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Research Collection Lee Kong Chian School Of Business

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2018

Articles 31 - 60 of 150

Full-Text Articles in Business

New Factors Wanted: Evidence From A Simple Specification Test, Ai He, Dashan Huang, Guofu Zhou Oct 2018

New Factors Wanted: Evidence From A Simple Specification Test, Ai He, Dashan Huang, Guofu Zhou

Research Collection Lee Kong Chian School Of Business

In this paper, we examine the pricing errors (PEs) of three kinds of factor models: a) six well known ones– the CAPM, the Fama-French three-factor model, the Carhart four-factor model, the Fama-French five-factor model, the Hou-Xue-Zhang Q-factor model, and the Stambaugh-Yuan mispricing-factor model; b) principal component factors of sixty-two anomalies; c) extracted statistical factors. We find that there is a systematic PE reversal pattern. A spread portfolio that buys stocks in the bottom PE decile and sells stocks in the top PE decile earns significant abnormal returns across all the models, implying that none of them is adequate in explaining …


Monitoring From Afar: Do Foreign Institutional Investors Deter Insider Trading?, Claire Yurong Hong, Frank Weikai Li, Qifei Zhu Sep 2018

Monitoring From Afar: Do Foreign Institutional Investors Deter Insider Trading?, Claire Yurong Hong, Frank Weikai Li, Qifei Zhu

Research Collection Lee Kong Chian School Of Business

This paper examines the disciplinary effect of foreign institutional investors on opportunistic insider trading. Using a novel global insider trading data set containing 35,557 firms from 26 countries over the period 2000-2015, we find that greater foreign institutional ownership significantly reduces the profitability of insider trading, above and beyond the effect of domestic institutional ownership. Using the exogenous variation in foreign institutional ownership induced by MSCI index inclusion, we show that the effect is causal. The impact of foreign investors is stronger in countries with weak insider trading regulations and poor institutional environments, and operates mainly through the monitoring channel, …


Monitoring From Afar: Do Foreign Institutional Investors Deter Insider Trading?, Claire Yurong Hong, Frank Weikai Li, Qifei Zhu Sep 2018

Monitoring From Afar: Do Foreign Institutional Investors Deter Insider Trading?, Claire Yurong Hong, Frank Weikai Li, Qifei Zhu

Research Collection Lee Kong Chian School Of Business

This paper examines the disciplinary effect of foreign institutional investors on opportunistic insider trading. Using a novel global insider trading data set containing 35,557 firms from 26 countries over the period 2000-2015, we find that greater foreign institutional ownership significantly reduces the profitability of insider trading, above and beyond the effect of domestic institutional ownership. Using the exogenous variation in foreign institutional ownership induced by MSCI index inclusion, we show that the effect is causal. The impact of foreign investors is stronger in countries with weak insider trading regulations and poor institutional environments, and operates mainly through the monitoring channel, …


Asian Relevance, Global Impact: Asian Management Research Entering A New Era, Daphne W. Yiu, Long W. Lam, Ajai Gaur, Seung-Hyun Lee, Chi-Sum Wong Sep 2018

Asian Relevance, Global Impact: Asian Management Research Entering A New Era, Daphne W. Yiu, Long W. Lam, Ajai Gaur, Seung-Hyun Lee, Chi-Sum Wong

Research Collection Lee Kong Chian School Of Business

In 1998, the Asia Pacific Journal of Management (APJM) was formally affiliated with Asia Academy of Management (AAOM), the official affiliate of the Academy of Management, with the mission to “encourage contextualized management research with Asian relevance towards contribution to global scholarship” (Lau, 2007: 401). According to Peng (2007), APJM has become a highly reputable and the most prestigious journal in Asian management research. To date, APJM has published over 1,000 articles with a five-year average journal Impact Factor of 2.647 (as of 2018).


Event-Based Allocation Of Airline Check-In Counters: A Simple Dynamic Optimization Method Supported By Empirical Data, Mahmut Parlar, Brian Rodrigues, Sharafali Moosa Sep 2018

Event-Based Allocation Of Airline Check-In Counters: A Simple Dynamic Optimization Method Supported By Empirical Data, Mahmut Parlar, Brian Rodrigues, Sharafali Moosa

Research Collection Lee Kong Chian School Of Business

This paper studies the real-life problem of dynamically optimizing the number of airport check-in counters to allocate for a single flight. The main feature of our work is the use of empirical data collected at the Singapore Changi Airport, which drives the dynamic optimization model of a parallel queues system. We propose an event-based dynamic programming model that simplifies considerably the optimization analysis even for large-scale problems with 700+ booked passengers. We investigate the following research questions: (a) For a particular flight, what is the optimal number of counters the system should open with and what is the corresponding optimal …


Investors' Evaluations Of Price-Increase Preannouncements, Leon Gim Lim, Kapil R. Tuli, Marnik G. Dekimpe Sep 2018

Investors' Evaluations Of Price-Increase Preannouncements, Leon Gim Lim, Kapil R. Tuli, Marnik G. Dekimpe

Research Collection Lee Kong Chian School Of Business

Several firms preannounce their price increases with the expectation that such announcements will be evaluated favorably by investors. However, little is known about the actual effect they have on shareholder value. Accordingly, the authors present the first systematic empirical examination of investors' evaluations of 274 price-increase preannouncements (PIPs). Results show that whereas the average increase in abnormal returns following a PIP is 0.51%, almost 41% of the PIPs result in negative abnormal returns. To explore this heterogeneity, the authors propose a conceptual framework that focuses on three key pieces of information that investors can use when evaluating a PIP: information …


Decoy Effect, Anticipated Regret, And Preferences For Work-Family Benefits, Jochen Reb, Andrew Li, Jessica Bagger Sep 2018

Decoy Effect, Anticipated Regret, And Preferences For Work-Family Benefits, Jochen Reb, Andrew Li, Jessica Bagger

Research Collection Lee Kong Chian School Of Business

Attracting talent is one of the key challenges for organizations, and offering attractive work-family benefits plays an increasingly important role in succeeding at this challenge. However, behavioural decision theory suggests that when choosing among job offers with different work-family benefits, individuals may fall prey to a decoy effect and this effect may be mediated through anticipated regret. This effect occurs when preferences are influenced by a normatively irrelevant decoy option that is clearly inferior to one of the other options in the choice set, but not the other (i.e., ‘asymmetrically dominated’). Across two studies, we investigated preferences for two important …


Warrants And Their Underlying Stocks: Microstructure Evidence From An Emerging Market, Charlie Charoenwong, David K. Ding, Nuttawat Visaltanachoti Sep 2018

Warrants And Their Underlying Stocks: Microstructure Evidence From An Emerging Market, Charlie Charoenwong, David K. Ding, Nuttawat Visaltanachoti

Research Collection Lee Kong Chian School Of Business

The Stock Exchange of Thailand provides an ideal platform for comparing the trading characteristics of warrants and their underlying stocks since both of them trade in the same market under identical trading rules. If their patterns diverge significantly, it may be possible for an astute trader to devise profitable arbitrage strategies during the life of the warrants. We find that both their patterns are downward-sloping for spreads, U-shaped for flow toxicity, volatility, depth concentration, and trading volume; and upward-sloping for depth and market order flow ratio. This implies that trading under identical market structures leads to similar trading characteristics. We …


Homophily And Individual Performance, Gokhan Ertug, Martin Gargiulo, Charles Galunic, Tengjian Zou Sep 2018

Homophily And Individual Performance, Gokhan Ertug, Martin Gargiulo, Charles Galunic, Tengjian Zou

Research Collection Lee Kong Chian School Of Business

We study the relationship between choice homophily in instrumental relationships and individual performance in knowledge-intensive organizations. Although homophily should make it easier for people to get access to some colleagues, it may also lead to neglecting relationships with other colleagues, reducing the diversity of information people access through their network. Using data on instrumental ties between bonus-eligible employees in the Equity Sales and Trading division of a global investment bank, we show that the relationship between an employee’s choice of similar colleagues and her performance is contingent on the position this employee occupies in the formal and informal hierarchy of …


Reading Between The Lines: Not All Csr Is Good Csr, David K. Ding, Christo Ferreira, Udomsak Wongchoti Aug 2018

Reading Between The Lines: Not All Csr Is Good Csr, David K. Ding, Christo Ferreira, Udomsak Wongchoti

Research Collection Lee Kong Chian School Of Business

Purpose: This paper aims to investigate whether corporate social responsibility (CSR), as evidenced in annual financial reports, is associated with a firm’s financial performance in New Zealand. Design/methodology/approach: A word count approach of several key CSR indicators found in the audited financial reports of NZX50 constituent firms is used. Several variables are constructed that measure the presence of CSR within the annual report such as sustainability, responsibility, social, environment, diversity, employee and community, and eight other variables within the annual report that measure the penetration of stakeholder engagement. Control variables and alternative measures of CSR are also included. Descriptive statistics …


Public Hedge Funds, Lin Sun, Melvyn Teo Aug 2018

Public Hedge Funds, Lin Sun, Melvyn Teo

Research Collection Lee Kong Chian School Of Business

Hedge funds managed by listed firms significantly under-perform funds managed by unlisted firms. The under-performance is more severe for funds with low manager deltas, poor governance, and no manager co-investment, or managed by firms whose prices are sensitive to earnings news. Notwithstanding the under-performance, listed asset management firms raise more capital, by growing existing funds and launching new funds post listing, and harvest greater fee revenues than do comparable unlisted firms. The results are consistent with the view that, for asset management firms, going public weakens the alignment between ownership, control, and investment capital, thereby engendering conflicts of interest.


The Competitive Dynamics Of New Dvd Releases, Anirban Mukherjee, Vrinda Kadiyali Aug 2018

The Competitive Dynamics Of New Dvd Releases, Anirban Mukherjee, Vrinda Kadiyali

Research Collection Lee Kong Chian School Of Business

We study the market for new (movie) DVDs in the United States. Our demand model captures seasonality, freshness (i.e., time between theatrical and DVD release), and state dependence. We also develop a structural model of dynamic competition in which studios balance waiting for high-demand weeks, against reduced freshness, and against competitive crowding. We find that studios emphasize DVD revenues from larger movies (by theatrical revenue) over DVD revenues from smaller movies. Studios also emphasize revenue from consumers who prefer larger and fresher movies. These behaviors are consistent with managerial conservatism: studio executives forgo DVD revenues from smaller movies to ensure …


Building A United And Shared Vision Beyond The Bottom Line, Siow-Heng Ong Aug 2018

Building A United And Shared Vision Beyond The Bottom Line, Siow-Heng Ong

Research Collection Lee Kong Chian School Of Business

No abstract provided.


A Signaling Theory Of Institutional Activism: How Norway’S Sovereign Wealth Fund Investments Affect Firms’ Foreign Acquisitions, Gurneeta Vasudeva, Lilac Nachum, Gui-Deng Say Aug 2018

A Signaling Theory Of Institutional Activism: How Norway’S Sovereign Wealth Fund Investments Affect Firms’ Foreign Acquisitions, Gurneeta Vasudeva, Lilac Nachum, Gui-Deng Say

Research Collection Lee Kong Chian School Of Business

Combining perspectives from institutional activism and signaling theory literatures, we suggest that an activist sovereign wealth fund (SWF) can serve as an intermediary signaler, providing cues about host countries’ institutional environment to internationalizing firms. By publicizing its investments and engaging in institutional activism, a SWF can signal the institutional quality of host countries to internationalizing firms, thus allowing them to overcome the well-known “lemons problem” in international decision-making. We examine the impact of a SWF’s signals on firms’ ownership choices in their foreign acquisitions. Our empirical analysis of Norway’s socially responsible SWF and firms from Norway and Sweden during 1998–2011 …


The Evolution Of The French Cfos' Role Since The Introduction Of The Financial Market Logic, Redon Marie, Toru Yoshikawa, Berland Nicolas Aug 2018

The Evolution Of The French Cfos' Role Since The Introduction Of The Financial Market Logic, Redon Marie, Toru Yoshikawa, Berland Nicolas

Research Collection Lee Kong Chian School Of Business

This paper highlights the changes of the Chief Financial Officers (CFOs) role since the introduction of the financial market logic in France. Through an analysis of thirty-seven interviews with CFOs and observations during events organized by the professional association of CFOs, we show that the CFOs’ role evolved in different pathways depending on the relationships between logics. We contribute to the literature that studies professions from an institutional perspective by responding to the question of whether professionals change their role when the logic to which they adhere and from which they derive their role is being challenged, or whether institutional …


Experience And Signaling Value In Technology Licensing Contract Payment Structures, Reddi Kotha, Pascale Crama, Phillip H. Kim Aug 2018

Experience And Signaling Value In Technology Licensing Contract Payment Structures, Reddi Kotha, Pascale Crama, Phillip H. Kim

Research Collection Lee Kong Chian School Of Business

Whencommercializing technology, the lack of proven results and a reluctance toinvest upfront resources hamper efforts by firms to work jointly with inventorsto bring new discoveries to market. An effective contract payment structure – amix of upfront and royalty payments – can help overcome these hurdles. Weconduct our research in university technology licensing, where licensingmanagers act as intermediaries to unite inventors and licensee firms. Rather than leveraging their experience to bargainfor maximum payments, highly experienced managers offer contractual paymentstructures that trade lower upfront payments for higher royalty payments inorder to signal value. The signal instills confidence in the value of the …


How Do Emerging Multinationals Configure Political Connections Across Institutional Contexts?, Liang Chen, Yi Li, Di Fan Aug 2018

How Do Emerging Multinationals Configure Political Connections Across Institutional Contexts?, Liang Chen, Yi Li, Di Fan

Research Collection Lee Kong Chian School Of Business

Research Summary: Forming informal ties with political agents is viewed as a viable strategy for multinational enterprises seeking to enter emerging countries. Less is known about the conditions under which political connection is most helpful for firms dealing with cross-border institutional distance. We discuss the distinctive mechanisms through which emerging multinationals may benefit from both home and host political connections. Based on the strategy tripod perspective, we postulate that the importance of different types of connections depends on the overall configurations of a firm's resources and industry characteristics, and these may change with institutional distance. Our analysis of a sample …


Place, Space, And Foreign Direct Investment Into Peripheral Cities, Conor Mcdonald, Peter J. Buckley, Hinrich Voss, Adam R. Cross, Liang Chen Aug 2018

Place, Space, And Foreign Direct Investment Into Peripheral Cities, Conor Mcdonald, Peter J. Buckley, Hinrich Voss, Adam R. Cross, Liang Chen

Research Collection Lee Kong Chian School Of Business

Perspectives drawn from the economic geography literature are increasingly used to generate insights into locational issues in international business. In this paper, we seek to integrate these literatures further by investigating the locational determinants of foreign direct investment (FDI) into peripheral cities within an emerging economy. Peripheral cities in emerging economies are attracting a growing proportion of global FDI flows, but the international business literature lacks a framework for understanding subnational determinants of FDI, particularly into non-core locations. We draw on the core-periphery model to build and test theory on how spatial interdependencies between subnational locations impact on the distribution …


Marking To Market And Inefficient Investment Decisions, Clemens A. Otto, Paolo F. Volpin Aug 2018

Marking To Market And Inefficient Investment Decisions, Clemens A. Otto, Paolo F. Volpin

Research Collection Lee Kong Chian School Of Business

We examine how mark-to-market accounting affects the investment decisions of managers with reputation concerns. Reporting the current market value of a firm’s assets can help mitigate agency problems because it provides outsiders (e.g., shareholders) with new information against which the management’s decisions can be evaluated. However, the fact that the assets’ market value is informative can also have a negative side effect: managers may shy away from investments that indicate conflicting private information and would damage their reputation. This effect can lead to inefficient investment decisions and make marking to market less desirable when market prices are more informative.


Mirror, Mirror On The Retail Wall: Self-Focused Attention Promotes Reliance On Feelings In Consumer Decisions, Hannah H. Chang, Iris W. Hung Aug 2018

Mirror, Mirror On The Retail Wall: Self-Focused Attention Promotes Reliance On Feelings In Consumer Decisions, Hannah H. Chang, Iris W. Hung

Research Collection Lee Kong Chian School Of Business

The authors propose that increased attention that consumers pay to themselves promotes relative reliance on affective feelings in making decisions. This hypothesis was tested in a variety of consumption domains and decision tasks, including real-life, consequential charitable donations. Consistent support from five experiments with more than 1,770 participants shows that (a) valuations of the decision outcome increase when consumers with high (low) self-focus adopt a feeling-based (reason-based) strategy. The hypothesized effect of self-focus on relative reliance on feelings in decision making is (b) moderated by self-construal. Further, greater attention to the self (c) increases evaluations of products that are affectively …


Affective Boundaries Of Scope Insensitivity, Hannah H. Chang, Michel Tuan Pham Aug 2018

Affective Boundaries Of Scope Insensitivity, Hannah H. Chang, Michel Tuan Pham

Research Collection Lee Kong Chian School Of Business

People can be surprisingly insensitive to quantities in valuation judgments—a phenomenon called scope insensitivity, which is generally attributed to the operation of affective processes in judgment. Building on research showing that affect is inherently a decision-making system of the present, we propose that scope insensitivity is more likely to be observed in decisions that are psychologically proximate to the immediate self. Consistent with this proposition, results from seven experiments (and two replications) show that scope insensitivity is more prevalent in decisions that are temporally proximate, both prospectively (near future vs. distant future) and retrospectively (recent past vs. distant past), and …


Choosing The Precision Of Performance Metrics, Alan D. Crane, Andrew Koch, Chi Shen Wei Aug 2018

Choosing The Precision Of Performance Metrics, Alan D. Crane, Andrew Koch, Chi Shen Wei

Research Collection Lee Kong Chian School Of Business

There is a standard trade-off in contracts between the provision of incentives and insurance. We hypothesize that this trade-off influences the precision with which firm performance is measured. We find that firm outcomes are measured less precisely when chance plays a large role in these outcomes. Further, this precision is determined through the choice of shares outstanding. This has several novel implications. Nominal stock prices can remain constant over time, and firms with unpredictable cash flows should have more shares and lower stock price levels, all else equal. We find evidence consistent with these implications.


Prosocial Implicit Trait Policies Underlie Performance On Different Situational Judgment Tests With Interpersonal Content, Stephan J. Motowidlo, Filip Lievens, Kamalika Ghosh Aug 2018

Prosocial Implicit Trait Policies Underlie Performance On Different Situational Judgment Tests With Interpersonal Content, Stephan J. Motowidlo, Filip Lievens, Kamalika Ghosh

Research Collection Lee Kong Chian School Of Business

This study tests the hypothesis that situational judgment tests (SJTs) with interpersonal content reflect implicit beliefs about the utility of prosocial action for job effectiveness and that agreeable people are more likely to believe that prosocial action is effective. Two hundred ninety-four undergraduates completed four different SJTs with interpersonal content and a measure of Agreeableness. Results show that the effectiveness of response options in these SJTs is positively correlated with the level of prosociality they express and that because of their prosocial elements, scores on different SJTs are correlated with one another and with Agreeableness. These results shed light on …


The Informational Role Of Overconfident Ceos, Chi Shen Wei, Lei Zhang Aug 2018

The Informational Role Of Overconfident Ceos, Chi Shen Wei, Lei Zhang

Research Collection Lee Kong Chian School Of Business

We study how overconfident CEOs communicate with the market and whether this has implications on the firm’s information environment. Textual analysis reveals that overconfident CEOs communicate using less negative tone in their 10K/Q filings. Our evidence suggests that overconfident CEOs provide market participants with more value-relevant information as sell-side analysts make more accurate forecasts of their firm’s future earnings. Consistent with a reduction in asymmetric information, implied cost of equity capital is lower. However, not all investors benefit as the information advantage of short sellers disappears in the stocks of overconfident CEOs.


Government Intervention In Corporate Crises: An Asian Perspective, Augustine Pang, Paige Pei-Hua Tan Jul 2018

Government Intervention In Corporate Crises: An Asian Perspective, Augustine Pang, Paige Pei-Hua Tan

Research Collection Lee Kong Chian School Of Business

Governments are expected to intervene in national crises like natural disasters (Rosenthal & Kouzmin, 1997). Less clear are corporate crises. In recent years, there have been several corporate crises in Asia where governments have intervened to restore confidence. The paper seeks to examine the roles and extent of Asian governmental intervention in corporate crises, particularly it examines the impact Asian governments – described as paternalistic (Shin & Sin, 2012) – have on corporate crises. Five high profile Asian corporate crises were analyzed through Winkler’s (1977) Theory of Corporatism. Impact was analyzed through Boin and ’t Hart’s (2010) nine crisis response …


On The Design Of Sparse But Efficient Structures In Operations, Zhenzhen Yan, Sarah Yini Gao, Chung Piaw Teo Jul 2018

On The Design Of Sparse But Efficient Structures In Operations, Zhenzhen Yan, Sarah Yini Gao, Chung Piaw Teo

Research Collection Lee Kong Chian School Of Business

It is widely believed that a little flexibility added at the right place can reap significant benefits for operations. Unfortunately, despite the extensive literature on this topic, we are not aware of any general methodology that can be used to guide managers in designing sparse (i.e., slightly flexible) and yet efficient operations. We address this issue using a distributionally robust approach to model the performance of a stochastic system under different process structures. We use the dual prices obtained from a related conic program to guide managers in the design process. This leads to a general solution methodology for the …


The Predictive Power Of People's Intraindividual Variability Across Situations: Implementing Whole Trait Theory In Assessment, Filip Lievens, Jonas W. B. Lang, Filip De Fruyt, Myrjam Van De Vijver, Ronald Bledow Jul 2018

The Predictive Power Of People's Intraindividual Variability Across Situations: Implementing Whole Trait Theory In Assessment, Filip Lievens, Jonas W. B. Lang, Filip De Fruyt, Myrjam Van De Vijver, Ronald Bledow

Research Collection Lee Kong Chian School Of Business

In the last decade, there has been increased recognition that traits refer not only to between-person differences but also to meaningful within-person variability across situations (i.e., whole trait theory). So far, this broader more contemporary trait conceptualization has made few inroads into assessment practices. Therefore, this study focuses on the assessment and predictive power of people’s intraindividual variability across situations. In three studies (either in student or employee samples), both test-takers’ mean trait scores and the variability of their responses across multiple written job-related situations of a situational judgment test (SJT) were assessed. Results revealed that people’s intraindividual variability (a) …


The Real Effects Of Exchange Traded Funds, Frank Weikai Li, Xuewen Liu, Chengzhu Sun Jul 2018

The Real Effects Of Exchange Traded Funds, Frank Weikai Li, Xuewen Liu, Chengzhu Sun

Research Collection Lee Kong Chian School Of Business

This paper investigates the effects of exchange-traded funds (ETFs) on the real efficiency of the underlying securities. We document strong evidence that being held by ETFs increases the sensitivity of a firm's investment to its own stock price. This is consistent with the model prediction on the managerial learning channel. Higher ownership by ETFs increases the firm's stock price informativeness about systematic shocks but may decrease the informativeness about firm-specific shocks; however, the firm manager cares most and wants to learn from the stock price mainly about systematic shocks in making investment decisions as he already has precise private information …


The Role Of Space And Time In Balancing Conflicting Pressures Through Routine Dynamics, Kenneth T. Goh, Claus Rerup Jul 2018

The Role Of Space And Time In Balancing Conflicting Pressures Through Routine Dynamics, Kenneth T. Goh, Claus Rerup

Research Collection Lee Kong Chian School Of Business

To examine how spaces and the temporal context shape routine actions that balance conflicting pressures for efficiency and flexibility, we conducted an ethnography of the product development process, known as the scrum routine, in a video game development studio. We trace the temporal patterning of scrum meetings to reveal the mutual constitution of spaces and the temporal context. Examining how the co-constitution of space and time shapes actions and artifact use in the scrum routine reveals that balancing occurs through coalescing, reconstituting, standardizing, and reorganizing actions. From these findings, we develop a conceptual model of how pressures for efficiency and …


Towards A Dynamic Theory Of Enacted Complexity, Kenneth T. Goh, Brian T. Pentland Jul 2018

Towards A Dynamic Theory Of Enacted Complexity, Kenneth T. Goh, Brian T. Pentland

Research Collection Lee Kong Chian School Of Business

To develop new theory about the dynamics of enacted ask complexity, we analyze 15-months of field data from a video game development project consisting of observations, interviews, and an archival analysis of 2,428 tasks to present a novel way of conceptualizing and visualizing the complexity of emergent processual phenomena.