and called for more accountability for performance of municipal managers and the board of mayor and aldermen, as well as for the use of more output and outcome information. Interviews of participants on four different hierarchical levels in 12 municipalities show that the practices of output management at different hierarchical levels are only loosely coupled to each other (‘vertical loose coupling’). We also found some degree of ‘horizontal loose coupling’ at each hierarchical level between result orientation, the development of output indicators and the use of output information for performance evaluation. The paper analyses the reasons why municipalities encounter difficulties in designing a comprehensive and coherent performance management system.     

The effect of more rules‐based guidance on expense disclosure under International Financial Reporting Standards

International Financial Reporting Standards (IFRS) are often described as principles‐based; however, we show that IFRS and Australian pre‐IFRS expense‐related standards are more rules‐based than pre‐IFRS expense disclosure in New Zealand. Thus, we examine expense disclosure in New Zealand and Australia around IFRS adoption to provide evidence on the effect of more or less rules‐based standards on voluntary disclosure. First, we add to the rules versus principles‐based standards debate by finding higher voluntary expense disclosure under more rules‐based standards (e.g. IFRS). This contrasts with expectations, as we would expect fewer voluntary disclosures under more rules‐based standards as there would be fewer possible voluntary disclosures. Second, we document that New Zealand firms have significantly less voluntary expense disclosure than size‐ and industry‐matched Australian firms in both the pre‐ and post‐IFRS period. However, all measures of expense disclosure significantly improved post‐IFRS for New Zealand, whilst little change occurred for Australian firms. Thus, there is greater financial statement comparability across these countries post‐IFRS, but not full harmonization. Third, we show that the relationship between most firm characteristics and expense disclosure is weaker post‐IFRS. In addition, cross‐listed firms and loss‐making firms have a higher level of expense disclosure, as contrasted with firms in the investment and property industry which have a lower percentage of unspecified expenses but also report fewer voluntary expenses.     

Cross-ownership as a structural explanation for over- and underestimation of default probability

Based on the work of Suzuki, we consider a generalization of Merton’s asset valuation approach in which two firms are linked by cross-ownership of equity and liabilities. Suzuki’s results then provide no arbitrage prices of firm values, which are derivatives of exogenous asset values. In contrast to the Merton model, the assumption of lognormally distributed assets does not result in lognormally distributed firm values, which also affects the corresponding probabilities of default. In a simulation study we see that, depending on the type of cross-ownership, the lognormal model can lead to both over- and underestimation of the actual probability of default of a firm under cross-ownership. In the limit, i.e. if the levels of cross-ownership tend to their maximum possible value, these findings can be shown theoretically as well. Furthermore, we consider the default probability of a firm in general, i.e. without a distributional assumption, and show that the lognormal model is often able to yield only a limited range of probabilities of default, while the actual probabilities may take any value between 0 and 1.     

Comparison of Mean-Risk Efficient Portfolios in Asia-Pacific Capital Markets

In order to analyze the performance of mean-risk efficient portfolios, several methods of portfolio comparison have been developed. In this paper we analyze the second-order stochastic dominance efficiency of portfolios on the mean-risk efficient frontier assuming that the risk is represented by standard deviations and concordance matrices set up on the basis of Pearson's linear correlation, Spearman's rho, or Kendall's tau. Empirical analysis of the market returns of selected Asia-Pacific stock markets is carried out considering both the U.S. dollar and euro as reference currencies, and different periods: before and during the subprime crisis. Measures and portfolios on the mean-risk efficiency frontier that should be of interest to at least one risk-averse investor are empirically documented.     

Migration and Americanization: The special case of Belgian economics*

One of the distinguishing features of Belgian economics is that, from the early 1920s, so many of Belgium's best economists pursued postgraduate studies at top American universities, a case of ‘temporary’ migration. This was made possible by the fellowships granted by the Commission for Relief in Belgium, a legacy of the First World War. After a stay in the US of a few years, most returned to Belgium. However, they maintained strong links with the US. Also, they tried to recreate in Belgium the most valuable elements of their American experience. It would lead to a strong and early Americanization of Belgian economics. Moreover, they were at the forefront of several initiatives to organize economics on a European scale, such as the European Economic Review and the European Economic Association.