Bank Relationships and the Value Relevance of the Income Statement: Evidence from Income-Statement Conservatism

Abstract:  This study examines the effects of a firm's debt financing decision on the informativeness of the income statement. This study specifically examines the association between a firm's bank dependence and the value relevance of the income statement by investigating the income-statement conservatism of firms with bank loans. Focusing on relatively small businesses, this study finds that income-statement conservatism, measured as timely loss recognition, is increasing in a firm's bank dependence. This study also finds that the value relevance of the income statement is increasing in a firm's bank dependence. The findings of this paper suggest that the usefulness of the income statement varies with a firm's bank dependence, indicating that the value relevance of the income statement is a function of a firm's debt financing decision. The findings further suggest that bank relationships affect the value relevance of the income statement through their influence on income-statement conservatism.     

Conventions and Economic Change: A Contribution toward a Theory of Political Economy

This essay presents a perspective on the growth of knowledge as the source of economic growth. After a critical examination of the reasons why the crucial issue has been neglected in the dominant tradition in economics, a concept of paradigm-seeking as the essence of decision making under uncertainty and learning is proposed. Behavioral implications of paradigm-seeking include the generation of conventions by which people stabilize their expectations and build a network of coordination and cooperation. The stability of conventions, however, generates a dynamic process of change, by creating unexploited opportunities. Entrepreneurial successes and their emulation amount to the process of social learning and growth of knowledge. It is further suggested that implications of the proposed perspective are consistent with other observed phenomena.     

Contextualizing customer organizational citizenship behaviors: The changing nature of value cocreation and customer satisfaction across service settings

This study identified economic, emotional, and relational value as outcomes of customer organizational citizenship behaviors (COCBs; Study 1: in‐depth interviews). Study 2 (filed survey) found that COCBs have the strongest impact on emotional value compared with economic and relational value. Economic, emotional, and relational value also lead to customer satisfaction. Specifically, the findings supported that emotional value asymmetrically influences customer satisfaction, whereas economic and relational value symmetrically and positively influence customer satisfaction. Study 3 (filed survey) demonstrated that emotional value through COCBs has a greater and symmetrical influence on satisfaction in hedonic rather than utilitarian service contexts. However, economic value through COCBs is negatively associated with satisfaction in hedonic contexts, and there is no significant difference in the impact of relational value on satisfaction between service contexts. This study furnishes empirical evidence for the associations among COCBs, value perceptions, and customer satisfaction, along with their dynamic relationship patterns across service contexts.     

Relative Importance of Major Job Performance Dimensions in Determining Supervisors' Overall Job Performance Ratings

This study explores the factor structure of job performance and each performance dimension's relative importance in determining supervisors' overall job performance ratings. We found that the optimal factor structure of job performance includes five dimensions: task performance, organizational citizenship behaviour directed toward the organization and individuals (OCB‐O and OCB‐I, respectively), and counterproductive work behaviour directed toward the organization and individuals (CWB‐O and CWB‐I, respectively). The percent‐based relative weight (%RW) is the highest for task performance in determining job performance, followed by OCB and CWB. Interestingly, the %RW of non‐task performance dimensions directed toward the organization (OCB‐O and CWB‐O) is similar to the %RW of task performance but greater than the %RW of non‐task performance dimensions directed toward individuals (OCB‐I and CWB‐I). Copyright © 2018 ASAC. Published by John Wiley & Sons, Ltd.     

The acculturative stress of host country managers working at MNC subsidiaries: Determinants and effects

This paper introduces the concept of acculturative stress to indicate a distinct psychological difficulty faced by host country managers working at multinational corporation (MNC) subsidiaries. Drawing on the social identity and self-verification theories, we suggest that host country managers are exposed to acculturative stress due to the challenges they face in verifying their national cultural identity. We identify the perceived cultural incongruence and the lower relative standing of host country managers as proximal determinants of acculturative stress and examine its negative impact on their work engagement. The analysis results of a sample of 643 Korean managers working at 60 MNC subsidiaries in Korea support our hypotheses on the determinants and effects of acculturative stress.     

Strategic Second Sourcing by Multinationals*

Multinationals often serve foreign markets by exporting as well as by investing directly in foreign production facilities. We argue that if the multinational competes in an oligopolistic market characterized by strategic complements then there are strategic reasons to use two production facilities—committing to a second source allows the firm to keep average cost low while increasing its marginal cost. The increase in marginal cost softens product market competition resulting in higher profits. We argue that this theory also has implications for the “make or buy” literature in production management and the literature on second sourcing in industrial organization.     

Culture and the Star-Power Strategy: Comparing American and Korean Response to Celebrity-Endorsed Advertising

ABSTRACT

Given the wide interest in celebrity endorsements in advertising, it is surprising that there are no quantitative cross-cultural studies on their effectiveness across target audiences. Previous content-analytic research makes assumptions about effectiveness, but has not examined these assumptions. Our article fills this gap by comparing American versus Korean student samples’ response to celebrity-endorsed ads. We find these cultures diverge in purchase intentions after viewing celebrity-endorsed ads. We also find the emphasis of intuitive moral domains drives purchase intentions. Our discussion focuses on marketing implications as well as outlining future directions for this surprisingly underexplored research area.     

Visitor Books and Guest-generated Discourses of Hospitality: The Case of the Hanok

This study analyzes visitor book entries as cultural repositories of guest-generated hospitality discourses to understand how guests articulate/narrativize hospitality. Inquiry into visitor book entries offers insight into ways in which tourists render people and place intelligible. Utilizing textual analysis, this study examines discursive entries contained within visitor books displayed at a traditional South Korean hanok guesthouse/commercial home. The findings indicate that tourists' entries could be classified into three emergent categories: Structural Esthetics, Emotions/Affective State, and Inter-personal Engagement. Guests' entries indicated that there was an appreciation for the display of traditional architecture, which facilitated sentiments of relaxation, contentment, tranquility, and homeliness. The hanok is thus regarded as a therapeutic landscape in which positive emotions are nurtured. Guests' entries also showcased evidence of genuine and personalized exchanges with hosts. This study points to the need for further theorizations on the role of indigenous knowledge in informing the performance and reception of hospitality.     

Do Cold Images Cause Cold-Heartedness? The Impact of Visual Stimuli on the Effectiveness of Negative Emotional Charity Appeals

Previous research shows that negative emotional charity appeals tend to be more effective than other emotional charity appeals because they evoke sympathy. However, feelings of loneliness reduce individuals' ability to sympathize with others. Based on grounded cognition research, we propose that exposure to images of cold objects will lead to feelings of physical coldness, which in turn will increase perceptions of loneliness, such that negative emotional charity appeals that are viewed following exposure to cold (versus neutral or warm) images will be less effective at eliciting donations. Findings from four studies provide support for this hypothesis and delineate the link between the presence of certain commonplace visual images in the media and their influence on the effectiveness of embedded negative charity appeals, and identify a new context effect that attenuates the effectiveness of charity appeals.     

Do fluctuations in crude oil prices have symmetric or asymmetric effects on the real exchange rate? Empirical evidence from Indonesia

Current research on the oil price impacts on exchange rates typically relies on the assumption that fluctuations in crude oil prices have symmetric impacts on a country's real exchange rate. Thus, the contribution of the paper is to use the non‐linear autoregressive distributed lag (ARDL) method of Shin, Yu, and Greenwood‐Nimmo (2014) and examine whether crude oil prices are asymmetrically passed on to the real exchange rate in the case of Indonesia. We uncover that oil price changes indeed asymmetrically affect the Indonesian rupiah in both the long and short run; i.e., the movement in the Indonesian rupiah appears to be more responsive to rising oil prices than to declining oil prices.