Advertising, Its Determinants, and Market Structure

This study derives a formal model of firm advertising behavior and applies it to the industry level to figure out the relationship between advertising and market structure. The firm advertising model shows that both consumer preference andfirm-specific advertising competence jointly determineprofit-maximizing advertising intensity. At the industry level, advertising intensity is represented multiplicatively by consumer preference and a measure of market structure, which reflects the joint distribution of the levels of advertising competence and market shares among firms. The new market structure measure suggests that those single-dimensional measures of market structure such as seller concentration and the Herfindahl index are inadequate in explaining interindustry differences in advertising intensity, and that the long-debated advertising-concentration relationship differs depending primarily on the appropriability of advertising. An empirical analysis of 426 five-digit Korean manufacturing industries shows that an inverted U-shaped relationship between the Herfindahl index and industry advertising intensity is observed for consumer goods industries but a lazy J-shaped relationship for producer goods industries.     

Evolutionary Characteristics of China＇s Intermediate Manufactures

China's economic development is characterized by progressive integration with international production chains as an assembly producer. Japan and South Korea are the major partners providing intermediate products to China. The present paper analyzes the Chinese intermediate sector's present condition and evolutionary characteristics revealed in bilateral trade with Japan and South Korea. The analysis uses the framework of new trade theory represented by “intra‐industry trade”. Trade statistics from 1997 to 2004 are analyzed using the database published by the OECD. Results show that China's inter‐industrial evolution is characterized by its expanding positioning in the manner of the flying geese development paradigm of Asian countries. Furthermore, intra‐industrial evolution is characterized by a concentration on price competitiveness. The framework and results of the industrial analysis presented in this paper assist in the understanding of China's manufacturing evolution and of the policy‐making decisions taken in the process.     

Dominant markets,staggered openings,and price discovery

This study examines information incorporation and price discovery in closely related markets that witness staggered openings. A theoretical model is presented. In this framework, one market, termed dominant, is the venue where most of the price discovery occurs, and the other is termed secondary. The model predicts heightened volatility and order flow in each market when it opens first compared with when it opens second. The effects are predicted to be more pronounced in the dominant market, and is linked to the process of information incorporation. Tests conducted using futures on crude oil (dominant) and gasoline (secondary), two related markets that witness staggered openings, reveal findings consistent with the model's predictions. © 2010 Wiley Periodicals, Inc. Jrl Fut Mark     

The Emergence,Variation, and Evolution of Corporate Social Responsibility in the Public Sphere, 1980–2004: The Exposure of Firms to Public Debate

This study examined the emergence of corporate social responsibility (CSR) as a public issue over 25 years using a content analysis of two national news-papers and seven regional, geographically-dispersed newspapers in the U.S. The present study adopted a comprehensive definition encompassing all four CSR dimensions: economic, ethical, legal, and philanthropic. This study examined newspaper editorials, letters to the editor, op-ed columns, news analyses, and guest columns for three aspects: media attention, media prominence, and media valence. Results showed an increase in the number of opinion pieces covering CSR issues over the 25-year period. The prominence of each of the four CSR dimensions varied over time. Each of the four CSR dimensions had its moment of media prominence when it was more important than the other dimensions. The most prevalent valence of the opinion pieces was negative; the volume of negative pieces increased over the 25 years, whereas the number of opinions with positive, neutral, and mixed tones showed little change over time. The study concludes by tracing the implications of the role of the news media for business ethics research.     

Sophisticated but confused: The impact of brand extension and motivation on source confusion

Legal and consumer psychology scholars have focused recent attention on source confusion, which is the likelihood that consumers will be confused regarding the company that is a product's source or sponsor. The authors evaluate two potential antecedents of source confusion: (1) consumer motivation and (2) a brand extension that has been undertaken by a competitor. There have been disagreements in the courts, the scholarly legal literature, and the consumer psychology literature concerning the nature and extent of the impact of these two variables on the likelihood of consumer confusion. Based on schema theory, the authors hypothesize that consumer motivation and brand extension will influence the likelihood of source confusion. An interaction between the two variables is proposed, with consumer motivation having an effect that is opposite to the effect typically identified in the literature and case law. The results of a controlled laboratory experiment support the theoretical predictions. © 2011 Wiley Periodicals, Inc.     

Imparting negative news to salespeople

Sales managers often are required to give negative information to their sales personnel. Perhaps the salespeople's territories will be reduced, their compensation or expense program decreased, or their positions realigned or eliminated. Although extensive research has examined delivering negative news to sales personnel, no empirical work has yet explored how that inimical information should be disseminated to sales subordinates. Scholars in organizational psychology argue that providing adverse news to employees using interpersonal sensitivity is advantageous for both the individual and the organization. To date, though, this issue has not been investigated in a selling context. Therefore, this article reports the results of an exploratory study that investigated factors that influence whether sales managers provide negative communication to salespeople in an interpersonally sensitive fashion. © 2011 Wiley Periodicals, Inc.     

The effect of consumer emotional disclosure on fairness perceptions

One way consumers cope with an unfair consumption experience is to express how they felt about it. Understandably, these disclosures are often rich with emotion. Does emotional disclosure in this context influence consumers' perceptions of fairness? Drawing hypotheses from the emotional disclosure literature, this research reveals that writing about emotions improves consumer fairness perceptions and satisfaction. However, the benefit of emotional disclosure disappears if the disclosure is solicited by the company perceived to be responsible for the unfairness and they do not offer redress. The findings lead to the recommendation that companies provide and facilitate opportunities for consumers to disclose to third parties the emotions arising from consumption experiences perceived as unfair. Implications for managing customer feedback, complaints, and negative word‐of‐mouth are discussed. © 2011 Wiley Periodicals, Inc.     

Materialism,fashion consumers and gender: a cross‐cultural study

The purpose of this study was to examine the relationships among materialism, gender and fashion consumer groups from two countries – one representative of an individualistic culture (US) and one representative of a collectivistic culture (Korea). Participants were 397 students from a university in Korea (n = 221) and a university in the US (n = 176) who completed the questionnaire. The materialism construct showed adequate reliability for participants in both cultures. Fashion change agents scored higher on materialism (centrality and success) than fashion followers. Females scored higher on materialism than males which seemed to be based on higher scores on the centrality subscale. Participants from the US and Korea differed on all three subscales of materialism with US participants scoring higher on centrality but lower on success and happiness than Korean participants. The findings of this study provide valuable implications for fashion marketers and retailers in Korea and US. The findings are limited to Korean and US consumers and cannot be generalized to other cultures. This paper fills a gap in the literature by comparing materialistic values between genders and fashion consumer groups in an individualistic culture (US) and a collectivistic culture (Korea).     

A forecast simulation analysis of the next‐generation DVD market based on consumer preference data

Just as standards wars over formats had characterized VCRs upon introduction to the market, the next‐generation DVD standards war between Blu‐Ray and HD‐DVD lasted 6 years before Blu‐Ray won the contest. Beginning with stated preference data drawn from a structured conjoint survey conducted before Blu‐Ray became the de facto standard of the next‐generation DVD format, we estimate consumer preferences on digital video players. A Bayesian mixed‐logit model is used and market share simulations are conducted under various scenarios based on the estimated parameters from Bayesian mixed‐logit model to surmise the future South Korean digital video‐player market. Results indicate that consumers feel that network size and title availability are more important than hardware‐related facets of the product, such as definition and storage capacity. The level of title availability and price of the Blu‐Ray player for Blu‐Ray's dominance over DVD will dramatically vary by the penetration rate of DVD players.     

Comparison of Effects from Different Institutions: Public Credit Guarantee in Korea*

We aim to compare the activities of the two main credit guarantee institutions in Korea. There has been mounting criticism that although these institutions were mandated to play different roles in financing small and medium‐sized enterprises (SME), their operations are, in fact, similar, and many SME receive overlapping support from both institutions. Using the propensity score matching method (allowing for multiple, mutually exclusive support scenarios) to compare the effects of PCG on different institutions, the present study provides suggestions to help the government make decisions regarding the consolidation of PCG funds. The results suggest that the institutions function differently and target different SME. However, overlapping support enables firms to expand their sales only, indicating the existence of inefficiency in the case of overlapping support to firms.