Current Issue

CONTENTS of Volume 26, Number 2, December 2020

  • YOUNGSOO CHOI, WOOJIN KIM, EUNJI KWON

  • Holding Period and Investor Performance: An Analysis of Account-Level ELW Transactions

  • ABSTRACT

    This paper documents that median holding period in structured products based on market index is less than a day from initial purchase to liquidation even for retail investors. Less than 6% of all series ever traded by retail investors are held until maturity. Based on a unique proprietary dataset that provides the details of all transactions - including account identifier and direction of the trade - in the Korean ELW (equity linked warrant) market between 2009 and 2011, we find that trading performance is negatively correlated with holding period. Specifically, both HFT (high frequency trader) accounts and non-HFT accounts perform worse when either average holding period is long or average end-of-the-day position is large. Our findings suggest that the relationship between holding period and trading performance in the structured product markets may be fundamentally different from those in equity markets.

  • KEYWORDS

    Option, ELW (Equity Linked Warrant), HFT (High Frequency Trader), Korea

  • JOE (PYUNG) NAHM, SUN HYUN PARK

  • Value of Friendship: Instrumental and Sentimental Motivations for Corporate Executives’ Networking Behavior

  • ABSTRACT

    We examine how corporate executives form and retain interpersonal ties with other executives. Drawing on social exchange theory, we argue that corporate executives have instrumental and sentimental motivations in their efforts to develop ties with other executives. Our results show that the higher (lower) instrumental (sentimental) motivations of an executive, the higher the likelihood of friendship seeking tie, since executives pursue different benefits from ties. Executives also seek advice from more competent executives, and the instrumental motivation continues to impact executive’s retention of friendship ties. Utilizing social network data among Korean executives, our empirical data provide support for our arguments.

  • KEYWORDS

    Corporate Executives, Networking Motivations, Social Networks, Social Exchange Theory

  • MINJAE KOO, JEONG-HOON HYUN, INY HWANG, TAESIK AHN

  • Distorted Cost Allocation: An Encouragement or Discouragement?

  • ABSTRACT

    Firms allocate divisions overhead costs, to provide information for management decisions (information perspective) and create incentives to control costs (motivation perspective). They occasionally distort (overor under-allocate) cost, so that the allocated cost is deviated from the optimal level for which divisions are expected to be accountable (hereafter, cost distortion). We study the impact of cost distortion on divisional performance and firm performance. We find that both over- and underallocation discourage divisional managers from improving their subsequent performance and that cost distortion negatively affects the overall firm performance. Our findings suggest that for motivation and decisionfacilitating purpose, it is desirable that overhead costs are allocated at an anticipated level.

  • KEYWORDS

    Cost allocation, cost distortion, divisional incentives, accurate cost drivers

  • HYONCHANG KIM, JUNGSUK OH

  • Measuring Electronic Service Quality (E-SQ) in Mobile E-Commerce Services Using Fuzzy AHP and TOPSIS

  • ABSTRACT

    This paper proposes an approach to measuring E-Service Quality (ESQ) in mobile commerce industry. Our approach is based on SERVQUAL instrument, which has been widely used in the context of web-based service quality measurement. Our model uses fuzzy method, specifically incorporating fuzzy analytical hierarchy process (AHP) and fuzzy TOPSIS to consider both quantitative and qualitative factors in order to measure electronic service quality (E-SQ) in mobile commerce application using SERVQUAL dimensions. Then, the model is utilized to rank four of the most competitive e-commerce related applications on mobile Android market using results from fuzzy AHP and TOPSIS.

  • KEYWORDS

    Mobile commerce, Fuzzy, AHP, TOPSIS, E-Service quality, Quality management