An Empirical Analysis of Franchisee Value-in-Use, Investment Risk and Relational Satisfaction

An exchange perspective of franchising recognizes the important role that both the franchisor and franchisee assume in developing and maintaining sustainable relationships. However, should franchisees not perceive value in the quality of provided products or services, some incentive misalignment between agent and principal is likely (e.g. free riding, non-compliance with system standards), potentially resulting in greater perceptions of financial risk, diminished levels of franchisee satisfaction, reduced unit performance and conflict ( [Harmon and Griffiths, 2008] and [Kaufmann and Dant, 1998] ). A greater understanding of franchisee perceptions of value is very important if ongoing satisfaction in the franchising relationship is the goal. This paper, therefore, makes a significant contribution to such an understanding by empirically testing the dimensions of value that influence franchisee perceptions of risk and relationship satisfaction. Moreover, we make important comparisons across gender, the results of which provide rich information. In theoretical terms, we advance the literature in the context of value and franchising and, in practical terms, the results, by managing for performance (financial risk and relationship quality), assist franchisors in developing, delivering and managing what is of value to their franchisees. Furthermore, the findings of this study provide a solid platform for future research in this area.     

Consumer Sovereignty in Healthcare: Fact or Fiction?

We pose the question: Is consumer sovereignty in the healthcare market fact or fiction? Consumer sovereignty in healthcare implies that society benefits at large when healthcare organizations compete to develop high quality healthcare products while reducing the cost of doing business (reflected in low prices), and when consumers choose wisely among healthcare products by purchasing those high quality products at low prices. We develop a theoretical model that encourages systematic empirical research to investigate whether consumer sovereignty in healthcare is fact or fiction. In doing so, we develop a series of theoretical propositions that may demonstrate that consumer sovereignty is more fiction than fact. Specifically, healthcare consumers lack the ability, motivation, and opportunity to choose healthcare products that are high in quality and low in price. Similarly, healthcare firms lack the ability, motivation, and opportunity to compete in ways to develop and market higher quality products at lower prices.     

Interaction effects of globalization and institutional forces on international HRM practice: Illuminating the convergence‐divergence debate

In the face of globalization, scholars continue to debate about whether a convergence in human resources practices will prevail, or a trend of divergence perspective will persist. Building on institution theory, this article helps to explicate this debate by examining how globalization may interact with different dimensions of local institutional forces to lead to convergence, divergence, or crossvergence in international HRM practices for enhanced performance. We also present useful propositions for guiding future empirical research and theory development on the interaction between globalization and different forms of local institutional forces, which in turn influence the formation of successful international HRM practices. © 2011 Wiley Periodicals, Inc.     

Experimental evidence on coverage choices and contract prices in the market for corporate insurance

In this paper, we present experimental evidence on the effect adverse selection has on coverage choices and pricing in corporate insurance markets. Two sets of experimental data, each generated by experiments utilizing a specific parameterization of a corporate insurance decision, are presented to gauge these effects. In the first, subject behavior conforms to a unique equilibrium in which high risk firms choose higher coverage and contracts are priced accordingly. Insurers act competitively and convergence to equilibrium behavior is marked. In the second set, there is little evidence that subject behavior is consistent with either of the two equilibrium outcomes supported by the experimental setting—pooling by fully insuring losses and pooling by self insuring. JEL Classification C90, G14, G22 Electronic Supplementary Material Supplementary material is available in the online version of this article at http://dx.doi.org/10.1007/s10683-006-9152-y.     

A stochastic differential game for optimal investment of an insurer with regime switching

We introduce a model to discuss an optimal investment problem of an insurance company using a game theoretic approach. The model is general enough to include economic risk, financial risk, insurance risk, and model risk. The insurance company invests its surplus in a bond and a stock index. The interest rate of the bond is stochastic and depends on the state of an economy described by a continuous-time, finite-state, Markov chain. The stock index dynamics are governed by a Markov, regime-switching, geometric Brownian motion modulated by the chain. The company receives premiums and pays aggregate claims. Here the aggregate insurance claims process is modeled by either a Markov, regime-switching, random measure or a Markov, regime-switching, diffusion process modulated by the chain. We adopt a robust approach to model risk, or uncertainty, and generate a family of probability measures using a general approach for a measure change to incorporate model risk. In particular, we adopt a Girsanov transform for the regime-switching Markov chain to incorporate model risk in modeling economic risk by the Markov chain. The goal of the insurance company is to select an optimal investment strategy so as to maximize either the expected exponential utility of terminal wealth or the survival probability of the company in the ‘worst-case’ scenario. We formulate the optimal investment problems as two-player, zero-sum, stochastic differential games between the insurance company and the market. Verification theorems for the HJB solutions to the optimal investment problems are provided and explicit solutions for optimal strategies are obtained in some particular cases.     

Classroom peer effects and academic achievement: Evidence from a Chinese middle school

This paper estimates peer effects on student achievement using a panel data set from a middle school in China. Unique features of the organization of Chinese middle schools (Grades 7 to 9) and panel data allow us to overcome difficulties that have hindered the separation of peer effects from omitted individual factors due to self-selection and from common teacher effects and to identify peer effects at the classroom level. We estimate peer effects for Math, English, and Chinese test scores separately. In a linear-in-means model controlling for both individual and teacher-by-test fixed effects, peers are found to have a positive and significant effect on math test scores, a positive but insignificant effect on Chinese test scores, but no effect on English test scores. Importantly, in Math and Chinese students at the middle of the ability distribution tend to benefit from better peers, whereas students at the ends of the ability distribution do not, suggesting that policy makers who want to exploit positive peer effects face difficult tradeoffs in classroom and school assignment.     

Desired attributes of public accounting firms in the job selection process: an empirical examination of accounting graduates' perceptions

The purpose of this study is to identify attributes of public accounting firms that accounting graduates find most desirable in their job selection decisions, and the impacts of individual differences on these perceptions. Factor analysis performed on the responses of 167 final-year accounting students in Hong Kong to a 30-item questionnaire identified seven factors. The results indicate that accounting graduates considered help in finishing their professional accounting examinations and good staff relationships as the most important criteria in their choice of employers. In addition, female accounting graduates were more concerned about the possibility of being required to travel or be transferred, but were less concerned about the reputation and profile (such as the client base and the size) of the firms than their male counterparts. Accounting graduates with a higher grade point average (GPA) were less concerned about the working environment, but more concerned about a firms' reputation and profile than those with a lower GPA. The implications of these results are discussed.