What constrains firms from divesting their legacy business?

This study focuses on a unique business phenomenon, legacy divestitures, which refers to the sale or spinoff of a firm's original business. I argue that firms may be prevented from engaging in legacy divestiture by organizational inertia, which become increasingly stronger as the legacy business gets older. I also examine factors that help firms overcome the constraints of inertial forces on firms' legacy divestitures. Hypotheses are tested using a sample of 108 diversified American companies, 27 of which divested legacy businesses between 1980 and 2017. Firms are less likely to divest their legacy businesses as the legacy units get older. The negative relationship is weakened by two factors, performance–aspiration gaps and R&D intensity.     

Pricing risky corporate bonds: An empirical study

This paper empirically studies a model for pricing risky corporate bonds proposed by Baaquie—based on the seminal Merton. The proposed model provides an exact solution for the price of a risky corporate bond with a finite maturity and explains the market price of corporate fixed coupon bonds as being the result of the market risk that is carried by the bond. Baaquie's model is empirically tested using 42 fixed coupon bonds issued by 23 US corporations, between 2011 and 2017. It is found that the proposed model estimates most bond prices quite accurately. Market time (similar to the concept of psychological time), which is distinct from calendar time, is quantified in the paper and is an exogenous behavioral parameter that plays a pivotal role in improving the accuracy of the pricing model for long-maturity risky bonds.     

Media visibility and corporate social responsibility investment evidence in Spain

Despite the extensive research in both the determinants and the results of corporate social responsibility (CSR), relatively few studies have considered extra-legal institutions as potential determinants of CSR. Our work fills this gap by looking at how media attention affects CSR over a long-term period in a continental European setting. Our results show that media coverage positively affects CSR. Additional scrutiny triggered by media coverage encourages dominant owners to signal their commitment to limiting self-dealing transactions and their orientation toward stakeholders' needs through CSR investments. Additionally, our results reveal that this signaling device offers greater benefits and lower costs in firms where controlling owners show a voting-cash flow wedge. Our results are relevant to different actors such as investors, auditors, and policy makers as they provide solid evidence that media coverage is an important driver of CSR orientation in a continental European setting.     

BRAND ACTIVISM: A Literature Review and Future Research Agenda

Brand activism is a new and fragmented phenomenon that has been attracting growing attention from scholars. Research on this topic is still at an exploratory stage and in need of advancement and conceptualization. The aim of this study is to systematize the extant literature on brand activism by attempting an in-depth exploration of the antecedents that identify the construct along with the influencing and consequence factors that will need to be tested and validated by future research. This study adopts the guidelines provided by the SPAR-4-SLR protocol and considers 76 papers with no time limitation. To the best of our knowledge, this seems to be the first scientific systematization of brand activism. From the in-depth analysis of the extant literature, two conceptual frameworks were constructed that can guide both researchers, in their understanding and investigation of the phenomenon, and practitioners in their implementation strategies of brand activism. The no time restriction of the analysis has allowed an investigation of the phenomenon from its prodromes until recent years, also highlighting important gaps that will have to be filled by future research.     

Consumer value of virtual music festivals

Virtual music festivals (VMFs) are a great opportunity for the music industry to improve high quality digital events; as an alternative consumption phenomenon, VMFs can reach hybrid audiences and help in the challenge of digitalization. This study aims to investigate the multidimensional structure of consumer value in VMFs (intra-variable perspective), as well as the effects of value on cognitive versus affective satisfaction and loyalty (inter-variable perspective). Using a qualitative–quantitative approach—focus group and survey with festival attendees (n = 246)—, a value structure of VMF is tested with partial least square–SEM as a reflective-formative-formative third-order model. Benefits and sacrifices are second-order constructs, while five positives (escape, novelty, enjoyment, musical content, and socialization) and two negatives (monetary and nonmonetary costs) are first-order ones. Results show VMFs value as a multidimensional trade-off, where socialization is not contributing to value, but a balance between cognitive (musical content) and affective (enjoyment, and less escape and novelty) exists. Furthermore, consumer value intensifies both cognitive and affective satisfaction, but just the former affects loyalty. These findings provide new insights to better understand the decision-making processes of virtual festival attendees.     

Exploring the mediating role of utilitarian value and hedonic value in the formation of oppositional loyalty in online communities

Our research expands the scope of the research on oppositional loyalty from brands to online communities. Online communities allow members to freely express their opinions and promote the occurrence of oppositional loyalty behaviours towards the communities. Oppositional loyalty is defined in this article that, for the purpose of strengthening the market position of their preferred community, members of the online community may express negative views or even show oppositional behaviour towards adversarial communities. In view of social capital theory, the study examines the effect of hedonic value and utilitarian value on oppositional loyalty in online communities. The results show that only hedonic value significantly affects oppositional loyalty; hedonic value mediates the effect of the three dimensions of social capital (network ties, identification, and common language) on oppositional loyalty. The study identifies that community type moderates the impact of social capital (identification and common language) on hedonic value but does not moderate the effect of social capital on utilitarian value. Finally, we find that members' oppositional loyalty towards their community can promote their community participation. This research provides recommendations for online community managers to manage and benefit from members' oppositional loyalty.     

Social responsibility,moral hazard,and collateral requirement: Evidence from a quasi-natural experiment in India

The stakeholder theory predicts that corporate social responsibility (CSR) activities reduce the morale hazard problem between creditors and corporate firms and decrease the requirement of collaterals in debt transactions. Consistent with this theory, our analysis shows that there is a negative relationship between CSR and secured debt in a cross-section of firms. Further, by using the mandatory CSR regulation implemented in India as a quasi-natural experiment setting, we observe the same negative relationship across periods in firms that were impacted by the regulation. These results suggest that CSR activities may substitute collaterals for obtaining debt from financial institutions, especially banks.     

Stuck at the bottom: Role of tacit and explicit knowledge on innovation of developing-country suppliers in global value chains

We take a social exchange theoretical perspective of innovation to develop and test a model of the intervening role of tacit and explicit knowledge exchange in explaining innovation of developing-country suppliers in non-equity-based global value chains (NEGVCs). Results of structural equation modelling for a sample of Bangladeshi suppliers embedded in apparel NEGVCs show that tacit and explicit knowledge fully mediate the associations between network competence and both low value-added and high value-added innovation contingent on the quality of network relationships. We also found that both tacit and explicit knowledge contribute more to low value-added innovation than to high value-added innovation. The managerial and policy implications of our findings as to why developing-country suppliers in NEGVCs are stuck in low value-added activities are fully discussed.     

Uniform pricing effect: The influence of uniform pricing on product value judgement and purchase intention

Uniform pricing, which is a pricing strategy that sets a unified price for all products in the store or all products in the same category, is becoming increasingly popular over the past decades. However, scarce attention has been paid to investigating its impact on consumer behaviour. This research investigates the influence of uniform pricing on product value judgements and purchase intentions. Four studies demonstrate that uniform pricing (vs. non-uniform pricing) could induce stronger promotion perception, which leads to more positive product value judgements and purchase intentions. Moreover, price sensitivity and product involvement moderate this effect, and this effect only exists for high price-sensitive consumers and low product involvement consumers.     

Does servicification of manufacturing increase the GVC activities of firms? Case of India

Does greater use of services’ inputs in manufacturing increase the global value chain (GVC) activities of the firms? In this study, we analyse the effects of servicification on the GVC activities of manufacturing firms in India. Using panel data of 4608 Indian manufacturing firms from 2001 to 2018, we examine the effects of servicification of manufacturing firms on their decision to participate in GVCs. The study examines the overall service inputs in manufacturing activities and its impact on GVC activities of firms. The results indicate that servicification of manufacturing tends to have a positive impact on GVC activities of firms. We also observe positive impact on Indian small and medium enterprises (SMEs) to participate in the GVC through the servicification of manufacturing. Further, the results also indicate the differential impact of servicification between high- and low-technology industries.