Managerial Overconfidence and Share Repurchases

Following prior studies, we use keywords in press portrayals to gauge managerial overconfidence. We hypothesize that managerial overconfidence is related to a manager's perception that the firm is undervalued. Results from 2744 share repurchase programs launched by 783 listed firms in Taiwan confirm this hypothesis. We find that managerial overconfidence is positively correlated with the intensity of share repurchasing, which is measured by scale, execution, frequency, and the difference between the announced price and post‐execution price. Moreover, the programs launched by overconfident managers were not undervalued and therefore were associated with reduced post‐announcement returns.     

An Asian Currency Unit: Simulations for Its Effects on East Asia

An Asian currency unit (ACU) is necessary to deepen Asian financial markets and to convert national currencies into a single monetary policy. However, the experiences of the European Currency Unit and the European Exchange Rate Mechanism crisis in 1992–93 have indicated the danger of the so‐called gradual approach. This study evaluates the effects of welfare should the ACU indicator become a long‐term constraint of the People's Republic of China and Japan, the big two in East Asia. Our results indicate that the constraints of countries’ own baskets (e.g. real effective exchange rates) are still better before the launch of a true single currency. That is, pegging to an ACU indicator could hardly be sustained in the long‐run if East Asian countries have not reached a consensus about a regional monetary union.     

Key account relationship management: the moderating effects of relationship duration and transaction volume

This study investigates the impact of three relational benefits (i.e. financial benefits, human interaction benefits, preferential treatment benefits) on switching barriers, customer satisfaction, and behavioral loyalty for key accounts in the context of the air express delivery industry in Taiwan. Empirical results indicate that relational benefits impact switching barriers, switching barriers influence customer satisfaction and loyalty, and customer satisfaction effects loyalty. Findings also confirm most of the hypothesized moderating effects for relationship duration and transactional volume on the relationship between relational benefits and switching barriers. Specifically, long-term key accounts place greater emphasis on the human interaction and preferential treatment benefits. Key accounts that have less established relationships based on the length of business relationship place more importance on financial benefits. Financial benefits were found to have a positive influence on switching barriers only for low annual transactional volume clients, while both human interaction benefits and preferential treatment benefits have positive effects for both low and high transactional volume key accounts.     

Consumers’ evaluations of the efficiency of actions to improve environmental quality: A comparative study between Brazil and China

There is a gap in our knowledge about environmentally conscious consumers in industrialized economies and the desire to achieve sustainable economies. Given that most aspects of consumer behaviour are culture bound, this paper contributes by comparing consumers’ evaluations of the efficiency of actions to improve environmental quality in two of the most promising industrializing consumer societies: Brazil and China. The proposed conceptual framework includes environmental concerns, perceived consumer effectiveness, green attitudes, green behaviours and external motivators as constructs to explain the perception of efficient environmental support. Field research was conducted in Brazil with 1,149 respondents, and in China with 632 respondents to test the model. The results suggested that the belief that environmental quality can be improved is directly associated with consumers’ internal and external motivators. However, cultural traits drove important differences in the evaluation of the efficiency of such improvements. Specifically, Chinese people tended to rely on collective leadership to create the conditions necessary for improving environmental quality, while they remained concerned with the current status. In contrast, Brazilians accepted more personal responsibility for the results, although they face important constraints, such as the availability of products.     

The Effect of Confucian Work Ethics on Learning About Science and Technology Knowledge and Morality

While Chinese societies often appear centralized and traditional, presumably impeding technology and innovation, these values may simply reflect the negative-leaning poles of Confucianism. This study proposes a Confucian work ethic dimension that stresses justified tradition. In combination with Western innovative cultures, this Chinese style might facilitate learning about knowledge and morality in an interaction seemingly unique to the Chinese science and technology sector. Specifically, contrary to the Western style that tolerates conflict to achieve harmony, Confucian work ethics – an Eastern way – prefer to respect hierarchy to attain harmony. Samples from the multinational corporations in Shanghai and privately owned enterprises in Hsinchu of Taiwan represent two levels of Westernization. The findings reveal that the two types of cultures almost equally influence the facilitation of learning about morality, whereas the Western way more effectively teaches about professional knowledge and the Eastern way more effectively teaches general knowledge. In addition, though the samples from both locations enjoy positive advantages from their combined cultures, Shanghai appears more Westernized than Taiwan, and Taiwan benefits more from Confucian work ethics and a higher level of quality learning, particularly with regard to morality. This result may suggest the benefits of Confucius’ ideas, if they are not used excessively to emphasize the negative aspects.     

Comparing Trading Performance of the Constant and Dynamic Hedge Models: A Note

The constant and dynamic hedge models, with the presence of transaction costs are compared for the Share Price Index futures contract trading on the Sydney Futures Exchange. The optimal hedge ratio is estimated by using a dynamic, bivariate two-stage model for the return equation with a dynamic GARCH error structure for the conditional hedge ratios. When portfolio projections are compared based on their profit positions (net of transaction costs), the GARCH hedge model dominates the next best competitor in terms of trading profit.     

Exploring the linkage effects of place attachment in rural areas using the fuzzy analytic network process

ABSTRACT

Though previous research has developed an evaluation measurement for place attachment, it has ignored the interdependence of the criteria and subcriteria associated with that evaluation tool. Because it is challenging for researchers to digest the multi-criteria messages presented in place attachment and to understand the multiple place attachment terms, this study adopts the fuzzy analytic network process (FANP) model to identify the characteristics of place attachment, and categorizes these characteristics into three dimensions, namely personal context, community context, and environment context. Using the FANP model, an empirical survey was conducted that included the collected survey data of 187 respondents from the Meinong region of Taiwan to determine the typical features of place attachment. Our research results demonstrate that, with respect to successful community involvement, familiarity is essential for place attachment. As familiarity establishes social ties with the setting, one’s emotional attachment to the location or environment increases. The ability to define clear priority weights for personal, community, and environment contexts is one of the benefits of using the FANP method to evaluate place attachment. Accordingly, the findings regarding these three contexts raise issues about the role of local government and self-efficacy in place attachment in Taiwanese environments.     

Monetary Policy Rules in an Open Economy with Heuristics: Which Model Is Best?

The choices of policy targets and the formation of agents’ expectation have been critical issues for reconsidering monetary policy management since 2008. The purpose of this article is to evaluate macroeconomic stability in a New Keynesian open economy in which agents experience cognitive limitations. The (im)perfect credibility of various monetary policies (e.g., a Taylor-type rule, strict domestic inflation targeting, strict CPI inflation targeting, exchange rate peg) may lead agents to react according to their expectation rules, and then create various degrees of booms and busts in output and inflation. Therefore, relaxation of the rational expectation hypothesis has potential consequences for policy designs. Our simulations confirm that the business cycles induced by animal spirits are enhanced by strict inflation targeting. Furthermore, a Taylor-type (CPI or domestic inflation) rule or a credible exchange rate pegging system can improve social welfare and stability in an open economy.