A new hub and spoke system proposal: A case study for Turkey's aviation industry

In this paper, we are proposing a multi-objective mathematical model for the selection of a newly constructed hub and spoke system. The objectives of this model are maximizing aircraft utilization and revenue whilst reducing the commercially infeasible network detour factor. The sensitivity analysis of the model is tackled using weights related to the objectives as well as the network detour factor. The number of available aircraft and the range that an aircraft can reach are also considered in this model. Since Istanbul has already got a hub and spoke system with busy airports on both sides of the city, the model is applied to three other major cities of Turkey, Ankara, Antalya, and Izmir. The test data consists of over 90 cities in Europe and in the Middle East. The data includes unit passenger revenues and operating costs for the segments, distances between cities and hubs, expected load factors and flying times of segments. The scenarios are tested under specific expectations of airline network experts and the results are visualized by using Pareto front graphs. Compared to other candidates, Antalya stands out as a good choice for a new hub and spoke system in Turkey. The results of this model could be helpful for airlines and other airports in Turkey in order to identify their potential and competitive position in relation to their counterparts.     

Partner‐diversity effects on alliance termination in the early stage of green alliance formation: Empirical evidence from carbon‐emission reduction projects in Latin America

Partner diversity is a key influencer in interorganizational alliances, and several empirical studies have shown that its outcomes are contingent on alliance‐specific factors. We extend this research as well as the growing literature on green alliances, in which partner diversity is uniquely high. Specifically, we examine partner‐diversity effects on alliance termination in the early stage of green alliance formation. We hypothesize that in this context, size disparity increases termination likelihood, whereas organizational variety and cultural separation have the opposite effect. To test our hypotheses, we use a sample of 366 alliance projects located in Latin America and submitted to the Kyoto Protocol's Clean Development Mechanism for evaluation, validation, and registration from 2004 to 2014. Our findings contribute to several research streams and provide practical guidance for successful formation of alliances focused on environmental protection.     

Supplier empowerment: Mediating situational factors and perceived performance

The understanding of the behavioral and cognitive factors that affect organizations' performance has attracted increasing attention of scholars and practitioners. Based on the literature of psychological empowerment at the individual and the team levels, this study develops the concept of supplier empowerment in the context of purchasing and supply management. Further, this study proposes a research model that explores the role of supplier empowerment as a cognitive concept in mediating the relationship between situational factors (a supplier's process modularity and the mutual trust with its customers/buyers) and the supplier's perceived performance in its operations and customer service. This model is tested with 208 responses from automotive industry suppliers. The findings highlight the importance of empowered suppliers in decreasing inventory levels and increasing order fulfillment performance.     

Valuing Initial Public Offerings Using Article 11 Pro Forma Financial Information in the Prospectus*

We investigate whether Article 11 pro forma financial information assists investors in valuing IPOs. While the SEC expects it to be helpful in assisting investment decisions, Article 11 pro forma financial information is based on registrants' understanding and assumptions, and registrants can exercise their own judgment when preparing pro forma financial statements. It is therefore an empirical question whether the information contained in pro forma financial statements is useful to investors. We examine the association between pro forma adjustments of earnings and book value of equity and the IPO offer value and find asymmetric results. While positive pro forma adjustments of earnings and book value of equity are positively associated with the IPO offer value, negative pro forma adjustments of earnings and book value of equity are negatively associated with the IPO offer value, suggesting that negative pro forma adjustments are priced as growth opportunities. Additional analyses reveal that the association between pro forma adjustments of book value of equity and the IPO offer value varies across different time periods and industries and that pro forma adjustments of book value of equity are initially mispriced by investors. In contrast, we do not find similar results for pro forma adjustments of earnings. Further empirical tests show that the asymmetric results of mispricing of pro forma adjustments of earnings and book value of equity may be explained by the requirements of Article 11 of Regulation S‐X for pro forma adjustments dictating that adjustments to earnings reflect only recurring items while adjustments to book value reflect both recurring and nonrecurring items.     

Auditors' Responses to Workload Imbalance and the Impact on Audit Quality*

Using detailed data for fieldwork hours and audit hours by rank from audit engagements in Korea, we examine whether audits conducted under workload imbalance, proxied by busy‐season audits, impair audit quality, and how auditors adjust staff assignments for busy‐season audits. We generally find that busy‐season audits are associated with lower audit quality, and that audit firms reduce the involvement of senior auditors during busy‐season audits. In addition, the greater the involvement of senior auditors and junior auditors, the lesser the deterioration in audit quality. Finally, although there is no increase in interim audits in response to workload imbalance during busy seasons, increasing interim audits can mitigate the negative impact of busy‐season audits on audit quality. Our results are relevant to auditors and regulators, who have expressed concerns about the adverse effects of workload imbalance on audit quality.     

Legal evolution of the concept of ‘home base’ for the purpose of determining labour and social security law applicable to European aircrew members

This paper has a dual aim: (1) to outline the legal evolution of the ‘home base’ concept and (2) to map the role of this concept in determining the law applicable (both employment law and social security law) to employment contracts of European aircrew members. An in-depth analysis of the relevant portions of (1) Reg. (EEC) No 3922/91, (2) Reg. (EU) No 465/2012, (3) Reg. (EU) No 83/2014, (4) EASA's 2014 Certification Specifications, and (5) the European Court of Justice's preliminary ruling on joined cases C-168/16 and C-169/16 is conducted.What emerges is that (1) the ‘home base’ definition, due to its subjectivity, has traditionally been susceptible to multiple interpretations and (2) due to regulatory ambiguity, the use of ‘home base’ to identify the labour laws applicable to airline workers has for a long time been inconsistent, ranging from one extreme (being considered a key element for this purpose) to the other (being assigned a secondary role). It was only in the last few years that some improvements were made, with Reg. (EU) No 465/2012 first and the European Court of Justice's 2017 preliminary ruling then, clarifying that the ‘home base’ concept must be assigned a central role in the determination of the law (both social security law and employment law) applicable to employment contracts in the aviation industry.     

信息化水平对生产率的直接效应和间接效应——劳动力技能结构的中介作用

构建了关于信息化水平、劳动力技能结构以及生产率的理论框架,探讨了信息化水平对生产率的直接和间接影响,以及劳动力技能结构在其中的中介作用,并利用中国省际面板数据对理论框架进行验证。结果表明:信息化水平对生产率同时具有直接影响和间接影响;信息化水平对生产率的直接影响呈现出动态的阶段性特征,两者之间存在U形关系,信息技术对生产率的促进作用只有在信息化水平达到一定程度后才能显现;信息化水平对生产率的间接影响通过劳动力技能结构的中介作用来实现:信息化水平的提升对低技能劳动者有明显的挤出效应,并带来了中、高技能劳动力需求上升,导致劳动力技能结构升级,从而促进劳动生产率以及资本生产率的提高;劳动力技能结构在信息化水平与全要素生产率之间的中介作用不显著。要使信息化更好地发挥作用,必须匹配较高水平的人力资本,劳动者需要进行持续学习与提升,以适应不断变化的社会需求。     

Cointegration in China's log import demand: Price endogeneity and structural change

The monthly data of China's log import from January 2000 to December 2013 are used to estimate the import demand elasticities, with the consideration of possible price endogeneity due to China's large share of the international log market, and structural break caused by global financial crisis in 2008. To address the possible structural break, cointegration tests allowing for a deterministic shift in the level of the variables are employed, and a two-stage estimation with top-down sequential elimination algorithm is performed on the restricted subset VECM. The results demonstrate that there exists a long-run cointegration relationship between China's log import and the explanatory variables. The import elasticities of macroeconomic development and import price are around 0.76 and −0.81, respectively. Other things being equal, the structural break would induce a 29.6% decline in China's log import. All the above parameters are significant at the 1% risk level. Furthermore, the contribution decomposition analysis suggests that China's macroeconomic development plays a dominant role in determining its log import, which implies that China's log import would not increase as quickly as before, given that its economy is shifting into the “New Normal State”. This conjecture is supported by our simulations, which indicate that, by 2020, the growth rate of China's log import will be lower than it has been in the past and the import volume would be approximately 1.1–1.6 times greater compared to imports in 2013.     

When do MNCs fail to learn from prior failure experience?

Do multinational corporations (MNCs) learn from their prior failures in international joint ventures (IJVs)? When does decision makers’ cognitive inability hinder MNCs from learning through their prior failure experiences? In the context of IJV survival in subsequent IJV entries, this study compares predictions made from two distinct theoretical perspectives, both of which belong to the behavioural school in strategy literature. According to the performance feedback perspective, MNCs may effectively learn from their prior failure experiences gained in familiar decision‐making contexts. On the other hand, according to the cognitive bias perspective, MNCs may not be able to effectively learn from their prior failure experiences if they inaccurately interpret the causes of their prior failures. The results provide partial support for the notion that MNC decision makers may not be able to effectively learn from their prior failures because of their cognitive biases. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.     

Building a better literature review: Looking at the nomological network of the country‐of‐origin effect

Due to a rising pace of knowledge production, reviewing extant knowledge on mature topics has become increasingly challenging. Researchers often need to account for hundreds of references with little guidance on how to proceed. Taking the phenomenon of the country‐of‐origin effect (COE) as an example, this paper proposes a solution to tackle this challenge. By adopting the principles of integrative literature reviews and using online databases, bibliography management software, and literature‐mapping techniques, I organize 355 papers about the COE. As a result, the nomological network of the COE is drawn while establishing links between the phenomenon, its antecedents, and its outcomes. This methodological article contributes to building better literature reviews. Copyright © 2015 ASAC. Published by John Wiley & Sons, Ltd.