Debt financing in private and public firms

Using administrative confidential data on the universe of Canadian corporate firms, we compare debt financing choices of private and public firms. Private firms have higher leverage ratios, which are entirely driven by private firms’ stronger reliance on short-term debt. Further, private firms rely more of leverage during economic expansions, while public firms rely on equity financing. Specifically, private firms manage to increase their long-term debt during expansions, while short-term debt is used during downturns. Our findings have implications for a better understanding of the role of asymmetric information in private firms’ capital structure decisions.     

A Study on the Effect of Financial Inclusion on the Relationship Between Income Inequality and Economic Growth

In this article, we attempt to estimate whether financial inclusion, expressed as financial accessibility, has a positive effect on reducing income inequality. Furthermore, we estimate the effect of such financial inclusion on economic growth by reducing income inequality. From the results of our empirical analysis, we can draw the following three conclusions. First, income inequality has a very negative effect on GDP growth. The negative relationship between income inequality and GDP growth is strong in low-income countries. In addition, income inequality has a stronger effect on reducing economic growth in high-fragility countries. Second, progressivity is not a major factor in reducing income inequality in low-income countries or in high-fragility countries. Finally, financial inclusion improves the relationship between income inequality and economic growth. The reduction in income inequality through financial inclusion changes the negative relationship between income inequality and economic growth into a positive relationship. This trend is stronger in high-fragility countries than in low-fragility countries.     

Left-digit biases: Individual and institutional investors

This study examines the left-digit bias of individual and institutional investors using the microstructural data set from a highly liquid index futures market. Both investor groups exhibit excess buying after the ask falls with a tens-digit decrement, whereas excess selling (buying) is observed only for institutions (individuals) after the bid rises with a tens-digit increment. Such excess buying is generally pronounced when price uncertainty is high. Institutional excess selling is evident when uncertainty is low and immediately after the market opens. While both investor groups focus on cognitive reference points, our findings imply that investors heterogeneously respond to the bias and that individuals experience investment losses as they trade on the bias.     

The roles of R&D team leaders in Korea: a contingent approach

This study empirically examines the relationship between the role of R&D project leaders and their team performance using data from 87 project teams in 6 R&D organizations in Korea. The results reveal that:
(1) R&D project leaders played five different roles in performing their jobs – strategic planner, team builder, gatekeeper, technical expert, and champion;
(2) All but the champion role of a leader is positively related with project team performance;
(3) However, this relationship between the role of leader and project team performance varies according to the characteristics of R&D project teams and their tasks.
Specifically, it becomes important for a leader to focus less on the team building role as the team gets older. The team building role of a leader, however, is more important for higher performance of relatively certain R&D projects, while for uncertain R&D projects, the strategic planning role appears to be more crucial. Based on these results, this study discusses several managerial and theoretical issues related to the role of a leader in R&D project teams.     

3D simulation technology as an effective instructional tool for enhancing spatial visualization skills in apparel design

The purpose of this study is to explore the effectiveness of 3D simulation technology for enhancing spatial visualization skills in apparel design education and further to suggest an innovative teaching approach using the technology. Apparel design majors in an introductory patternmaking course, at a large Midwestern University in the United States, participated in this study. Three different teaching methods (lecture, 3D simulation instruments, and paper patternmaking) were employed in consecutive instructional phases, within a single day. A short questionnaire devised to assess students’ visualization abilities and overall evaluation on the three different teaching methods was administered to the students after each of the three phases. Overall, students’ abilities to visualize 2D patterns onto a human body were improved by all three teaching methods. The 3D simulation instruments anchored positive effects of training on spatial visualization abilities between lecture and paper patternmaking practices. The results affirm that 3D simulation technology has positive potential as an efficient instructional tool for improving students’ visualization skills in apparel design.     

Enhancing firm performance through intra-group managerial experience: Evidence from group-affiliated firms in Korea

Asia Pacific Journal of Management - Although business groups often benefit from tangible and intangible resource sharing across member firms, little is known about whether and how sharing...     

An examination of the nature of the relationship between Leader-Member-Exchange (LMX) and turnover intent at different organizational levels

The present study investigates the nature of the relationship between Leader-Member-Exchange (LMX) quality and turnover intent in the South Korean hospitality industry. Self-administered survey questionnaires were collected from 232 frontline workers as well as 88 supervisors employed in hotel properties. Prior research has produced mixed results, finding linear relationships between LMX quality and turnover intent in some studies and non-linear relationships in others. Traditional hierarchical regression analyses were performed to test the nature of the relationship in these two samples. We found evidence for a U-shaped curvilinear relationship between LMX and turnover intent for non-supervisory employees, but only a linear relationship for supervisory employees. Conceptual and practical implications and recommendations for future research are provided.     

Leveraging ideas from user innovation communities: using text‐mining and case‐based reasoning

User innovation communities, where end users voluntarily share their ideas about new products or services, have become an important source of innovation. While efforts have been made to extract and develop ideas from these sources, existing studies have largely focused on company‐led efforts to facilitate user participation, rather than on voluntary user discussions within communities themselves. As a remedy, this research proposes to directly target those voluntary ideas from user innovation communities for product/service innovation. Because quantities of textual information within these communities are rather massive, we propose a modified and integrated approach of text‐mining (TM) and case‐based reasoning (CBR). Specifically, by constructing two casebases on ideas and existing products using TM and checking for overlap between the two using CBR, the approach enables the identification of opportunities for innovation and reference products for adaptation. We demonstrate the approach through a case of mobile apps in Apple App Store, and our findings suggest that the approach can help firms and users/developers broaden the source of ideas and leverage them into new product concepts.     

How does local partners network embeddedness affect international joint venture survival in different subnational contexts?

Do local partners' network attributes affect the survival of high-tech international joint ventures (IJV)? How does the effect of network attributes vary in different subnational institutional environments? While the classic economic explanation for IJV formation and subsequent performance draws from the resource-based view (RBV), we add the relational dimension to explain that IJV survival may be affected by local partners’ relation-specific assets within the local network. We test the effect of the local partners’ network attributes as calculated by UCINET (centrality, network status, and structural hole position) on IJV survival. We additionally assert that this relationship is moderated by subnational institutional heterogeneity. Using our sample of 125 IJV dyadic pairs of US multinational enterprises (MNEs) operating in high-tech industries and their local partners in China, we find partial support for our claims.     

Price Competition and Market Segmentation in Retail Gasoline: New Evidence from South Korea

I examine price dispersion in retail gasoline and focus on differentiation along the service dimension: full service versus self service. Consistent with more intensive search by self-service customers, I find that price dispersion always decreases with the number of nearby self-service stations, but does not decrease with the number of nearby full-service stations. When I segment the market by brand, I observe that the estimates are sensitive to how brands are separated into different types. These findings show that the market is more clearly segmented by service level than by brand type and also highlight the importance of product differentiation when modeling price dispersion.