EMERGING EQUITY MARKETS: GROWTH, BENEFITS, AND POLICY CONCERNS

Since the mid-1980s, stock market activity has increased substantiallyin many developing countries. This article first examines themain characteristics of emerging stock markets and illustratesthe evolution of equity prices in these markets during the lastdecade. It then discusses the reasons for the markets' growthand assesses the extent to which they have been affected bydomestic policies and external factors. The authors discussthe likely benefits of these markets, the effects any abruptcorrection in stock prices could have for the economy, and theways in which these markets can be made more efficient.      

The Effect of SEC-Ordered Suspensions on Returns, Volatility, and Trading Volume

This study evaluates the effect of SEC-ordered suspensions on securities' returns, volatility, and trading volume during 1963–1987. It is found that there is a permanent devaluation of these securities during the suspension. This result, however, is sensitive to the announced reason for the suspension. Both the variance and the trading volume are found to be substantially higher than normal in the presuspension period. This trend continues in the immediate postsuspension period. The variance and volume levels return to more normal levels only at a much later date. We conclude that trading suspensions are not associated with the immediate elimination of unusual market activity.     

Traffic law enforcement in Hyderabad, India

The aim of the study was to understand traffic law enforcement (TLE) carried out by the police to reduce non-compliance with traffic laws on the roads of Hyderabad city in India for 2001-2003. The Traffic Police database of citations issued to drivers who violated traffic laws in Hyderabad was analysed for the years 2001-2003 to describe the TLE activities of the police, to describe and compare the TLE activities for the different types of vehicles and to compare the TLE activities for the 3 years. The violations were classified in five categories - those related to driving, parking, vehicle, document and others; and TLE into safety and other TLE. A total of 646 161 traffic-law violations were registered in 2001, 904 447 in 2002 and 964 275 in 2003 for Hyderabad. Driving and parking violations were the most common violations registered in all 3 years, with parking violations slightly higher in 2001 (43.5%) and driving violations slightly higher in 2002 (35%) and 2003 (36.4%). Auto-rickshaws (three-wheel commercial passenger vehicles) accounted for the highest violations registered in 2001 (41.4%) whereas motorized two-wheelers had the highest registered violations in 2002 (35.5%) and 2003 (33.2%). Safety TLE activity (detecting and registering driving violations) was only one-third of all the TLE activity performed by the police in the 3 years, and disobeying traffic signals was the most common violation registered under safety TLE. Indian rupees 50 (US$1.1) were collected by way of a fine in 87% of the cases registered. Age and gender of the violators were not recorded in the database. These data can be used for planning, monitoring and evaluating TLE in Hyderabad. These can help identify traffic control and human factors that could lead to traffic noncompliance, and help identify priorities for improving road safety. These data indicate a need to enhance the safety TLE activity of the police, to make TLE more visible in Hyderabad, and to assess the effectiveness of the current legal action as deterrence to improve road safety. Recommendations to enhance TLE within the given resources of the police are made. More effort is needed towards systematic collection and analysis of data on TLE in India to facilitate long-term improvements in TLE for safer roads.     

Strategies to fight low-cost rivals

Companies find it challenging and yet strangely reassuring to take on opponents whose strategies, strengths, and weaknesses resemble their own. Their obsession with familiar rivals, however, has blinded them to threats from disruptive, low-cost competitors. Successful price warriors, such as the German retailer Aldi, are changing the nature of competition by employing several tactics: focusing on just one or a few consumer segments, delivering the basic product or providing one benefit better than rivals do, and backing low prices with superefficient operations. Ignoring cutprice rivals is a mistake because they eventually force companies to vacate entire market segments. Price wars are not the answer, either: Slashing prices usually lowers profits for incumbents without driving the low-cost entrants out of business. Companies take various approaches to competing against cut-price players. Some differentiate their products--a strategy that works only in certain circumstances. Others launch low-cost businesses of their own, as many airlines did in the 1990s--a so-called dual strategy that succeeds only if companies can generate synergies between the existing businesses and the new ventures, as the financial service providers HSBC and ING did. Without synergies, corporations are better off trying to transform themselves into low-cost players, a difficult feat that Ryanair accomplished in the 1990s, or into solution providers. There will always be room for both low-cost and value-added players. How much room each will have depends not only on the industry and customers' preferences, but also on the strategies traditional businesses deploy.     

Do Short Sellers Target Firms with Poor Earnings Quality? Evidence from Earnings Restatements

We study the behavior of short sellers around earnings restatements. We find that short sellers accumulate positions in restating firms several months in advance of the restatement and subsequently unwind these positions after the drop in share price induced by the restatement. The increase in short interest is larger for firms with high levels of accruals prior to restatement. We document that heavily shorted firms experience poor subsequent performance and a higher rate of delisting. Overall, these results suggest that the motive for short selling is, at least in part, related to suspect financial reporting and that short sellers pay attention to information being conveyed by accruals.

The impact of social cues on passengers’ travel experience

Despite the importance of social cues in service experience environments, little is known about the role of other customer perceptions (OCP) in the formation of passengers’ travel experience (PTE) and loyalty in public transportation. This study examines the impact of OCP on PTE and loyalty in public transportation and also investigates the moderating role of face-consciousness between OCP and PTE. Results revealed that all three dimensions of OCP have a positive effect on PTE, which consequently influences loyalty. More importantly, face-consciousness moderated the relationship between suitable behavior and PTE. Transport managers can benefit from these findings by considering the social environment as they design their services.     

How talent capability can shape service analytics capability in the big data environment?

We know very little about how big data-driven service analytics capabilities (SAC) are built in data-driven service organizations and the potential role of talent capability in facilitating overall SAC and the impact of both on firm performance (FPER). Drawing on the dynamic capabilities (DC) approach, this study investigates the link between SAC and FPER examining the mediating role of talent capability and the moderating influence of a firm’s strategic alignment. On the basis of two Delphi studies and survey data from 267 service analysts in the US and France, the findings show that even though SAC are built on technology, talent and information capabilities, their overall impact on firm performance is mediated by the level of talent capability of service analytics managers. The findings also confirm the critical moderating impact of strategic alignment between dynamic talent capability and firm performance in the big data environment.     

How do successful scholars get their best research ideas? An exploration

We interview 24 marketing professors to ask how they got the ideas for 64 of their papers. More than three-quarters of the papers were inspired by holes in the literature, by a “stylized fact” that the current literature cannot explain, or by an interaction with a manager. The rest fall into several smaller categories that to a large extent can be seen as special cases of the three big ones. We describe how papers from each of the three big categories help move the literature forward. We also illustrate the range of situations contained in each category by way of several examples. Among the authors we interview, most do not use a single source. As these authors become more senior, managerial contacts play an increasing role, while the balance between literature and stylized facts appears to be unchanged.