The link between customer satisfaction and price sensitivity: An investigation of retailing industry in Taiwan

Are customers less likely to seek bargains once they are satisfied with a product and service? This study examines the relationship between customer satisfaction and price sensitivity. Specifically, satisfaction is divided into economic satisfaction derived from tangible products and social satisfaction provided by service encounters. This survey of 248 retailer–consumer dyads shows that economic satisfaction is negatively associated with price sensitivity. However, social satisfaction is positively related with price sensitivity, especially for female customers and customers with high patronage frequency. Interpersonal relationships emphasized in the Chinese collectivist societies tend to influence customers' price sensitivity. These findings have many implications for researchers and practitioners in the retail sector.     

International Evidence on the Link between Quality of Governance and Stock Market Performance

Abstract

This paper examines the link between country-level governance and global stock market returns. We find a negative relation between governance quality and equity return. Countries with low governance scores, on average, have higher equity returns than those with high governance scores after controlling for global risk factors known to influence international equity returns. This implies that investors associate low governance quality with increased risk and thus demand higher risk premium. We find that the quality of governance as measured by Political Stability and Absence of Violence is key governance dimension affecting international equity returns, suggesting that heightened investor concerns over political risks have profound impact on equity markets. Interestingly, we find no evidence that variation in equity returns is affected by the governance indicator representing Voice and Accountability. The findings of this study provide important policy implications.     

Investor Myopia and CEO Turnover

We find that Chief Executive Officer (CEO) turnover is significantly higher and considerably less sensitive to performance in firms with short investor horizons. Decisions to dismiss a CEO lead to worse operating performance, which is even poorer when investors have short horizons. Furthermore, new managers respond to investor short‐termism by increasing industry‐adjusted capital expenditures while maintaining R&D and patenting activity. In addition, in firms with short‐horizon investors, total risk increases around forced CEO turnovers, largely because of an increase in idiosyncratic risk. The evidence is consistent with short‐term investors distorting corporate policies of firms through their influence on top management turnover.     

The Exercise and Acceptance of Power in an Industrial Channel Dyad

ABSTRACT

Purpose: Power is an adaptive process in which power exercised by one firm could be less than, equal to, or greater than that accepted by another over the course of different periods. This study incorporates previous research on power asymmetry to examine the process of power exercise and acceptance over three stages: power exploration, power balance and power idleness.

Design/methodology/approach: Semistructured interviews were conducted with 4 powerful suppliers (the source firms) and their distributors (the target firms) in different industries.

Findings: The exercise and acceptance of power are influenced by expected rewards and expected costs in the power exploration stage and are impacted by dependence and trust in the power idleness stage; in the stage of power balance, power exercise and acceptance will not be altered. Under power shortage, the source firm will attempt to use less power and/or to enhance the levels of power accepted by the target; under power surplus, the source firm will transform the surplus into company performance and/or personal interests.

Research limitations/implications: The findings deepen our understanding of how power is exercised and accepted in a channel dyad over time, and of how firms behave in dealing with power shortage and power surplus.

Practical implications: The findings also provide some guidance for practitioners, so that they may apply power more appropriately based on different power stages in marketing channels.

Originality/value: This study extends our knowledge on power evolution over three stages from both a power holder and an acceptor viewpoint.     

Operational efficiencies across Asia Pacific airports

This paper analyses various dimensions of operational efficiencies in major Asia Pacific airports through Data Envelopment Analysis (DEA) models that simultaneously account for external macroeconomics and price factors. Results from this study show that technical, scale and mix efficiencies are high among the major Asia Pacific airports. In addition, significant disparities in cost efficiencies were detected amongst these airports. These disparities can be attributed to the presence of country-specific effect and differences in allocative efficiencies. A virtual airport is then introduced as a superior performer to rank the efficiency performances of airports.     

Self-insurance in a life-cycle model of labour supply and savings

This paper analyses the incentives to work and to save over the life cycle in the presence of incomplete markets. In a calibrated, partial equilibrium model, flexibility in hours worked changes asset age-profiles: borrowing when young is greater and saving when middle-aged is greater than when labour supply is fixed. Uncertainty causes individuals to work longer hours and to consume less when young. With flexibility over hours, accumulating precautionary assets incurs less of a utility cost and so the level of saving is greater. Further, allowing for flexibility and uncertainty means simulated hours of work and consumption more closely match the age profiles in the data.     

Effects of physical environment and locus of control on service evaluation: A replication and extension

As a replication and extension, this study empirically tested Bitner's (1990, Journal of Marketing 54, 69–82) model of consumer service evaluation using Singaporean subjects. It investigated the effects of a service failure, physical environment, and attribution on customer evaluation of and satisfaction with the service. The experimental findings showed that consumers engaged in causal inferences when they evaluated the service. Specifically, in cases of service failure, consumers were more dissatisfied when they perceived that the service firm had more control over the cause, and when the failure was recurring vis-à-vis a rare event. Consumers also tended to attribute service failure to a lack of control on the part of the service firm when the failure occurred in a more pleasant environment. The results also showed that satisfaction with the service resulted in perception of higher service quality. Although the physical environment affects perception of service quality, it was mediated by attribution and satisfaction.     

The non-relevance of the elusive holy grail of asset pricing tests: The “true” market portfolio does not alter CAPM validity conclusions

Empirical evaluations of CAPM usually attach a caveat that rejection is conditional on the choice of market proxy. We explore the criticality of the proxy choice disclaimer. Using different proxies and comprehensive simulations of the unobserved “true” market in Fama–MacBeth tests of CAPM, we find that the significance (t-statistics) corresponding to betas remain consistently unaltered, even if the proxy is a small fraction of or has a low correlation with the true market. The constancy of t-statistics persists in a simulated true-CAPM world as well: if CAPM is indeed valid, the choice of proxy is unlikely to reject it erroneously. Identity of the elusive true market portfolio and the choice of representative proxy cannot overturn conclusions on validity of CAPM based on Fama–MacBeth tests. Roll’s Critique, incontrovertible in theory, may be quite forgiving in practice – CAPM cannot be resurrected by a “closer” approximation of the elusive true market portfolio when it has commonly been rejected.     

Human Resource Development in the Asia–Pacific

The literature on education, training and other aspects of human resource development in the Asia–Pacific region is still under-developed. Many country studies are emerging, together with regional programs initiated under ASEAN, APEC and PECC auspices. Many East Asian countries have proved that a human resource development-led strategy promotes economic growth and development. Upgrading of education and skills relevant to R&D and international competitiveness in technology-intensive manufacturing and services are evident in some newly-industrialising economies in the region. But more efforts are needed.