Non-linearities in international prices

We consider multiple sources of non-linearity in good-level law-of-one-price deviations across the globe using a structural model that accounts for previously omitted variables and allows estimation of good-level convergence rates both within and outside the bands of no trade. Accounting for the role of theoretically implied variables and their non-linear interactions in the convergence process of law-of-one-price deviations, we find that good-level convergence rates are systematically faster compared with convergence estimates based on reduced-form models. Contrary to conventional wisdom, good-level price differentials exhibit mean-reverting behaviour even within the bands of no trade. Moreover, mean-reversion rates are strongly related to economic characteristics such as tradability and a good's non-traded input content.     

Crisis management—dealing with asymmetric information problems

A key component of crisis management involves the management of asymmetric information problems. Drawing on the experience of the recent severe acute respiratory syndrome (SARS) epidemic, this article examines the nature of the asymmetric information problems that typically prevail during a crisis, the costs associated with it, and the various mechanisms to address the problems. We find that the asymmetric information problems in the event of a crisis can be severe and potentially costly if the problems are not adequately resolved. © 2009 Wiley Periodicals, Inc.     

Customer loyalty to newly opened cafés and restaurants in Malaysia

An extended review of the literature indicates that there is an insufficient number of past studies which test the SERVQUAL model (tangibles, reliability, responsiveness, assurance, empathy) in the food and beverage industry. Therefore, this research attempts to provide new insight into the impact of service quality on customer loyalty in the food and beverage industry. The purpose of the research is to determine the impact of service quality and price fairness on customer loyalty in the food and beverage industry in Penang, Malaysia. This article surveyed the customers of newly opened cafés and restaurants in Penang, Malaysia, by using a structured questionnaire. The research revealed that service quality (tangibles, reliability, assurance, and empathy) and price fairness have a positive relationship with customer loyalty. However, responsiveness had no relationship with customer loyalty. This article includes an additional independent variable, price fairness, to investigate customer loyalty.     

Accounting variables and stock returns： Evidence from Istanbul stock exchange

The fundamental relationship between accounting variables and stock returns is a recurring theme in financial research. One of the major purposes of accounting is to help investors provide reliable, comparable and accurate information. If accounting data are informative about fundamental values and changes in values, they should be correlated with stock price changes. This study provides theory and evidence showing how accounting variables explain stock returns and examines the relationship between the stock returns and accounting variables of listed non financial companies in ISE-100 Indice for 2006-2008 period by using panel data methodology. Empirical analysis consists of 192 observations of 64 companies in years 2006-2008 to examine the effects of inventory, accounts receivable, gross margin, operating expense, return on assets, cash flow, leverage, liquidity, price/earnings, return on equity on stock returns. The results of the study confirm that the predicted roles of fundamental factors and stock returns are significantly related to gross margin, cash flow, leverage and equity variables. The model explains about 13.35 % of the variation of annual stock returns with the leverage variable with most of the significant power.     

Examining Cultural Worldview and Experience by International Tourists: A Case of Traditional House Stay

The purpose of the study was to investigate relationships between cultural worldview (CW), cultural experiential dimensions, and satisfaction among international travelers who stayed at Hanok, a traditional house in South Korea. Findings of the study show that respondents' CW and experience were significantly different with respect to the respondents' origin of residence. Americans and Europeans shared a similar CW, whereas Japanese and Chinese expressed a similar view on CW. The strong and significant prediction on satisfaction by all experience dimensions warranted the importance of experiential qualities of tourism products and services in the cultural tourism context.     

The Wealth Effects of Property Acquisitions: Evidence from Japanese and Singaporean REITs

This article examines the wealth effects of 228 property acquisition announcements made by REITs publicly traded in Singapore and Japan, which are the two largest REIT markets in Asia. Adopting an aggressive growth‐by‐acquisition strategy, the newly listed REITs acquired a number of properties within a short time period. Despite their regular activities, we observe the acquisition announcements are associated with a significantly positive abnormal increase in shareholder wealth averaging 0.38% in a 5‐day window around the event date. Controlling for the method of payment, buyer's acquisition strategy and seller's relationship with the acquiring REIT, the regression results show that the likely sources of economic gains associated with acquisitions are economies of scale and better management by acquiring firms. We also find strong evidence that the market reacts less favorably to acquisitions involving a portfolio of properties as opposed to a single property and weaker evidence that it reacts less favorably to mixed‐use acquisitions. These findings suggest the presence of premiums on transparency and corporate focus.     

LIABILITY AND ANTIFRAUD INVESTMENT IN FINTECH RETAIL PAYMENT SERVICES

Motivated by recently introduced retail payment schemes using information technology, often called “FinTech,” we examine the effect of fraud liability regime on antifraud investment in a FinTech payment scheme, where the front‐end and back‐end services are vertically separated. In an environment where a FinTech payment service provider (FPP) covers only the front‐end services, delegating the back‐end services to an integrated payment service provider (IPP) such as banks and credit card companies, we show that under the IPP liability regime, the IPP invests more in general, while the respective investment depends on the range of the access fee under the FPP liability regime. Specifically, given a sufficiently great loss from accident, if the access fee is in a certain range, the FPP liability regime is superior in terms of antifraud investment. When the FPP makes its indirect revenue from its user base in addition to the revenue from user fees, we can observe greater antifraud investment under both liability regimes, but the overall decrease in fraud probability is higher under the IPP liability regime. Our results suggest that it might be desirable to induce FPP liability regime, which might necessitate regulating the access fee to achieve such an outcome. (JEL G23, G28, D43, L22)     

The Role of Regulatory Focus and Information in Investment Choice: Some Evidence Using Visual Cues to Frame Regulatory Focus

This study examines the role of regulatory focus and additional information on risk preferences in investment choice using an experimental approach. The findings reveal that situational regulatory focus plays an important role in influencing investment choice. In particular, a congruent promotion-focused image and related message increases risk-taking behavior in terms of choice for stocks rather than fixed deposits, whereas the reverse is true for a congruent prevention-focused image and related message. However, this relationship depends on the amount of information available during the decision-making process, and regulatory focus has a stronger impact on investment choice under the condition without additional financial information.