Transformational leadership and job performance: A social identity perspective

Drawing on social identity theory, this study provides a model explaining the underlying process through which transformational leadership influences creative behavior and organizational citizenship behaviors. Individual differentiation and group identification are proposed as social identity mechanisms reflecting the characteristics of personal and collective identity orientations that underpin the differential effects of transformational leadership behaviors on performance outcomes. The model is tested with data from a sample of 250 front-line employees and their immediate managers working in five banks in the People's Republic of China. Results of hierarchical linear modeling provide support for the model whereby group-focused and individual-focused transformational leadership behaviors exert differential impacts on individual differentiation and group identification. Furthermore, individual differentiation mediates the relationship between individual-focused transformational leadership and creative behavior, whereas group identification mediates the relationships between group-focused transformational leadership and OCBs toward individuals and groups. Implications for theory and practice are discussed and future research directions are outlined.     

Fractional cointegration and futures hedging

This article examines the performance of various hedge ratios estimated from different econometric models: The FIEC model is introduced as a new model for estimating the hedge ratio. Utilized in this study are NSA futures data, along with the ARFIMA-GARCH approach, the EC model, and the VAR model. Our analysis identifies the prevalence of a fractional cointegration relationship. The effects of incorporating such a relationship into futures hedging are investigated, as is the relative performance of various models with respect to different hedge horizons. Findings include: (i) Incorporation of conditional heteroskedasticity improves hedging performance; (ii) the hedge ratio of the EC model is consistently larger than that of the FIEC model, with the EC providing better post-sample hedging performance in the return–risk context; (iii) the EC hedging strategy (for longer hedge horizons of ten days or more) incorporating conditional heteroskedasticty is the dominant strategy; (iv) incorporating the fractional cointegration relationship does not improve the hedging performance over the EC model; (v) the conventional regression method provides the worst hedging outcomes for hedge horizons of five days or more. Whether these results (based on the NSA index) can be generalized to other cases is proposed as a topic for further research. © 1999 John Wiley & Sons, Inc. Jrl Fut Mark 19: 457–474, 1999     

The Effects of Macroeconomic Factors on Pricing Mortgage Insurance Contracts

Numerous empirical studies, including Abraham and Hendershott (1996) , Muellbauer and Murphy (1997) , Leung (2004) , and Oikarinen (2009) , have identified a significant relationship between housing prices and macroeconomic factors. Using a linear regression on the comovement of macroeconomic factors and housing prices, this article employs an option‐pricing framework to price and hedge the fair premia of mortgage insurance (MI). Our model provides improved performance in terms of MI premium pricing, especially during periods that are characterized by high housing prices. Ignoring the impacts of macroeconomic factors on housing prices will lead to an underestimation of MI premia.     

Pricing and Hedging of Discrete Dynamic Guaranteed Funds

We derive a risk‐neutral pricing model for discrete dynamic guaranteed funds with geometric Gaussian underlying security price process. We propose a dynamic hedging strategy by adding a gamma factor to the conventional delta. Simulation results demonstrate that, when hedging discretely, the risk‐neutral gamma‐adjusted‐delta strategy outperforms the dynamic delta hedging strategy by reducing the expected hedging error, lowering the hedging error variability, and improving the self‐financing possibility. The discrete dynamic delta‐only hedging not only causes potential overcharge to clients but also could be costly to the issuers. We show that a naive application of continuous‐time hedging formula to a discrete‐time hedging setting tends to worsen these possibilities.     

Do Unexpected Land Auction Outcomes Bring New Information to the Real Estate Market?

Land and real estate are intrinsically related but generally traded in two different markets. Vacant land, being a major “raw material” for development of real estate, is traded by developers who actively manage development risk for profit. Real estate, being a long lived final product, is traded by end-users or investors for use or investment in the secondary market. This study examines price discovery between the two markets. The key question is whether land transactions, in the form of public auctions, convey any new information to the secondary real estate market. Our results suggest unexpected land auction outcomes have both market-wide and local effects on real estate prices. However, the impacts are asymmetric. We found that lower than expected land auction prices have a significant negative market-wide and local impact on real estate prices while higher than expect land auction prices have little or no impact.     

TEACHING PARADIGM SHIFTING IN MANAGEMENT EDUCATION: UNIVERSITY BUSINESS SCHOOLS AND THE ENTREPRENEURIAL IMAGINATION

This paper argues that the cultivation of the 'entrepreneurial imagination' is the singular most important contribution university business schools can make to the business community. Instead of the prevalent emphasis on the vocationalizing of business/management programmes in order to make them more 'relevant', university business schools should adopt a deliberate educational strategy that privileges the 'weakening' of thought processes so as to encourage and stimulate the entrepreneurial imagination. This requires a radical shift in pedagogical priorities away from teaching analytical problem-solving skills to cultivating a 'paradigm-shifting' mentality. This, in turn, requires that management academics themselves engage in the practice of what is termed here 'intellectual entrepreneurship'. It is through this academic practice that management educators can become skilled in the art of crafting relationship between sets of apparently disparate ideas and of thus bringing alive the facts they are attempting to impart. Only when such facts are embellished and illuminated by a mind possessing an intimate sense for the power and beauty of ideas and the bearing of one set of ideas on another, can they become pregnant with meaning and therefore able to excite the entrepreneurial imagination. It is argued here that recourse to literature and the arts provides new avenues for exploring relational patterns and frames of understanding, as well as the micro-logics of perceptual organization, necessary for cultivating a critical sensitivity to hidden assumptions and subtle relationships in social situations which lend themselves to entrepreneurial interventions.     

A technology replacement model with variable market potential — An empirical study of CRT and LCD TV

The rapidly changing economic environment and increasingly fierce competition indicate that companies must innovate in both their products and marketing strategies if they are to continue to flourish. Specifically, the ability to accurately predict the demand for products is crucial when firms decide to allocate their resources, especially in the fast moving high technology industries, where there is very high investment in R&D and production facilities. This study establishes a forecast model for technology replacement based on the diffusion model with population growth used for the variable market potential. The proposed model is then applied to investigate the CRT and LCD TV market.The results suggest that the new model is more accurate than the constant market potential model in fitting and forecasting performance. Consumers who purchase a TV for the first time are likely more attracted to LCD TV rather than CRT TV. As for those individuals who already own a CRT TV, the attraction is not strong enough to encourage them to replace their current CRT TV with a new LCD TV. Moreover, it is noted that the falling price of LCD TV is an essential factor in encouraging purchases.     

Increasing Wealth and Increasing Instability: The Role of Collateral

In development economics, growth in credit is generally associated with faster long-run growth as financial intermediation improves the efficiency of channeling capital to productive investment. Yet, among developing countries high growth in credit almost always guarantees the outbreak of a financial crisis. The authors attempt to reconcile the two seemingly contradictory facts with an endogenous growth model in which entry to international borrowing entails some significant fixed cost. The poorest countries are excluded from international borrowing because of the fixed cost. The higher-income developing countries will find it optimal to sink the fixed cost to borrow internationally, growing faster as a result, but also become prone to fluctuations arising from shocks to the international financial market.     

Holy mad cow! Facts or (mis)perceptions: A clinical study

The May 20, 2003, announcement confirming diagnosis in a Canadian cow of mad cow disease caused price disturbances in livestock, grain, and stock markets. Price and time data are used to provide a clinical study on the timing, persistency, and rationality of those disturbances in different U.S. markets, showing the three types of uncertainty that C. Avery and P. Zemsky (1998) use to identify herd behavior and the resulting mispricing. Markets react at different times, showing an informational cascading pattern. Misperceptions cause futures contract and stock reactions that are unsupported by the facts. Livestock and grain futures markets reactions suggest that people would replace beef with pork. Biogenetic stocks show price disturbances for companies with no relation to screening or treatment for mad cow disease. The market reactions to the December 23, 2003, announcement of the first incidence of mad cow disease in the United States are examined to see whether the markets have learned from the May event. © 2006 Wiley Periodicals, Inc. Jrl Fut Mark 26:315–341, 2006