Intra and inter-country comparative effects of symbolic motivations on luxury purchase intentions in emerging markets

Emerging markets, and especially lower-tier cities within these markets, are seen as the future growth engines for luxury brands. However, extant literature on the drivers of luxury consumption has predominantly focused on Tier-1 cities. Grounded in the theory of network effects, this study offers first such intra and inter-country comparison of the symbolic motivations (i.e. snob, bandwagon and Veblen motivations) underpinning luxury purchases between and within Tier-1 and lower-tier cities in two prominent emerging markets, China and India. The findings offer first account of similarities and differences in consumer motivations that drive luxury consumption within and between these markets. While most luxury brands have ubiquitous strategies for emerging markets, the results will assist managers in developing distinctive brand strategies catering to the intra and inter-country differences.     

Valuation of Discrete Dynamic Fund Protection Under Lévy Processes

Abstract

This paper investigates the valuation of discrete dynamic fund protection (DFP) under Levy processes. Specifically, the analytical solution of discrete DFP under Lévy processes is obtained in terms of Fourier transforms. The derivation uses Spitzer’s formula and leads to a recursion on computing the characteristic function of the maximum protection-to-fund ratio using the Fourier inversion. DFP can then be valued efficiently and accurately via the fast Fourier transform. The pricing behavior of the discrete DFP is numerically examined using several Levy processes, such as geometric Brownian motion, jump-diffusion models, and variance gamma process. Numerical experiments confirm that the proposed approach produces highly accurate discrete DFP values within 1 second.     

Changes in the value relevance of accounting information over time: Evidence from the emerging market of China

We investigate the changes in the value relevance of accounting information among Chinese firms over the past two decades, during which accounting reforms are launched to provide decision makers with increased disclosure and higher quality financial information. We also investigate the factors that differentiate firms showing significant value relevance improvement from firms showing little improvement. We find increases in the value relevance of some financial variables and decreases in others, which suggests that accounting numbers help to explain the pricing process of stock shares although at different levels. In addition, we find that value relevance improvements are more pronounced for smaller firms, firms with lower growth rates, and those with greater asset tangibility. We also document that value relevance improvements are generally lower in an exuberant stock market. These results have implications for a variety of information users and policy makers in emerging countries which are reforming their accounting systems.     

Managing reverse logistics to enhance sustainability of industrial marketing

In this paper, a sustainable industrial marketing framework of latest requirement of green and sustainable operation is proposed. When literatures in strategy, marketing and operation have provided insight about the efficiency of reverse logistics and business value for the customer, the interrelationship is still under explored. This raises the question whether manufacturers could determine ecological friendly strategies to address their customer's environmental conscious needs and design the suitable solution to strike the balance between ecology and economics. Based on the case study of a medical product manufacturer, this study addresses this question by investigating how manufacturers identify the problem of reverse logistics; design and develop of sustainable product and service by enhancing the efficiency of operations, and market competencies that add value to their customers' business processes. Within the strategy for designing for effective reverse logistics, these findings contribute to understand the use of information system and technology for reverse logistics to enhance the customer's business process and provide value-added process for customer retention.     

Auditors’ decision-making under going-concern uncertainties in low litigation-risk environments: Evidence from Hong Kong

This study examines the audit opinions issued by auditors in a low litigation-risk environment at a time of high economic uncertainty – that of Hong Kong in the period immediately after the Asian financial crisis of 1997. Empirical research using United States data has shown that, contrary to professional guidance which restricts the issue of “disclaimer of opinion” only to situations where existing uncertainties prevent the auditor from forming an opinion, auditors tend to use the “disclaimer” report (in the going concern context) to signal more extreme client firm’s distress. In the high litigation-risk environment of the US, researchers have attributed this tendency to the idea that “disclaimer of opinion” reports are used by auditors to provide some protection against potential legal liability. The results of this study provide evidence that, even in the low litigation-risk environment of Hong Kong, auditors still use “disclaimer” reports to signal more extreme client firm financial distress. Thus, the maintenance of a high litigation-risk environment does not appear to be a necessary pre-requisite for high quality audits.     

Courts,scheduled damages,and medical malpractice insurance

We study how the functioning of the judicial system affects the availability and affordability of medical liability insurance, as proxied by the number of insurers and the premiums paid. We use two unique datasets collected in Italy from 2000 to 2010. Using the first dataset—insurance contracts for hospitals—we estimate the average treatment effect of schedules on insurers and premiums paid, conditional on judicial efficiency and proxied by different measures. Our identification rests on the partial overlap between healthcare districts and judicial districts, meaning that the caseload of a court and malpractice events at the healthcare provider level are not perfectly correlated. On average, the adoption of schedules does not produce any significant effect on insurers or on premiums paid. However, adopting schedules has a robust and significant effect on the number of insurers, but only in inefficient courts. We further investigate these findings using a second dataset comprising 17,578 malpractice insurance claims. We find evidence of a composition effect among claims that is triggered by higher levels of judicial inefficiency: As a court’s inefficiency increases, the likelihood for a case to not be decided on the merits decreases and the levels of reserve and recovery per claim decrease.     

Is a Picture Always Worth a Thousand Words? The Impact of Presentation Formats in Consumers' Early Evaluations of Really New Products (RNPs)

Really new products (RNPs) enable consumers to do things they have never been able to do before. However, research has shown that consumers have difficulties understanding the benefits of such novel products, and therefore, adoption intentions remain low. Mental simulations and analogies have been identified as effective framing strategies to convey the benefits of RNPs. However, existing research has focused solely on the use of mental simulations and analogies conveyed using words, whereas these can also be conveyed using pictures. Although the general consumer research literature points to a superiority effect of pictures, because the underlying mechanisms that individuals use to understand RNPs differ entirely from those used for traditional products, there is a need to study the impact of pictures for RNPs. Moreover, prior work has not examined differences in RNP type. The present research argues that RNPs can be utilitarian, hedonic, or hybrid and that the optimal presentation format (words versus pictures) is contingent upon the type of RNP considered. Consequently, failure to acknowledge this distinction could lead to negative consequences. The present study aims to identify the impact of alternative presentation formats (i.e., words versus pictures) presented using different framing strategies (i.e., analogies versus mental simulations) on individual responses (i.e., product comprehension and attitude to the product) to three types of RNPs (i.e., utilitarian versus hedonic versus hybrid). Hypotheses are tested by means of an experimental study. The results of the study show that the effectiveness of alternative combinations of framing strategies and presentation formats in enhancing comprehension and attitude for RNPs depends on product type (utilitarian versus hedonic versus hybrid). The empirical findings presented not only extend prior work on consumer responses to mental simulations and analogies for RNPs, but also establish connections between this literature and an underdeveloped stream of research on hybrid products, as well as a broader stream of research on utilitarian versus hedonic product benefits. The findings suggest that practitioners may not have been using optimal marketing communications strategies to convey the benefits of RNPs. Strategies that may help enhance consumer responses to RNPs by taking into consideration product type (utilitarian versus hedonic versus hybrid) are put forward.     

Transfer of knowledge in technical vocational education: a narrative study in Swedish upper secondary school

In vocational education, teaching and learning are expected to take place in the different learning arenas; schools and workplaces. In such a dual school system, the question of transfer is vital, i.e. how to use knowledge learned in previous situations in new situations. This article is an empirical contribution to research concerning transfer, by means of results from semi-structured group interviews with teachers and supervisors who educate students in the Energy program and the Industry program in Swedish upper secondary school. The interviews were analysed by analyses of narratives. The results show four themes of transfer in the interviews: (1) transfer of basic knowledge, (2) transfer of principles and skills, (3) transfer of written materials and real life and (4) transfer of experiences. The results also show three factors that are crucial in order to create possibilities for transfer: (1) communication, (2) financial resources and (3) reflection. These factors demand close cooperation between the teachers and supervisors during the students’ vocational education.     

Freedom of Association, Freedom of Contract, and the Right-to-Work Debate

The debate over union security arrangements is often presented as involving irreconcilable goals and values. Supporters of union security typically stress their importance to the union’s organizational strength and workers’ welfare. Right-to-work supporters, who favor banning such arrangements, typically emphasize employee freedom and choice. Our approach involves a unique comparison of both perspectives, which shows that neither perspective is completely compatible with safeguarding freedom. We therefore advocate reconciliation based on compulsory worker representation, which preserves the best freedom-enhancing properties of each perspective.     

An Empirical Study of Volatility in Seven Southeast Asian Stock Markets Using ARV Models

This paper investigates the volatility persistence, volatility variability from day to day and transmission of volatility in seven Southeast Asian stock markets from 1980 to 1991 using the ARV approach. We found strong evidence that shocks to volatility are persistent in Taiwan. Moreover, the Stock Exchange of Thailand Daily Index has the strongest interday volatility fluctuation. Instantaneous causality of volatility among six of the seven markets (except Seoul) was discovered. Besides, there is significant volatility spillover effect from Hong Kong to Taiwan, Malaysia to Singapore and Singapore to Malaysia in the period 1980 to 1991.