Recent Issues

Vol.18/1 (2012, June)
I Will Like It Later But Not Now: The Roles of Temporal Distance and Guilt in Hedonic Product Evaluation
Author KIWAN PARK,YOUNGRONG KIM
Keywords construal level, guilt, hedonic consumption, temporal distance
Download
How and why does temporal distance influence consumers’ evaluation of future hedonic consumption? Drawing upon the construal level theory, we propose that guilt is a lower-level construal than hedonic pleasure and becomes salient in the immediate versus distant consumption. As such, we hypothesize that consumers evaluate future hedonic consumption less positively as temporal distance becomes smaller. We find that temporal distance influences product evaluation when the product is framed as a hedonic option, but not when it is framed as a utilitarian one (study 1). The effect of temporal distance is mediated by anticipated guilt (study 2).
Vol.18/1 (2012, June)
Markov Model of Word-of-Mouth Effect and Stock Market Participation
Author KUAN-HUI LEE
Keywords Markov chain, Word-of-mouth, pleasure-in-talk, stock market participation
Download
The question of determinants of participation of stock market has long been a central question to financial economists. Most notably, Hong, Kubik, and Stein (2001) argue that social interactions affects the investment decision of potential stock market investors through two popular channels: word-of-mouth and pleasure-in-talk about stock market. In this paper, I extend Hong et al.’s model of social interactions to incorporate different effects of these two channels on stock market participation, conditioning on current market situation. The idea is intuitive: When potential investors observe current bull (bear) market, word-of-mouth and pleasure-in-talk effect would work positively (negatively) toward stock market participation due to increased number of peers who benefitted (lost their wealth) from bull (bear) market situation. In Markov chain process framework, I model stock market participation depending on current market situation and discuss empirical implications of my model.
Vol.18/1 (2012, June)
A Study on Global Orientation in New Product Development among Small and Medium-Sized Firms
Author INSIK JEONG,JOOYOUNG KWAK,DONG JIN LEE
Keywords Global orientation in new product development, Customer orientation; Long-term focus
Download
While many small and middle-sized enterprises are entering into emerging markets to satisfy diverse consumer needs, limited attention has been given to global orientation in new product development among these small and middle-sized enterprises in emerging markets. In order to find the antecedents and consequences of this managerial value, we have developed and tested a model of global orientation in new product development among small and middle-sized enterprises. Specifically, we hypothesize that customer orientation and long-term focus have a positive influence on the global orientation among small and middle-sized enterprises, which in turn has a positive effect on performance. Data collected from 482 firms supports the model. Theoretical and managerial implications are discussed.
Vol.18/1 (2012, June)
An Empirical Assessment of A-Share IPO Under-Pricing in China
Author CHAN-HYUN SOHN,ALBERT K TSUI,FENG ZHANG,ZHAOYONG ZHANG
Keywords Chinese stock market, A-share IPO, Under-pricing
Download
This paper investigates the under-pricing and long-run performance of 230 A-share IPOs issued in the Chinese markets using comparable firm multiples. We find that A-share IPOs are severely under-valued by issuers and underwriters at the offer, but over-valued by investors on the listing day. Both contribute to the severe under-pricing of IPOs in China. Our findings are robust across stock exchanges, classification of firms, criteria for choosing matching firms; absence of CSRC regulation and B-share market prices, respectively. The results also show that those over-valued IPOs by investors on the listing day under-perform those under-valued IPOs in the long-run.
Vol.18/1 (2012, June)
Corporate Governance, Financial Slack and Firm Performance: A Comparative Study between US and UK
Author SANGHOON LEE
Keywords Corporate Governance, Financial Slack, Organizational Slack, GMM Regression
Download
This paper presents an empirical analysis of the relationship between financial slack and firm performance using a large panel data set of the U.S. and the U.K. firms. Conducting dynamic GMM regressions, the empirical analysis finds that there are the negative relationship between slack and performance in the U.S. and the positive relationship in the U.K. These empirical findings support the hypothesis that the relationship between slack and performance differs across corporate governance systems. The novelty of the paper lies in its demonstration of the conclusion on the role of corporate governance in the relationship between slack and performance as well as the fact that we could obtain the result by comparing the two countries—the U.S. and the U.K—that have been regarded as belonging to a single corporate governance system.
Vol.17/2 (2011, December)
Environmental Scanning Behavior of the Top Managers: A Regulatory Focus Model
Author Theresa S. Cho
Keywords Regulatory focus theory, top management teams, managerial cognition, diversity
Download
Drawing on regulatory focus theory (Higgins 1997), I propose a model of firm’s environmental scanning behavior. Specifically, I explore a firm’s environmental scanning behavior as a function of the motivational mindset of the firm’s top management team. Prior research has shown that diversity of the TMT’s composition has an impact on the firm’s strategic behavior. I take this premise further to suggest that: 1) a TMT’s cognitive diversity is likely to differ in the collective mindset in their degree of promotion- or prevention-focus; 2) this differential mindset is likely to mediate the processing style of the environment, and subsequently differentially drive the firm’s strategic choice.
Vol.17/2 (2011, December)
CEO Inside Debt and Costs of Bank Debt Financing
Author Joong Ho Han
Keywords inside debt, managerial agency, costs of debt, debt contracts, loan terms
Download
This study examines the role of CEO’s pensions and deferred compensations by exploring their impacts on pricing and non-pricing contract terms of bank loans. CEO’s inside debt, defined as the sum of defined benefit pension and deferred compensations, pays fixed amounts at periodic intervals. We find that higher inside debt holdings significantly reduce both loan rate spreads and demands for collateral. We also find that such effects are particularly pronounced under weak external governance proxied by a degree of anti-takeover defenses. Overall, our results support the idea that debt-like incentives for CEOs increase convergence of interests between managers and creditors.
Vol.17/2 (2011, December)
The Effect of Local Holdings on Audit Policy and Outcomes
Author Bok Baik
Keywords none
Download
This paper examines whether local block holdings are associated with audit policy and outcomes. For local investors are long-term investors and they tend to invest a larger portion of their total investment in local companies, I posit that local block holders will be dedicated investors and have strong incentives to monitor management. Consistently I find that companies with local block holders are less likely to have unclean/going-concern opinions, and more likely to have long-term relationships with auditors. In addition, although I find weak evidence that the existence of local block investors affects audit fees, I do not observe any significant difference of audit fees between firms with local block holdings and firms with nonlocal block holdings. Overall, this paper shows that information advantage of local investors can have real effects on audit process through monitoring activities.
Vol.17/2 (2011, December)
Cooperative Exchange with Substitutable Ties and Its Competitive Outcomes
Author Jonghoon Bae
Keywords Social Capital, Tie Substitution, Cooperation
Download
With a model of tie substitution, a construct that reflects each actor’s evaluation of his or her social relations or networks, this study proposes that each actor’s subjective evaluation of objective structural constraints may facilitate or delay the realization of structural constraints in general and the division of cooperative benefits in particular. It shows the following: first, ego with few (perceived) substitutable ties is likely to accept the unequal allocation of cooperative benefits; second, symmetry in tie-substitution at the global network suppresses (aggravates) competition for the division of cooperative outcomes when individual tie-substitution is low (high).
Vol.17/2 (2011, December)
Brand Equity Model and Marketing Stimuli
Author Hong-Youl Ha
Keywords marketing stimulus, brand equity process, satisfaction, loyalty
Download
The intangibility of services differentiates product brands from its characteristics. Building brand equity in the context of services, is therefore crucial to the conduct of a firm’ marketing strategies and plays an important role in increasing consumers’ perceptions. This study attempts to address relationships between brand equity and marketing stimuli. In particular, the study aims to draw theoretical and managerial implications from comparisons between bank services and discount malls. The empirical tests use a structural equation model (bank vs. discount mall) to support the research hypotheses. The findings show that marketing stimuli have a different influence on brand equity between the two different categories. Results from comparison between two different settings indicate that satisfaction plays a critical role as a mediator between antecedents of brand equity and outcomes. As a result, the model increases understanding of brand equity processes and extends existing knowledge of academic scholars in different service categories. This article discusses future research directions and managerial implications
Seoul Journal of Business
ISSN 1226-9816 (Print)
ISSN 2713-6213 (Online)