A model of the used car market with lemons and leasing

This article extends Kim's (1985 Kim, J-C. 1985. The market for lemons reconsidered: a model of the used car market with asymmetric information. American Economic Review, 75: 836–43.  [Google Scholar]) model of the used car market with asymmetric information to examine the possible impacts of leasing and Certified Pre-Owned (CPO) programs on the average quality of traded used cars in the market. The author assumed that a consumer can buy or lease a new car, or he/she can buy a used or a CPO car. While, like Kim (1985 Kim, J-C. 1985. The market for lemons reconsidered: a model of the used car market with asymmetric information. American Economic Review, 75: 836–43.  [Google Scholar]), the author assumed that the quality of a car depends on the maintenance level, the maintenance level in this model is chosen when a car is still a ‘new’ car, i.e. after the warranty ends. The model implied that the average quality of traded used cars can be either higher or lower than the average quality of nontraded used cars. The study also found that leasing and CPO have substantially improved the information mechanism between buyers and sellers of used cars, which, in turn, has helped reduce adverse selection and improved the average quality of traded used cars in the market.     

REDISTRIBUTIVE OUTCOMES OF SICKNESS INSURANCE ON INCOME: AN EMPIRICAL STUDY OF SOCIAL INSURANCE INSTITUTIONS

We analyzed the redistributive outcomes of sickness benefits using a typology of social insurance institutions, including four different systems, after adjusting for sickness risk factors. The aim is to empirically observe if the expected redistributive pattern of the typology could be verified whether or not considering the variations in sickness risk across the countries. Data on household earnings and sickness benefits in ten countries and for different years were taken from the Luxembourg Income Study. We also used data on labor force demography and educational attainment. Gini coefficients were used for measuring earnings inequality. Relative changes in earnings inequality for sickness benefits were predicted by social insurance institutional dummies using multiple regression analyses. Among the four different schemes, the encompassing system is found to be most redistributive, followed by basic security and targeting systems. The corporatist system has shown no significant difference from the encompassing system in redistributive outcomes.     

Policy preferences of experts seeking to raise and stabilise farm incomes in the Eastern Gangetic Plains

Poverty is endemic in the highly populated Eastern Gangetic Plains where agriculture is critical to more than half the population. However, the mechanisms to support agriculture for development are contested. For example, some have advocated a strong role for government support and assistance due to market weaknesses, while others have promoted the need for more market-oriented approaches. We use an elicitation process focussed on expert policymaking communities, employing stated preference techniques to explore these options. Differences in perceptions about the effectiveness of policies and their delivery are reported between countries, while also empirically examining the influence of the respondents' organisational background. The results show support for policies that improve farmers' access to inputs, especially when delivered by private sector actors. The research provides an important contribution to the literature on policies for agricultural development.     

Corporates' strategic responses to economic policy uncertainty in China

Using a novel news‐based index of economic policy uncertainty, this paper studies the impact of economic policy uncertainty on corporate strategic positioning and corporate risk in China from 2009 to 2015. The study also investigates the impact of corporate strategic positioning on corporate risk. The results show that corporate strategic positioning and economic policy uncertainty have a significant positive impact on corporate risk. The results also explain that economic policy uncertainty increases the market risk of the firms irrespective of their corporate strategy. However, it increases the business risk of prospector firms and decreases the business risk of defensive firms. The study may help the firms to formulate and improve their strategic positioning while considering economic policy uncertainty. Our results are robust to alternate proxies of economic policy uncertainty and corporate risk.     

Consumers un-tethered: A three-market empirical study of consumers' mobile marketing acceptance

This study examines factors influencing consumers' acceptance of mobile marketing across three influential markets, namely U.S., China, and Europe. The authors develop an integrative conceptual model on consumers' attitudes and behaviors toward mobile marketing. The authors incorporate three individual-level characteristics, namely personal attachment, innovativeness, and risk avoidance and investigate how permission-based acceptance influences the relationship between consumers' attitude and mobile marketing activity. Focusing on Generation Y consumers, the model is empirically tested with data from U.S., China, and Europe. The findings illustrate several cross-market differences and similarities regarding the relationships between individual-level characteristics, attitude, and mobile marketing activity. Research and managerial implications of these findings are discussed.     

Hedging performance of multiscale hedge ratios

In this study, the wavelet multiscale model is applied to selected assets to hedge time-dependent exposure of an agent with a preference for a certain hedging horizon. Based on the in-sample and out-of-sample portfolio variances, the wavelet-based generalized autoregressive conditional heteroskedasticity (GARCH) model produces the lowest variances. From a utility standpoint, wavelet networks combined with GARCH have the highest utility. Finally, the wavelet-GARCH model has the lowest minimum capital risk requirements. Overall, the wavelet GARCH and wavelet networks offer improvements over traditional hedging models.     

Determinants of IT Usage and New Product Performance*

Explosive growth of information technologies (IT) has prompted interest in examining the role of IT in new product development (NPD). Through desktop software and Web‐based tools, IT has been used to aid idea generation and product testing as well as for NPD activities such as process and portfolio management. Recent research suggests, however, that a gap exists between IT availability and usage. Given the importance of IT in creating business value through the development of new products and services, the present study seeks to identify factors that affect IT usage. Further, anecdotal evidence and conceptual studies intimate that the usage of IT tools for NPD can shorten time to market, can improve product quality, and can increase productivity. However, empirical substantiation of this impact is mostly nonexistent. The current study investigates the relationship between IT usage and two measures of new product performance: speed to market and market performance. Employing a mail‐survey methodology, the study uses data from a sample of practitioner members from the Product Development & Management Association to examine the effect of project risk, existence of a champion, autonomy, innovative climate, IT infrastructure, and IT embeddedness on the extent of IT usage. These data are also used to explore the impact of IT usage on speed to market and market performance. The results indicate that project risk, existence of a champion, and IT embeddedness positively affect the extent of IT usage for NPD. Additionally, IT usage positively and significantly influences the performance of the new product in the marketplace. Surprisingly, and contrary to popular belief, IT usage does not have any impact on speed to market. An important implication of this study is that IT usage influences performance but not in the way managers expect. Specifically, IT usage does not seem to affect speed to market but rather positively impacts the performance of the new product in the marketplace. This result suggests that IT usage in NPD provides far more value to firms than previously thought and provides evidence to support greater investments in IT for product development efforts. Other implications of the study are that unless IT is embedded into the NPD process and champions for IT tools exist, chances are that IT will not be used and its benefits will not be realized.     

The Development of Accounting and Reporting in Ghana

In this paper, we examine the economic, political, and legal systems as well as the institutional factors that influence the accounting and disclosure practices in Ghana. The impact of International Financial Reporting Standards (IFRS) on disclosure is also investigated, as Ghana has recently completed full adoption. We find that the accounting and reporting practices are significantly influenced by legal, political, institutional, and economic factors and that the regulatory environment is neither effective nor efficient due to the weak monitoring and enforcement of compliance. Although there has been some recent progress, the Companies' Code, which is the corporate legal framework of Ghana, must be updated to reflect the dynamic nature of world operations. This study advances the course of standards setters, regulators, accounting practitioners, and policymakers to improve the corporate reporting and accounting practices. Urgent measures need to be undertaken to reform and build the capacities of institutions charged with the responsibility of regulating and monitoring Ghanaian accounting and reporting practices to ensure best practices and build investors' confidence.     

Brand in the hand: A cross-market investigation of consumer acceptance of mobile marketing

Given the great potential of developing marketing campaigns delivered via mobile devices and the evolution of near-field communication technologies, this study examines factors influencing consumers’ acceptance of untethered, or mobile, marketing across three influential markets: the United States, China, and Europe. We examine the extent to which the usefulness of mobile information/programs and individual characteristics—namely innovativeness, personal attachment, and risk avoidance—jointly influence attitudes toward mobile marketing, and how the latter influences consumers’ mobile marketing activity across three large and influential markets. We found perceived usefulness, consumer innovativeness, and personal attachment to directly influence attitudes toward mobile marketing in all three markets. In China and Europe, risk avoidance also negatively influences attitudes toward mobile marketing. Marketers seeking to build and maintain customer relationships via mobile platforms should view these individual characteristics as levers brands can push to amplify consumers’ acceptance of mobile marketing.     

Development of financial reporting environment in Malaysia

The purpose of our paper is to examine the development of the financial reporting environment in Malaysia. We explore the influence of environmental factors such as social, political, economic, legal and cultural in the development of accounting and Malaysia’s recent move towards the adoption of International Financial Reporting Standards (IFRS). We find that Malaysia’s colonial past and the reformation of corporate governance have significantly influenced the country’s financial reporting practices. Although there are a number of reforms in place more needs to be done in order to improve the transparency of corporate financial reporting practices in Malaysia. Our conclusion suggests the necessity to improve the quality of financial reporting practices and to build the confidence of stakeholders and potential investors. The findings of our study are particularly important to the standard-setters, regulators and accounting professionals to improve the financial reporting practices in Malaysia and other developing countries throughout the world.