The Impact of Power Distance and Uncertainty Avoidance on Real Options Exercise: Potential for Suboptimal Time Delays and Value Destruction

Real options (RO) valuation has been promoted as a way to evaluate investment opportunities and make investment decisions that takes into account the value of managerial flexibility in the face of uncertainty. Although RO enjoys a substantial body of literature considering its application and suitability in different situations, the impact of national culture on the application of RO has received little attention. Values embedded in national culture affect the behavior of managers. In particular, these values play a role in how managers frame information, communicate, and make decisions, directly and indirectly affecting behavior through cultural layers such as organizational culture. National culture, therefore, can systematically affect the application of RO, potentially leading to suboptimal outcomes. In this article, we hypothesize how 2 particularly relevant dimensions of culture, power distance and uncertainty avoidance, affect RO exercise, and estimate the magnitude suboptimality of these effects using a model we develop for the case of a put option. Our estimates suggest RO may not always be a superior valuation approach to net present value for national cultures with certain characteristics.     

Investor behaviour and reaching for yield: Evidence from the sterling corporate bond market

We provide evidence on how corporate bond investors react to a change in yields, and how this behaviour differs in times of market‐wide stress. We also investigate ‘reaching for yield’ across investor types, as well as providing insights into the structure of the corporate bond market. Using proprietary sterling corporate bond transaction data, we show that insurance companies, hedge funds and asset managers are typically net buyers when corporate bond yields rise. Dealer banks clear the market by being net sellers. However, we find evidence for this behaviour reversing in times of stress for some investors. During the 2013 ‘taper tantrum’, asset managers were net sellers of corporate bonds in response to a sharp rise in yields, potentially amplifying price changes. At the same time, dealer banks were net buyers. Finally, we provide evidence that insurers, hedge funds and asset managers tilt their portfolios towards higher risk bonds, consistent with ‘reaching for yield’ behaviour.     

“100% EDI-connected suppliers” projects: An empirical investigation of success factors

Electronic Data Interchange (EDI) is becoming increasingly important, and new organizational forms based on EDI suppliers’ capabilities are emerging. Therefore, taking advantage of recent technological changes, especially the development of Web-based EDI systems, many big industrial buyers are seeking to get all their suppliers EDI-connected. Based on previous research on EDI adoption, we conducted a survey to study the opportunities of success of such a “100% EDI-connected suppliers” policy using data from the vehicle industry. Findings from our survey helped us to understand suppliers’ responses to such a policy and to provide recommendations to industrial buyers who are seeking to succeed in a “100% EDI-connected suppliers” project. This includes employing tailored communication strategies and selecting appropriate incentives that take into account different levels of suppliers’ EDI-capabilities and suppliers’ dependence.     

What Do Bettors Want? Determinants of Pari‐Mutuel Betting Preference

A bstract .   This paper is an analysis of the demand for thoroughbred racetrack wagers, examining evidence that would support the existence of two types of bettors: the risk-averse informed bettor versus the uninformed bettor. Looking at 12 major racetracks over the fall of 2002, we undertake an empirical examination of the determinants of bettors' preferences for particular wagers on specific races. The goal is to try to determine what individual aspects of a race (conditions, surface, participants, etc.) will encourage increased wagering dollars. With the advent of simulcasting, the competition for the wagering dollar is fierce, as the bettor can choose from more than 100 races daily, each race offering numerous betting options. We find for most wagers that higher quality participants, larger and more competitive fields, and turf races increase betting volume while higher pari-mutuel takeout, poor track conditions, and other races run concurrently reduce volume. However, more competitive fields reduce betting volume in the show and trifecta pools. Optimal field size is determined to be between 10 and 12 betting interests. Overall, we find support for the existence of a significant share of risk-averse informed bettors.     

Managed competition

People don't like change. That includes materiel managers, administrators, and clinical providers. Managed competition or managed care will work if, and only if, the American professions and the American public recognize the value of highly educated and qualified clinical and nonclinical providers and if the health care industry responds in kind.     

Impacts of e-Commerce and Enhanced Information Endowments on Financial Services: A Quantitative Analysis of Transparency, Differential Pricing, and Disintermediation

Some implications of e-Commerce financial services firms are becoming clear. The web drives transparency, and increases the information endowment of all market participants. It is harder to manipulate customers' behavior, or to overcharge them. Transparency drives differential pricing. Not all customers can or should be charged the same prices. Transparency reduces the viability of cross-subsidies between customers can or between products. The differential pricing enabled by the web transforms distribution channels, and enables direct distribution and alternative forms of distribution. Some intermediateraries may be bypassed altogether, while others may rapidly lose their best, most profitable, and previously most loyal customers.     

New MII Circular on Telecom and Internet Firms

On July 13, 2006, the Min istry of Information Indus try of the People＇s Repub lic of China （＂MII＂） issued a new notice concerning foreign-invested telecom and internet companies in China. MII＇s ＂Notice on Strengthening Regulation of Foreign Investment in and Operations of Value-Added Telecom Services＂ （the ＂MII Circular＂）, further clarifies the existing regulatory framework governing foreign investment in internet and other value-added telecommunications （＂ VATS ＂） businesses in China.     

与娜塔莉·德约博格对话

有一部电视卡通《弗莱格》(Fraggle Rock)就吓坏了我。杰拉德·马特:你在瑞典出生,获得过马尔摩艺术学院美术新媒体学位,是吗?娜塔莉·德约博格:是的。     

How perceived empowerment HR practices influence work engagement in social enterprises – a moderated mediation model

Abstract

Drawing insights from the group engagement model and self-determination theory, our research explored the role of perceived empowerment human resource (HR) practices in the hybrid organizational form of social enterprise in China. Based on two studies, this paper developed and examined a moderated mediation model, linking perceived empowerment HR practices, identification motivation, work engagement, and authority work value. Specifically, in Study 1 we found perceived empowerment HR practices increased employees’ work engagement through enhancing employees’ identification motivation. In Study 2, we adopted a two-wave design to duplicate and extend this mediation model. A moderator, employees’ authority work value, was found to weaken both the mediation relationship, and the positive relationship between perceived empowerment HR practices and identification motivation. This study broadens the understanding of what social enterprises look like in alternative contexts, while providing an opportunity to explore how a HRM mechanism and its boundary condition function in large social enterprises in China.