Current Issue

CONTENTS of Volume 24, Number 1, june 2018

  • KYOUNGMI LEE

  • Feeling Stereotyped and its Effects on Investment Decisions

  • ABSTRACT

    How do consumers respond in financial contexts when a negative stereotype about an ingroup is salient? I predicted and found that, in such circumstances, consumers consistently preferred safe investment options to riskier yet potentially better-pay-off ones, as compared to the situation in which a negative ingroup stereotype is not salient. The results of three experiments suggest that consumers tend to prefer stable securities (e.g., Treasury bonds or stocks with low betas) versus unstable securities (e.g., stocks with high betas) when a negative stereotype to their group is made salient.

  • KEYWORDS

    Stereotype Threat, Investment Decisions, Risk-taking tendency, Avoidance Motivation

  • YUJIN KIM

  • What Makes the Divergence between Cross-border VCs and Domestic VCs Persist?: in the Context of the Chinese VC industry

  • ABSTRACT

    This project introduces the recent development of the Chinese VC industry. One characteristics of the Chinese VC market is that both cross-border VCs and local VCs play significant roles. The two types of VCs show clear difference in terms of invested sectors and geographic regions. This paper provides a literature review to address some mechanisms leading to the divergence. It also documents two mechanisms not addressed in the extant literature through interviews with local investors and startups: the rigidity of a typical startup’s fund structure and the types of limited partners of VCs explain why the divergence takes place in the first place and why the dissimilarity is likely to persist. The simple empirical analysis shows that cross-border VCs are more likely to invest in market-oriented high-tech sectors and regions with relatively well-established market institutions, while local VCs tend to invest in fields and regions of the nation’s strategic focus.

  • KEYWORDS

    Cross-border venture capitals (VCs), international VCs, VCs in developing economies, VCs in China, determinants of VC investments

  • KYU-HO BAE, JUNG-WOOK KIM

  • Positive Correlation between Systematic and Idiosyncratic Volatilities in Korean Stock Return

  • ABSTRACT

    Bartram, Brown, and Stulz (2016) report a strong positive correlation between systematic and idiosyncratic stock return volatilities and suggest heterogeneous firm-level responses to market wide shock may be an underlying driver. We test the hypothesis using Korean stock market data by including additional factors that reflect the macroeconomic conditions to the single factor model used in Bartram, Brown, and Stulz. Even though the correlation decreases by about 25% from 0.85 to 0.64 with additional factors, a substantial positive correlation still remains. In addition, we cannot find evidence that a high correlation industry experiences more volatile corporate sector dynamics in terms of changes in firm ranking and market share.

  • KEYWORDS

    systematic volatility, idiosyncratic volatility

  • MOON JOUNG KIM

  • Group Positive Affect and Group-level Organizational Citizenship Behavior: Investigating the Substituting Role of Leader Emotional Intelligence and the Mediating Role of Affective Fit Perception

  • ABSTRACT

    In the present study, I examine how group-level positive affect (GPA) may interact with a leader’s emotional intelligence (EI) to generate important group outcomes, such as group-level perception of affective fit and group-level organizational citizenship behavior (GOCB). A moderated mediation model was tested by using the data of 293 employees nested in 66 work groups. Research findings show that the indirect effect of GPA on GOCB through the group-level perception of affective fit is stronger when leader EI is low than when leader EI is high. These results highlight the substituting role of leader EI in the relationship between GPA and affective fit perception. The current analysis reveals potential complementary functions of GPA and leader EI in explaining subsequent group processes and performance.

  • KEYWORDS

    group positive affect, affective fit perception, GOCB, leader EI