Algebra of Integrated Time Series: Evidence from Unit Root Analysis

It is argued if x_t ~ I(1) and y_t ~ I(1), then running a regression x_t on y_t would produce spurious results because e _t would generally be I(1). However, there may exist a ‘b’ such that e _t  = x _t - by _t is I(0), then running a regression x _t on y _t would not produce spurious results. This special case of two integrated time series is known in the literature as cointegration. In this particular case, x _t and y _t are said to be cointegrated. In our review of the development of the concept of cointegration, we identified that the underlying reason for this special case to arise is the proposition that if x _t  ~ I(d _x ), y _t  ~ I(d _y ), then z _t  = bx _t  + cy _t  ~ I(max(d _x ,d _y )). In this research, we offer evidence against this proposition.     

QUALITATIVE RESEARCH IN ORGANIZATIONAL BEHAVIOUR

Qualitative and quantitative approaches to the study of organizations are not mutually exclusive. Yet, over the last several years they have tended to become as such. Also, the interest in qualitative research of organizations seems to be renewing in the recent years. The present paper looks at some of the currently popular qualitative tools of organizational research emphasizing the complementary nature of qualitative and quantitative approaches in most settings.     

The Department of Justice as a gatekeeper in whistleblower-initiated corporate fraud enforcement: Drivers and consequences

We examine drivers and consequences of U.S. Department of Justice (DOJ) oversight of whistleblower cases of corporate fraud against the government. We find that the DOJ is more likely to intervene in and conduct longer investigations of cases that have a higher chance of victory and yield greater monetary proceeds, indicating that DOJ enforcement is influenced by its performance measures. DOJ intervention also affects the firm- and aggregate-level fraud environment. Firms subject to DOJ intervention improve their employee relations, internal controls, and board independence, and experience lower future whistleblowing risk. Whistleblowers avoid courts and agencies with low DOJ intervention rates. In contrast, we do not find that cases pursued by whistleblowers alone affect firms' or whistleblowers' behavior, suggesting that public enforcement through DOJ intervention has a greater deterrent effect on fraud than private enforcement by whistleblowers acting alone.     

Unexpected Share Repurchase Announcements

Abstract

Open-market stock repurchase announcements are generally perceived by the stock market as a signal of firm undervaluation. Our study shows that repurchase announcements that were preceded by SEOs of other firms in the same industry within the prior six months (namely SEO-RPs) are more likely the result of lacking investment opportunities than signaling undervaluation, especially in concentrated industries. Specifically, we find investors response negatively to SEO-RP announcements while react positively to regular repurchase announcements. The higher the intensity of SEO activities in the industry, the more negative market reaction to SEO-RP announcements. We argue that the market doesn’t expect a repurchase announcement when other rival firms are raising more capital via SEOs. These SEO-RPs represent a negative surprise to the market and lead to a downward adjustment in value of the repurchasing firms in the announcement window. In the three-year post-announcement periods, the SEO-RP firms underperform regular repurchasing firms in both stock return and operating performance. Moreover, while regular repurchasing firms gradually increase their capital expenditures, SEO-RP firms significantly reduce their capital expenditures. These findings support our arguments that repurchase announcements that immediately follow SEOs of rival firms (SEO-RPs) more likely indicate the announcing firms entering a slower growth rate with fewer investment opportunities than signal the undervaluation problem. The underperformance in stock return and operation combined with a significant reduction in capital expenditures in the post-announcement periods are consistent with this logic and also explain why the market reacts negatively to SEO-RP announcements.     

Challenges and Insights from South Asia for Imagining Ethical Organizations: Introduction to the Special Issue

Journal of Business Ethics - South Asia is a region that two billion world citizens call home. It connotes not only a geographical place but a discursive space that, despite its heterogeneities of...     

Are religious people more caring? Exploring the impact of religiosity on charitable organizations in a developing country

• The purpose of this study is to explore the impact of religiosity on reasons that individuals volunteer. Additionally, this study will investigate the pro‐social attitudes towards helping others and charitable organizations. This study focuses on Indonesia where religion plays an important role in daily life. The data were derived from a convenience sampling at a large private university in Surabaya, Indonesia (N = 258). The results showed that individuals with high intrinsic and extrinsic personal religiosity were more likely to have ‘other‐oriented’ reasons when performing philanthropic activities. Nonetheless, religiosity did not influence attitudes of individuals towards helping others. This study contributes to the debate regarding the effect of religious values on pro‐social attitudes in the context of a developing country. Furthermore, the study provides social implications for researchers, policy makers and practitioners operating in a developing country. This is one of the first few studies exploring the impact of religion on attitude towards charitable organization in Indonesia.

Copyright © 2014 John Wiley & Sons, Ltd.     

Can we find the right balance in cause‐related marketing? Analyzing the boundaries of balance theory in evaluating brand‐cause partnerships

Cause‐related marketing (CRM) refers to the phenomenon where brands partner with causes, such as nonprofit organizations. Consumers may see some CRM partnerships as less compatible than others, however the level of perceived compatibility differs from one consumer to another. We know a great deal about how perceptions of compatibility affect attitude and behavior toward CRM partnerships, but we know less about how to predict a consumer's perception of compatibility. Therefore, our purpose was to investigate the boundaries in which balance theory could be used to make predictions about consumers’ responses to CRM partnerships. This is the first study to consider the construct of attitude strength (vs. attitude alone) when considering balance theory. We found that a consumer's attitude toward a brand, along with their attitude toward a cause, predicts their perceptions of CRM compatibility. We also found that CRM triadic balance could be predicted when attitude strength was included in the models, and that balance theory allowed us to observe preliminary evidence of attitude and attitude strength spillover effects in CRM triads. Practitioners can use these insights to determine which organizations to partner with, as well as determine how advertising these partnerships may affect acceptance of these partnerships.     

The resurgence of currency mismatches: Emerging market economies are not out of the woods yet?

International Economics and Economic Policy - The emerging market economies (EMEs) are experiencing significant financial distress due to the rapid accumulation of foreign currency-denominated debt...