Extended generalized purchasing power parity and optimum currency area in East Asian countries

We build a model in which corporate governance allows for the adoption of an institution acting as a mechanism to control agency problems. Our model predicts that the incentive to adopt such an institution is decreasing in ownership concentration and increasing in free cash flow. Testing our theoretical model by means of a sample of 157 Italian listed companies over the period 2004–2007, we find that board composition favours independent members in firms with a large free cash flow, and executive members in firms with high ownership concentration, supporting the view of governance as a way to limit agency costs.     

The pricing of foreign currency options under jump‐diffusion processes

In this article, the authors derive explicit formulas for European foreign exchange (FX) call and put option values when the exchange rate dynamics are governed by jump‐diffusion processes. The authors use a simple general equilibrium international asset pricing model with continuous trading and frictionless international capital markets. The domestic and foreign price level are introduced as state variables that contain jumps caused by monetary shocks and catastrophic events such as 9/11 or Hurricane Katrina. The domestic and foreign interest rates are stochastic and endogenously determined in the model and are shown to be critically affected by the jump risk of the foreign exchange. The model shows that the behavior of FX options is affected through the impact of state variables and parameters on the nominal interest rates. The model contrasts with those of M. Garman and S. Kohlhagen (1983) and O. Grabbe (1983), whose models have exogenously determined interest rates. © 2007 Wiley Periodicals, Inc. Jrl Fut Mark 27:669–695, 2007     

Influence of customer–firm relationships on customer participation in the service industry

Previous research has focused on relationship value and outcome as ‘consequence variables’ of customer participation (CP). This study examines customer–firm relationships as an ‘antecedent variable’ of CP. Early contact and relationships with customers build confidence in the service encounter and create customer trust, which leads to commitment and improves customer cooperation. Likewise, interaction and relationship building in the service encounter encourage active customer cooperation and participation in the later stages of interaction. This study analyzes the influence of relational antecedent factors affecting customer participation intention, examines the moderating effects of customer relationship proneness, and suggests some theoretical and practical implications.     

Explicating the ‘like’ on Facebook brand pages: The effect of intensity of Facebook use,number of overall ‘likes’, and number of friends' ‘likes’ on consumers' brand outcomes

This study examined the relationship between the number of overall ‘likes’ and friends' ‘likes’ on Facebook brand pages in influencing consumers' brand attitude, brand trust, brand involvement, and purchase intention, drawing upon theoretical concepts including diffusion of innovations, social capital theory, strength of weak ties, sociometric versus perceptual popularity, and prior research in online impression formation. Results of a 2 × 2 experiment revealed significant main effects of number of overall ‘likes’ and friends' ‘likes’ on key dependent measures. A significant interaction effect was also found between overall ‘likes’ and friends' ‘likes’. Additionally, intensity of Facebook use also mediated the relationships between number of overall ‘likes’ and friends' ‘likes’ with brand attitude, brand trust, and purchase intention.     

A model of sustainable household technology acceptance

There is an expanding range of technologies used in a residential setting to enable sustainable living, including ‘smart’ technology that uses learning and connectivity to modify household behaviours. Understanding what drives the adoption of sustainable household technology will allow product developers, marketers and policy makers to use technology to reduce the environmental impact of homes. Based on the United Theory of Acceptance and Use of Technology, a model that explains predictors of intention to adopt sustainable household technology was developed and tested via an online survey of 592 US consumers. The results from structural equation modelling demonstrate that product attributes of sustainable household technology including performance, compatibleness and hedonic expectancy as well as consumer characteristics, in specific, sustainable innovativeness significantly predicts adoption intent. Conversely, the model testing shows that effort expectancy as well as social pressure and environmentalism are not significant predictors of adoption intention Theoretical and practical implications are discussed.     

Leaders’ Core Self-evaluation,Ethical Leadership,and Employees’ Job Performance: The Moderating Role of Employees’ Exchange Ideology

With the increasing demand for ethical standards in the current business environment, ethical leadership has received particular attention. Drawing on self-verification theory and social exchange theory, this study investigated the effect of leaders’ core self-evaluation on the display of ethical leadership and the moderating role of employees’ exchange ideology in the relationship between ethical leadership and employees’ job performance (i.e., task performance and organizational citizenship behavior). Consistent with the hypotheses, the results from a sample of 225 dyads of employees and their immediate leaders showed a positive relationship between leaders’ core self-evaluation and ethical leadership. Moreover, the results showed that ethical leadership mediates the effects of leaders’ core self-evaluation on employees’ job performance. Furthermore, we found that employees’ exchange ideology moderates the relationship between ethical leadership and job performance. The theoretical and practical implications of these findings are discussed.     

Asymmetric transmission between factory and wholesale prices in fiberboard market in Korea

This paper extends the estimation of price relationships in wood processing and empirical assessment of asymmetric price transmission by incorporating time lags in both explanatory and dependent variables. Each of the models developed and estimated in this article reveals the existence of asymmetric price transmission between factory and wholesale prices of fiberboard in Korea. Estimation results indicate that wholesalers earn additional profits by exploiting price fluctuations in the markets. The empirical findings in this study suggest the potential for lower wholesale prices of fiberboard with more competition in wholesale marketing.     

Country image,product image and consumer purchase intention: Evidence from an emerging economy

In offering fresh insights on the country-of-origin effect literature, this article provides evidence to suggest that cognitive country image (CI) is not necessarily consistent with affective country image. Based on a large scale consumer survey conducted in China, the findings reported provide empirical support for a hypothesized decomposing effect. In particularly, the results demonstrate that cognitive and affective CI have a different impact on the intention to purchase, with the former influencing purchase through product image, and the latter having a direct influence, independent of product image. Such a decomposing effect has important theoretical and managerial implications surrounding the mechanics of country image and the impact on purchase intention which are extracted from this study along with directions for future research.     

Financial and Corporate Sector Restructuring in South Korea: Accomplishments and Unfinished Agenda

Following the Asian financial crisis, South Korea has undertaken wide-ranging, economic structural reforms under IMF conditionality while receiving IMF assistance. This paper describes Korean accomplishments in restructuring the financial and corporate sectors, and also addresses the unfinished agendas. It suggests ongoing reforms in a knowledge-based economy, in which the financial sector serves as the "brain" of market economy by allocating scarce capital to the most profitable firms within South Korea. It also recommends that subsidiary companies of Korean chaebols become independent viable business units, and that new sources of growth be found by promoting Korean SMEs and venture businesses. JEL Classification Numbers: E44, F34, G18, G32, G34, L11, L22, O16, O53.     

Understanding the human side of openness: the fit between open innovation modes and CEO characteristics

In small- and medium-sized enterprises (SMEs), where typically the decision-making process is highly centralised, important decisions, such as open innovation (OI) adoption, will be strongly influenced by the characteristics of their Chief Executive Officers (CEOs). Pointing the attention to the strategic leadership and human elements, this paper sheds light on the micro-foundation of OI by emphasising the role that the personal traits of key individuals in innovation. OI adoption could result in the enactment of several OI modes – each representing an opportunity of potential change (of market, of technology or/and of the organisation) – and this paper attempts to examine the relationships between the CEO characteristics and each of the OI modes. Our analysis, using Korean SME data, shows that CEOs’ positive attitude, entrepreneurial orientation (EO), patience and education can play important roles in facilitating OI in SMEs. However, this paper also observed that the effects of CEO characteristics on OI adoption were differently configured according to the nature of each OI mode, for example, CEOs’ patience and EO had different impacts depending on the degree of uncertainty in the OI mode. This suggest that OI must be understood as a wide innovation spectrum, and, to increase opportunities for successful OI adoption, CEOs have to attempt to compensate for characteristics they may lack by recruiting appropriate complementary top managements. The research has practical implications for CEOs and policy makers who are interested in enhancing competitiveness of SMEs.