Dynamic Global Linkages of the BRICS Stock Markets with the United States and Europe Under External Crisis Shocks: Implications for Portfolio Risk Forecasting

Crisis shocks often lead to changes in the interdependence across stock markets and thus affect risk assessment and management. This paper investigates the extent to which the global financial crisis of 2008–09, which was triggered by the US subprime crisis in 2007, and the European debt crisis that started at the end of 2009, affects the interdependence of the leading emerging markets of the BRICS countries with those of the United States and Europe. Our empirical analysis makes use of the FIAPARCH model combined with the Dynamic Equicorrelation (DECO‐FIAPARCH), which allows for the estimation of market linkage for a large group of countries as a whole, while controlling for asymmetric volatility and long memory. The results reveal the presence of important changes in the time‐varying linkages of the BRICS stock markets with the US and European ones. In particular, the average linkages have significantly been higher between 2007 and the first half of 2012 than the remaining part of the sample, and there is also evidence of a structural change around the Lehman Brothers collapse. We also show the effects of these stylised facts on portfolio risk assessment and forecasting.     

The Effects of Superstition on Choice and Latency

This study investigates the effects of superstition characteristics on choice and latency. Three dimensions of superstition are investigated—valence, accessibility, and relevance. Exposure to negative, accessible, or relevant superstition resulted in faster choices made. Superstitions that were negative or relevant led to choices favoring the auspicious product than superstitions that were positive or irrelevant. The auspicious product was also more likely to be chosen if it were associated with a superstition that was more accessible than less accessible. Findings also suggested that when superstition was relevant, the effects of a negative superstition were amplified than when superstition was irrelevant. Relevancy had less effect on positive superstition.     

The Value Relevance of Environmental Audits: Evidence from Japan

Environmental audits are implemented internally in order to monitor compliance with environmental laws, regulations and related accounting rules, and to develop recommendations for ways in which to improve environmental accounting processes and performance. In addition, external third‐party assurance on environmental information is used to verify whether firms’ disclosures on environmental information are in compliance with environmental accounting rules and regulations. We examine whether firms’ environmental audits positively affect their market values and whether third‐party assurance strengthens positive effects, using value relevance theory as a theoretical foundation. Our main tests are based on 266 Japanese manufacturing firms’ published environmental reports for the period 2010–2013. We find that the average market value of firms that implement environmental audits is 9 percent greater than those that do not. Further, we find that environmental audits positively affect firm value, largely through interaction with third‐party assurance. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

The Effects of Changes in Property Tax Rates and School Spending on Residential and Business Property Value Growth

In this article, we examine the effects of changes in property tax rates and school spending on residential and business property value growth in southeast Michigan. We use panel data for 152 communities in the five counties surrounding Detroit between the years 1983 and 2002, a period during which state government mandated major changes to school finance. Using the mandated changes to identify causality, we find that: (1) residential property values are more responsive to school spending changes than property tax rate changes; (2) business property values are more responsive to tax rate changes than school spending changes; and (3) business property values are more sensitive to changes in tax rates as compared to residential property. We also examine tax competition effects on property value growth, showing that tax competition plays an important role in property value growth in the southeast Michigan region.     

Evaluating spatial and temporal variation in agricultural output elasticities in Turkey

This study evaluates spatial variation in the relationship between agricultural output and input use across Turkey. The potential impact of the national agricultural policy reform introduced in 2001 on the spatial variation in agricultural output elasticities across the country was explored. By applying a spatial production function to the province‐level data in 2000 and 2007, spatial heterogeneity in the variance of provincial total factor productivity and the input factor‐output elasticities was identified across the country. Results show that the disparities in agricultural activities and geographic conditions affected return from input factors. Empirical findings from a spatial spillover model also suggest that changes in the input factor‐output elasticities varied significantly across Turkey between 2000 and 2007, after the policy reform. Results suggest that future policy reform that recognizes regional comparative advantage through understanding the geographic heterogeneity of the agricultural sector is important for enhancing Turkey's agricultural output.     

Temporal variations in technical efficiency: evidence from German soccer

This paper applies stochastic production frontier models with time-varying technical efficiency to a panel data set including hitherto unavailable information on team wage bills from the first division in German professional soccer (the “Bundesliga”) covering the years 1981–2003. We demonstrate that individual teams experience significant variation in technical efficiency over an extended period of 22 seasons while the league’s average level of efficiency remains constant over time. More detailed analyses reveal that, first, the decision to fire or to retain the head coach is mainly influenced by changes in managerial efficiency between two adjacent seasons and, second, relegated teams on average experience considerable reductions in technical efficiency compared to the previous season.     

An empirical analysis of the determinants of technology roadmap utilization

For many years now, firms have managed their research and development (R&D) by applying various approaches drawn from the discipline of technology roadmapping (TRM). The underlying rationale of these roadmapping approaches is to align firms' product and technology developments with their business goals. By visually representing firms' technology strategy, roadmaps support intra‐firm communication and facilitate the coordination of strategic decisions and activities within the technology management domain. Most previously published research on TRMs has focused on the design and implementation of roadmapping processes; that is, relatively few empirical or quantitative studies describe the use and evaluation of roadmapping techniques. This paper seeks to address this gap by conducting a survey of 186 different R&D units within stock market‐listed companies in Korea that have implemented TRM. The paper attempts to identify the antecedent factors behind firms' successful use of roadmaps, further identifying correlations between these antecedent factors through an analysis of the R&D units. It also empirically highlights these antecedent factors by empirically analyzing and verifying correlations between roadmap utilization and R&D performance.     

A Tale of Passion: Linking Job Passion and Cognitive Engagement to Employee Work Performance

We propose a model of job passion that links two types of passion, harmonious and obsessive passion, to employees' work performance, via the mediating mechanism of cognitive engagement (comprising attention and absorption). Results from a survey conducted with 509 employees from an insurance firm indicate that employees with harmonious passion performed better at work, and that this relationship was mediated primarily by cognitive absorption, that is, the intensity of focus and immersion experienced by the employees when working. However, even though obsessive passion was negatively related to cognitive attention (i.e. the amount of cognitive resources spent thinking about work), it did not have a significant relationship to work performance overall. We identify and discuss research and practical implications for job passion and performance management.     

HEADS I WIN,TAILS YOU LOSE: INSTITUTIONAL MONITORING OF EXECUTIVE PAY RIGIDITY

Agency theory argues that pay for performance alleviates the conflict of interest between managers and shareholders. Furthermore, the literature finds that institutional monitoring tends to promote the performance–pay linkage, thus aligning the two parties’ incentives. We find that executive compensation rigidity is negatively and significantly associated with firm value. Moreover, ownership by long‐term institutional investors reduces the pay rigidity of top managers in underperforming firms, thus decreasing the value‐destroying effect of the rigidity. Overall, these results reaffirm the role of institutional monitoring in mitigating managerial rent extraction.     

The Contributions of Firm Innovativeness to Customer Value in Purchasing Behavior

The purpose of this research is to examine the influence of firm innovativeness and product innovativeness on the components of customer value mediated by instrumental and symbolic brand benefits. Over the last 10 years, the mobile phone industry in Korea has grown rapidly, with the introduction of several innovative phone features. The research context therefore is mobile phones with Internet access and their users in Korea. A major research finding is that the firm innovativeness affects product innovativeness, and hence, the instrumental brand benefits. A firm's innovativeness also has a significant effect on the symbolic brand benefits and the partnership value. Our key academic contribution is to expand the previous fragmentary studies of customer value, by classifying customer value into four components: expectation, partnership, transaction, and relationship customer values, rather than just focusing on benefits and sacrifices. Implications for managers include the verification that firm innovativeness is a source of ability for mobile phone firms to create value for customers. Instrumental and symbolic brand benefits through innovation should be the focus area for marketers and new product development (NPD) managers in mobile phone firms to communicate with consumers to increase expectation values in the prepurchase step.