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CONTENTS of Volume 30, Number 1, June 2024
The Measurement of Efficiency of Asia-Pacific Airports: An Application of Network Data Envelopment Analysis
Author Sungbin Kim, Hyonchang Kim, Nikita Kim, Jungsuk Oh
Keywords DEA, efficiency, airport performance, Asia-Pacific region, two-stage network DEA
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This paper aims to analyze the efficiency level of the airports in Asia-Pacific region. By using two-stage network DEA, efficiency of the airport is decomposed into two sub-procedures: operations and revenue efficiency. Regression and non-parametric statistical testing were performed to test research questions regarding internal and external factors determining the difference in efficiency levels across the airports. It was shown that Asia-Pacific airports have low efficiency in revenue-generating stage, leading to low efficiency overall. Also, several statistically significant factors were identified in terms of determining airport efficiency levels, providing implications for airports in terms of setting managerial strategies.
The Effect of Discount Coupons on Lead Time Driven Cancellations
Author Jae Sang Rhee, Hongsuk Yang
Keywords Sale Promotion, Coupon, Profit Maximization, Order Cancellations, Lead time
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This paper analyzes the optimal level of discount coupons and a point when to introduce it in a situation when firms provide discount coupons to minimize its loss; order cancellations occurred by difficulty in delivering products on time due to an increase in orders. This paper first finds the expected number of order cancellations using the nonhomogeneous Poisson process. Second, the profit function is structured by introducing discount coupons with a multivariate probability function. Findings reveal that offering coupon helps a firm to minimize its loss of profit, but if popularity does not settle down, discount coupon is no use.
Re-examining the Relation between Financial and Tax Reporting Aggressiveness
Author Hyungjin Cho, Heesun Chung, Lee-Seok Hwang, Seunghee Yang
Keywords financial reporting aggressiveness, tax reporting aggressiveness, non-linear relationship, agency theory, external monitoring
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This study contributes to the ongoing debate concerning whether firms that exhibit aggressive financial reporting are correspondingly more or less aggressive in tax reporting. Drawing upon the agency theory, it would be reasonable to anticipate that managers, in pursuit of private benefits, will seek to maximize reported earnings while simultaneously minimizing tax liabilities. However, given that tax regulatory agencies utilize financial information for monitoring purposes, the detection risk of tax reporting aggressiveness (TRA) and the associated penalties escalate with the degree of financial reporting aggressiveness (FRA), compelling firms to weigh the competing incentives of financial and tax reporting. Our empirical investigation reveals that while TRA increases with FRA at lower levels of FRA, this relation reverses at higher levels of FRA, resulting in an inverted U-shaped relation between FRA and TRA. We also find that the negative association between FRA and TRA observed at high levels of FRA is stronger during the periods when tax regulatory agencies rely more on financial reporting. These results indicate that both FRA and TRA are intricately determined through a manager’s cost-benefit analysis and thus necessitate consideration as a unified strategic approach. Additionally, our findings suggest that empirical models assuming a linear relationship may inadequately capture the joint determination of FRA and TRA.
The Fragility of Price Informativeness
Author Jungsuk Han
Keywords informed trading, information acquisition, intertemporal feedback, price informativeness, uncertainty
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This paper investigates the influence of uncertainty on information acquisition in financial markets with information asymmetries. Using a variation of the Kyle (1985) model, we analyze the interactions among short-horizon informed traders, linking information acquisition to different levels of fundamental uncertainty. Expectations of future changes in information acquisition shape current trading incentives, impacting subsequent information acquisition. This feedback can lead to a self-fulfilling collapse of price informativeness. Our findings suggest that either too little or too much fundamental volatility may result in uninformative prices, creating market fragility.
Seoul Journal of Business
ISSN 1226-9816 (Print)
ISSN 2713-6213 (Online)