Limit-order submission strategies under asymmetric information

This paper provides evidence that informed traders dominate the response of limit-order submissions to shocks in a pure limit-order market. In the market we study, informed traders are highly sensitive to spreads, volatility, momentum and depth. By contrast, uninformed traders are relatively insensitive to all these market conditions. The dominance of the informed over limit-order submissions is magnified by contrasts between them and the uninformed in the use of aggressively-priced limit orders.     

Collateral and its substitutes in emerging markets’ lending

Due to opaque information and weak enforcement in emerging loan markets, the need for collateral is high, whereas borrowers lack adequate assets to pledge as collateral. How is this puzzle solved? We find for a representative sample from Northeast Thailand that indeed most loans do not include any tangible assets as collateral. Instead, lenders enforce collateral-free loans through third-party guarantees and relationship lending, but also through modifying loan terms, such as reducing loan size. Guarantees are the relatively most important substitute, they reduce collateral requirements independently of relationship lending and they are more often used by formal financial institutions.     

Professionals’ endorsement of behavioral finance: Does it impact their perception of markets and themselves?

This paper provides evidence on the hypothesis that many behavioral finance patterns are so deeply rooted in human behavior that they are difficult to overcome by learning. We test this on a target group which has undoubtedly very strong incentives to learn efficient behavior, i.e. fund managers. We split this group into endorsers and non-endorsers of behavioral finance. Endorsers do, indeed, view markets differently as they regard stronger influences from behavioral biases. However, when it comes to the perception of one's own behavior the endorsement of behavioral finance becomes almost meaningless, even though endorsers otherwise do adapt behavior towards their conviction.     

Are All Professional Investors Sophisticated?

Abstract. Existing empirical evidence is inconclusive as to whether professional investors show more sophisticated behavior than individual investors. Therefore, we study two important groups of professional investors and compare them with laymen by means of a survey covering about 500 investors. We find that some professionals, i.e. institutional investors, behave in a more sophisticated manner than laymen, whereas the less researched investment advisors seem to do even worse. Our survey approach complements available evidence due to its design: it compares professionals with (qualified) interested laymen, it covers six measures of sophisticated behavior, uses several control variables and strictly compares investment decisions in the private domain.     

Attributions and behavioral intentions of inexperienced salespersons to failure: An empirical investigation

The goal of this research was to determine how inexperienced sales representatives (rookies) interpret and respond to their sales failure situations. The authors studied 296 rookie financial services sales representatives'performance attributions for a previous unsuccessful sales interaction and their intended behaviors for a future, similar selling situation. This provided the authors the opportunity to compare their results with Dixon, Spiro and Jamil's (2001) findings for experienced sales representatives (veterans). In the event of a sales failure, rookies'responses do not parallel those of veterans. The results suggest that rookies are likely to engage in several inappropriate behaviors in response to failed sales encounters. Implications for managers and directions for future research are discussed. Andrea L. Dixon (Andrea. Dixon@uc.edu) (Ph.D., Indiana University) is an assistant professor of marketing at the University of Cincinnati. Her research focuses on selling behaviors, team selling, integrating technology and personal selling, and the role of developmental relationships in enhancing creativity and productivity in the sales division. The primary focus of her research is improving the performance of sales representatives and the sales organization or unit. She has published in theJournal of the Academy of Marketing Science, theJournal of Marketing, and theJournal of Personal Selling and Sales Management. She currently serves on the editorial review boards of theJournal of the Academy of Marketing Science and theJournal of Personal Selling and Sales Management. Dixon is the vice chair for conference programming of the Selling and Sales Management Special Interest Group of the American Marketing Association. Rosann L. Spiro (spiro@ indiana.edu), Ph. D., is a professor of marketing and chairperson of the Marketing Department at Indiana University in Bloomington, Indiana, where she teaches Sales Management, Personal Selling, International Marketing, Business-to-Business Marketing Strategy, and Managerial Research in Marketing. Her research interests focus on sales strategy, sales management, and personal selling. Her work has appeared in numerous publications, including theJournal of Marketing Research, theJournal of Marketing, theJournal of Consumer Research, theJournal of Business, and theJournal of Personal Selling and Sales Management. She currently serves on the editorial review boards of theJournal of Personal Selling and Sales Management andMarketing Management. She is also a coauthor of a leading sales management text,Management of a Sales Force (11 th ed.). She formerly served as the chairperson of the Board of the American Marketing Association. Curtently she serves on an Advisory Board for the Univted States Bureau of Census and is the chair of the Selling and Sales Management Special Interest Group of the American Marketing Association. Lukas P. Forbes (Lukas.Forbes@wku.edu) is an assistant professor of marketing in the Gordon Ford College of Business at Western Kentucky University. He received his B.S. from the United States Military Academy at West Point, his M.B.A. from worcester Polytechnic Institute, and is completing his Ph.D. at the University of Kentucky. His research interests include personal selling, services, and product development. He has previously published in the American Marketing Association Educators and Frontiers in Services conference proceedings.     

The Role of Dividends, Debt and Board Structure in the Governance of Family Controlled Firms

Abstract:  We investigate whether family controlled firms use dividends, debt and board structure to exacerbate or mitigate agency problems between controlling and minority shareholders in a capital market environment with high investor protection and private benefits of control. Results indicate family controlled firms employ higher dividend payout ratios, higher debt levels and lower levels of board independence compared to non-family firms. This suggests family controlled firms use either dividends or debt as a substitute for independent directors. We also find that dividends and debt are more effective governance mechanisms in mitigating the families' expropriation of minority shareholders' wealth. Independent directors are, in contrast, more effective in controlling owner-manager conflict in non-family firms.