Business Commons^™

Dbs Impact Measurement Project: Technical Review, Hao Liang, Phuong Tran Bao Nguyen, David Fernandez, Jun Ho Park

Research Collection Lee Kong Chian School Of Business

The measurement of ESG and its impact is becoming one of the more important and debated issues in sustainable business practice, with the significant challenges being the subjectivity of scope, criteria, as well as lack of consistency across different rating agencies and data providers

Impact measurement goes beyond ESG measurement. Apart from qualitative and input-based approach, it encapsulates a more outcome/impact-based approach, supported with quantitative methods

Impact measurement and valuation are still at the infant stage, with limited research and guidelines, thus [Impact Institute] II’s approach has significant novelty and is among the first to measure and value impact

II …

A Behavioral Signaling Explanation For Stock Splits: Evidence From China, Chenyu Cui, Frank Weikai Li, Jiaren Pang, Deren Xie

Research Collection Lee Kong Chian School Of Business

We propose a behavioral signaling explanation for the positive announcement effects of stock splits. There are two key behavioral ingredients in our model. First, (retail) investors have misconceptions about stock splits that make them view stock splits as good news. Second, investors are loss-averse and will be particularly disappointed if a splitting firm’s ex-post performance falls short of expectation. In a separating equilibrium, only managers with favorable private information use stock splits to signal. Using a comprehensive sample of stock splits in China over the period of 1998 to 2017, we find supporting evidence: (1) stock splits elicit positive announcement …

Why Commonality Persists?, Raja Velu, Zhaoque Zhou, Chyng Wen Tee

Research Collection Lee Kong Chian School Of Business

Studies on commonality in returns, order flows and liquidity find that the first principal component is closely aligned with the market factor. With the increasing presence of high-frequency trading, commonality in returns, order flows, and liquidity can potentially arise from the commonality in the interpretation of real-time signals. In this paper, we go beyond the first factor and show that the other dominant principal components consistently reflects investors' herding behavior, demonstrating the multi-dimensional aspect of commonality. Instead of relating the asset returns to order flows, we take both as endogenous, and provide empirical evidence showing that returns commonality is driven …

Commentary: Where Does The Talent Pools Of Smes Come From?, T. Mandy Tham

Research Collection Lee Kong Chian School Of Business

In a commentary, SMU Assistant Professor of Finance Mandy Tham explored how ‘family members’ is defined could affect the size of talent pool for SMEs and family businesses, and suggested some criteria for the selection of family members to be nurtured for the SMEs and family businesses.

Win-Win In Distributive Negotiations: The Economic And Relational Benefits Of Strategic Offer Framing, Michael Schaerer, Martin Schweinsberg, Nico Thornley, Roderick I. Swaab

Research Collection Lee Kong Chian School Of Business

In distributive negotiations, people often feel that they have to choose between maximizing their economic outcomes (claiming more value) or improving their relational outcomes (having a satisfied opponent). The present research proposes a conversational strategy that can help negotiators achieve both. Specifically, we show that using an offer framing strategy that shifts offer recipients’ attention to their reservation price (e.g., “How does my offer compare to your minimum price?”) leads to both (a) an assimilation effect whereby recipients make more favorable counteroffers (economic benefit) as well as (b) a contrast effect whereby recipients feel more satisfied with the negotiation (relational …

Brain Drain: The Impact Of Air Pollution On Firm Performance, Shuyu Xue, Bohui Zhang, Xiaofeng Zhao

Research Collection Lee Kong Chian School Of Business

By exploiting the exogenous variation in air pollution caused by China’s central heating policy, we find that air pollution reduces the accumulation of executive talent and high-quality employees. We also find that firms located in polluted areas have poorer performance, especially for firms with greater dependence on human capital.

Strategic Intent Of Obor: Enhancing Energy Supply Resilience, Loon Ching Tang, Joyce M. W. Low

Research Collection Lee Kong Chian School Of Business

Since the launch of the One Belt, One Road (OBOR) initiative in 2015, China has announced its intention to invest in major infrastructure projects to promote trade and co-operation with its trading partners along OBOR. This paper examines the current level of trading and key projects underway along OBOR so as to provide insights to understand its strategic intent. In particular, a network model is constructed to analyze the impact to China current and future demand for energy under various conditions especially during prolonged periods of supply uncertainties. Since these key projects are closely connected to the current and proven …

How Smart Is Institutional Trading?, Jingi Ha, Jianfeng Hu

Research Collection Lee Kong Chian School Of Business

We estimate daily aggregate order flow at the stock level from all institutional investors as well as for hedge funds and the other institutions separately. We achieve this by extrapolating the relation between quarterly institutional ownership in 13F filings, aggregate market order imbalance in TAQ, and a representative group of institutional investors’ transaction data. We find that the estimated institutional order imbalance has positive price impact in the short term, which reverses in the long term. The “smart” order flow from hedge funds generates greater and more persistent price impact than the “dumb” order flow from all the other institutions. …

Is It All In The Eye Of The Beholder? The Importance Of Situation Construal For Situational Judgment Test Performance, Jan-Philipp Freudenstein, Philipp Schaepers, Lena Roemer, Patrick Mussel, Stefan Krumm

Research Collection Lee Kong Chian School Of Business

Recent research challenges the importance of situation descriptions for situational judgment test (SJT) performance. This study contributes to resolving the ongoing debate on whether SJTs are situational measures, by incorporating findings on person x situation interactions into SJT research. Specifically, across three studies (N-Total = 1,239), we first tested whether situation construal (i.e., the individual perception of situations in SJTs) predicts responses to SJT items. Second, we assessed whether the relevance of situation construal for SJT performance depends on test elements (i.e., situation descriptions and response options) and item features (i.e., description-dependent vs. description-independent SJT items). Lastly, we determined whether …

Dating Disruption: How Tinder Gamified An Industry, Niloofar Abolfathi, Simone Santamaria

Research Collection Lee Kong Chian School Of Business

Tinder’s gamelike user experience enticed overlooked users, led to rapid segment growth, and ultimately displaced industry incumbents.

Superstition, Conspicuous Spending, And Housing Market: Evidence From Singapore, Jia He, Haoming Liu, Tien Foo Sing, Changcheng Song, Wei-Kang Wong

Research Collection Lee Kong Chian School Of Business

We study the effect of superstition and conspicuous spending motives on housing demand and price in Singapore. We find that buyers pay less for homes with unlucky addresses and more for homes with lucky addresses. There were fewer housing transactions on inauspicious days of the lunar calendar when people are advised to avoid making major economic decisions. This suggests that superstitious belief still affects economic activities. The demand for lucky addresses is also weaker on these inauspicious days, suggesting that superstitious belief indeed affects the demand for lucky addresses. Moreover, the price premium for a lucky address is significantly higher …

Financial Illiteracy And Pension Contributions: A Field Experiment On Compound Interest In China, Changcheng Song

Research Collection Lee Kong Chian School Of Business

I conduct a field experiment to study the relationship between peoples’ misunderstanding of compound interest and their pension contributions in rural China. I find that explaining the concept of compound interest to subjects increased pension contributions by roughly 40%. The treatment effect is larger for those who underestimate compound interest than for those who overestimate compound interest. Moreover, financial education enables households to partially correct their misunderstanding of compound interest. I structurally estimate the level of misunderstanding of compound interest and conduct a counterfactual welfare analysis: lifetime utility increases by about 10% if subjects’ misunderstanding of compound interest is eliminated.

An Empirically Supported Taxonomy Of Misinformation, Mark Chong, Murphy Choy

Research Collection Lee Kong Chian School Of Business

Fake news, which includes both disinformation and misinformation, has been a challenge for many countries in the last few years. Disinformation has been present in modern history as part of the tool kit of PSYOPS for the military. Likewise, misinformation has been part of human history for a long time. Hoaxes, rumors, and urban legends—all of which can be classified as differing types of misinformation, although they are not commonly addressed as such—have been exploited by adversarial organizations for their own benefit. This study will propose a comprehensive taxonomy to tackle fake news, disinformation, and misinformation and assess the level …

Managing Talent In The Gig Economy: Human Capital Implications, Richard Raymond Smith

Research Collection Lee Kong Chian School Of Business

As digital technologies continue to open new connections and ways of working, the era of the gig economy will continue to thrive.

How Inheritance Law Affects Family Firm Performance: Evidence From A Natural Experiment, Yong Kyu Gam, Min Jung Kang, Junho Park, Hojong Shin

Research Collection Lee Kong Chian School Of Business

We argue that changes in the inheritance system affect incentives leading to sibling rivalry among descendants and therefore have a material impact on family firm performance. Using South Korea's 1991 inheritance law reform that stipulates the equal distribution of a deceased person's property to descendants, we find that the performance and operating growth rate in family firms show significant enhancement compared with those of nonfamily firms. Moreover, the positive effects are greater for family firms that undergo a business succession with multiple sons and married daughters. Overall, our results suggest that changing to equal bequests of inheritance has a positive …

Familiarity, Attitudes, And Self-Regulatory Challenges Related To Mindfulness, Alissa J. Mrazek, Michael D. Mrazek, Leandro A. Calcagnotto, Jonathan N. Cloughesy, Abigail M. Holman, Theodore C. Masters-Waage, Jonathan W. Schooler

Research Collection Lee Kong Chian School Of Business

Objectives: Despite growing evidence demonstrating the benefits of mindfulness for physical and mental health, little is known about the barriers that dissuade individuals from practicing mindfulness. The present study sought to examine the self-regulatory barriers that most commonly prevent mid-life adults from engaging in mindfulness practice. Methods: The present study surveyed a nationally representative sample of 385 mid-life adults (ages 50-64) in the USA to assess familiarity, attitudes, and prior experiences with mindfulness, as well as self-regulatory challenges that may hinder consistent practice. Specifically, this research focused on the self-regulatory elements of (i) goal setting, (ii) limiting beliefs, (iii) habit …

Apply Liberally: Towards A Model Of Liberal Management Education, Howard Thomas

Research Collection Lee Kong Chian School Of Business

Howard Thomas argues the case for integrating the liberal arts into management education so that the existing curricula emphasis on technological and analytical acumen is balanced with skills of critical thinking and ethical intelligence necessary for managerial judgment.

How Do Prior Ties Affect Learning By Hiring?, Vivek Tandon, Gokhan Ertug, Gianluca Carnabuci

Research Collection Lee Kong Chian School Of Business

Research has shown that hiring R&D scientists from competitors fosters organizational learning. We examine whether hiring scientists who have many collaborative ties with the hiring firm prior to the mobility event produces different learning outcomes than hiring scientists who have few or no such ties. We theorize that prior ties reduce explorative learning and increase exploitative learning. Namely, we posit that prior ties lead the hiring firm to focus on that part of a new hire’s knowledge with which they are already familiar and that they help appropriate the new hire’s newly generated knowledge. At the same time, prior ties …

Situational Judgment Tests For Selection: Traditional Versus Construct-Driven Approaches, Paul A. Tiffin, Lewis W. Paton, Deborah O'Mara, Carolyn Maccann, Jonas W. B. Lang, Filip Lievens

Research Collection Lee Kong Chian School Of Business

Context: Historically, situational judgement tests (SJTs) have been widely used for personnel selection. Their use in medical selection in Europe is growing, with plans for further expansion into North America and Australasia, in an attempt to measure and select on ‘non-academic’ personal attributes. However, there is a lack of clarity regarding what such tests actually measure and how they should be designed, scored and implemented within the medical and health education selection process. In particular, the theoretical basis from which such tests are developed will determine the scoring options available, influencing their psychometric properties and, ultimately, their validity. Methods: The …

How Institutions Enhance Mindfulness: Interactions Between External Regulators And Front-Line Operators Around Safety Rules, Ravi S. Kudesia, Ting Lang, Jochen Reb

Research Collection Lee Kong Chian School Of Business

How is it that some organizations can maintain nearly error-free performance, despite trying conditions? Within research on such high-reliability organizations, mindful organizing has been offered as a key explanation. It entails interaction patterns among front-line operators that keep them attentive to potential failures—and relies on them having the expertise and autonomy to address any such failures. In this study, we extend the mindful organizing literature, which emphasizes local interactions among operators, by considering the broader institutional context in which it occurs. Through interview, observational, and archival data of a high-reliability explosive demolitions firm in China, we find that external regulators …

The Paradoxical Consequences Of Choice: Often Good For The Individual, Perhaps Less So For Society?, Shilpa Madan, Kevin Nanakdewa, Krishna Savani, Hazel Rose Markus

Research Collection Lee Kong Chian School Of Business

The proliferation of products and services, together with the rise of social media, affords people the opportunity to make more choices than ever before. However, the requirement to think in terms of choice, or to use a choice mind-set, may have powerful but unexamined consequences for judgment and decision making, both for the chooser and for others. A choice mind-set leads people to engage in cognitive processes of discrimination and separation, to emphasize personal freedom and independent agency, and to focus on themselves rather than others. Reviewing research from social psychology, legal studies, health and nutrition, and consumer behavior, we …

A Theories-In-Use Approach To Building Marketing Theory, Valarie A. Zeithaml, Bernard J. Jaworski, Ajay K. Kohli, Kapil R. Tuli, Wolfgang Ulaga, Gerald Zaltman

Research Collection Lee Kong Chian School Of Business

This article’s objective is to inspire and provide guidance on the development of marketing knowledge based on the theories-in-use (TIU) approach. The authors begin with a description of the TIU approach and compare it with other inductive and deductive research approaches. The benefits of engaging in TIU-based research are discussed, including the development of novel organic marketing theories and the opportunity to cocreate relevant marketing knowledge with practitioners. Next, they review criteria for selecting research questions that are particularly well-suited for examination with TIU-based research. This is followed by detailed suggestions for TIU research: focusing on developing new constructs, theoretical …

The Role Of Endogenous And Exogenous Risk In Fdi Entry Choices, Peter J. Buckley, Liang Chen, L. Jeremy Clegg, Hinrich Voss

Research Collection Lee Kong Chian School Of Business

FDI research has presented consistent evidence that firm experience moderates the effect of risk on entry in a new foreign market. This conclusion is contested by recent research. By revisiting the conceptualisation of risk by economists and behaviourists, we show that the proposed learning mechanism only applies to endogenous risk, not exogenous risk. As assessing endogenous risk involves self-evaluation of risk-reducing capability, it is posited that firms have differential tendencies to take such risks even when experience and ownership are accounted for. We find both observed and unobserved variations in firms' responses to endogenous risk, as opposed to exogenous risk.

Do Overall Dimension Ratings From Assessment Centres Show External Construct-Related Validity, Andreja Wirz, Klaus G. Melchers, Martin Kleinmann, Filip Lievens, Hubert Annen, Urs Blum, Pia V. Ingold

Research Collection Lee Kong Chian School Of Business

There have been repeated calls for an external construct validation approach to advance our understanding of the construct-related validity of assessment centre dimension ratings beyond existing internal construct-related validity findings. Following an external construct validation approach, we examined whether linking assessment centre overall dimension ratings to ratings of the same dimensions that stem from sources external to the assessment centre provides evidence for construct-related validity of assessment centre ratings. We used data from one laboratory assessment centre sample and two field samples. External ratings of the same dimensions stemmed from assessees, assessees’ supervisors, and customers. Results converged across all three …

Soliciting Resources From Others: An Integrative Review, Jia Hui Lim, Kenneth Tai, Peter A. Bamberger, Elizabeth W. Morrison

Research Collection Lee Kong Chian School Of Business

Resource seeking, or the act of asking others for things that can help one attain one’s goals, is an important behavior within organizations due to the increasingly dynamic nature of work that demands collaboration and coordination among employees. Over the past two decades, there has been growing research in the organizational sciences on four types of resource seeking behaviors: feedback-, information-, advice-, and help-seeking. However, research on these four behaviors has existed in separate silos. We argue that there is value in recognizing that these behaviors reflect a common higher order construct (resource seeking), and in integrating the findings across …

Editors' Comments: Is Corporate Social Responsibility Research Undertheorized?, Heli Wang, Cristina Gibson, Udo Zander

Research Collection Lee Kong Chian School Of Business

Corporate social responsibility (CSR) is a concept that has brought about both progress and controversy. Under the banner of CSR, we have made progress in addressing some of the world’s most pressing challenges, yet corporations still struggle to figure out where, how, and when to devote their social efforts, and doubts abound as to whether corporate efforts are truly in the public’s best interest. Scholarly interest in CSR research has also flourished. As a pervasive topic in the business literature, CSR is being addressed not only in the management field but also in the domains of economics, finance, marketing, operations, …

Publishing In Management: Exhilaration, Bafflement And Frustration, Mike Wright, David J. Ketchen, Timothy Adrian Robert Clark

Research Collection Lee Kong Chian School Of Business

Scholars find the journal publishing process exhilarating, baffling and frustrating in equal measure. The professional joy and excitement of receiving an acceptance letter following a long drawn-out process inwhich you have diligently responded to successive rounds of reviewers’ comments is probably only matched by a letter awarding a research grant. Contrast this to the sense of dejection and distress that accompanies a rejection letter. This is further exacerbated if the reviewers’ comments and decision appear to be harsh and if they make little sense. It is even more disappointing if the paper appears to have beenprogressing through different rounds of …

The Invisible Hand Of Evolutionary Psychology: The Importance Of Kinship In First-Generation Family Firms, Xiaodong Yu, Laura Stanley, Yuping Li, Kimberly A. Eddleston, Franz W. Kellermanns

Research Collection Lee Kong Chian School Of Business

While previous studies focus on differences between family and nonfamily firms regarding CEO selection and executive compensation, this study investigates differences among family firms with different types of kinship ties. We find that, compared with family firms with close kinship ties, those with distant kinship ties are more likely to appoint a nonfamily CEO and to pay nonfamily executives lower salaries. This relationship is moderated by firm performance and family ownership. Based on evolutionary psychology, we propose that family firms with close versus distant kinships have different motivation levels to preserve socioemotional wealth.

I Don’T Want To Go Back: Examining The Return To Physical Workspaces During Covid-19, Zihan Liu, Drake Van Egdom, Rhona Flin, Omolola Adepoju, Ramanari Krishnamoorti

Research Collection Lee Kong Chian School Of Business

Objective: We study employee perspectives on return to physical workspaces to ultimately inform employers' and policy makers' decision making around the return to work during COVID-19. Methods: We tested the three-component conceptual model using survey data collected in the United States in May 2020 from samples of energy workers (N = 333). Results: Women, non-Caucasians, and employees living in multi-generational households were less willing to return. Concerns about childcare were negatively related to willingness to return, whereas organizational strategies for mitigating COVID-19 transmission at work were positively related to willingness to return. COVID-19 infections in an employees' network were also …

Financial Vulnerability And The Reproduction Of Disadvantage In Economic Exchanges, Tianyu He, Rellie Derfler-Rozin, Marko Pitesa

Research Collection Lee Kong Chian School Of Business

Integrative value generation through negotiated business deals is a fundamental way in which organizations and economic systems attain economic benefits. It is also an important way in which individuals can improve their financial situation. We propose that individuals most in need of improving their financial standing, those in a financially vulnerable situation, are least likely to reap the benefits of integrative value generation. We theorize that financial vulnerability induces a more zero-sum construal of success, or a view that success for one person must come at another person’s success. A more zero-sum construal of success, in turn, hampers negotiators’ ability …