Business Commons^™

Aggregate Mutual Fund Holdings And Fund Performance, Sanjeev Bhojraj, Young Jun Cho

Research Collection School Of Accountancy

In this paper we examine the differences in aggregate ownership of stocks held by passive equity funds and active equity funds and in the characteristics of stocks held by these funds. We find that holdings of passive funds do not mirror the holdings of active funds. There are systematic differences in the holdings between the two groups with active funds more likely to hold smaller stocks, growth stocks, and stocks with higher momentum, higher turnover and more recent IPOs. We also find evidence that the holdings of passive and active funds have trended closer together over time, consistent with the …

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 …

The Human Penguin Project: Climate, Social Integration, And Core Body Temperature, H. Ijzerman, S. Lindenberg, I. Dalgar, S.S.C. Weissgerber, R.C. Vergara, A.H. Cairo, M.V. Colic, P. Dursun, N. Frankowska, R. Hadi, C.J. Hall, Y. Hong, C.P. Hu, J. Joy-Gaba, Sim Su-Hsien, Samantha

Research Collection Lee Kong Chian School Of Business

Social thermoregulation theory posits that modern human relationships are pleisiomorphically organized around body temperature regulation. In two studies (N = 1755) designed to test the principles from this theory, we used supervised machine learning to identify social and non-social factors that relate to core body temperature. This data-driven analysis found that complex social integration (CSI), defined as the number of high-contact roles one engages in, is a critical predictor of core body temperature. We further used a cross-validation approach to show that colder climates relate to higher levels of CSI, which in turn relates to higher CBT (when climates get …

The Making Of A Construct: Lessons From 30 Years Of The Kogut And Singh Cultural Distance Index, Ilya R. P. Cuypers, Gokhan Ertug, Pursey Pmar M.A.R. Heugens, Bruce Kogut, Tengjian Zou

Research Collection Lee Kong Chian School Of Business

The 30-year anniversary of Kogut and Singh’s (1988) groundbreaking study that introduced the concept of cultural distance and its accompanying measure provides the opportunity to take stock of what makes for a good construct. We organize our discussion around the issues of concept, algorithm, and data to clarify and gauge their contribution, before highlighting the impact of their work more generally. Many of the challenges raised by critical observers focus on one of these three dimensions. As there is value in looking systematically at the construct from concept to data, we set out the argument of the index and discuss …

Identifying Ineffective Monitors From Securities Class Action Lawsuits, Chi Shen Wei, Lei Zhang

Research Collection Lee Kong Chian School Of Business

We identify “ineffective” institutional monitors based on the prevalence of occurrences of securities class-action lawsuits in their overall portfolio. We find that firms with a higher representation of such institutional investors among the firms’ large shareholders have a greater likelihood of future litigation and experience more negative market reactions upon such litigation filings. These firms exhibit other unfavorable governance outcomes including poorer acquisitions and lower CEO turnover-performance sensitivity. We find suggestive evidence that ineffective monitoring may be a result of higher operational risk.

The Case For Learning Journeys, Siow-Heng Ong

Research Collection Lee Kong Chian School Of Business

No abstract provided.

From The Editors: A Brief Primer On Data Visualization Opportunities In Management Research, Gokhan Ertug, Marc Gruber, Anthony Nyberg, H. Kevin Steensma

Research Collection Lee Kong Chian School Of Business

“A picture is worth a thousand words.” A picture or illustration not only helps readers to grasp the key content of a study, but also to remember it. A picture or illustration provides alternative mechanisms for communicating, akin to speaking a second language. In fact, research has long shown that individuals understand (Carney & Levin, 2002) and better remember information when it is delivered in pictures than when delivered in single words or short sentences (Shepard, 1967). Traditional data visualization methods, such as scatter plots, bar charts, histograms, line charts, and pie charts, are widely used inmanagement research. In parallel …

I4s: Capturing Shopper’S In-Store Interactions, Sougata Sen, Archan Misra, Vigneshwaran Subbaraju, Karan Grover, Meeralakshmi Radhakrishnan, Rajesh K. Balan, Youngki Lee

Research Collection School Of Computing and Information Systems

In this paper, we present I4S, a system that identifies item interactions of customers in a retail store through sensor data fusion from smartwatches, smartphones and distributed BLE beacons. To identify these interactions, I4S builds a gesture-triggered pipeline that (a) detects the occurrence of “item picks”, and (b) performs fine-grained localization of such pickup gestures. By analyzing data collected from 31 shoppers visiting a mid-sized stationary store, we show that we can identify person-independent picking gestures with a precision of over 88%, and identify the rack from where the pick occurred with 91%+ precision (for popular racks).

Decentralized Planning For Non-Dedicated Agent Teams With Submodular Rewards In Uncertain Environments, Pritee Agrawal, Pradeep Varakantham, William Yeoh

Research Collection School Of Computing and Information Systems

Decentralized planning under uncertainty foragent teams is a problem of interest in manydomains including (but not limited to) disaster rescue, sensor networks and security patrolling. Decentralized MDPs, Dec-MDPs havetraditionally been used to represent such decentralized planning under uncertainty problems.However, in many domains, agents may notbe dedicated to the team for the entire timehorizon. For instance, due to limited availability of resources, it is quite common for policepersonnel leaving patrolling teams to attend toaccidents. Such non-dedication can arise dueto the emergence of higher priority tasks ordamage to existing agents. However, there isvery limited literature dealing with handlingof non-dedication in decentralized settings. …

Operating A Digital Marketing Agency Out Of China, Singapore Management University

Perspectives@SMU

Mobile Now has to contend with the Great Firewall of China but the opportunities for growth outweigh the technical obstacles

The Power Of Sameness, Singapore Management University

Perspectives@SMU

Whether it is our name, hometown or personal characteristic, our similarities could alter our reactions to service failures

Building A Successful F&B Franchise, Singapore Management University

Perspectives@SMU

The right consumer value proposition and franchisor-franchisee relationship are key

Leveling The Playing Field Between Large And Small Institutions: Evidence From The Sec’S Xbrl Mandate, Nilabhra Bhattacharya, Young Jun Cho, Jae B. Kim

Research Collection School Of Accountancy

We investigate how XBRL adoption affects smaller institutions’ access to financial statement information relative to their larger counterparts. We examine three aspects of trading responsiveness: abnormal trading volume, response speed to 10-K information, and decision to trade immediately following the 10-K filing. With regard to all three aspects of trading responsiveness, we find that small institutions’ responsiveness to 10-K news increases significantly more relative to the change experienced by large institutions from the pre- to post-XBRL periods. We further document that small institutions’ stock picking skills in the 10-K filing period increase more compared to those of large institutions following …

Motivations To Engage In Word Of Mouth From Non-Market Participants: A Study Using Automotive Business As The Field Of Investigation, Yao Han Kwan

Dissertations and Theses Collection (Open Access)

Word of mouth (WOM) can have significant impacts on businesses. Positive WOM can go a long way in helping to grow a brand while negative WOM may cause considerable damages. Managers have constantly attempted to actively manage WOM but often find it difficult to control. Extensive academic research has also been conducted in this field, with a significant amount of literature built up over the last few decades. The advent of the Internet, social media and consequently electronic WOM (eWOM) further intensified practice and research interest in this area.

Despite decades of research and managerial precepts about WOM, the full …

Leading Mindfully In Dynamic Times: Can A Mindfulness-Based Leadership Training And Coaching Program Increase Leadership Effectiveness?, Nina Tan

Dissertations and Theses Collection (Open Access)

This research examined the influence of a Mindfulness-based Leadership Training and Coaching Program (MBP), in garnering three aspects of leadership effectiveness; extra employee effort, productive performance and followers’ satisfaction with leadership.

We hypothesized that mindfulness-based leadership training and coaching program can influence leaders’ frequency in adopting authentic, transformational and transactional leadership behaviors to enhance leadership effectiveness.

We tested these predictions separately on two control and intervention groups. Results suggested that the combined training and coaching mindfulness-based intervention program had predictive effects between the practice of mindful attunement of leaders’ behaviors and enhancement in leadership effectiveness, even in a short span …

Director Tenure Diversity And Board Monitoring Effectiveness, Na Li, Aida Sijamic Wahid

Research Collection School Of Accountancy

This study examines the impact of director tenure diversity on board effectiveness. We find that tenure-diverse boards exhibit significantly higher CEO performance-turnover sensitivity and that firms with tenure-diverse audit committees are less likely to experience accounting restatements. Furthermore, we document that tenure-diverse compensation committees also award less excess compensation and are less likely to overcompensate. Even though tenure-diverse boards seem to exhibit superior monitoring performance, there is limited evidence that their firms exhibit superior financial performance. The findings suggest that recent calls for board renewal, to the extent that it would increase tenure diversity rather than just decrease average board …

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 …

Zombie Board: Board Tenure And Firm Performance, Sterling Huang, Gilles Hilary

Research Collection School Of Accountancy

We show that board tenure exhibits an inverted U-shaped relation with firm value and accounting performance. The quality of corporate decisions, such as M&A, financial reporting quality, and CEO compensation, also has a quadratic relation with board tenure. Our results are consistent with the interpretation that directors’ on-the-job learning improves firm value up to a threshold, at which point entrenchment dominates and firm performance suffers. To address endogeneity concerns, we use a sample of firms in which an outside director suffered a sudden death, and find that sudden deaths that move board tenure away from (toward) the empirically observed optimum …

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

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, …

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 …

Why Bcc-Ing The Boss Is A Bad Practice, David De Cremer, Jack Mcguire, Tessa Haesevoets

Research Collection Lee Kong Chian School Of Business

Imagine you’re drafting an email about a sensitive project when you realize you need to keep your supervisor in the loop. You decide to Bcc her on the email. Later, the rest of the team finds out. How does this make them feel?

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 …

Board Independence As A Panacea To Tunnelling? An Empirical Study Of Related Party Transactions In Hong Kong And Singapore, Christopher C. H. Chen, Wai Yee Wan, Wei Zhang

Research Collection Yong Pung How School Of Law

In this article, we examine a general question: is the legal transplantation of corporate governance rule effective in curtailing agency costs? Entering into the 21st century, we have seen reforms of corporate governance standards in the Far East since the Asian Financial Crisis in 1997, including in Hong Kong and Singapore. These reforms built on the Anglo-American model of corporate governance in the UK and US supported by broad academic literature of connecting better corporate governance with firm value and identifying the association of tunneling or wrongdoings with poor corporate governance practices. The idea is also to provide more checks-and-balances …

Optimal Portfolio Choices And The Determination Of Housing Rents Under Housing Market Uncertainty, Gang-Zhi Fan, Ming Pu, Xiaoying Deng, Seow Eng Ong

Research Collection Lee Kong Chian School Of Business

This study proposes a utility indifference-based model to investigate the pricing issue of house rents under housing market uncertainty. Our model not only allows for the crucial features in the housing market, such as market incompleteness and high idiosyncratic risk, but also the interaction of households’ house tenure choices with their financial asset holdings. Our model provides interesting insights into the hedging of house market risk and determination of housing rents. In addition to the parameters describing the expected changes and volatility on stock and house returns, we also show that individual precautionary savings motive, idiosyncratic risk premium, and the …

Innovation, Firm Size Distribution, And Gains From Trade, Yi-Fan Chen, Wen-Tai Hsu, Shin-Kun Peng

Research Collection School Of Economics

We study a trade model with monopolistic competition a la Melitz (2003) that is standard except that firm heterogeneity is endogenously determined by firms innovating to enhance their productivities. We show that the equilibrium productivity and firm-size distributions exhibit power-law tails under rather general conditions on demand and technology. In particular, the emergence of the power laws is essentially independent of the underlying primitive heterogeneity among firms. We investigate the model’s welfare implications, and conduct a quantitative analysis of welfare gains from trade. We find that, conditional on the same trade elasticity and values of the common parameters, our model …

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 …

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).

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 …

A Strategic Value Appropriation Path For Cloud Computing, Abhishek Kathuria, Arti Mann, Jiban Khuntia, Robert J. Kauffman

Research Collection School Of Computing and Information Systems

Cloud-based information management is one of the leading competitive differentiation strategies for firms. With the increasing criticality of information management in value creation and process support, establishing an integrated capability with cloud computing is vital for organizational success in the changing landscape of business competition. These issues have received scant attention, however. We draw on the resource-based view, dynamic capability hierarchy concepts, and the perspective of operand and operant resources to suggest a cloud value appropriation model for firms. We argue that, to appropriate business value from cloud computing, the firm needs to effectively deploy cloud computing and leverage cloud …