Why Firms Engage in Corruption: A Top Management Perspective

This study builds upon the top management literature to predict and test antecedents to firms’ engagement in corruption. Building on a survey of 341 executives in India, we find that if executives have social ties with government officials, their firms are more likely to engage in corruption. Further, these executives are likely to rationalize engaging in corruption as a necessity for being competitive. The results collectively illustrate the role that executives’ social ties and perceptions have in shaping illegal actions of their respective firms.     

SME Competitive Strategy and Location Behavior: An Exploratory Study of High-Technology Manufacturing

Forty-four Scottish small and medium-sized high-technology manufacturing firms were surveyed regarding their technology strategies and the impact of regional- and site-specific infrastructure requirements on their location behavior. An empirically derived typology of technology content for high-technology firms was developed via cluster analysis and utilized, together with selected technology and manufacturing strategy variables, to investigate whether significant linkages existed between these variables and firms' related location decisions. Results suggest that location decisions are directly correlated to a firm's competitive strategy and that they should actually be considered a dynamic dimension of strategy rather than a static one-time choice.     

A Complete Nonparametric Event Study Approach

Event studies have been used to examine the direction, magnitude, and speed of security price reactions to various phenomenon. Concerns over the lack of normality in stock return distributions motivated the introduction of nonparametric test statistics in the event study literature. A parametric procedure (OLS), however, has been extensively employed in the estimation of parameters for the market model. This paper, in contrast, applies Theil's nonparametric regression in the estimation of abnormal returns; an approach which is distribution free and provides a complete nonparametric approach for the detection of abnormal performance. Simulation results indicate Theil's estimation procedure offers a slight improvement in power in the detection of abnormal performance over the traditionally employed methodology. The results suggest employing Theil's nonparametric estimation procedure combined with the rank statistic. This complete nonparametric combination offers similar power with fewer underlying assumptions.     

Top management team incentive heterogeneity,strategic investment behavior,and performance: A contingency theory of incentive alignment

Research summary : We develop and test a contingency theory of the influence of top management team (TMT) performance‐contingent incentives on manager–shareholder interest alignment. Our results support our theory by showing that although TMTs engage in significantly higher levels of acquisition investment when their average incentive levels increase, investors' responses to those large investments are generally negative. More importantly, however, we further find that within‐TMT incentive heterogeneity conditions that effect, such that investors evaluate TMTs' large acquisition investments more positively as the variance in those top managers' incentive values increases. Thus, within‐TMT incentive heterogeneity appears to increase manager–shareholder interest alignment, in the context of large acquisition investments. Managerial summary : We find that as the average value of TMTs' incentives increase, relative to their total pay, they invest more in acquisitions and investors' respond negatively to the announcement of those deals. However, we further show that investors respond more positively to acquisitions announced by TMTs whose members' incentive values vary (some TMT members hold higher incentives and others hold lower). Results imply that when TMT members hold differing incentives levels, they approach investments from divergent perspectives, scrutinize those investments more heavily, and make better decisions, relative to TMTs with similar incentives. They also suggest that boards seeking tighter manager–shareholder interest alignment may benefit from introducing variance into TMT members' incentive structures, as doing so appears to create divergent preferences that can improve team decision making. Copyright © 2016 John Wiley & Sons, Ltd.     

Machine Learning and Expert Judgement: Analyzing Emerging Topics in Accounting and Finance Research in the Asia–Pacific

In this paper, we focus on the question to what extent machine learning (ML) tools can be used to support systematic literature reviews. We apply a ML approach for topic detection to analyze emerging topics in the literature—our context is accounting and finance research in the Asia–Pacific region. To evaluate the robustness of the approach, we compare findings from the automated ML approach with the results from a manual analysis of the literature. The automated approach uses a keyword algorithm detection mechanism whereby the manual analysis uses common techniques for qualitative data analysis, that is, triangulation between researchers (expert judgement). From our paper, we conclude that both methods have strengths and weaknesses. The automated analysis works well for large corpora of text and provides a very standardized and non-biased way of analyzing the literature. However, the human researcher is potentially better equipped to evaluate current issues and future trends in the literature. Overall, the best results might be achieved when a variety of tools are used together.     

Corporate Social Responsibility Disclosures and Investor Judgments in Difficult Times: The Role of Ethical Culture and Assurance

Journal of Business Ethics - We conduct an experiment with 459 nonprofessional investors to examine whether they evaluate companies differently based on management’s stated purpose for...     

Brand and consumer engagement behaviors on Facebook brand pages: Let's have a (positive) conversation

This paper examines consumer-brand engagement on social media, focusing on the dynamic interplay between brands and consumers as well as among consumers themselves. In addition to liking and sharing behaviors, we look at what influences consumers to provide feedback to brands by commenting on brand posts, connect with other consumers by replying to their comments and agree with other consumers by liking their comments and replies. Drawing on a large longitudinal dataset from 2740 Facebook brand pages across 25 industries, a multilevel multivariate autoregressive zero-inflated negative binomial model is used to examine how brand post and response behaviors are related to specific consumer engagement behaviors. Results show that the amount of brand posts indirectly affects consumer comments through increased liking and sharing, but with diminishing returns. Liking is key as it increases positive and attenuates negative feedback, whereas sharing is associated with both positive and negative consumer-brand comments. Posting photos and videos encourages liking, with photos having increasing returns. Videos are the only format with a direct positive influence on consumer-brand comments, though with decreasing effect. Brand replies to consumer comments, even delayed ones, have little effect on negative conversations but prompt replies would be more beneficial as they bolster positive consumer comments. Moreover, our findings provide evidence for both a “positivity spiral” and “negativity spiral”, with the negativity spiral stronger than the positivity one. Taken together, these findings shed light on how marketers can stimulate positive conversations between brands and consumers on social media.     

Managing Critical Spare Parts within a Buyer–Supplier Dyad: Buyer Preferences for Ownership and Placement

Despite the criticality and expense of spare parts, many firms lack a coherent strategy for ensuring needed supply of spare parts. Moreover, scientific research regarding a comprehensive spare parts strategy is sparse in comparison with direct material. Our research identifies and tests three literature-based, theoretically anchored attributes that influence a buyer's preference for inventory ownership and inventory placement when managing the stock of a critical spare part. Our findings indicate that item specificity and item supply uncertainty are useful in predicting a buyer's preference for managing the inventory of a critical spare part. Furthermore, we find that buyers have (1) a strong preference for consignment-based inventory management approaches, (2) a bias against inventory speculation despite its use in practice and analytical models, and (3) a strong preference for inventory postponement when the level of supply uncertainty is low.     

Analysis of Brexit and its policy lessons for Asian integration

Galvanised by the devastation of the Second World War, European countries achieved a historically unprecedented and unparalleled level of regional economic integration in the post-war period. Intensive cooperation between the two biggest powers of continental Western Europe, France and Germany, lay at the core of Europe's seemingly relentless momentum towards integration, crystallised by the European Union (EU). The Franco-German alliance also provided strong eadership and sense of direction for the EU, which gained further traction with the admission of Central and Eastern European states after the fall of communism and the establishment of a monetary union among many of its members. However, more recently, the European integration process no longer seems unstoppable or inevitable. Most shockingly, the United Kingdom, a core EU member and the EU's third largest economy, has opted to leave the union, triggering the ‘Brexit’ process. Nor is Brexit the only sign of growing fractures within the EU. The current standoff between the EU and Italy over Italy's unwillingness to rein in its fiscal deficit is just one additional example of the loss of momentum. The central objective of the paper is to examine EU's past successes and current problems from the perspective of Asian countries, in particular ASEAN+3 countries that have achieved some measure of integration, although well below that of the EU. Both past successes and current problems hold valuable lessons for ASEAN+3 countries as they chart their own course towards regional integration. Given that the level of integration among ASEAN+3 is much lower than that of the EU, it would be unwise to draw lessons, positive or negative, without the proper context. Nevertheless, the European experience can provide valuable insights for Asia's integration process.