Momentum profits in the Australian equity market: A matched firm approach

This paper examines momentum trading strategies within the Australian equity market over the period 1990 to 2007, inclusive. We analyse excess returns employing both Jegadeesh and Titman's (Jegadeesh, N., Titman, S., 1993. “Returns to buying winners and selling losers: implications for stock market efficiency”. The Journal of Finance, 48:65–91) zero cost investment portfolio approach and a matched control firm approach. We also allow for short sale restrictions, liquidity constraints and transaction costs in the form of bid-ask spreads. Testing reveals that both the Jegadeesh and Titman (Jegadeesh, N., and Titman, S. (1993). “Returns to buying winners and selling losers: implications for stock market efficiency”. The Journal of Finance, 48:65–91.) zero cost investment portfolio approach and the matched control firm approach yield excess profits. While the implementation of short sale restraints increases momentum profitability, the subsequent inclusion of bid-ask spreads results in a reduction in these gains. Further, we find that executing a momentum strategy in Australia results in statistically significant dollar profits.     

The Financial Performance of a Socially Responsible Investment Over Time and a Possible Link with Corporate Social Responsibility

This paper empirically examines the financial performance of a UK unit trust that was initially “conventional” and later adopted socially responsible investment (SRI) principles (ethical investment principles). Comparison is made with three similar conventional funds whose investment objectives remained unchanged. Analysis techniques employed in previous studies find similar results: mean risk-adjusted performance is unchanged by the switch to SRI, with no evidence of over-or under-performance relative to the benchmark market index by any of the four funds. More interestingly, changes in variability of returns over time are also modelled using generalised autoregressive conditional heteroscedasticity models, not previously applied to SRI funds so far as is known. Results show a temporary increase in variability of returns, followed by a return to previous levels after around 4 years. Evidence shows the increased variability to be associated with the adoption of SRI rather than with a change in fund management. Possible explanations for the subsequent reduction in variability include the spread of corporate social responsibility activities by firms and learning by fund managers. In addition to reporting on a previously unobserved phenomenon, this paper raises questions for further research.     

Job guarantees, employability training and partnerships in the retail sector

This paper discusses the potential value of local, partnership-based employability training and job guarantee programmes, focusing on one example—the 'Alloa Initiative'. The Initiative involved an employability training and job guarantee scheme developed in partnership with Tesco, a major retailer, in preparation for the opening of one of the company's new stores. This paper reports on the outputs from this project, which placed 109 disadvantaged job seekers into positions at the store, and proved particularly effective at targeting the long-term unemployed and those with limited experience of the retail sector. The analysis is based on the findings of survey research undertaken with 86 of the 109 training course completers (a 79 per cent response rate) and all the main partners involved in the Initiative. Innovative elements of the training programme that contributed to its positive outcomes are discussed, and a model for 'managing successful partnerships' is applied, in order to identify critical factors explaining the apparent success of the Initiative. In particular, the importance of employers providing job guarantees is noted.     

IS THE DOLLAR REALLY UNDER-VALUED?

In the second of tow articles focusing on the determinants of real exchange rates Jenni Greenslade and John Whitely look at estimates of "equilibrium" exchange rates derived from the FEER approach. They find evidence that the dollar is currently under-valued but its equilibrium level is expected to depreciate in the future. Estimates of equilibrium rates are shown to be sensitive to assumptions about trade elasticities and the opening up of the service sectors in international trade.     

Supporters’ Perceptions of Benefits Delivered by Different Charity Activities

Donating time and money are traditional ways individuals support charities. Other support activities include buying charity products, attending events, or sponsoring others. The proliferation of activities means that charity marketers often face difficult decisions when designing a portfolio of support-generating activities. This research draws on the social exchange theory to examine 11 charity-support activities from the supporter’s perspective. Drawing on Australian data from a survey of 248 supporters of a wide range of charities, we use correspondence analysis to map each activity against four benefit dimensions (material, social, expressive, and personal commitment). We quantify overall supporter perceptions of benefits delivered by engaging in each activity and use multinomial logistic regression to identify how past experience can shape perceptions of activities. We discuss academic and managerial implications, including whether or not specific attributes are more useful to recruit or to retain supporters.     

Correction to: Are two brands better than one? Investigating the effects of co-branding in advertising on audience memory

Marketing Letters - The article Are two brands better than one? Investigating the effects of co-branding in advertising on audience memory, written by Cathy Nguyen, Jenni Romaniuk, Margaret...     

IQ and Audit Quality: Do Smarter Auditors Deliver Better Audits?

This study examines the role of an individual auditor's cognitive ability in delivering high‐quality audits. Our results from analyzing archival data from Sweden show that audit partners' IQ scores obtained from psychological tests are positively associated with going‐concern audit reporting accuracy and audit fee premiums. We also find some, albeit weak, evidence that audit partners' IQ scores are negatively associated with the income‐increasing abnormal accruals of the client. These results suggest that, although audit services are standardized through various control mechanisms and audits are conducted by teams rather than by individual auditors, the cognitive ability of audit partners responsible for an audit remains important in delivering high‐quality audit services.     

Out of control or right on the money? Funder self-efficacy and crowd bias in equity crowdfunding

Our findings extend the entrepreneurship literature by highlighting the mechanism through which self-efficacy can hinder rather than enhance performance in entrepreneurial settings. Using two complementary experimental studies and a third quasi-experimental field study on equity crowdfunding decisions, we demonstrate that self-efficacy is negatively related to decision-making performance. This relationship is mediated by reduced searching effort. Our research also indicates that high self-efficacy funders tend to exhibit a “crowd bias” whereby they over-weight the opinions of the crowd, increasing the likelihood that they will fund poor quality ventures when such ventures are favored by the crowd. We introduce the term crowd bias and explore its effects, establishing that social indicators in the form of crowd cues can exasperate the negative effects of self-efficacy.     

Is consumer psychology research ready for today’s attention economy?

ABSTRACT

Attention has become an area of major interest in marketing research as a dependent or moderating variable. In this article, we argue for respondent attention as a pivotal part of any consumer psychology research protocol and highlight the risks of not incorporating realistic attention components into research design. We propose four areas where this approach can help the external validity of consumer psychology research. Our recommendations include accounting for variability in the baseline attention levels; smart use of distractions; allowing for variability in attention over the task and avoiding attention leading/assumptive questions.     

Benchmarking buyer behavior towards new brands

New brand launches are risky endeavors for marketers, as many fail to attract a sustainable customer base. This research examines the buying behavior of customers acquired by a new brand and revisits the theoretical norms of the NBD-Dirichlet model benchmarks. Investigating 40 new brand launches in the UK, across a wide range of brand and category conditions, we find that in the first 12 months, new launches have more, but less loyal buyers than expected from NBD-Dirichlet benchmarks, irrespective of type, price point, or the sales gained by the new launch. Further we find exploratory evidence that new buyers of brands have weaker associations than existing buyers. We propose that the combination of the new experience that lacks distinctiveness in encoding means that the experience of buying the new brand creates weaker memory traces in new buyers and that these buyers need additional marketing reinforcement to consolidate the memory of buying the brand to establish the brand in their ongoing repertoire.