The antecedents and consequences of job stress of flight attendants – Evidence from Taiwan

This study investigates the relationships between the antecedents of job stress, such as work-to-family and family-to-work conflicts, and consequences, such as job satisfaction, organizational commitment and turnover intentions, of flight attendants who are typically characterized as undertaking ‘emotional labor’. Using a sample of flight attendants collected from Taiwanese airline companies, the study reveals evidence of the following linkages; family-work conflict → job stress → job satisfaction → organizational commitment → turnover intention.     

To improve investors' valuation of accounting earnings in emerging markets: evidence from Taiwan

The valuation of accounting earnings is related to the level of earnings management used by the firm. In emerging markets where earnings management is typically pervasive, investors lose confidence in accounting earnings and thus tend to under‐value earnings. Using data from Taiwan, we show that better governance characteristics are associated with improved investor valuation of accounting earnings. Under weaker governance structures, such as excessive control on the part of majority shareholders, small board size, and chief executive officer/chairman of the board duality, the market tends to under‐value accounting earnings. Reducing controlling shareholders' ownership, increasing board size, and reinforcing the monitoring function of the board improves investors' ability to value accounting earnings. Copyright © 2010 ASAC. Published by John Wiley & Sons, Ltd.     

Credit valuation adjustment of cap and floor with counterparty risk: a structural pricing model for vulnerable European options

This study develops a structural pricing model based on the Black 76 formula for the evaluation of the credit value adjustment (CVA) of OTC traded caps and floors, which is mandated as an integral part of Basel III. The proposed structural pricing model improves the existing structural pricing models for vulnerable European options by allowing payments to be made after the exercise of the options. Five crucial determinants of caps’ and floors’ CVAs are identified by the proposed structural model, they are: the cap’s/floor’s tenor, the writer’s total asset value, the correlation between the cap’s/floor’s underlying and the writer’s total asset value, the volatility of the writer’s total asset value, and the writer’s aggregate liabilities. Numerical examples are given to demonstrate the effects of the crucial parameters. Compared to the market practice of CVA calculation based on reduced-form models, the five crucial parameters are the unique features of the proposed structural model.     

Good deeds earn chits? Evidence from philanthropic family controlled firms

This study examines whether charitable family controlled firms have lower default risk. Using Taiwan data that provide clear information about firms’ benevolent intention and avoid endogeneity issue of risk and charitable activities, we show that charitable family controlled firms have lower default risk, which is proxied by value-at-risk and expected shortfall measures. Our finding shows that charitable activities bring benefits of lower risk to shareholders. This study also provides various channels that can lower default risk for the charitable firms. That is, these firms appear to have higher credit ratings, engage less in earnings management, and have higher worker productivity. This study argues that the benevolent mindset of decision makers at firms help lower default risk.     

Using structural equation modeling to predict cabin safety outcomes among Taiwanese airlines

The aim of the study was to examine the relationship between safety culture (e.g. management commitment, various work environment factors) and flight attendant safety performance (e.g. rule compliance, crewmember involvement and participation, accident investigation, injury incidence). A comprehensive questionnaire was derived from the Loughborough University “Safety Climate Assessment Toolkit” and several similar surveys. Additional items were designed for an airline cabin work environment. The questionnaire was distributed to four major Taiwanese national airlines and achieved a valid response rate of 84.65%. Structural equation modeling was used to test a hypothesized model concerning safety culture and cabin safety performance. A variety of fit indices confirmed the overall model fit but not all of the paths in the model were statistically significant. The findings show that safety culture was a predictor of cabin safety outcomes. The results indicated that high management commitment was significantly related to high crewmember participation, and that safe cabin work environment was significantly related to crewmember’s individual behavior. However, the findings showed no relationship between management commitment and injury incidence which means injury incidence might not be predicted by management commitment.     

Price discovery in Taiwan's foreign exchange market

This paper investigates the dynamics of price adjustments and the price discovery roles of two markets on Taiwan's foreign exchange, TFI and CFE. Results from the multivariate threshold model indicate prices are integrated nonlinearly. The roles of price discovery are asymmetric, depending on the size and sign of the price discrepancies between the two markets. In the lower regime of discrepancies, each market employs information from its counterpart and reacts to each other with different adjustment speeds. When the discrepancy is in the upper regime, CFE's role of price discovery is characterized by its exogenous behavior within the error-correction process.     

Is price undertaking a more friendly protection policy than an anti-dumping duty?1

It is generally believed that price undertaking is a more amicable protection policy for a foreign dumping firm than an anti-dumping (AD) duty as the former allows the foreign dumping firm to keep the duty rents. However, this result contradicts the empirical finding in, who shows that only 41% of anti-dumping measures in EEC end up with price undertaking in 1981–2001, even though firms can commit to a minimum price instead of being imposed with an anti-dumping duty. From the perspective of the dumping firm, this paper shows that whether the price-undertaking police is more or less amicable than the AD duty is contingent upon the competition modes of the firms in the industry.     

Optimal access regulation with downstream competition

We analyze the setting of access prices for a bottleneck facility where the facility owner also competes in the deregulated downstream market. We consider a continuum of market structures from Cournot to Bertrand. These market structures are fully characterized by a single parameter representing the intensity of competition. We first show how the efficient component pricing rule should be modified as the downstream competitive intensity changes. We then analyse the optimal access price where a regulator trades off production efficiency and pro-competitive effects to maximize total surplus.     

The choice between civil service and entrepreneurship in the presence of credit rationing

This article examines the role of opportunities to be civil servants in determining both an individual’s ability to borrow to be an entrepreneur and his career choices that are related to the endowment of wealth. It is assumed that the civil servants are hired to produce the public goods or services that benefit all the entrepreneurs hiring workers to produce private goods. In considering the case where the position of a civil servant is randomly up for grabs without rent-seeking, it is known that the effect of a rise in the number of civil servants to be hired on an individual’s ability to borrow is mainly based on the improved efficiency and a rise in the wage due to an increase in the demand for workers. When the position of a civil servant is secured through rent-seeking, it is found that an improvement in the financial environment will lower the cost of rent-seeking if the welfare of the civil servant is not too high.