Labor Unions and Income Smoothing

We study labor unions, an important stakeholder group that has not been a focus of the earnings smoothing literature. We posit that managers strike a balance between sheltering resources from employees’ profit sharing demands and catering to employees’ aversion to downside risk by smoothing earnings. We then hypothesize that a strong labor union would intensify managerial incentives to smooth earnings. Consistent with our hypothesis, we find that union strength is positively associated with earnings smoothing activities through management of both accruals and R&D expenditures.     

Analysis of threshold cointegration with asymmetric adjustments in the Hong Kong grocery industry

High market concentration in the Hong Kong grocery industry has been prevalent over many years with the domination of a few large supermarket chains. However, no research has been conducted on the price dynamics between the supermarket and non-supermarket sectors to investigate whether the non-supermarket sector can impose competitive discipline on the dominating supermarket chains. We argue that standard cointegration tests cannot allow for transaction costs and distinguish whether the price co-movement is attributable to price competition or collusion. Our study therefore fills this research gap by adopting the threshold cointegration tests in a three-regime threshold vector error-correction model to account for the asymmetric price adjustment dynamics between supermarket and non-supermarket sectors of Hong Kong and evaluate the market power of the supermarket sectors in the presence of transaction costs. Our results favour the presence of cointegration between the supermarket and non-supermarket price indices with asymmetric adjustment dynamics. We interpret the results of statistically significant downward price adjustments in the outer-band regimes as the evidence of mutual price competition. Nevertheless, the supermarket sector has stronger market power than the non-supermarket sector, and therefore can sustain higher price level without inducing substantial competition pressures inside the neutral band.     

Contagion in the stock markets: The Asian financial crisis revisited

This paper presents empirical evidence of herding contagion in the stock markets during the 1997 Asian financial crisis, above and beyond macroeconomic fundamental driven co-movements. We analyze the cross-country time-varying correlation coefficients among the stock prices for the countries of Thailand, Malaysia, Indonesia, Korea, and the Philippines, between crisis and tranquil periods. Macromodels are constructed and implemented to capture the pure contagion effects on the markets. After controlling for the economic fundamentals for the five countries, the paper finds strong evidence of herding contagion.     

The indirect gaming contributions of cash and comped casino dining: Does providing complimentary meals pay off at the slots?

This study examined the relationship between gaming volume and restaurant revenue for paid and comped diners; i.e., diners for whom the meal was provided free, using data from two hotel casinos in different markets. The results of time series regression analysis revealed a significant and positive relationship between restaurant revenue and gaming volume in both markets. However, the gaming contribution of comped diners in terms of estimated incremental gaming revenue was much higher than that of cash diners in both markets. These findings confirm the ability of casino restaurants to attract gaming patrons and suggest that providing complimentary meals may be an effective tool to stimulate visits and generate gaming revenue.     

Merger abnormal returns and payment methods of hospitality firms

The study aims to examine the long-term abnormal returns to hospitality acquirers as well as the association between excess returns with financing methods and size. The study applies regression analysis with secondary data examining 19 hospitality acquirers from 1996 to 2007. Using hospitality sector specific indices, the study shows that hospitality acquirers receive positive abnormal returns 12 months post-merger and that there is negative association between cash payment and acquirers’ excess returns.     

Individual and group level antecedents and consequence of emotional labor of restaurant employees

The purposes of this study is two-fold: it examines antecedents and consequence of choosing an emotional labor strategy from the basis of the conservation of resource theory and it sub-divides preceding factors of emotional labor into an individual level (emotional intelligence [EI] and psychological contract) and a restaurant level (service under pressure). The research supported all the hypotheses proposed. Employees with high EI tend to select deep acting (DA), which is a driver of higher service performance. Service under pressure is a significant driver of employee surface acting (SA), which leads to poor service performance. In addition, DA enhances service performance, while SA impedes the effective delivery of services.     

Asymmetric Inventory Management and the Direction of Sales Changes*

We study manufacturing firms' asymmetric inventory investment in response to sales changes. Focusing on the costs of resource adjustment and stockout that likely differ in sales‐increasing and sales‐decreasing periods, we predict and find that inventory investment declines less during periods with sales decreases than it rises during periods with sales increases. We validate this claim by showing that managers' expectations of future demand and desire to avoid inventory stockouts are important determinants of this asymmetry. In addition, we find that asymmetric inventory investment provides useful information for predicting future sales growth, and that both managers' and analysts' sales forecasts are positively associated with the asymmetry. Lastly, we document that forecasts of future sales growth that incorporate asymmetric inventory investment are associated with lower absolute forecast errors than benchmark forecasts. Overall, we highlight the importance of inventory information in understanding managers' resource adjustment and utilization decisions that have implications for forecasting future demand. Our findings on asymmetric inventory management provide new insights to fundamental analysis based on inventory signals.     

Union substitution effects of human resource management practices in South Korean workplaces, 2005–2013

Abstract

This article explores the association between various workplace-level HRM practices and a decline in union strength using a unique longitudinal survey data-set gathered in South Korea from 2005 to 2013. It addresses the underlying theoretical mechanisms by which HRM programs substitute for the roles labor unions have traditionally played. Suggesting more nuanced theoretical implications about HRM practices and union decline, statistical analyses reveal that workplaces that have implemented HRM practices have unions with a weaker organizational base than those without such practices, but that certain HRM programs correlate with unions with a strong collective voice in management decision-making. This article identifies the new roles for unions in South Korea in the era of HRM.