SCHOOL OF BUSINESS
| Researcher : Bai Y |
| Project Title: | American Finance Association 2007 Annual Meeting Asset Prices under Short-Sales Constraints |
| Investigator(s): | Bai Y |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 01/2007 |
| Abstract: |
| N/A |
| Researcher : Banerjee S |
| List of Research Outputs |
| Bose I. and Banerjee S., Wal-mart And Bharti: Transforming Retail In India, Asia Case Research Center, Reference # 09/424C. Hong Kong, China, Asia Case Research Center, 2009. |
| Researcher : Bose I |
| Project Title: | Detecting the migration of customers of mobile services using clustering |
| Investigator(s): | Bose I |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2009 |
| Abstract: |
| Mobile technologies have entered the everyday life of people around the world. A recent report from the IDC group stated that the number of mobile subscribers in the Asia-Pacific region (excluding Japan) will reach 1.05 billion by 2010 (IDC 2006). The growth in mobile services is taking place not only in the Asia-Pacific but also in other parts of the world. According to the research firm Analysys, the penetration rate of mobile telephony for Western Europe is going to reach 100% by the end of 2007 (Analysys 2005) and the US will have 100% penetration by 2013 (SNL Kagan 2007). Again, the market for global mobile commerce will reach US $88 billion by 2009 (ePayNews.com, 2005). However, a hot market also implies fierce competition. The key to survival in this competitive market lies in knowing customers better. One of the approaches used to understand customers is customer clustering. Companies like Pannon GSM (Tdwi.org 2006) and Tianjin Unicom (SAS.com 2006) carried out data mining projects in which customer clustering was used to facilitate detection of customer churn and customer retention. In these projects, clustering was performed as a one time snapshot of customers’ behaviors without consideration of the possible change in their behaviors over time. However, the behaviors of customers often change dynamically in the mobile services industry due to the advent of new technology or the changing needs and preferences of the customers. At the same time, transactions in mobile services between customers and service providers, compared to traditional services, occur more frequently. Therefore, it is important to determine profiles of customers based on non-static behavioral data collected over multiple time periods. An objective of this research is to develop a new clustering algorithm to identify clusters of customers based on their behavioral characteristics and to determine the appearance, disappearance, and reappearance of these customer clusters over time that reflect the changing behavior of the customers. Although many choices exist in the domain of clustering algorithms, the proposed algorithm will be developed based on the standard fuzzy clustering algorithm. This is because fuzzy clustering algorithms use membership functions to determine which cluster a customer should belong to. This knowledge of the membership function can be used to determine the migration path of customers as they change their position from one cluster to another. Cluster validity indexes determine the quality of the generated clusters based on their separateness and compactness. In this case several cluster validity indexes will be investigated on a comparative basis to determine the quality of the dynamic clusters. An important task will be to conduct a rigorous analysis of the findings generated from the migration of the customers and come up with meaningful suggestions on modifications of the current mobile service plans that can satisfy the customers’ changing needs over time and increase the revenue generated for the mobile service providers. The key research questions that will be addressed are listed below. 1. How can we develop a fuzzy clustering algorithm to determine appearance of new clusters, disappearance of old clusters, and re-appearance of old clusters based on temporal data related to customers' usage of mobile services obtained from a mobile service provider? 2. How can we use the membership function associated with the fuzzy clustering algorithm to discover the migration path of customers and determine which cluster validity indexes should be used to ascertain the quality of those discoveries? 3. How can we devise effective mobile service plans that address the needs of the customers and increase the generation of revenues for the mobile service providers based on the knowledge nuggets discovered by the proposed algorithm? |
| Project Title: | International Conference on Asia Pacific Business Innovation and Technology Management An Analysis of Investment in Identity Theft Countermeasures |
| Investigator(s): | Bose I |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 01/2010 |
| Completion Date: | 01/2010 |
| Abstract: |
| N/A |
| Project Title: | Human learning versus machine learning: Understanding the effects of prior and contextual knowledge, training, and noise |
| Investigator(s): | Bose I |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 03/2010 |
| Abstract: |
| Striving for near-human performance has long been an unachievable goal for intelligent computational systems. Despite the rapid advancement in computer technologies, a large gap exists between human and machine performance in terms of process and outcome. It is still not possible to create completely automatic solutions for any non-trivial task. Computational machines excel in their ability to process large amount of information quickly and accurately whereas human learners are capable of solving real-world unstructured problems. Recently, computer scientists have begun to explore the possibility of improving automated problem solving by emulating human behavior and cognition. However, mimicking cannot be done without understanding of the underlying processes of human information processing. One of the attributes of human information processing that could contribute to the design of near-human performance algorithms is the ability of human problem solvers to make use of a diverse array of contextual and prior knowledge. Prior knowledge refers to “the whole of a person’s actual knowledge that: (a) is available before a certain learning task, (b) is structured in schemata, (c) is declarative and procedural, (d) is partly explicit and partly tacit, and (e) is dynamic in nature and stored in the knowledge base” (Dochy 1994). Contextual knowledge is information regarding the general content or framework (Miller et al. 2006). Numerous studies have confirmed the positive effect of prior and contextual knowledge on learning outcomes. For example, Dochy et al. (1999) ascertained that 91.5% of related studies reported positive effects of prior knowledge on performance. If prior and contextual knowledge is crucial to the effectiveness of human learning, it would be more so for machine learning. Broadly speaking, a machine is said to learn if its performance for some tasks improves with experience (Mitchell 1997). Unlike the human counterparts that possess at least some prior and contextual knowledge on virtually any given task, machines can only work on the limited experience (i.e., training data) that they are fed. Previous studies have demonstrated the feasibility and positive impact of incorporating prior knowledge into various machine learning techniques such as neural networks (Mitchell 1997), Bayesian networks (Zhou et al. 2006), and support vector machines (Schölkopf et al. 1998). In general, the empirical results support the propositions that the incorporation of prior knowledge into various machine learning techniques improve their predictive accuracy, speed up their learning rate and increase their tolerance against noisy data and small size of training data set. The aforementioned evidence reveals and justifies the potential contribution of studying and comparing human versus machine learning in the context of prior and contextual knowledge. Extant studies that attempt to compare human and machine learning in the information systems and computer science literature mainly focus on validation and evaluation of a particular computational system against human experts; thus they don’t put the comparison of human and machine learning performance under a theoretical framework. This lack of theoretical foundation effectively precludes these studies from generalizing to other settings and machine learning systems. As a result, it confines the insights generated within the scope of their particular application domain. The current study aims to put the investigation of human versus machine learning under the lens of cognitive learning theories so that the findings so generated can be cumulated and generalized to other settings. In particular, we focus on the theoretical dimensions of contextual and prior knowledge, size of training data set, and level of noise present in data, which when viewed under the lens of cognitive information processing theory, is applicable to both human and machine learning paradigms. It has been theorized that these three variables interact with each other in moderating the effectiveness of human and machine learning. Studies show that the presence of contextual and prior knowledge would increase the tolerance of noisy data (Zhou et al. 2006) and reduce the requirement on the size of the training data set for producing a desirable level of learning performance (Schapire et al. 2005). This study aims to advance our understanding of the human and machine learning process by investigating the role of contextual and prior knowledge in human and machine based problem solving and by gauging human performance in various settings against advanced machine learning techniques. Specifically, we attempt to answer the following three research questions through our study: (1) How would the level of contextual and prior knowledge that a human/machine possesses influence his/her performance on unstructured learning task such as financial performance prediction? (2) How would the performance of a machine learning system without prior knowledge input compare with that of the human learning counterparts with and without the help of contextual and prior knowledge? (3) How would the noise level and size of training data set interact with the level of contextual and prior knowledge in influencing human learning and machine learning effectiveness? References: Dochy, F. “Prior knowledge and learning.” In: International Encyclopedia of Education (Second edition), T. Husen and T. N. Postlethwaite (eds.), Oxford / New York: Pergamon Press, 1994. Dochy, F., Segers, M. and Buehl, M. M. “The relation between assessment practices and outcomes of studies: The case of research on prior knowledge.” Review of Educational Research (69:2), 1999, pp. 145-186. Miller L. M , Cohen, J. A. and Wingfield, A. “Contextual knowledge reduces demands on working memory during reading.” Memory & Cognition (34:6), Sept. 2006, pp. 1355-1367. Mitchell, T. M. Machine learning. New York: McGraw-Hill, 1997. Schapire, R. E., Rochery, M., Rahim, M. and Gupta, N. “Boosting with prior knowledge for call classification.” IEEE Transactions on Speech and Audio Processing (13:2), March 2005, pp. 174-181. Schölkopf, B., Simard, P. Y., Smola, A. J. and V. N. Vapnik. “Prior knowledge in support vector kernels.” In: Advances in neural information processing systems. M. I. Jordan, M. J. Kearns, and S. A. Solla (eds.), Volume 10, Cambridge, MA: MIT Press, 1998, pp. 640-646. Zhou, Z., Prugel-Bennett, A. and Damper, R. I. “A Bayesian framework for extracting human gait using strong prior knowledge.” IEEE Transactions on Pattern Analysis and Machine Intelligence (28:11), Nov. 2006, pp. 1738-1752. |
| List of Research Outputs |
| Bose I. and Chen X., A Framework For Context Sensitive Services: A Knowledge Discovery Based Approach, Decision Support Systems. North-Holland, Elsevier, 2009, 48: 158-168. |
| Bose I. and Leung C.M.A., An Analysis Of Investment In Identity Theft Countermeasures, International Conference On Asia Pacific Business Innovation And Technology Management. cebu, Phillipines, 2010, 1-5. |
| Bose I., Editorial Board, International Journal Of Online Marketing. Hershey, PA, IGI Global, 2010. |
| Bose I., Editorial Board, International Journal Of Technology In Small And Medium Enterprises. Hershey, PA, IGI Global, 2010. |
| Bose I., Editorial Board, Journal Of Applied Logistics. Hershey, PA, IGI Global, 2009. |
| Bose I., Ngai E.W.T., Thompson T.S.H. and Spiekermann S., Editorial: Managing Rfid Projects In Organizations, European Journal Of Information Systems. Hampshire, UK, Palgrave-Macmillan, 2009, 18: 534-540. |
| Bose I. and Chen X., Exploring Business Opportunities From Mobile Services Data Of Customers: An Inter-cluster Analysis Approach, Electronic Commerce Research And Applications. North-Holland, Elsevier, 2010, 9: 197-208. |
| Bose I. and Chandrasekhar R., Green It Matters At Wipro Ltd. , Asia Case Research Center, Reference # 09/455C. Hong Kong, China, Asia Case Research Center, 2009. |
| Bose I. and Fong M.C., Implementation Of Quality Of Service In Voice Over Internet Protocol, In: M. Pagani, Encyclopedia Of Multimedia Technology And Networking, 2nd Edition. Hershey, USA, IGI Global, 2009, 2: 655-660. |
| Bose I., Session Chair, International Conference on Electronic Business. Macau, China, 2009. |
| Bose I. and Banerjee S., Wal-mart And Bharti: Transforming Retail In India, Asia Case Research Center, Reference # 09/424C. Hong Kong, China, Asia Case Research Center, 2009. |
| Bose I. and Leung A.C.M., What Drives The Adoption Of Anti-phishing Measures By Hong Kong Banks?, Communications Of The ACM. USA, ACM, 2009, 52: 141-143. |
| Chen X., Bose I., Leung C.M.A. and Guo C., Analyzing The Risk And Financial Impact Of Phishing Attacks Using A Knowledge Based Approach, Ninth International Conference On Electronic Business. Macau, China, 2009, 119-126. |
| Pal R. and Bose I., An Optimization Based Approach For Deployment Of Roadway Incident Response Vehicles With Reliability Constraints, European Journal Of Operational Research. North-Holland, Elsevier, 2009, 198: 452-463. |
| Ravisankar P., Ravi V. and Bose I., Failure Prediction Of Dotcoms Using Neural Network And Genetic Programming Hybrids, Information Sciences. North-Holland, Elsevier, 2010, 180: 1257-1267. |
| Researcher : Carverhill AP |
| Project Title: | Non-parametric modelling of the term structure of interest rates, using Eurodollar futures |
| Investigator(s): | Carverhill AP |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding for New Staff |
| Start Date: | 08/2002 |
| Abstract: |
| To model the Term Structure of Interest Rates, that is the ways in which interest rates of various maturities move, and the equilibrium relationships between then, taking as data the Eurodollar futures prices, and using a non-parametric modelling approach. |
| Project Title: | 2007 China International Conference in Finance The Smirk in the S&P500 Futures Options Prices:a Linearized Factor Analysis" |
| Investigator(s): | Carverhill AP |
| Department: | Sch of Economics & Finance |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 07/2007 |
| Abstract: |
| N/A |
| Researcher : Celly N |
| Project Title: | Subsidiary downsizing: Antecedents and performance consequences |
| Investigator(s): | Celly N |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 04/2010 |
| Abstract: |
| Downsizing has been called the ‘most pervasive yet understudied phenomenon in the business world’ Cameron (1994:189). Cascio and Young (2003) in a comparison of downsizing in the 2000s versus the 1990s found, ‘If anything the pace has accelerated.’ Further, downsizing is not an issue confined to a single country. The recent global economic crises, unfortunately provided ample evidence with 2.6 million jobs lost in the US alone in 2008, the largest job loss ever in a single year since the 1940s (http://money.cnn.com/2009/01/09/ news/economy/jobs_december/). Although academic research on downsizing has increased over the last two decades, two questions remain unanswered. First it remains unclear why multinational companies undertake downsizing in some of their subsidiaries while choosing not to downsize others and secondly the question whether downsizing works or not remains unresolved. Most of the downsizing studies such as Dewitt (1998) and Ahmadjian and Robinson (2001) have examined the antecedents of downsizing in large multinationals at the corporate level (why did the parent firm downsize?) Others have examined the impact of downsizing on subsequent parent firm performance (Cascio, Young and Morris, 1997; Wayhan and Werner, 2000). However empirical studies of the performance consequences of downsizing are mixed with positive (Wayhan and Werner, 2000), negative (De Meuse, Vanderhedien and Bergmann, 1994, 1999;) and nil (Cascio, Young and Morris ,1997) effects reported. I shift the focus of extant downsizing research from a corporate (or parent level) of analysis to the subsidiary level of analysis. I argue that it makes sense to study the effect of change (downsizing) at the locus of change (subsidiary) level where it is most felt. I draw on Capelli’s (2002) argument that treating a massive corporation such as General Electric, with its hundreds of divisions and facilities as a single observation simply does not make sense, since downsizing at the corporate level ‘is often far removed from where the employment decisions are made’ (Capelli, 2002:269). Further, by also investigating why some subsidiaries are downsized versus others that are not, I focus on what really matters to local employees (and the local economy and local government): whether or not a particular plant is to be downsized rather than layoffs in other plants or at corporate headquarters. In sum, this study seeks to examine two research questions. First, why do multinationals downsize some of their subsidiaries (versus others) and second what is the impact of this downsizing on subsidiary performance? Another objective of this study is to extend my dissertation work on the same topic. In the dissertation I conducted a large sample study of Japanese multinationals using secondary data on more than 800 subsidiaries. The dissertation findings have been incorporated into two research articles, one is currently under second stage review at the Strategic Management Journal and the other is being submitted to the Journal of International Business. The proposed study involves conducting interviews with senior executives from select global corporations who have extensive international experience with downsizing. These interviews and questionnaires will provide new and additional information from other companies not present in the dissertation data set as well as enable me to collect information on firm level variables not present in the dissertation data (for example data on types of employees that were let go and type of subsidiary etc). Such rich interview data and comprehensive information collected through the questionnaires will enable me to generate additional articles to advance academic research and managerial practice of downsizing. |
| Project Title: | Academy of International Business Annual Meeting 2010 (AIB 2010) Subsidiary Downsizing: Which Ones Get Cut? |
| Investigator(s): | Celly N |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 06/2010 |
| Completion Date: | 06/2010 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Celly N., Globalization of Indian companies, Fudan University, MBA International Management. Shanghai, 2010. |
| Celly N. and Han M., Professional CEO, independent directors, innovation and family controlled firms’ performance, International Council of Small Business and Entrepreneurship World Conference, Cincinnati, Ohio. 2010. |
| Celly N., Subsidiary downsizing. Which ones get cut?, Academy of International Business Conference. 2010. |
| Researcher : Chan CMK |
| Project Title: | Institutional Development and Foreign Affiliate Performance |
| Investigator(s): | Chan CMK |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 03/2007 |
| Abstract: |
| One major objective of this project is to develop the institutional perspective of the performance of foreign affiliates of multinational corporations (MNCs). Previous studies drawing from the industrial organization economics perspective and the resource-based view of the firm suggest that the industry structure and a firm’s resources and capabilities are the primary determinants of foreign affiliate performance (e.g., Chang, 1995). However, these studies have ignored the influences of institutional environments. As foreign affiliates cannot be immune from the host country institutional contexts in which they are embedded (Kostova and Zaheer, 1999; Peng, 2002; Westney, 1993), this oversight has left a significant gap in the literature on the theoretical implications of foreign affiliate performance. The second major objective is to examine how host country institutions influence MNCs’ risk and return of investment in the host country. Recent studies suggest that host country institutions do matter in influencing foreign affiliate performance (Christmann et al., 1999; Makino et al., 2004), but they merely provided empirical evidence on the extent to which the country effects explained the variation in foreign affiliate performance by employing the variance component analysis. As each host country constitutes a distinct institutional environment (Kostova and Zaheer, 1999) and has its own economic, political, and social institutions that affect the profitability of engaging in business activities (Khanna and Rivkin, 2001; North, 1990), little is known about in which country the variation in foreign affiliate performance is lesser (or greater) and the level of foreign affiliate performance is higher (or lower). The third objective is to examine the influences of the level of institutional development on foreign affiliate performance. As the extent to which institutions are well developed varies across countries, their influences may also differ from country to country. Research has provided limited insights regarding how the level of institutional development of a host country influences the level of and the variation in foreign affiliate performance in the host country and the extent of this influence. |
| Project Title: | The Institutional Perspective of Foreign Affiliate Performance |
| Investigator(s): | Chan CMK |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2008 |
| Abstract: |
| To develop the institutional perspective of foreign affiliate performance. To examine how host country institutions influence MNCs' risk and return of investment in the host country. To examine the influences of the level of institutional development on foreign affiliate performance. |
| Project Title: | THE VARIATION IN FOREIGN AFFILIATE PERFORMANCE: AN INSTITUTIONAL PERSPECTIVE |
| Investigator(s): | Chan CMK |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 01/2010 |
| Abstract: |
| This project has three objectives. First, it examines the institutional influences on foreign affiliate performance. Many previous studies have put forward economic explanations for foreign affiliate performance, but few have offered institutional explanations for this performance. To understand the dynamics of foreign affiliate performance, we need to take into account of the institutional context of the markets in which foreign affiliates are embedded and explore the strength of the institutional pressures on foreign affiliate performance. Second, it focuses on the “variation” in foreign affiliate performance. Previous studies have primarily examined how the “average level” of performance varies across certain reference groups (i.e., host/home countries and MNCs), and have paid little attention to how “business extremes” vary across groups (Andriani & McKelvey, 2007). Business extremes represent the extent of discrepancy between successful and unsuccessful performers in a certain business context. As the actual performance of foreign affiliates in a local market can deviate from their average performance, research needs to examine the source of business extremes (or the variation in performance) and why it varies across different local markets. Third, it conducts a two-level analysis of the variation in foreign affiliate performance that covers both the host country level and the local industry level (an industry that is defined separately within each host country). Foreign affiliates that operate in multiple industries in multiple host countries, face different sets of legitimating requirements to which they must conform (Ghoshal & Westney, 1993; Kostova & Zaheer, 1999; Sundaram & Black, 1992). Given that they are exposed to both host country and local industry levels of institutional pressures, an analysis of the different levels of institutional pressures will provide a more comprehensive understanding of their relative influence on the variation in foreign affiliate performance. |
| Project Title: | Academy of International Business Annual Meeting 2010 (AIB 2010) An Institutional Perspective of Foreign Affiliate Performance |
| Investigator(s): | Chan CMK |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 06/2010 |
| Completion Date: | 06/2010 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Chan C.M.K., An institutional perspective of foreign affiliate performance, Academy of International Business Annual Meeting, Rio de Janeiro, Brazil. 2010. |
| Chan C.M.K., Makino S. and Isobe T., Does sub-national region matter? Foreign affiliate performance in the U.S. and China, Strategic Management Journal. 2010, 31(11): 1226-1243. |
| Chan C.M.K., Which country matters? Institutional Development and Foreign Affiliate Performance, Journal of Strategic Management. 2009, 1: 55-59. |
| Isobe T., Makino S. and Chan C.M.K., National border and enterprises: Analysis of institutions and global strategy. Tokyo, Japan, Toyo Keizai, 2010. |
| Researcher : Chan CWH |
| List of Research Outputs |
| Wang L.I.N.G.H.U.A., Lau A.H.L. and Chan C.W.H., Preference for Balanced Scorecard Measures: The Effects of Compensation and Strategy Formulation, American Accounting Association 2009 Annual Meeting. 2009. |
| Researcher : Chan DKW |
| Project Title: | Pre-audit information, outsourcing and perceived auditor independence |
| Investigator(s): | Chan DKW |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2006 |
| Completion Date: | 12/2009 |
| Abstract: |
| To identify a possible benefit of ICS outsourcing (e.g. the outsourcing of the design and implementation of internal control system), namely the flow of information from the client to its external auditor about the ICS quality that helps to better coordinate the audit effort and the ICS quality. Pae and Yoo (2001) point out that when there is asymmetric information regarding the ICS quality when audit fees are set between the client and the auditor, an efficiency loss due to a a suboptimal allocation of audit effort and ICS quality is inevitable. Outsourcing the ICS to an external auditor, who will also conduct the audit, will thus solve this asymmetric information problem and reduce the efficiency loss due to coordination failure. More importantly, I want to show that this informational benefit remains significant even when the auditor is a less cost-effective ICS provider, and is perceived to be less independent when it also provides ICS services to the same audit client; to determine the conditions under which the client will choose to outsource its ICS. |
| List of Research Outputs |
| Chan D.K.W. and Gao J., Earnings Management, Incentive Contracts, Private Information Acquisition and Production Efficiency, 2009 Chinese Accounting Professor's Association of North America's Second Annual Research Conference. 2009. |
| Researcher : Chan LHL |
| Project Title: | Market Reactions to Subsequent Earnings Announcements for Firms with Prior SEC Filing Earnings Revisions |
| Investigator(s): | Chan LHL |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2008 |
| Completion Date: | 01/2010 |
| Abstract: |
| The federal securities laws in U.S. require publicly traded companies to file with the Securities and Exchange Commission (SEC) their quarterly reports on Form 10-Q within 45 days after the fiscal quarter end and their annual reports on Form 10-K within 90 days after the fiscal year end. These reports have been available to the public through the SEC’s EDGAR database since 1994. Approximately 80% of companies also report their earnings in press releases after the fiscal period ends but before the filing date (Amir and Livnat 2005). However, some of these companies file a different earnings number with SEC from the one they report in the public earnings announcement, even though the earnings announcement date and the corresponding SEC filing date are close in time. The objective of this paper is to study the information content of earnings and differential investor trading response to earnings announcement for firms with SEC filing earnings revisions from preliminary earnings announcements in previous periods. Prior studies have examined the market reaction and differential investor trading response around the SEC filing dates when firms revise their earnings in the 10-K/Q. Hollie, Livant, and Segal (2005) found that the stock market reacted significantly around the 10-K/Q filing dates (day -1 to day +1) when the filed earnings have been revised and different from the preliminary earnings announcement. They concluded that such earnings revisions provided new information to investors and that the market therefore incorporated the revisions in stock prices when the 10-K/Q reports were filed. Chan and Cready (2007) found that the abnormal trading activities of large, sophisticated investors around the SEC filing dates were positively associated with the earnings revisions in Form 10-K/Q reports, while the abnormal trading activities of small, less-sophisticated investors did not respond to SEC filing earnings revisions. This study extends these two studies by investigating the market reaction to earnings announcement news following SEC filing earnings revisions in prior periods (i.e. the market reaction to earnings announcements in the post-revision revision in Figure 1). We examine when firms have revised their earnings in SEC filings, whether the investors would delay their response to earnings announcements in later quarters after SEC filing earnings revisions (post-revision period) because the investors would view the earnings announcements as uncertain and not representative of the firms’ real earnings. |
| List of Research Outputs |
| Chan L.H.L., Chen T. and Hilary G., Insider trading and family firms, European Finance Association 37th Annual Meeting. 2010. |
| Researcher : Chang EC |
| Project Title: | 2008 China International Conference in Finance Behavioral Finance I International Finance II |
| Investigator(s): | Chang EC |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 07/2008 |
| Abstract: |
| N/A |
| Project Title: | Dual-listing and pricing efficiency: The informational and anchoring role played by the reference price. |
| Investigator(s): | Chang EC, Ren J |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 10/2009 |
| Abstract: |
| 1) To analyze the dual-role of the reference price in pricing the dual-listed securities in another not-fully-integrated market, and to document empirical evidence concerning the dual-role argument. 2) To examine how the dual-role is related to the IPO literature and international finance literature, and in particular, to examine the relative importance of the anchoring bias. 3) To provide policy suggestions to the Chinese economic reform, and help to improve the primary market efficiency. |
| List of Research Outputs |
| Chang E.C. and Ren J., Cross-listing and Pricing Efficiency: The Informational and Anchoring Role Played by the Reference Price, 2009 China International Conference in Finance (CICF2009), July 7-10, 2009, Guangzhou, China. 2009. |
| Chang E.C. and Ren J., Cross-listing and Pricing Efficiency: The Informational and Anchoring Role Played by the Reference Price, 2009 Financial Management Association Conference in Finance, October 2009, Reno, Nevada, U.S.A.. 2009. |
| Chang E.C., Tang Y. and Zhang M., Financial Literacy and Household Investments in Structured Financial Products, 2010 Five Asian Universities Joint Conference, January 29, 2010, Hong Kong. 2010. |
| Chang E.C., Tang Y. and Zhang M., Financial Literacy and Household Investments in Structured Financial Products, 2010 Hitotsubashi-Thammasat Conference on Asian Financial Market, May 2-3, 2010, Hua Hin, Thailand. 2010. |
| Chang E.C., Tang Y. and Zhang M., Financial Literacy and Household Investments in Structured Financial Products, The 17th Conference on the Theories and Practices of Securities and Financial Markets, December 11-12, 2009, Kaohsiung, Taiwan. 2009. |
| Chang E.C., Index Futures and Financial Innovation, Invited lecture at Antai College of Economics and Management Shanghai Jiao Tong University, June 25, 2010, Shanghai. 2010. |
| Chang E.C., 富民?負民? - 形形色色私有化，紛紛紜紜眾生相, Invited lecutre at Lung Yingtai Cultural Foundation, Taipei. 2010. |
| Chang E.C., Shi L. and Zhang J., Is Warrant Really a Derivative? Evidence from the Chinese Warrant Market, 2009 China International Conference in Finance (CICF2009), July 7-10, 2009, Guangzhou, China. 2009. |
| Chang E.C., Shi L. and Zhang J., Is Warrant Really a Derivative? Evidence from the Chinese Warrant Market, Invited lecture at Guanghua School of Management in Peking University, Beijing, October 20. 2009. |
| Chang E.C., Shi L. and Zhang J., Is Warrant Really a Derivative? Evidence from the Chinese Warrant Market, Invited lecture at School of Mathematical Sciences in South China Normal University, Guangzhou, 8 July. 2009. |
| Chang E.C., Zhang J. and Zhao H., The Relation Between Physical and Risk-Neutral Cumulants, 2009 Financial Management Association (FMA) Annual Meeting, October 21-24, 2009, Reno, Nevada, U.S.A. 2009. |
| Zhang J., Zhao H. and Chang E.C., Equilibrium Asset And Option Pricing Under Jump Diffusion, In: Dilip B. Madan, Mathematical Finance. 2010. |
| Zhang J., Zhao H. and Chang E.C., Equilibrium Asset and Option Pricing under Jump Diffusion, Invited lecture at Risk Management Institute & Department of Mathematics in National University of Singapore, Singapore, 7 April. 2010. |
| Zhang J., Zhao H. and Chang E.C., The Relation Between Physical and Risk-neutral Cumulant, Invited presentation at the department of finance and business economics, Macau University, October, 2009. 2010. |
| Researcher : Chau MCL |
| Project Title: | Analysis and Visualization of Web Search Queries |
| Investigator(s): | Chau MCL |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2007 |
| Completion Date: | 12/2009 |
| Abstract: |
| There has been a significant amount of research in the area of Web search query logs analysis. For example, the AltaVista study and the Excite study have been widely cited. It is important to analyze Web search logs to investigate how people are searching for infomraiton on the Web and the findings can be applied to improving search engine design and assisting useres in information retrieval. Most of the earlier Web log studies have focused on basic statistical and characteristic analysis of the search queries, such as the search topics, the average query length, the number of queries per sessions, and so on. In recent years, there are more studies on the mining of search queries, such as query classification (Pu et al., 2002; Shen et al., 2005). However, there are two major areas that can be improved. First, only a few data mining techniques have been applied. There are many other data mining and text mining techniques that have not been tested on search query logs. Second, these projects were mostly focused on data characteristics or technical issues, but did not focus on how the results should be presented to users in real search tasks. The proposed project is to address these issues by applying some new techniques on Web query logs and studying how this can assist users in their search tasks. We propose to develop three modules based on search query logs available, such as the Excite query logs, the AOL query logs, and the Timway query logs (Chau et al., 2006). The three modules are (a) QuerySpace, (b) QueryTree, and (c) Query Map. The QuerySpace is a similarity network for simple query suggestion based on spreading activation. The QueryTree is a visualization tool for exploring the query network using a tree metaphor. The QueryMap is a two-dimensional display for query clusters based on neural network. These three methods are chosen because of their wide successes in previous text and Web retrieval research and their ability to help users in real tasks by query analysis and visualization. Experiments and user studies will be conducted to evaluate the performance of the proposed system. |
| Project Title: | Applying Information Visualization Techniques to Web Search Results |
| Investigator(s): | Chau MCL |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 03/2008 |
| Abstract: |
| The Internet has made a lot of information available to management at various levels for decision making. With tens of billions of pages on the World Wide Web, it is possible to get the information on a large variety of topics. While there is a large amount of useful resources, searching for the ones that are useful could be a big problem. Most people rely on Web search engines, such as Google or Yahoo, to search for Web pages that are relevant to their tasks on hand and filter out the irrelevant ones (Spink et al. 2001). Most popular Web search engines, relying on various information technologies, allow users to type in one or several keywords and search for documents containing these words in their database systems. This will often result in millions of documents in the result set Out of this set, the top documents will be returned to users. The documents are often returned as a plain list of page titles and snippets (short summaries) and a user has to browse through the list to search for relevant and high quality results. However, browsing through a long list of documents to locate the information needed could be a mentally exhausting task. This is known as the information overload problem, which is often faced by decision makers in organizations (O’Reilly, 1980; Farhoomand and Drury 2002). Recent research has tackled this problem by addressing the issues involved in different steps of the information retrieval process on the Web. Most previous studies have focused on improving the effectiveness of the searching and ranking algorithms, but few have investigated the effect of the presentation of search results to users. The Web search result display nowadays is still more or less the same as that of the search engines (like AltaVista and Lycos) in the early days of the Web more than a decade ago – a one-dimensional list showing the top search results. Users have to browse through the list of items one by one to get an overview of the results. Although many new information visualization techniques have been proposed in recent years, none of them have been widely adopted in search engine result visualization. In this project, our objective is to explore the feasibility of using multi-dimensional visualization techniques on Web search results. In particular, glyphs will be used to represent the different attributes, such as number of relevant keywords and number of incoming links, of the search result pages. Glyphs were first proposed for visualizing multi-dimensional data by Chernoff (1973). In the well-known Chernoff Faces, different facial features, such as head eccentricity, eye size, nose size, mouth shape, and mouth length, are used to represent the values of different dimensions of the data. Since then, various types of glyphs have been proposed, such as time-wheels, insects, stars, flowers, trees, castles, pies, polygons, among others (Kleiner and Hartigan 1981; Chuah and Eick 1998; Ebert et al. 1997; Xiong and Donath 1999; Roberts et al. 2002; Fanea et al. 2005). These glyphs have all achieved various levels of success because of several reasons. First, glyphs can represent rich information as a small object a picture is worth a thousand words. Second, many glyphs, such as human faces and flowers, are representations that users are familiar with. Users often find it easy to interact with these glyphs with their innate ability (Chernoff 1973). Third, compared with complex visualization structures such as network displays, glyphs are simple and can be easily understood by users. The different visual cues in glyphs can represent the values of different parameters based on their respective scales, allowing users to understand and compare the different attributes (Pinker 1990). In the proposed research, as a preliminary study, we plan to design, develop, and evaluate one specific type of glyphs for Web search result visualization. References 1. Chernoff, H. “The Use of Faces to Represent Points in k-dimensional Space Graphically,” Journal of the American Statistical Association (68), 1973, pp. 361-368. 2. Chuah, M. C. and Eick S.G. “Information Rich Glyphs for Software Management Data,” IEEE Computer Graphics and Applications (18:4), 1998, pp. 24-29. 3. Ebert, D. S., Kukla, J. M., Shaw, C. D., Zwa, A., Soboroff, I., and Roberts, D. A. “Automatic shape interpolation for glyph-based information visualization,” Proceedings of IEEE Visualization 97, Phoenix, AZ, October 1997. 4. Fanea, E., Carpendale, S., and Isenberg, T. “An Interactive 3D Integration of Parallel Coordinates and Star Glyphs,” Proceedings of the IEEE Symposium on Information Visualization (INFOVIS), Oct 23-25 2005, pp. 149-156. 5. Farhoomand, A. and Drury, D. “Managerial Information Overload,” Communications of the ACM (45:10), 2002, pp. 127-131. 6. Kleiner, B. and Hartigan, J. A. “Representing Points in Many Dimensions by Trees and Castles,” Journal of the American Statistical Association (76), pp. 260-269. 7. O’Reilly, C. A. “Individuals and information overload in organizations: Is more necessarily better?” Academy of Management Journal (23), 1980, pp. 684-696. 8. Pinker, S. “A theory of graph comprehension,” in: Artificial Intelligence and the Future of Testing, R. Freedle (Ed.), Lawrence Erlbaum Associates, Hillsdale, NJ, 1990, pp. 73-126. 9. Roberts, J., Boukhelifa, N., and Rodgers, P. “Multiform Glyph BasedWeb Search Result Visualization,” Proceedings of the Sixth International Conference on Information Visualisation, 2002. 10. Spink, A., Wolfram, D., Jansen, B. J., and Saracevic, T. “Searching the Web: The Public and Their Queries,” Journal of the American Society for Information Science and Technology (52:3), 2001, pp. 226-234. 11. Xiong, R. and Donath, J. “PeopleGarden: creating data portraits for users,” Proceedings of the 12th Annual ACM symposium on User Interface Software and Technology, Asheville, North Carolina, United States, 1999, pp.37 – 44. |
| Project Title: | Social Mining for Web 2.0 Applications |
| Investigator(s): | Chau MCL |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 05/2009 |
| Abstract: |
| Web 2.0 sites, such as Facebook, MySpace, and Wikipedia, are becoming increasingly popular in recent years. These Web sites are often characterized by user-generated content and user collaboration. There are various types of social linkages interactions among users on these sites. Examples of these social linkages include the friend relationship in social networking sites (e.g., Facebook), the commenting relationship in blogs, and the co-purchase relationship in e-commerce sites (e.g., Amazon), among others. These linkages form the social networks that are of interest to both research studies and commercial applications. Previous research has studied methods to analyze relationships and identify communities in online social networks and the characteristics of these networks. For example, it has been suggested that different types of connections between online users have different characteristics and play different roles in facilitating interactions between them (Ali-Hasan & Adamic, 2007). It has been found that such relationships in Web 2.0 sites can enable several network functions such as information diffusion (Adar & Adamic, 2005). Researchers have also employed various techniques from Web structure mining to extract communities in Web 2.0 sites. Kumar et al. tracked time-dense communities in blogs using the Web trawling method (Kumar et al., 1999) and found that these communities often show significant temporal bursts around a specific topic in a period of time (Kumar et al., 2005). Lin et al. defined Web 2.0 communities based on mutual awareness and extracted them using a PageRank-based algorithm (Lin et al., 2006). The topology of online social networks has also been studied recently. These studies compare the topological features such as in-degree distributions, average shortest path lengths, and clustering coefficients of different online social networks (Shi et al., 2007). In this project, we propose to study the application of “social mining” - the collection, analysis, and mining of the social networks in Web 2.0 applications. The objectives of the project are as follows: 1. Investigate the nature and characteristics of the social network in Web 2.0 sites and compare that with existing online social networks. 2. Develop a framework for the automatic identification, collection, and analysis of social networks in Web 2.0 sites. 3. Apply graph theory and social network analysis algorithms on these social networks to reveal interesting patterns. References: 1. Adar, E. and L.A. Adamic (2005). Tracking information epidemics in blogspace, in Proceedings of the 2005 IEEE/WIC/ACM International Conference on Web Intelligence (WI'05). Compiegne, France. 2. Ali-Hasan, N.F. and L.A. Adamic (2007). Expressing social relationships on the blog through links and comments, in International Conference on Weblogs and Social Media: Boulder, Colorado. 3. Kumar, R., J. Novak, P. Raghavan, and A. Tomkins (2005). On the bursty evolution of blogspace. World Wide Web: Internet and Web Information Systems, 8: p. 159-178. 4. Kumar, S.R., P. Raghavan, S. Rajagopalan, and A. Tomkins (1999). Trawling the web for emerging cyber-communities. Computer Networks, 31(11-16): p. 1481-1493. 5. Lin, Y.-R., H. Sundaram, Y. Chi, J. Tatemura, and B. Tseng (2006). Discovery of blog communities based on mutual awareness, in The 3rd Annual Workshop on Weblogging Ecosystem Edinburgh, Scotland. 6. Shi, X., B. Tseng, and L.A. Adamic (2007). Looking at the blogosphere topology through different lenses, in International Conference on Weblogs and Social Media: Boulder, Colorado. |
| Project Title: | Promoting mental well-being in youths through an interactive online game on a social networking website |
| Investigator(s): | Chau MCL, Yip PSF, Wong PWC |
| Department: | School of Business |
| Source(s) of Funding: | Health Care and Promotion Fund - Research Grant Projects |
| Start Date: | 04/2010 |
| Abstract: |
| To develop an online game on facebook - the most popular social networking website in Hong Kong and across the globe - to promote mental health awareness through the internet. To utilize the information from an award-winning and locally developed website on depression " The Little Prince is Depressed" to form an interactive online game that will educate young users about mental health, mental illness, the negative impact of drug use, the positive effects of utilizing problem-solving, communication, anger management, and social skills. Evaluation of the effectiveness of the project will be based on logs collected from the game as well as questionnaires that will be administered to selected players of the game. |
| List of Research Outputs |
| Cao J., Knotts T., Xu J. and Chau M.C.L., Word of Mouth Marketing through Online Social Networks, Proceedings of the Americas Conference on Information Systems (AMCIS 2009). 2009. |
| Chau M.C.L. and Wong C.H., Designing the User Interface and Functions of a Search Engine Development Tool, Decision Support Systems . 2010, 48: 369-382. |
| Chau M.C.L., Wong C.H., Zhou Y., Qin J. and Chen H., Evaluating the Use of Search Engine Development Tools in IT Education, Journal of the American Society for Information Science and Technology. 2010, 61: 288-299. |
| Chau M.C.L., Invited speaker, ISiM Workshop on Intelligence and Security Informatics. 2010. |
| Chau M.C.L., Keynote speaker, International Symposium on Computational Intelligence and Design (ISCID 2009). 2009. |
| Chen H., Chau M.C.L., Li S.H., Urs S., Srinivasa S. and Wang G.A., Editor, In: Chen, H., Chau, M., Li, S. H., Urs, S., Srinivasa, S., and Wang, G. A., Proceedings of the Pacific Asia Workshop on Intelligence and Security Informatics 2010. SPRINGER, 2010. |
| Chen H., Li X., Chau M.C.L., Ho Y.J. and Tseng C., Using Open Web APIs in Teaching Web Mining, IEEE Transactions on Education. 2009, 52: 482-490. |
| Park T., Li J., Zhao H. and Chau M.C.L., Analyzing Writing Styles of Bloggers with Different Opinions, Proceedings of the 19th Annual Workshop on Information Technologies and Systems (WITS'09). 2009. |
| Qiao S., Tang C., Jin H., Dai S., Chen X., Chau M.C.L. and Hu J., Processing Constrained K-Closest Pairs Queries in Crime Databases, Annals of Information Systems . 2010, 9: 59-75. |
| Zhu B., Luo X., Ma J. and Chau M.C.L., Finding Treasures from Your Trash, Proceedings of the Joint Conference on eServices and Business Intelligence (JCeSBI 2010). 2010. |
| Researcher : Chau PYK |
| Project Title: | Examining the Effects of Avatars as a New Form of Personalization Agents on Online Shopping Decision Making and How Distrust Influences These Effects |
| Investigator(s): | Chau PYK |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2009 |
| Abstract: |
| 1) This research aims to bridge the gap between the potential growth of the use of avatar-based personalization agents and the lack of understanding of how distrust affects the acceptance of personalized recommendations by avatar. No prior research, of which the investigators are aware, examines this issue. 2) Specifically, this research has three objectives. First, the study deepens our understanding of a new form of personalization agent which is gaining its popularity in e-commerce. Web personalization aims to provide the right content in the right format to the right person at the right time. Much prior personalization research has only focused on the issue of “right content”, and the findings are computer algorithms to increase the level of preference matching (e.g., Ahn 2006; Shahabi and Banaei-Kashani 2003; Wei et al. 2008). However, with increasing customer expectation, not only the messages themselves, but also the messengers are important to the persuasion process. Results of this research may throw lights on the issue of the “right format”. 3) Second, this research also helps us understand more about the effect of different features of an avatar. Implementing an avatar as a personalization agent requires a lot more technical and financial resources than implementing a recommendation list. How sophisticated an avatar should be, in terms of what features it incorporates, is a question with implications to both theory and practice. In research, it adds new knowledge to human computer interaction. In practice, the results should be of significant value to firms when strategically designing their avatar recommenders. 4) Third, this research examines how online shoppers’ distrust in a website affects the effect of avatar-based recommendations. Online shoppers with different characteristics prefer different recommendation formats. A successful personalization strategy should take this into consideration. This research considers which recommendation format (i.e. a list or an avatar) is more effective in influencing users with different distrust levels in the website to form a positive attitude towards the recommendations. Distrust is online users’ suspicions and fear to the website, and is important in the transaction-based e-commerce context (McKnight et al. 2004). The propensity of distrust varies from person to person. If users are suspicious of or unconfident in the website, will the use of avatars lead to lower confidence? Or will users perceive avatar-based recommendations to be the firm’s effort, resulting in higher confidence? The findings let online firms know to which type of users the avatar-based recommendations are the most effective. In practice, the results provide insights to firms on the strategic use of their avatar recommenders. |
| List of Research Outputs |
| Chau P.Y.K., Associate Editor, MIS Quarterly. 2010. |
| Chau P.Y.K., Chang Jiang Scholar , 长江学者, Ministry of Education, PRC. 2010. |
| Chau P.Y.K., Conducting Information Management research in Asia: Some possible paths, Invited talk at the Journal Tutorial and Research Workshop, National Chun Hsin University, Taiwan . 2009. |
| Chau P.Y.K., Possible paths to conducting and advancing Information Systems research in Asia, Invited Talk at the CCU MIS Research Workshop, National Chung Cheng University, Taiwan. 2009. |
| Chau P.Y.K., Publishing multiple papers from a single project: A personal experience, Keynote address at the Seventh China Management Science and Engineering Forum, Wuhan, China. 第七届中国管理科学与工程论坛, 2009. |
| Chau P.Y.K., Publishing multiple papers from a single project: Two success stories, Invited talk at the Journal Tutorial and Research Workshop at National Chun Hsin University, Taiwan. 2009. |
| Lai V. .S., Chau P.Y.K. and Cui X., Examining Internet banking acceptance: A comparison of alternative technology adoption models, International Journal of Electronic Business. 2010, 8(1): 51-79. |
| Li D., Chau P.Y.K. and Van Slyke C., A comparative study of individual acceptance of instant messaging in the US and China: A structural equation modeling approach, Communications of the AIS. 2010, 26(5): 86-106. |
| Li D., Chau P.Y.K. and Lai F., Market orientation, ownership type and e-business assimilation: Evidence from Chinese firms, Decision Sciences. 2009, 41(1): 115-145. |
| Li D... and Chau P.Y.K., Acceptance of Internet-based services: A comparison of three models, Pacific-Asia Journal of Association for Information Systems. 2009, 1(3): 1-24. |
| Wang W.Y.C., Heng M.S.H. and Chau P.Y.K., The adoption behaviour of information technology industry in increasing business-to-business integration sophistication, Information Systems Journal. 2009, 20(1): 5-24. |
| Researcher : Chen X |
| List of Research Outputs |
| Bose I. and Chen X., A Framework For Context Sensitive Services: A Knowledge Discovery Based Approach, Decision Support Systems. North-Holland, Elsevier, 2009, 48: 158-168. |
| Bose I. and Chen X., Exploring Business Opportunities From Mobile Services Data Of Customers: An Inter-cluster Analysis Approach, Electronic Commerce Research And Applications. North-Holland, Elsevier, 2010, 9: 197-208. |
| Chen X., Bose I., Leung C.M.A. and Guo C., Analyzing The Risk And Financial Impact Of Phishing Attacks Using A Knowledge Based Approach, Ninth International Conference On Electronic Business. Macau, China, 2009, 119-126. |
| Researcher : Enright MJ |
| Project Title: | Hong Kong's competitiveness: a quantitative approach |
| Investigator(s): | Enright MJ, Newton J |
| Department: | School of Business |
| Source(s) of Funding: | Low Budget High Impact Programme |
| Start Date: | 11/2000 |
| Abstract: |
| To further develop and test a research methodology that can generate quantitative measures o the determinants of competitiveness at the industry level; to use this methodology to determine Hong Kong's position relative to its main competitors for a series of industries, identifying the SAR's strengths and weaknesses on an industry by industry basis; to use the above information to inform public policy and firm strategy within Hong Kong. |
| List of Research Outputs |
| Enright M.J., A Global Economic Update: What comes next? (Singapore) , PWC Global Tax Forum . Singapore, 2010. |
| Enright M.J., Bijie Experimental Zone Economic and Social Development Project, Masterplan Industry Reports, Hong Kong, 2010, 180. |
| Enright M.J., Bijie Experimental Zone Economic and Social Development Project, Masterplan Industry Reports, Hong Kong, 2010, 127. |
| Enright M.J. and Hoffmann W.J., Bijie Experimental Zone Economic and Social Development Project, Masterplan Reports Overview, Hong Kong, 2010, 53. |
| Enright M.J., Bijie Experimental Zone Economic and Social Development Project, Masterplan Study Results (Beijing) , Bijie Working Group under China’s State Council. Beijing, 2010. |
| Enright M.J., China Into the Future: What Comes Next? (Delhi) , IMA-India, Delhi, . Delhi, INdia, 2010. |
| Enright M.J., China Into the Future…What comes next? (Singapore) , Economist Intelligence Unit, Asia Forum . Singapore, 2010. |
| Enright M.J., China’s Internationalization: The Next Wave (Singapore) , IMA-Asia CEO Foru,. Singapore, 2010. |
| Enright M.J. and Zhang Z.H., Clusters, firm size, and performance, Working paper. Hong Kong, 2010, 45. |
| Enright M.J. and Zhang Z.H., Does regional clustering affect firm performance?, Working paper. 2010, 42. |
| Enright M.J., Hoffmann W.J. and Wood P., Get Ready, Here China Inc. Comes, Wall Street Journal. New York, 2010, 1. |
| Enright M.J., Picking Locations in China (Hong Kong) , IMA-Asia CEO Forum . Hong Kong, 2009. |
| Enright M.J., Successful Business Management: Getting Things Right (Hong Kong) , Goldman Sachs Forum. Hong Kong, 2010. |
| Enright M.J., Sustainable Strategies in an Uncertain World (Hong Kong) , Goldman Sachs Forum . Hong Kong, 2009. |
| Enright M.J., Scott E.E. and Petty R.M., The Greater Pearl RIver Delta, 6th edition. Hong Kong, Invest Hong Kong, 2010, 196. |
| Enright M.J., The Greater Pearl River Delta (Hong Kong) , Invest Hong Kong / Intercham. Hong Kong, 2010. |
| Enright M.J., Hoffmann W.J. and Wood P., What China's Overseas Direct Investment Means, , AmCham China China Brief. Beijing, 2010, 4. |
| Researcher : Farhoomand AF |
| Project Title: | 15th Bled Electronic Commerce Conference Japan Net Bank: Japan's First Internet-only Bank |
| Investigator(s): | Farhoomand AF |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 06/2002 |
| Abstract: |
| N/A |
| Project Title: | The 8th World Congress on the Management of eBusiness Opening up of the Software Industry: The Case of SAP |
| Investigator(s): | Farhoomand AF |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 07/2007 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Farhoomand A.F. and Huang M., Does IT Payoff? Strategies of Two Banking Giants, Communications of the Association for Information Systems. AIS, 2009, 24: 821-836. |
| Researcher : Fong MC |
| List of Research Outputs |
| Bose I. and Fong M.C., Implementation Of Quality Of Service In Voice Over Internet Protocol, In: M. Pagani, Encyclopedia Of Multimedia Technology And Networking, 2nd Edition. Hershey, USA, IGI Global, 2009, 2: 655-660. |
| Researcher : Gao J |
| List of Research Outputs |
| Chan D.K.W. and Gao J., Earnings Management, Incentive Contracts, Private Information Acquisition and Production Efficiency, 2009 Chinese Accounting Professor's Association of North America's Second Annual Research Conference. 2009. |
| Researcher : Gorn GJ |
| Project Title: | RELAXATION AND MONETARY VALUATION |
| Investigator(s): | Gorn GJ |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2009 |
| Abstract: |
| Moods are relatively long lasting, positive or negative affective states. They differ from emotions in that they are less discrete and less intense. Extensive research has been carried out on the effects of mood on consumer judgments. However, there is by contrast very little research on how discrete emotions affect consumer judgments, and the research that has been done has tended to focus on negative emotions. Recent studies on the impact of negative discrete emotions, suggest that feelings of anxiety signal that the environment is uncontrollable and uncertain whereas feelings of sadness signal that a certain source of reward is lost (e.g., Raghunathan and Pham 1999). One positive emotion that is frequently induced in marketing situations is relaxation, an emotion that is surprisingly understudied in consumer behavior. Only a couple of studies have looked at the effect of feelings of relaxation on consumer judgment and decision making. One study showed that colors in ads that elicited feelings of relaxation resulted in more favorable ad and brand attitudes (Gorn et al. 1997). A second found that people perceived a webpage to have downloaded more quickly if while waiting, they were exposed to a relaxing (vs. non-relaxing) color on the screen (Gorn et al 2004). This proposal focuses on how affective states of relaxation affect the monetary valuation of a product- how much the product is worth. To my knowledge, the present research is the first to examine the impact of affective states of relaxation on consumer judgments by directly manipulating them. Relaxed vs. non-relaxed states will be compared keeping mood valence (feelings of pleasantness) constant. It is predicted that the monetary valuation of products will be different for people who are relaxed compared to those who are not relaxed. Our objective in the four experiments we plan to conduct is to investigate whether relaxed participants assign a higher monetary value to products than non-relaxed participants. We predict they will. Our prediction is grounded in construal level theory. According to construal level theory people tend to represent events and objects that are (psychologically) distant vs. (psychologically) close to them in a different fashion. Take for example, going on a vacation next year vs. tomorrow. In the first case, the person would focus on the desirability of going on a vacation next year. They would think in terms of whether they want to go on one and why they would want to go on one. Going on a vacation later on in the week would primarily prompt by contrast more concrete, lower level thinking, and feasibility concerns, e.g., can I take a vacation later on this week and if yes, what I would have to do to get ready for one (Liberman, Trope and Sherman 2007; Trope and Liberman 2003)? Take as another example a different consumer situation. A consumer is thinking of buying a camera and they come across an ad for a camera describing its features; this is a situation that we are thinking of mirroring in the proposed research. Some of the viewer’s attention will be focused on the specific features of the camera in the ad (concrete/lower level thinking in construal theory terms). In some cases, however, they may also be thinking about what they are going to do with the camera when they get it, like take pictures of enjoyable events- abstract/higher order thinking in construal theory terms. We suggest that being in a state of relaxation will induce this more abstract/higher level thinking. We propose that relaxed people are more likely to take a step back and think in terms of the desirability of the (positive) value of the end state- what they will do with the camera when they get it. In so doing, the monetary valuation they assign to a product is likely to be higher than it is for non-relaxed participants. So while both relaxed and non-relaxed people may process the features of a camera in an ad they are exposed to, and perhaps also evaluate the features similarly (we will verity that this is the case in our experiments), it is the only latter that are likely to think in terms of the positive value of the end state, like for example, buying the camera to take pictures of an upcoming vacation. Provided the results hold in our experiments, it is our belief that the higher monetary valuation on the part of relaxed participants is best characterized as an inflation of valuation (i.e., an overvaluation) since it derives from a focus away from the product and towards the positive things it will be used for. We will check on our suggestion that it is an “overvaluation” by comparing the monetary worth that relaxed and non- relaxed participants assign to products against their true prices. In sum, if the findings of the proposed experiments are supportive of our theorizing, they will provide evidence for the proposed process; that the overvaluation effect is driven by a higher-level of construal activated by an affective state of relaxation. |
| Project Title: | Society For Consumer Psychology Conference 2010 Relaxation Increases Monetary Valuations |
| Investigator(s): | Gorn GJ |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 02/2010 |
| Completion Date: | 02/2010 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Gorn G.J., Chattopadhyay A. and Darke P., "Similarities and Differences in Color Preference and Choice Among Chinese and North Americans" , In: Aradhna Krishna, Sensory Marketing. Routledge Academic, 2009. |
| Gorn G.J., Society for Consumer Psychology, February. Florida, USA, St. Petersberg, 2010. |
| Gorn G.J., University of Sydney. 2010. |
| Gorn G.J., University of Western Australia. 2010. |
| Researcher : Guan Y |
| Project Title: | The Effect of Pension Accounting on Corporate Pension Asset Allocation |
| Investigator(s): | Guan Y |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 04/2007 |
| Completion Date: | 07/2009 |
| Abstract: |
| The purpose of this project is to investigate the effect of accounting recognition and disclosure on the allocation of pension funds to equity and debt securities. Specifically, this project aims to examine whether the introduction of the new pension accounting standard FRS 17 in the UK has any impact on the pension asset allocation of UK companies that sponsor defined benefit pension schemes. In November 2000, the Accounting Standards Board (ASB) in the UK issued Financial Reporting Standard (FRS) No. 17, Retirement Benefits (ASB, 2000), which had to be adopted for periods beginning on or after January 1st, 2005. During fiscal years 2001-2005 companies were required to provide detailed disclosure in accordance with FRS 17 (however, early adoption was encouraged). Unlike its predecessor, Statement of Standard Accounting Practice (SSAP) No. 24 (ASC, 1988), FRS 17 requires that pension assets are measured at market value and pension liabilities are discounted using the prevailing market yield on AA-rated corporate bonds. In contrast, under SSAP 24 the valuation of both pension assets and liabilities rely primarily on actuarial assumptions. Furthermore, FRS 17 requires any actuarial gains or losses arising during the year to be recognized immediately in the statement of total recognized gains and losses, while under SSAP 24, actuarial gains/losses are deferred and amortized to income over the average remaining service lives of employees. Finally, FRS 17 requires the total pension surplus/deficit to be recognized on the balance sheet as an asset or a liability (net of deferred tax). Under SSAP 24 such surplus/deficit is kept off balance sheet and disclosure in the notes is required. By requiring market-based valuation of pension assets/liabilities, recognition of net pension asset/liability on the balance sheet, and the immediate recognition of actuarial gains/losses in the statement of total recognized gains and losses, FRS 17 introduces material volatility to UK companies’ balance sheets, especially if pension assets are mostly invested in equity securities. Firstly, reporting actual rather than smoothed pension returns injects volatility into pension reserves in the shareholders’ equity. Furthermore, the recognized net pension asset/liability could be a significant portion of a company’s book value and market capitalization. For example, in 2002 Rolls Royce disclosed a FRS 17 deficit of £580 million in its pension fund, more than 25% of the assets of the company. The volatility that can therefore be introduced into corporate balance sheets is evidenced by the fact that at the end of 2001 the combined surplus for the FTSE 100 was £5 billion, but by mid July 2002 with the collapse in world stock markets this fell to a deficit of £25 billion (Reynolds, 2002). Prior literature indicates that key balance sheet items (e.g. book value of shareholders' equity, distributable reserves) have significant implications for corporate diviend policy, firm valuation and contracting activities. First and foremost, a decline in the market value of pension assets could eliminate the company's entire distributable reserves on the balance sheet and consequently restrict its dividend payout ability; Second, debt covenants are commonly tied to those key balance sheet items. Consequently, increased balance sheet volatility would result in increased probability of violating debt covenants and thus increased contracting cost. Finally, the extant literature also shows that apart from reported earnings, book value of shareholders' equity is another important bottom-line number used by investors in firm valuation. Therefore, given the implications that balance sheet volatility has for dividend payout, contracting and firm valuation, UK firms have motives to mitigate such balance sheet volatility introduced by the new pension accounting standard. One way for corporate managers to better match pension assets with pension liabilities and thus reduce the FRS 17 volatility is to exercise a greater degree of investment conservatism with respect to pension asset allocation. This could be accomplished by shifting from investments in equity securities to (presumably) less volatile debt securities. Ceteris paribus, shifting investment from equity to debt is likely to reduce the magnitude of actuarial gains/losses and thus its effect on shareholders’ equity. Also, FRS 17 requires pension liabilities to be discounted using the prevailing market yield on AA-rated corporate bonds. Consequently, firms can reduce mark-to-market volatility by selecting a portfolio of pension assets whose fair value is positively correlated with the fair value of the pension liability. Therefore, the purpose of this project is to identify and quantify the effect of FRS 17 on pension asset allocation of sponsoring companies in the UK. Specifically, the project aims to address three research questions. First, we examine changes in UK companies’ pension asset allocation over the period 2001-2005, the transitional period of FRS 17. Second, we investigate whether the companies that are more vulnerable to the financial effects of FRS 17 exhibit greater conservatism in pension investment strategy. Finally, we classify the UK companies into two groups: the UK companies that decided to adopt FRS 17 earlier than the mandatory adoption date (early adopters) and the UK companies that only disclosed pension information in accordance with FRS 17 during the transitional period (mandatory disclosers). We then compare the pension asset allocation between these two groups. |
| Project Title: | Do managers withhold bad news? Evidence from management's earnings guidance |
| Investigator(s): | Guan Y |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 01/2010 |
| Abstract: |
| The purpose of this project is to investigate whether managers delay the release of bad news to the investment community relative to good news in their earnings guidance activities. Specifically, this project examines whether managers issue downward earnings guidance revisions in a timely manner on observing bad news about future economic outcome. Due to the separation between stewardship and ownership, managers typically possess superior private information relative to the outsiders. Timely disclosure of such private information can reduce information asymmetry between insiders and outsiders, and thus potentially result in reduced cost of capital (Glosten and Milgrom, 1985; Diamond, 1985; Diamond and Verrecchia, 1991; Botosan, 1997). On the other side of the spectrum, timely disclosure may reveal proprietary information about the firm’s prospects to competitors (Verrecchia, 2001). Therefore, managers face a cost-benefit tradeoff when they make disclosure decisions. Moreover, the extant literature suggests that managers may time the release of bad and good news to increase the value of their option grants or the sale price of their stock. For example, Frankel et al. (1995) and Lang and Lundholm (2000) report that managers release good news prior to raising capital. Yermack (1997) and Aboody and Kasznik (2000) show that managers accelerate bad news and/or withhold good news in the period immediately preceding option grant dates to lower the exercise price of the options. Apart from the above-mentioned timing of news release around an event (capital raising or the exercise of stock option), managers may overall exhibit an asymmetric disclosure behavior regarding the release of good news versus bad news. Nevertheless, the empirical evidence on this issue provided in the existing studies is limited and mixed. The earlier studies suggest that managers may prefer to speedily reveal bad news to the investors due to litigation risk or reputation concerns (Kasznik and Lev, 1995; Skinner, 1994, 1997; Baginski et al., 2002). However, recent studies provide opposing arguments. The survey conducted by Grahma et al. (2005) show that managers delay bad news disclosures in the hope that they may never have to release the bad news if the firm’s status improves before the required information release. Kothari et al. (2008) also argue that managers face strong incentives to withhold bad news and gamble that subsequent event swill turn in their favor. Such incentives include career concerns, lower bonus payments, a reduction in the quantity of stock options awarded, and the loss in wealth as a result of the stock price decline following the disclosure of bad news. Overall, the evidence concerning the asymmetric speed with which managers disclose good or bad news is quite mixed. This study aims to provide additional evidence on this from a different perspective. Companies make earnings forecasts in press releases and interviews before they report the actual earnings. In this study we focus on investigating how managers revise their quarterly earnings guidance before the next quarterly earnings are announced. Given that managers have issued the first earnings guidance for the next quarter, with the passage of time, the management may observe more useful information on the outcome of the next quarter’s earnings. If it is good news, managers can choose to issue an upward revision in their earnings guidance. On the opposite, with the arrival of bad news, managers may issue a downward guidance revision to lower the market expectation in a timely manner. The possibility also exists that managers may delay the disclosure of the bad news by simply remaining silent without issuing any subsequent guidance before the next actual earnings are announced. We use the quarterly earnings announcement as the starting point of each quarter, and then examine the duration of upward or downward revisions of management forecasts before the next earnings announcement. If the management do not issue a second earnings guidance, we right-censor it using the next earnings announcement date. This approach is similar to McNichols, Obrien and Lin (JAR 2005) who use a duration model (hazard model) to study analysts’ stock upgrade/downgrade decisions after equity offerings. Assume that new information, good or bad, arrives randomly, and that the arrival process is not systematically different across good and bad news (Kothari et al., 2009). If managers disclose all information in an equally timely manner, the average duration for an upward revision (good news) should be equal to that of a downward revision (bad news). Therefore, the goal of this study is to draw an inference about the potential asymmetric disclosure behavior of managers from a duration model. The findings will help us further understand whether managers delay the release of bad news to the investment community relative to good news. |
| List of Research Outputs |
| Amir E., Guan Y. and Livne G., The Association Between Auditor Independence And Conservatism , 2009 AAA Annual Meeting . 2009. |
| Amir E., Guan Y. and Oswald D., The effect of pension accounting on corporate pension asset allocation, In: Catherine Schipper, Review of Accounting Studies . US, Springer, 2010, 15: 345-366. |
| Guan Y. and Khan Z., Pension Management at General Motors, Harvard Business Review. 2009. |
| Researcher : Guo D |
| Project Title: | Venture Capital Investment and Entrepreneurship in China |
| Investigator(s): | Guo D |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 06/2009 |
| Abstract: |
| This study empirically explores venture capitalists’ (VCs) investment strategies in China. Under an institutional framework, it examines how institutions, especial regulatory institutions, affect VCs’ investment in China through three aspects: i.e. VCs’ investment preferences in terms of the technology and development stage of their portfolio companies, VCs’ ex-ante project screening criteria and VCs’ stage financing strategies. Entrepreneurial R&D activities are vitally important for innovation, and, consequently for economic development. However, it is very hard to finance young R&D oriented companies due to the pronounced information asymmetries and institutional issues. Venture capital has been recognized as a powerful financial instrument to fill the funding gaps faced by young R&D-oriented companies. It is suggested that various mechanisms such as the ex-ante project screening, contingent financing contract designing, and ex-post project monitoring etc., are employed in venture capital investing to control the potential agency problems and uncertainties associated with R&D financing (Gomper & Lerner, 1999). Starting from 1980s, venture capital investment has been duplicated around the world with the expectation to accelerate national innovation. However, despite the intense interest, little research has been conducted on venture capital outside the United States. Many areas remain unexplored, such as how venture capital operates in other countries, whether the American model works in other countries, and what the determinants for venture capital development are. This lack of knowledge not only limits our understanding in the mechanisms of venture capital from the scholarly strand but also constrains the decision-making of policymakers and practitioners. This study tries to bridge up the knowledge gap with an insightful examination on venture capital investment in China under an institutional view. The general institutional environments and arrangements related to venture capital investment in China will be first explored. It focuses on the trajectory of China’s venture capital industry in the past twenty years together with the discussion on the overall legal and financial systems, public policies and social norms under which venture capital investment operates. The impacts of institutions on VCs’ investment preferences in terms of technological intensity and development stage of their portfolio companies will then be discussed. Although researchers have claimed that venture capital investment indeed supports young R&D-oriented companies in the US (Elango et al., 1995; Gompers and Lerner, 1999a), some empirical studies show that venture capitalists tend to invest in later-staged companies in other countries (Jeng and Wells, 2000; Mayer et al., 2005). This analysis will reveal to what extent VCs support young R&D entrepreneurship activities under the unique institutions in China. It will also examine whether different types of VCs have different investment preferences and what factors determine VCs’ investment preferences. The impacts of institutions on VCs’ ex-ante project screening criteria in China will also be evaluated. Newly-established high-technology companies are associated with serious agency problems and uncertainties due to information asymmetries and high rate of failure (Hall, 2002). As a result, it is difficult for external investors to determine the potential and likelihood of success. Existing literature suggests that VCs employ sophisticated screening criteria as a major mechanism to avoid investing in bad projects. It is also found that the screening criteria used by venture capitalists across countries do not vary much. By comparing VCs’ ex-ante project screening criteria in China to those in the US and other western countries documented in the existing literature, this study examines whether VCs are more demanding in project screening under the weaker institutions in China. In addition, it also compares the screening criteria employed by different types of venture capital firms within China to examine the impacts of institutional arrangements on VCs’ project screening activities in China. Finally, the impacts of institutions on VCs’ stage financing strategies in China are investigated. Stage financing is considered as the most effective way to reduce agency costs and uncertainties in venture financing (Sahlman, 1990). Empirical studies show that VCs’ stage financing arrangements are indeed associated with the severity of agency problems and uncertainties of the investment; they are also correlated with the investment performance in the US (Gompers, 1995; Kaplan and Per Stromberg, 2004). Based on interviews with venture capitalists and systematic analysis on investment data of venture capital backed companies, the pattern of stage financing arrangements in China are identified and compared to those in the US to analyze whether and how institutions affect VCs’ stage financing strategies in China. By addressing the above questions, this study provides an empirical exploration and analysis on institutions of venture capital investment and VCs’ investment strategies in China, examining the impacts of institutions on VCs’ investment preferences, ex-ante project screening and stage financing strategies. It is among the first empirical studies exploring venture capital investment in China based on first-hand collected data. It is also among the first attempts examining the interaction between institutions and investment activities in developing countries. |
| List of Research Outputs |
| Guo D., Lecture on Venture Capital in China , School of Economics, Peking University . 2010. |
| Researcher : Han J |
| Project Title: | A Re-investigation of Open-Ended Management Earnings Guidance |
| Investigator(s): | Han J |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 10/2007 |
| Abstract: |
| The purpose of the current study is to re-examine open-ended management earnings guidance, i.e., minimum and maximum earnings guidance. 1.Management earnings guidance, according to the descending order of guidance precision, can be classified as point, range, open-ended (minimum and maximum), and qualitative guidance. (For detailed definitions and examples of guidance forms, please refer to Kross et al. 1994.) Prior accounting studies document mixed findings as to whether guidance precision affects investors’ reactions to the guidance (Baginski et al. 1993; Pownall et al. 1993). Hirst et al. (1999) suggest that investors’ confidence is positively related to management guidance precision, which in turn affects their investment decisions. However, their investigation is limited to the comparison between point and range guidance forms. On the other hand, psychology literature suggests that decision makers’ confidence may be actually higher facing an open-ended guidance than facing point guidance (Rantilla 2000). Hence we expect that investors’ confidence to be higher facing open-ended guidance than facing point or range guidance. 2.Prior research suggests that both investors’ own EPS estimates and their confidence affect their investment decisions (Hirst et al. 1999; Libby et al. 2006; Han and Tan 2007). Kennedy et al. (1998) demonstrate that disclosing the lower bound (i.e., minimum guidance) leads to lower estimates than disclosing the point or range guidance. As indicated above, the minimum guidance may lead to higher investors’ confidence than either point or range guidance. Prior experimental studies are limited to the scenario where the implications of investors’ own estimates and the related confidence are not inconsistent. By comparing point (range) guidance with minimum guidance, it is possible for us to create a setting where investors’ EPS estimates being lower while confidence being higher for minimum guidance than for point or range guidance, it will then be interesting to see which one (EPS estimates or confidence) is weighted more when investors make investment decisions. 3.We predict that the final effect depends on the width of range guidance. For narrow ranges, investors’ EPS estimates may differ little between minimum guidance and point or range guidance. Hence, the confidence effect will dominate the EPS effect; i.e., investment decision is consistent with the confidence effect. For wide ranges, investors’ EPS estimates may be much higher for point or range guidance than for minimum guidance. Even though investors’ confidence is higher for minimum guidance, it is not large enough to compensate, not mention to reverse the EPS effect. Therefore we predict that for wide ranges, the EPS effect dominates the confidence effect. 4.Although psychology research documents higher decision makers’ confidence for open-ended guidance than for point guidance, it does not suggest the reason(s) underlying this phenomenon (Rantilla 2000). Another purpose of our study is to identify the reason. We conjecture that the strong words used in open-ended guidance (e.g., more than, no less than) express managers’ strong confidence in delivering their guidance, which in turn boosts investors’ confidence. 5.Minimum and maximum guidance can take either affirmative or negative forms. An affirmative minimum guidance example is, “EPS will be more than 10 cents.” A negative minimum guidance example is, “EPS will be no less than 10 cents.” Archival studies do not differentiate the two forms (e.g., Baginski et al. 1993; Pownall et al. 1993). Psychology research suggests that the effects of negative guidance can be different from affirmative guidance (Mayo et al. 2004). According to the “schema-plus-tag” model, negative guidance likely triggers the schema which disconfirms the implications of the sentence rather than confirming schema. We predict that the effects of affirmative and negative open-ended guidance will be different. Affirmative minimum guidance leads to higher investors’ EPS estimates than negative minimum guidance. On the other hand, affirmative maximum guidance leads to lower investors’ EPS estimates than negative maximum guidance. 6. Han and Tan (2007) compare primarily three management guidance forms, i.e., point, MID, and range guidance. Our current proposal will focus on open-ended guidance forms, i.e, minimum and maximum guidance. Reference: Baginski, S., E. Conrad, and J. Hassell. 1993. The effects of management forecast precision on equity pricing and on the assessment of earnings uncertainty. The Accounting Review 68 (October): 913-927. Han, J., and H-T. Tan. 2007. Investors' reactions to management guidance forms: The influence of multiple benchmarks. The Accounting Review 82(2): 521-543. Hirst, D., L. Koonce, and J. Miller. 1999. The joint effect of management’s prior forecast accuracy and the form of its financial forecasts on investor judgment. Journal of Accounting Research 37: 101-124. Kennedy, J., T. Mitchell, and S. E. Sefcik. 1998. Disclosure of contingent environmental liabilities: Some unintended consequences? Journal of Accounting Research 36 (2): 257-277. Kross, W., W. Lewellen, and B. Ro. 1994. Evidence on the motivation for management forecasts of corporate earnings. Managerial and Decision Economics 15 (May – Jun.): 187-200. Libby, R., H-T. Tan, and J. Hunton, 2006. Does the form of management’s earnings guidance affect analysts’ earnings forecasts? The Accounting Review 81(1): 207-225. Pownall, G., C. Wasley, and G. Waymire. 1993. The stock price effects of alternative types of management earnings forecast. The Accounting Review 68 (October): 896-912. Rantilla, A. K. 2000. The role of expert advice formation on individual and group decision making. Ph.D. Thesis Completed at University of Illinois at Urbana-Champaign. |
| Project Title: | Research Output Prize (Faculty of Business) |
| Investigator(s): | Han J |
| Department: | School of Business |
| Source(s) of Funding: | Research Output Prize (in Faculty) |
| Start Date: | 11/2007 |
| Abstract: |
| The Research Output Prize accords recognition to an author (or team of authors) of a single research output published or created in the preceding calendar year. Faculties are free to determine what form of research output best represents their research achievement and how it should be selected. |
| Project Title: | Investors Reactions to Management Earnings Guidance: The Joint Effect of Investment Position, News Direction, and News Ambiguity' |
| Investigator(s): | Han J |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 07/2008 |
| Abstract: |
| 1) To provide a theory and empirically demonstrate that investors tend to interpret disclosures from management more positively (negative) when they have a long (short) position in the stock, and that this biased interpretation tends to be magnified for positive (negative) news that is ambiguous. 2) In doing so, we extend prior literature on the effect of investment position (e.g., Hales 2007) by showing that this effect is conditional on news ambiguity. We also extend prior literature on investors’ discounting of positive news (e.g., Hutton, Miller, and Skinner 2003) by showing that this effect is conditional on investors’ investment position. |
| Project Title: | The Effect of Self-Serving versus Self-Disserving Attributions with Management Earnings Guidance |
| Investigator(s): | Han J |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 10/2009 |
| Abstract: |
| 1) To understand how self-serving versus self-disserving attributions accompanying management guidance affects investors’ judgments and decisions. 2) To illustrate that management competence and truthfulness are different constructs, and show that management competence and truthfulness are affected by attributions in different ways. |
| List of Research Outputs |
| Han J. and Chen W., Investors' Reactions to Buddled Current Earnings and Management Earnings Guidance: The Earnings Trend Effect, the Chinese University of Hong Kong. 2010. |
| Han J. and Chen W., Investors' Reactions to Buddled Current Earnings and Management Earnings Guidance: The Earnings Trend Effect, the University of Hong Kong. 2010. |
| Han J. and Tan H.-.T., Investors’ Reactions to Management Earnings Guidance: The Joint Effect of Investment Position, News Valence, and Guidance Form, Journal of Accounting Research. University of Chicago, 2010, 48: 123-146. |
| Researcher : Huang M |
| List of Research Outputs |
| Farhoomand A.F. and Huang M., Does IT Payoff? Strategies of Two Banking Giants, Communications of the Association for Information Systems. AIS, 2009, 24: 821-836. |
| Huang M., Rural e-government for SMEs: Case Studies in China, International Journal of Electronic Democracy. Inderscience, 2009, 1: 124-135. |
| Yen B.P. and Huang M., Tug of war between the retailers and consumers: the phenomenon of group purchase in China, The 9th International Conference on Electronic Business (ICEB). 2009. |
| Researcher : Hui C |
| Project Title: | A temporal perspective of employee psychological ownership |
| Investigator(s): | Hui C |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 10/2006 |
| Abstract: |
| 1) To develop a temporal conceptual model of psychological ownership that includes both antecedents and outcomes of psychological ownership in organizational contexts. 2) To develop a classification of employee-organizational temporal orientation. 3) To develop and validate measures of individual temporal orientation and temporal orientation in employment relations. 4) To develop and validate measures of outcomes of psychological ownership from a temporal perspective. 5) To examine our temporal model of psychological ownership and outcomes using participants from both the USA and China. |
| Project Title: | Investment in Organizational Behavior: An investment theory of perceived insider status and outcomes |
| Investigator(s): | Hui C |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2009 |
| Abstract: |
| 1) Develop forms of organizational investment. 2) Develop a conceptual model relating organizational investment to perceived insider status and employee contribution (task and extra-role performance) and career success. 3) Develop and validate measures of organizational investment and perceived insider status. 4) Examine the relationship between organizational investment, perceived insider status, employee contribution and career success. 5) Examine how the relationship between antecedents and PIS varies as a function of cultural values. |
| Project Title: | A Temporal Approach To Studying Employee Proactive Behavior |
| Investigator(s): | Hui C |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 05/2009 |
| Abstract: |
| Understanding proactive behavior allows us to understand employee initiatives that are critical to the effective functioning of organizations but are at the same time difficult to manage because such initiatives are outside of the scope of most formal job descriptions or the technical cores of jobs. Crant (2000, p. 436) defined proactive behavior as “taking initiative in improving current circumstances or creating new ones; it involves challenging the status quo rather than passively adapting to present conditions.” Proactive behavior is important to organizations, particularly when organizations continue to increase their reliance on employees’ willingness to take initiatives in enhancing the organization. Despite the appeal of proactive behavior as a construct in organizational studies, Crant (2000) concluded that proactive behavior has not yet generated sufficient programmatic research in the organizational behavior literature to turn it into an important stream of research. Parker, Williams and Turner (2006) noted that previous studies emphasized passive rather than proactive behaviors. Furthermore, there is no uniform agreement on how best to conceptualize and measure proactive behavior at work (Crant, 2000). I seek to extend the literature on proactive behavior by developing a temporal approach to proactive behavior. Inherent in the definition and measures of proactive behavior is the importance of the individual’s temporal orientation, or his/her reverence for the past and anticipation of the future in enacting proactive behaviors. The definition of proactive behavior includes elements such as improving current circumstances or creating new ones and challenging the status quo. Frese, Kring, Soose and Zempel (1996) identified proactivity – having a long-term focus and anticipating future problems – as a key component of personal initiative, a construct similar to proactive behavior. Proactive behavior is essentially doing something to attain a better future. It is difficult to envision someone trying diligently to attain a better future if this person has no outlook for the future or if the future is not important to this person. Temporality, however, especially in terms of the importance of one’s past and future to oneself, has received little attention in organizational behavior research. As observed by Bluedorn (2000, p. 117), “time has been almost totally ignored as a research topic in organization sciences”. Quoting Eward T. Hall, Bluedorn stated that yet “everything in life occurs in a time frame”. Thus, the development of a temporal perspective of proactive behavior has the potential to enrich our understanding of temporality in organizational contexts. A temporal approach to studying proactive behaviors involves considerations of how time matters to employees. I propose to study time in terms of the past-future distinction. Specifically, I propose that what has happened in the past and what may happen in the future affect employee proactive behavior. I propose to study the past in terms of what one has accomplished in an organization and to study the future in terms of what one may attain in the future in one’s organization. Past attainment refers to what has been attained in by an employee in his/her organization to date. Attainment includes rank, status, etc. Past attainment may motivate proactive behavior because with more significant past attainments, employees have invested more in and are more attached to the organization. Future prospect of the individual within the organization refers to what the individual anticipates one can accomplish within the organization in the future (e.g., career opportunities). Heide and Miner (1992) suggested that the extendedness of a relationship (or the degree to which the parties anticipate that it will continue into the future) depends on how strongly a party expects that a relationship will continue in the future and whether the end point is indeterminate. Thus, when employees can see that they have a future in the organization (e.g., career opportunities), they are more likely to take initiatives and perform proactive behavior. While employees may be motivated to perform proactive behavior to the extent that they have significant past attainment and future prospect in an organization, the relative impact of past attainment and future prospect on proactive behavior may differ across employees. Employees have different temporal orientations. Temporal orientation is the degree of emphasis on the past, present, and future (Bluedorn, 2002, p. 140). Both Hofstede (1991) and Trompenaars and Hampden-Turner (1998) identified temporal orientation as an important cultural value. Yet little research has been conducted on how temporal orientation functions in organizational contexts, especially in employer-employee relationships. I suggest that the temporality of the relationship (i.e., past attainment and future prospect) may have the biggest impact on employee proactive behavior when it is consistent with the individual employee’s temporal orientation. Specifically, employees with a past temporal orientation are more likely to respond more strongly to past attainment, whereas employees with a future temporal orientation are more likely to respond more strong to future prospect. The objectives of the present study are: 1. To examine how past attainments and future prospect affect proactive behavior. 2. To examine how the relationship between past attainment, future prospect and proactive behavior differs across employees with past versus future orientations. 3. To validate measures of individual temporal orientations. 4. To validate a measure of proactive behavior. 5. To lay a foundation for the development of a temporal model of proactive behavior. |
| List of Research Outputs |
| Hui C., Strategic Human Resources Management: Research And Practice, ChinaNet100. 2010. |
| Lee C., Liu J., Hui C. and Chen Z.X., Why Do I Feel Valued And Why Do I Reciprocate, 69th National Academy of Management Meetings, Chicago, IL, USA. 2009. |
| Liu J., Hui C. and Lee C., Antecedents And Consequences Of Idiosyncratic Deals: The Role Of Resource Exchange, International Conference Of The International Association For Chinese Management Research, Shanghai, China. 2010. |
| Liu J., Wang H., Hui C. and Lee C., Psychological Ownership: The Importance Of Having A Say, 25th National Meeting Of The Society Of Industrial And Organizational Psychology. Atlanta, Georgia, Usa. 2010. |
| Researcher : Kwan MML |
| Project Title: | Managing the software development process: a knowledge management approach |
| Investigator(s): | Kwan MML |
| Department: | School of Business |
| Source(s) of Funding: | Other Funding Scheme |
| Start Date: | 05/2000 |
| Abstract: |
| To apply knowledge management techniques to software development; to develop measurement framework for software development based on knowledge management perspective. |
| Researcher : Lam SSK |
| Project Title: | Hiddle Profile Decision Making: The effects of Group Efficacy |
| Investigator(s): | Lam SSK |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2008 |
| Abstract: |
| To examine the effect of group efficacy on both the process (in terms of sharing of information) and outcomes (in terms of decision quality and deviation from initial individual preference) of group decision-making; to show that low group efficacy will lead to more through information sharing and better performance than high group efficacy when groups work on a hidden profile decision-making task; to make a useful contribution to the literature on group performance with respect to predictors of information sharing in group decision making. |
| List of Research Outputs |
| Lam S.S.K. and Yeung J.C.K., Staff Localization and Environmental Uncertainty on Firm Performance in China, Asia Pacific Journal of Management. 2009, In Press. |
| Researcher : Lau AHL |
| Project Title: | Game theoretic two-echelon supply chain models using a stochastic and asymmetric-information framework |
| Investigator(s): | Lau AHL |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2005 |
| Abstract: |
| To assume different demand-curve forms and consider as linear, iso-elastic and hybrid; to recognize the real-world prevalence of stochasticity and information-asymmetry in the players' knowledge of the market demand curve and of the manufacturing cost; to compare the manufacturing-Stackelberg and fixed-percentage-markup assumptions in defining the players' gaming relationship. |
| Project Title: | Alternative Approaches for Handling Demand Curves and Production Costs in a Fundamental Supply-Chain Pricing Model (new proposed code 41081) |
| Investigator(s): | Lau AHL |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2009 |
| Abstract: |
| 1) develop theoretical frameworks and practical methodologies for specifying a “Dp” that can be inputted to C-based supply-chain models; 2) develop an alternative framework and associated methodologies for handling the “c” factor in construct C. |
| Project Title: | 23rd European Conference on Operational Research Comparative performance of practical "Channel Coordinating" contract formats under market-parameter uncertainties |
| Investigator(s): | Lau AHL |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 07/2009 |
| Completion Date: | 07/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Lau A.H.L., Lau H.S. and Wang J., Usefulness of Resale Price Maintenance under Different Levels of Sales-Effort Cost and System-Parameter Uncertainties, European Journal of Operational Research. 2010, 203: 513-525. |
| Lau A.H.L., Lau H.S. and Wang J., When Should a Manufacturer Share Truthful Manufacturing Cost Information with a Dominant Retailer?, European Journal of Operational Research . 2009, 197: 266-286. |
| Wang L.I.N.G.H.U.A., Lau A.H.L. and Chan C.W.H., Preference for Balanced Scorecard Measures: The Effects of Compensation and Strategy Formulation, American Accounting Association 2009 Annual Meeting. 2009. |
| Researcher : Leung ACM |
| List of Research Outputs |
| Bose I. and Leung A.C.M., What Drives The Adoption Of Anti-phishing Measures By Hong Kong Banks?, Communications Of The ACM. USA, ACM, 2009, 52: 141-143. |
| Researcher : Leung CMA |
| List of Research Outputs |
| Bose I. and Leung C.M.A., An Analysis Of Investment In Identity Theft Countermeasures, International Conference On Asia Pacific Business Innovation And Technology Management. cebu, Phillipines, 2010, 1-5. |
| Chen X., Bose I., Leung C.M.A. and Guo C., Analyzing The Risk And Financial Impact Of Phishing Attacks Using A Knowledge Based Approach, Ninth International Conference On Electronic Business. Macau, China, 2009, 119-126. |
| Researcher : Li B |
| List of Research Outputs |
| Zhou K.Z. and Li B., How Strategic Orientation Influences the Building of Dynamic Capability in Emerging Economies, Journal of Business Research. 2010, 63: 224-231. |
| Researcher : Lin M |
| Project Title: | Technology Innovation and Public Policy |
| Investigator(s): | Lin M |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 10/2009 |
| Abstract: |
| The IT age is marked by innovative approaches to the online commerce. Technology as the core of innovation has undergone numerous evolutions through the ``creative destruction." This project examines the connection between business cycles and innovation and offers insights for regulatory innovation policies. An economic recession often heightens the awareness for innovation and calls for government’s support in research activities through the allocation of funds and provision of tax incentives. In order to evaluate the impact of these research stimuli, it is critical to understand the implications of different innovation policies. On innovation activities within fluctuating business cycles, one argument states that under unfavorable economic climates firms cut back on R&D in order to focus on their core business and that motivating continued innovation efforts is crucial for reviving the economy; However, others argue that it is exactly the recession that provides the strongest driving force for firms to explore drastically new ideas for a chance to survive and thrive. In the research front, empirical studies have shown strong support for the procyclicality of R&D activities, while other recent work demonstrates that recession should foster innovation. We analyze innovators' equilibrium decisions and R&D efforts facing economic shocks, explore the impact of public policies on R&D through reducing innovators' sunk costs and variable costs, and reconcile the conflicting views on business cycles and innovation. |
| Project Title: | 43rd Hawaii International Conference on System Sciences Regulatory Policies for Demand-Driven Innovation by Heterogeous Firms |
| Investigator(s): | Lin M |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 01/2010 |
| Completion Date: | 01/2010 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Lin M., Ke X. and Whinston A.B., "Open Innovation in Platform Competition", International Conference on Industrial Organization . 2010. |
| Lin M., Associate Editor, Decision Support Systems. 2009. |
| Lin M., Ke X. and Whinston A.B., Open Innovation in Platform Competition, Proceedings of the Seventh Workshop on e-Business (WeB) 2009. |
| Lin M., Li S. and Whinston A.B., Regulatory Policies for Demand-Driven Innovation by Heterogeneous Firms, Hawaii International Conference on System Sciences (HICSS-43) 2010. |
| Lin M., Regulatory Policies for Demand-Driven Innovation, City University of Hong Kong. 2010. |
| Researcher : Liu X |
| Project Title: | Accounting Conservatism and Agency Conflicts |
| Investigator(s): | Liu X |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 08/2008 |
| Abstract: |
| Accounting conservatism represents “the accountant’s tendency to require a higher degree of verification to recognize good news as gains than to recognize bad news as losses” (Basu 1997). Under conservatism principle, when faced with uncertainty regarding future gains or losses, losses should be recognized immediately in the current period, whereas gains should not be recognized until they are realized. Conservatism has been practiced in accounting for a very long time. Using data from 1963 to 1990, Basu (1997) finds that earnings is more timely in reporting bad news about future cash flows than good news, consistent with accounting being conservative. Despite the long history of conservatism in the accounting practice, however, in recent years the accounting standard setters both in the U.S. and at the international level begin to promote fair-value and unbiased accounting and eschew conservatism as conservatism introduces a negative bias into accounting. Formal theory on the rationale underlying conservatism is rare. Specifically, the logic in the contracting explanation for conservatism (i.e., conservatism improves firm value by reducing the manager’s opportunistic incentive to overstate earnings) has not been well developed or shown in a rigorous equilibrium analysis. In addition, we do not have a good understanding of what factors determine the degree of conservatism in a firm. This project will employ analytical approach to investigate the tradeoff of benefits and costs associated with the use of accounting conservatism in the context of agency conflicts between managers and shareholders and between shareholders and debt-holders. A model will be developed to incorporate various corporate characteristics that may affect efficient contracting of different parties, such as the quality of corporate governance and accounting system, the contractibility of accounting and other relevant information, contractibility of management decisions, discretionary accounting choices, and the degree of information asymmetry. Equilibrium will be derived to show the strategic decisions of different economic agents in the model, characterize the probability threshold for recognizing gains and losses, and show how the degree of conservatism for a firm depends on firm characteristics. In summary, this research seeks to achieve the following objectives. • Develop equilibrium results to explain the benefits and costs of conservatism in contracting between different parties; • Analyze the nature in the agency conflict between managers and shareholders as compared with the conflict between shareholders and debt-holders, and show how a demand for conservatism may arise in these two types of agency conflicts. • Characterize different circumstances under which firms employ different degrees of conservatism; • Help standard setting bodies gain new insights into the tradeoff associated with the use of conservatism in accounting. |
| Project Title: | 2009 American Accounting Association Annual Meeting Auditor-Client Bonding and Audit Quality: Partner-Level Evidence |
| Investigator(s): | Liu X |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 08/2009 |
| Completion Date: | 08/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Liu X., Chen C., Su X.-.J. and Wu X., Auditor-client bonding and audit quality: Partner-level evidence. , The American Accounting Association annual meeting. 2009. |
| Liu X., Choi J.H., Kim J.B. and Simunic D., Cross-listing audit fee premiums: Theory and evidence., The Accouting Review. The american accounting association, 2009, 84: 1429-1463. |
| Liu X., Zheng L. and Kim J.-.B., Does Mandatory IFRS Adoption Impact Audit Fees? Theory and Evidence, Canadian Academic Accounting Association annual meeting. 2010. |
| Researcher : Lu JZ |
| Project Title: | Valuation allowance for deferred tax assets and earnings management |
| Investigator(s): | Lu JZ |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 11/2002 |
| Abstract: |
| To examine empirically whether managers use the valuation allowance for deferred tax assets to take a "big bath" when they report earnings below the previous year's; to examine whether managers use the valuation allowance to increase reported income in the hope to loosen the debt covenant restrictions; to examine whether managers use the valuation allowance to meet analyst forecast. |
| Researcher : Lu Y |
| Project Title: | Economic Institutions and Foreign Direct Investment in China |
| Investigator(s): | Lu Y |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 10/2007 |
| Completion Date: | 01/2010 |
| Abstract: |
| Foreign direct investment (FDI) is one of the driving forces behind the development of transition economies. For example, the World Bank (1997) has credited FDI as a key factor to China's economic growth since it began the economic reform in 1978. Attracting FDI inflow is placed at the top of the agenda for most countries. However, what determines where FDI goes is still remained an intriguing question to academics and policy-makers. The conventional view puts much emphasis on the impact of market size, taxes, trade policies, exchange rates and interest rate policies, production costs, infrastructure adequacy, financial system development etc. on FDI location choices. Recently, more attention has been paid to the institutional infrastructures of the FDI recipient countries, i.e., corruption, contract enforcement, etc. The objective of this proposed research is to investigate the impact of regional economic institutions on FDI location choice by employing a comprehensive firm-level U.S. manufacturing multinationals data from China. The economic institutions here refer to protection of property rights (the vertical relations between the state and owners of private properties) and contract enforcement (the horizontal relations between transacting parties) (Acemoglu and Johnson, 2005). Although China is a unitary state with uniform de jure laws across the country, it is characterized by substantial regional disparity in economic institutions, i.e., the de facto property rights protection and contract enforcement exhibit wide variations across regions. In this sense, examining the cross-region variations in economic institutions in China allows us to conduct a natural experiment to focus on the de facto law enforcement after holding constant the de jure legal codes. This certainly offers a better setting to distinguish between legal codes and law enforcement than the cross-country analysis does. Meanwhile, the United States (U.S.) is the third largest FDI source country/region in China after Hong Kong and Taiwan. Compared with Hong Kong and Taiwan, investment from the U.S. is viewed as "truly foreign" in nature, because Hong Kong and Taiwan are ethnically Chinese economies and some of the investments from these two economies are originated from mainland China for tax and other reasons (so-called round-trip FDI). More importantly, FDI from the U.S. could be particularly vulnerable to weak economic institutions because of the 1977 Foreign Corrupt Practices Act that prohibits U.S. multinationals from bribing local officials in overseas investment (Bardhan, 1997). Hence, it is ideal to use FDI from the U.S. to explore the effects of economic institutions on FDI. |
| Project Title: | The 19th Annual Conference of the CEA (UK) Property Rights Protection and Firm Horizontal Scope: evidence from China's private enterprises |
| Investigator(s): | Lu Y |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 04/2008 |
| Abstract: |
| N/A |
| Project Title: | Political Connections and Trade Expansion |
| Investigator(s): | Lu Y |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2009 |
| Completion Date: | 06/2010 |
| Abstract: |
| Recently a growing body of literature has pointed to the investigation of the value of political connections. It has been found that political connections improve firm performance (e.g., Johnson and Mitton, 2003; Li et al., 2008) and increase firm value (e.g., Roberts, 1990; Fisman, 2001; Ramalho, 2007; Claessens et al., 2008). It has also been found that political connections help firms gain favors in the market, such as advantageous regulatory conditions (e.g., Agrawal and Knoeber, 2001), access to bank loans (e.g., Bai et al., 2006a; Khwaja and Mian, 2005; Faccio, 2006; Claessens et al., 2008; Li et al., 2008), and secure property rights protection (e.g., Hellman et al., 2003). In this proposed project, I am going to identify the impact of political connections (measured as the deputy to the Chinese People's Congress) on one of the most important firm behaviors, trade expansion, and investigate possible mechanisms behind such linkage. Firms are found to be born largely in the locals where their entrepreneurs resident (Michelacci and Silva, 2007), and expand to other markets along with their growth. However, trade expansion requires the existence of elaborate economic institutions such as property rights institutions, contracting institutions and financing institutions (Greif, 2006). For example, when the entrepreneur expands his business to distant cities where he is an alien, the concerns are how to protect his properties not being expropriated by local government officials and how to ensure honest compliance with the contract by his distant clients. The poor property rights protection and the deficient contract enforcement deter the entrepreneur to carry out the long distance trade. Meanwhile, the discrimination against firms' access to bank loans binds up their capabilities to expand due to insufficient funds. Under such circumstances, political connections can play a significant role by achieving de facto good property rights protection and contract enforcement, and by obtaining bank loans. In the proposed project, I plan to use the survey of Chinese private firms in 2004. The dataset offers me a good setting to investigate the role of political connections. On the one hand, China has maintained its one-party ruling system and strong government interventions on the economy during the transition from the central planning economy to the market economy, and there still are significant discriminations against operations of private firms (Clarke et al., 2008). This provides entrepreneurs with high incentives to enter politics (Li et al., 2006). On the other hand, China lacks well-developed economic institutions (Allen et al., 2005) and it has substantial variations in the development of these institutions across various regions (Du et al., 2008). Private firms are thus constrained in their production scales and range of markets. Taken together, this not only allows me to investigate the effect of political connections on trade expansion but also the role of economic institutions underpinning the effect. |
| Project Title: | 2010 American Economic Association Conference Vertical Integration and Firm Performance |
| Investigator(s): | Lu Y |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 01/2010 |
| Completion Date: | 01/2010 |
| Abstract: |
| N/A |
| Researcher : Man DCK |
| List of Research Outputs |
| Man D.C.K., Lui S. and Lai J., New product development for a food and beverage company: A showcase of evidence-based management, Knowledge and Process Management. Wiley & Son, 2010, 17(2): 74-81. |
| Researcher : Mao C |
| Project Title: | Does Regulation FD Benefit Investors? New Evidence from a Latent Variable Model |
| Investigator(s): | Mao C |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 08/2006 |
| Abstract: |
| In this study we investigate the effect of Regulation Fair Disclosure (Reg FD) on investors' information environment by using a latent variable model. Reg FD, effective October 23, 2000, prohibits managers from privately disclosing material information to securities markets professionals such as financial analysts. The SEC commissioners believed Reg FD would prevent managers from providing material information to select investors, who then traded profitably at the expense of less informed investors. The opponents argue, however, that Reg FD curtailing the flow of information from managers to analysts would reduce the amount of information to investors. Previous studies have also found inconsistent evidence in investigating the impact of Reg FD on the capital market's information environment by examining price reactions to corporate disclosures and the properties of earnings forecasts. Eleswarapu et al. (2002); Gadarowski and Sinha (2002); Heflin et al. (2003); Shane, Soderstrom, and Yoon (2001) found significantly lower return volatility around earnings announcements in the post-FD period, conjecturing that prices contain more information about upcoming earnings. Controlling for decimalization which occurred in January 2001, however, Bailey et al.(2003) found no incremental effect of FD on return volatility around earnings announcements. Thus, it is difficult to unambiguously attribute changes in the overall price impact to Reg FD because other confounding factors may cause differences in price between pre- and post-FD periods. The present study tries to bring new evidence to the Reg FD literature by using a latent variable model to investigate Reg FD's effect on information dissemination and information production. Indirect measures in the previous studies such as changes in return volatility could capture inherent price variability, changes in interest rates, growth opportunities and any changes in the market unrelated to the impact of Reg FD on the information environment. The advantage of a latent variable model is that it provides a direct measure of the investors' information environment, which therefore, reduces the possibility of effects contributed by factors other than Reg FD. In addition to our understanding of the effect of Reg FD on investors' information environment, the present study adds to the analyst forecast literature by investigating the effect of Reg FD on analysts' forecasts. The previous studies generally examine the accuracy of analyst forecasts between the pre- and post- Reg FD periods. Three studies (Bailey et al (2003) ; Heflin et al. (2003) and Shane et al (2001)) found no change in forecast accuracy, whereas the other two (Agrawal and Chadha (2003) and Mohanram and Sunder (2001)) found a decrease in forecast accuracy after FD. Further, Gintschel and Markov (2003) found the average price impact of the analyst's report on the day it is issued declined after FD. Using the latent variable to proxy for the market's expectation of earnings, our study adds to this literature from a new perspective by "observing" the difference between analyst forecasts and the market's expectation of earnings after FD. This difference implies the impact of the Reg FD to the dependence of investors on analysts' information, which is impossible to observe without the latent variable model. To study the effect of Reg FD on the investors' information environment, we first construct an identified system of equations which treats the unobservable market's earnings expectation as a latent variable. We then solve the system and calculate explicitly unknown variables including variance of unexpected earnings and variance of analysts' forecasts deviation from the market's expectation of earnings (Mao (2006)). If the variance of unexpected earnings increases after Reg FD, then it implies that Reg FD does not improve investors' information environment since investors' information about earnings becomes less accurate after Reg FD. Otherwise, if variance of unexpected earnings decreases after Reg FD, then it implies that Reg FD improves investors' information environment based on the more accurate investors' information after Reg FD. Similarly, if the deviation between analyst forecasts and the market's expectation of earnings increases, it implies that Reg FD reduces analysts' impact on investors and vice versa. We could examine whether changes in variance of analysts' forecasts deviation from the market's expectation of earnings vary systematically across brokerage houses and analysts. Gintschel and Markov (2004) argue that analysts working at prestigious brokerages and analysts relatively more optimistic about the prospect of a firm are likely to have received privileged access to information before Reg FD. If we find the changes in variance of analysts' forecasts deviation from the market's expectation of earnings vary across brokerage houses and analysts, it will increase our confidence in contributing the changes to Reg FD rather than to confounding circumstances. We could also examine whether variance of unexpected earnings and variance of analysts' forecasts deviation from the market's expectation of earnings vary with book-to-market ratios. Analysts are more likely to have required and received specific, firm-internal knowledge for high growth firms, therefore, finding the changes vary with growth and non-growth firms will support our argument about Reg FD. |
| Researcher : Newton J |
| Project Title: | 30th Annual Conference, UK Chapter, Academy of International Business Location is Everything! The Implications of Trade Liberalisation for the Location of Clothing Production |
| Investigator(s): | Newton J |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 04/2003 |
| Abstract: |
| N/A |
| Researcher : Ng SH |
| Project Title: | Industrial Relations and The Changing Hong Kong Environment: A Study of Trade Unions and Their Future Prospects In Hong Kong |
| Investigator(s): | Ng SH |
| Department: | School of Business |
| Source(s) of Funding: | Centre of Asian Studies - General Award |
| Start Date: | 09/2003 |
| Abstract: |
| To update the situation of trade unions in Hong Kong with respect to their size/membership, industry, and political affiliations; to examine post-1997 trade union policy with respect to economic and political developments in Hong Kong; to assess the effectiveness of government labour market policies from the perspectives of trade unions and identify their possible role and involvement. |
| Researcher : Ng TWH |
| Project Title: | The Role of Contract Replicability in Explaining the Relationship Between Psychological Contract Breaches and Employee Performance |
| Investigator(s): | Ng TWH |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 12/2008 |
| Completion Date: | 11/2009 |
| Abstract: |
| Psychological contracts consist of employees’ beliefs regarding the mutual obligations between them and their employers. Stated differently, psychological contracts consist of employees’ beliefs regarding what employers owe them and what they owe their employers in turn. For example, new MBAs typically expect to put in very long hours, but in return expect to be paid handsomely and promoted quickly. Psychological contract breaches occur when employees perceive that their employers have failed to fulfill their promises. Psychological contract breaches may have adverse consequences on employee-organization relationships because employees who experience theses breaches view themselves as being in a state of inequity. To restore equity, employees may reduce their loyalty and trust, withdraw their efforts and contributions, and in extreme cases, retaliate against their employers. Despite the strong evidence about the negative effects of contract breaches on employee performance, not all employees react equally strongly to contract breaches and not all breaches are responded to with equal intensity. For instance, recent research on employee turnover has shown that employees may stay with their organizations even when their employers have reneged on some aspects of their psychological contracts. However, little research has been conducted on the factors that may strengthen or weaken the relationship between contract breaches and poorer employee performance. In the proposed study, I introduce the concept of contract replicability as a potential explanation for this phenomenon. I define contract replicability as the extent to which an employee perceives that his/her psychological contract is replicable in other employment relationships. Here I argue that employees’ perceptions of contract replicability influence the level of tolerance for contract breaches and ultimately the degree of downturn in performance after contract breaches have been experienced. Employees formulate perceptions regarding the uniqueness of their “deals” in the external labor market. Researchers have long recognized that employees compare their current salaries to alternatives in the open labor market and that employees’ decisions to stay or leave are based, at least in part, on their perceptions of quantitative differences between positions. However, here I suggest that employees also make qualitative comparisons between their present jobs and alternatives in the external labor market. In other words, employees’ decisions about staying or leaving (and about how hard they work) are not based solely on the recognition that better-paying positions may be available elsewhere. Those decisions incorporate, as well, qualitative comparisons of current psychological contracts to those available in other organizations (for example, training opportunities, expatriate assignments, or mentoring). Employees can compare their current deals to those available in other firms in the same industry or to deals in the same functional area in different industries. In making these comparisons, individuals may be affected by enticements from headhunters, cues from recent new hires, interactions with others in their professional networks, self-initiated research, and even by their own idealism and optimism. The nature of contract replicability is informed by relative deprivation theory. Relative deprivation theory suggests that employees use multiple standards to judge the fairness of their employment arrangements. The seminal work on relative deprivation suggests that individuals’ satisfaction with their job situations depends not only on the discrepancy between what they were promised and what they received, but also on what they feel entitled to. That is, employees’ disgruntlement with their psychological contracts may emerge not only as the result of contract breaches, but also from feelings they deserved more. Consequently, perceptions of the external labor market come into play in the assessments of psychological contracts ex post, even if they do not come into play in the development of those contracts ex ante. My core premise is that perceptions of contract replicability are likely to moderate the psychological contract breach – job performance relationship. When employees perceive that they have rather unique psychological contracts (e.g., planned promotional tracks or extensive career development opportunities) that are not easily obtained from (or replicated by) other organizations, they will reciprocate especially positively when organizations fulfill those promises. This is largely attributable to the fact that psychological contracts which are not easily replicable will be very highly valued by employees. In order to sustain their current employment arrangements and to honor the good “deals” they have, employees will exhibit greater task performance, greater citizenship performance, and less counterproductive behavior. Conversely, perceived breaches of non-replicable contracts may draw especially intense negative reactions from employees for at least three reasons. First, individuals will be especially disappointed that expectations about getting rare (and valued) resources and rewards have been violated. Second, these employees will be very discouraged about being able to rectify their contract breaches simply by going elsewhere because, by definition, the deals they are looking for are rare in the marketplace. Third, individuals will be less trusting of their employers in the future and more pessimistic about the likelihood of getting even basic components of their psychological contracts fulfilled. In the proposed study, I examine job performance as the outcome of interest because negative reactions to psychological contract breaches will be reflected most directly in employees’ job behaviors following these breaches. In this study, the focus is on three dimensions of job performance in particular: core task performance, citizenship performance, and counterproductive performance. Core task performance refers to the basic required duties of a particular job. Citizenship performance refers to those extra behaviors engaged in by employees, over and above their core task requirements, that actively promote and strengthen the organization’s effectiveness (e.g., helping coworkers). Counterproductive performance refers to voluntary behaviors that harm the well-being of the organization (e.g., theft). In sum, then, I propose that perceptions of contract replicability will moderate the relationships between psychological contract breaches and these three components of job performance. Specifically, when a non-replicable psychological contract is breached, I expect employees will reciprocate especially negatively. Core task performance and citizenship performance will decline, while counterproductive performance will increase. Conversely, when replicable promises are unmet, employees may react less intensely because they anticipate they can obtain the same “deals” in other organizations. |
| Project Title: | The Effects of Job Embeddedness on Social Capital, Human Capital, and Career Success: A Change Perspective |
| Investigator(s): | Ng TWH |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 03/2010 |
| Abstract: |
| Researchers define job embeddedness as the combination of three organizational forces (fit, links, and sacrifice) that keep people in their current jobs. Fit is the extent to which an individual’s abilities match organizational requirements and an individual’s interests match organizational rewards. Links refer to the number of ties individuals have with other people and activities at work (e.g., friendship ties). Sacrifice is defined as what people would have to give up if they left their organizations (e.g., pensions). The purpose of this study is to examine the effects of job embeddedness on employees’ activities to build social capital and human capital and, subsequently, their career success. This study proposes that the more embedded employees are over time, the more likely they will be to show declines in both human capital and social capital development behaviors over time, which in turn undermine future career achievements. This study therefore highlights the potential negative consequences job embeddedness can have on employees’ career development. The proposed model appears in Figure 1. Job Embeddedness and Social Capital Development Behaviors Social capital refers to interpersonal relationships that create value for employees. Examples of such behaviors include actively participating in social functions and developing friendships with senior managers. Internal social capital refers to social ties within an organization (e.g., supervisors). External social capital refers to those social ties with people outside the organization (e.g., professional colleagues). From the individual perspective, developing social capital is one of the most effective career management strategies. Embeddedness researchers suggest that, as individuals accumulate more social ties at work, they become more embedded because those links create greater felt obligations to remain with their current employers. In this study, though, I am interested in the reciprocal relationship. Specifically, I argue that, once employees are highly embedded in an organization, they gradually lose some interest in developing additional social capital. Fewer, if any, opportunities for further internal advancement are available, and even many of the links that would be instrumental to further internal moves would have already been developed previously. Moreover, as instrumental as social capital development behavior might be, it often takes considerable effort and immersing oneself in workplace politics and networking can induce stress and fatigue. Therefore, after an employee has established a wide network of social ties, he or she may be more motivated to maintain existing relationships rather than spend more time cultivating new ones. For example, researchers found that, as time on the job increased, the extent to which employees proactively built relationships with coworkers decreased linearly. Finally, since many employees view high embeddedness as a signal of job security, employment stability, and professional success, social capital development behaviors may gradually decrease after employees feel embedded because many of their important career goals may have already been attained. Therefore, I predict: Research Question 1: The greater the increase in job embeddedness over time, the greater the decline in social capital development behaviors will be over time. Job Embeddedness and Human Capital Development Behaviors Human capital consists of the skills, knowledge, and experience which employees (and potential employees) acquire to enhance their productivity at work and success in the labor market. Acquiring more human capital is important because levels of human capital are frequently used as criteria for selection into firms, promotions within firms, and advancement into and through the ranks of management. Some types of human capital investment are relevant to specific job contexts, while other types of human capital investment are more generic in nature. However, what both types of human capital investments have in common is that they enhance employees’ marketability in the external labor market. Consequently, when employees have no intentions of leaving their current employers, they are likely to decrease the intensity of their investments in both general and job-specific human capital. Besides, human capital investment activities are costly too. For instance, it often takes at least one year, and sometimes a few years, to acquire additional educational degrees and professional qualifications. Because highly embedded employees have fewer intentions to leave, they also have fewer incentives to keep on accumulating more human capital – especially when those human capital investments can be costly. Therefore, I predict: Research Question 2: The greater the increase in job embeddedness over time, the greater the decline in human capital development behaviors will be over time. Social and Human Capital Development Behaviors Declines in social capital development behaviors will also be directly related to declines in human capital development behaviors. Previous research has seldom studied these two prominent career strategies together or empirically investigated how changes in the use of one strategy may elicit changes in the use of the other strategy. Because of limited resources, organizations do not offer all employees human capital development opportunities. Previous research has suggested that individuals who are socially skillful and actively develop social relationships with members of the organizational elite are likely to be offered greater amounts of valuable career assistance. The above arguments can be extended to a “change” perspective. As a result of decreasing social capital building behavior over time, employees may become increasingly less knowledgeable about which human capital development opportunities are available and less visible to senior managers as worthy recipients of further human capital investments. Furthermore, decreasing behaviors directed at building external social capital may also make individuals increasingly less attentive or sensitive to the importance of building transferable skills. Therefore, I predict: Research Question 3: The greater the decline in social capital development behaviors over time, the greater the decline in human capital development behaviors will be over time. Social Capital, Human Capital, and Career Success While previous research has shown that greater social and human capital is associated with more career attainments, longitudinal studies examining how changes in social and human capital affect career attainments are rare. To address that gap, I predict that: Research Question 4: Declines in social and human capital development behaviors are associated with lower levels of career success. |
| List of Research Outputs |
| Ng T.W.H. and Feldman D.C., Age, work experience, and the psychological contract. , Journal of Organizational Behavior. 2009, 30: 1053-1075. |
| Ng T.W.H. and Feldman D.C., Human capital and objective indicators of career success: The mediating effects of cognitive ability and conscientiousness. , Journal of Occupational and Organizational Psychology . 2010, 87: 207-235. |
| Ng T.W.H. and Feldman D.C., Idiosyncratic deals and organizational commitment. , Journal of Vocational Behavior. 2010, 76: 419-427. |
| Ng T.W.H. and Yim F.H.K., Making the transition from student to salesperson: A role identity approach. , Academy of Marketing Science Annual Conference, Portland, Oregon. . 2010. |
| Researcher : O'Connor NG |
| Project Title: | The Influence of Insitutional Factors and Specific Knowledge on Organization Design and Performance Measurement in Chinas Listed Enterprises. |
| Investigator(s): | O'Connor NG |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2008 |
| Abstract: |
| 1) Objective One (Contributions to research): The theoretical foundation for this study comes from the well-accepted economic theory of the firm, institutional and contingency theory. We aim to make several contributions to the literature. • to date, the economic theory research has considered limited aspects of internal organization – for example, Christie et al (2003) use cost centres or profit centres to proxy for different levels of decentralization. Our survey-based measures on decision rights transfer may more directly capture the underlying economic concept of decision right transfer. Our data also allows us to examine issues that have not been explored before due to a lack of data. For example, business decisions may have different importance to the top managers but there is no empirical evidence on the type of decisions that are more likely to be delegated to low level managers. • much of the theory development is based on findings from US based studies and there is little evidence that the relationship between the environment, organization structure and performance measurement applies to an emerging market. The emerging nature of the Chinese market provides a valuable opportunity to examine the dynamic interaction between social, political, and business reforms. • the analysis also will contribute to the institutional theory literature in so far as political and legal factors are examined for their influence on organization structure and performance measurement system. 2) Objective Two (Contributions to policy making and practice): The process of analyzing the data on the specific knowledge, structure and performance measurement archetypes of higher vs. lower performing SOEs (after controlling for moderating factors) will be used for developing benchmarks of good practice. We expect to publish these results in several articles addressed to policy makers, educators, practitioners, and investors in Chinese enterprises, and presentations in top level conferences. |
| Project Title: | The use of management control systems in buyer supplier partnerships |
| Investigator(s): | O'Connor NG |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 11/2008 |
| Abstract: |
| The purpose of this project will be to enhance our understanding of the role of management accounting and control systems in buyer supplier partnerships in bridging the different objectives of the partners that lead to reduced ex post opportunism and enhanced knowledge transfer that are foundational to long term performance. • The role of ex ante mechanisms (e.g. qualification, contractual safeguards, and hostages) in mediating the relationship between investment contributions and ex ante opportunism is well theorized in the transactions costs literature (e.g. Heide, 2006). • Ex post governance mechanisms such as management accounting and controls can foster relational ties which help to limit opportunism and enhance knowledge transfer. • The role of ex post mechanisms such as management controls in reducing ex post opportunism (e.g Chenhall and Langfield-smith, 2003) and in enhancing knowledge transfer (e.g. Minbaeva, Pedersen, Bjorkman, Fey & Park (2003) is largely unexplored (e.g. Chalos and O’Connor, 2004; Groot and Merchant, 2003); thus, • The larger number of strategic partnerships between overseas firms (buyers) and Chinese suppliers provides an ideal setting suitable for examining the role of MCS. Our design, which will incorporate both archival and survey data sources, will allow us to mitigate several weaknesses associated with the use of survey data sources alone, such as endogeniety problems, and several types of response bias. The use of survey data for the dependent variable only helps us to measure aspects of the internal organization which no other data sources is available. 2. Background of research: The role of management accounting and control systems in buyer supplier alliances Ex ante governance mechanisms such as qualification (contractual safeguards) and the use of hostages (whereby a supplier invests money with the buyer to secure a contract are features that parties to an alliance are likely to contract upon. The economics literature finds that such mechanisms help to mediate the relationship between investment contributions and ex ante opportunism (Heide, 2006). In the accounting literature, recent attention has been paid to the role of MCS in enhancing trust in interorganizational settings (see Anderson and Sedatole, 2003 for a review). For example, Chenhall and Langfield-smith (2003) find that accounting controls are positively related to the level of organizational trust. Vosselman & Meer-Kooistra (2005) find that accounting controls are likely to enhance relational ties and that they help to (i) mitigate strategic opportunism that occurs are the time of the writing of the contract, and (ii) mitigate myopic opportunism that occurs spontaneously after the contract has been signed. In the first case, accounting plays the role as a safeguarding device, while in the second case; accounting plays a role as an information sharing device. To date, few studies have examined the role of accounting controls as they are imbedded in the structure of inter organizational relationships. In a study of U.S.-Chinese joint ventures, Chalos and O’Connor (2004) find that joint venture partner contributions are positively associated with the use of different types of controls, but do not examine the performance consequences of use of such controls (e.g. opportunistic behavior). Groot and Merchant (2000) examine three car manufacture joint ventures and suggest that several factors are likely to drive the use (non use) of accounting controls – For example, they suggest that partner’s unique knowledge and capabilities will be positively associated with control tightness and broad focus of controls, and that partner’s level of trust in the other partner will be positively associated with the use of conflict resolution mechanisms. Both Chalos and O’Connor (2004) and Groot and Merchant (2000) highlight the importance of management accounting and controls in helping to align the interests and commitments of partners to a joint venture. However, no study to date has examined the performance consequences of using such controls. For example, whether the use of such controls no only enhances trust between the partners, but whether such controls help support alliance building decisions such as further investment decisions that allow both partners to enjoy the benefits of growth prospects. Similar findings are also documented in the strategic alliance literature which we document in figure 1. Overall, these studies provide the investigators with an in-depth understanding of the institutional environment of inter organizational control, which should serve as an inspiring starting point for the proposed project. |
| Project Title: | The use of management control systems in buyer supplier partnerships |
| Investigator(s): | O'Connor NG |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 11/2009 |
| Abstract: |
| 1) The general objective of this project will be to enhance our understanding of the role of management accounting and control systems in buyer supplier partnerships, and in bridging the different objectives of the partners that lead to reduced ex post opportunism and enhanced knowledge transfer that are foundational to long term performance. 2) The first specific objective of this study is to examine the role of ex post contracting mechanisms, such as management controls in reducing the opportunistic behavior of a partner (eg. Chenhall and Langfield-Smith, 2003) and in enhancing knowledge transfer (eg. Minbaeva, Pedersen, Bjorkman, Fey & Park, 2003) between the partners. This role has is largely unexplored in the literature (eg. Chalos and O’Connor, 2004; Groot and Merchant, 2003). 3) The second specific objective of this study is to examine the lagged performance consequences of contracting and management accounting controls in a buyer supplier partnership. To date the research has been cross sectional and has not examined the lagged performance affects of a partnership over time. As partners act to fulfill their obligations, signals are given by each partner that may positively or negatively impact on future partnership opportunities and performance. |
| Project Title: | 2010 Management Accounting Section Research and Case Conference and IMA/MAS Doctoral Colloquium The Effects of Market Competition and International Orientation on Management Control System Use by Emerging-Market Publicly Listed Companies |
| Investigator(s): | O'Connor NG |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 01/2010 |
| Completion Date: | 01/2010 |
| Abstract: |
| N/A |
| List of Research Outputs |
| O'Connor N.G., Business practises in China, Sunraysia Daily Newspaper and Radio National interview. 2010. |
| O'Connor N.G., EU Design’s Rise as a Fashion House: Coping with the First Growth Crisis. - Teaching note, ACRC. 2009. |
| O'Connor N.G., EU Design’s Rise as a Fashion House: Coping with the First Growth Crisis. , ACRC. 2009. |
| O'Connor N.G., Editorial Board Membership, Abacus. 2010. |
| O'Connor N.G., Editorial Board Membership, Advances in Management Accounting. 2010. |
| O'Connor N.G., Management Accounting Research - Editorial Board Member, 2010. |
| O'Connor N.G., Motivation Talk On Failure For Bba (law) Students, The University Of Hong Kong. 2009. |
| O'Connor N.G., PQI: Management of Suppliers - A Teaching note, ACRC. 2010. |
| O'Connor N.G., PQI: Management of Suppliers, ACRC. 2010. |
| O'Connor N.G., Strategic Performance Management of Suppliers at HTC. - A Teaching Note, ACRC. 2010. |
| O'Connor N.G., Strategic Performance Management of Suppliers at HTC., ACRC. 2010. |
| O'Connor N.G., The Effect of Market Competition and International Orientation on Management Control System, Use by Emerging Market PLCs, 6th International Symposium on Management Accounting and Controls, UIBE Business School, Beijing, China. 2010. |
| O'Connor N.G., The Effect of Market Competition and International Orientation on Management Control System, Use by Emerging Market PLCs, AAA MA Section mid year meeting. 2010. |
| O'Connor N.G., The Effect of Market Competition and International Orientation on Management Control System, Use by Emerging Market PLCs, European Accounting Association. 2010. |
| O'Connor N.G., The adoption of Management Accounting/Controls in Buyer Supplier Partnerships, Latrobe University, Mildura, Australia. 2010. |
| O'Connor N.G., The effect of market competition and international orientation on management control system, use by emerging market PLCs, Nangyang Technological University. 2010. |
| O'Connor N.G., Total cost of ownership and supplier purchase allocation decisions, The University of Hong Kong - Brown Bag Lunch. 2010. |
| Researcher : Pan Y |
| Project Title: | AIB 2003 Academy of International Business Conference: The Power of Ideas and International Business Market Share Performance of Multinational Enterprises in Transitional Economies |
| Investigator(s): | Pan Y |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 07/2003 |
| Abstract: |
| N/A |
| Researcher : Qiu C |
| Project Title: | Mood and Hedonic Consumption: The Antecedents to Consumer Mood and Its Consequences |
| Investigator(s): | Qiu C |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 12/2007 |
| Completion Date: | 05/2010 |
| Abstract: |
| Consumers’ mood states can have a pervasive impact on their evaluation and consumption of hedonic products. Therefore, it is important to understand what factors will trigger a particular mood state, and how the mood state will influence the subsequent product evaluation and consumption. Research in the affect-as-information paradigm suggests that consumers use their feelings as a basis for evaluating hedonic products (e.g., chocolate, music, and movie). As people usually cannot distinguish clearly between the different sources of feelings, they may misattribute their incidental mood to the product under evaluation, and interpret it as evidence of liking or disliking the product (i.e., mood is assimilated into product evaluation). Consequently, consumers tend to evaluate a hedonic product more favorably when they are in positive mood than when they are in negative mood (Pham 1998, 2004; Yeung and Wyer 2004). One important implication of this mood assimilation effect is that to the extent consumption intention is based on product evaluation, consumers should be more inclined to consume hedonic products when they are in positive mood than when they are in negative mood. As such, it is of both theoretical interest and practical implication to investigate ways to enhance consumers’ positive mood. Along this line, measures such as background music at the point of purchase have been successfully shown to facilitate positive-mood during the purchasing experience (Bruner 1990). Recent research advancement suggests other creative ways to bring positive mood to consumers. Wilson and colleagues (2005) found in a movie plot context that remaining uncertain about events with positive potential outcomes (i.e., people know the eventual outcome is positive, yet they do not know which particular outcome will occur or why it occurs) may actually result in positive mood. Extending this effort, we plan to investigate how incorporating uncertainty into marketing activities may enhance the positive mood that consumers experience. We suggest that uncertainty from positive marketing-related events (e.g., winning a lucky draw but not knowing the particular prize for a period of time) would place consumers in positive mood. This is because people experiencing a positive uncertain event may mentally simulate alternate possible favorable outcomes. Such hypothetical thoughts may potentially generate mental imagery, which is capable of eliciting affective reactions (MacInnis and Price 1987). Thus, generating mental imagery about marketing events with positive outcomes may bring about vicarious hedonic consumption experience (e.g., imagining pleasant situations of consuming the possible prizes from a lucky draw), which produces positive mood. Furthermore, since the positive mood originates from outcome-specific mental imagery, and the increased accessibility of consumption imagery may enhance product preference (Petrova and Cialdini 2005), the mood assimilation effect may be more prominent when consumers subsequently evaluate products that relate closer to the potential outcomes (e.g., evaluating an electronics product after winning a prize in the same category). This issue may be of particular interest to practitioners who are concerned with the creation of positive mood not only as an end (delighted consumers) but also as a means to an end (favorable responses to subsequent marketing stimuli). On the other hand, research in the area of mood regulation seems to suggest another possible consequence of mood. It is assumed that people prefer to be in positive mood than in negative mood. Therefore, when they are in negative mood, they may engage in mood regulation behaviors such as consuming certain hedonic products (e.g., eating junk food or shopping for clothes) to repair their mood (Erber and Erber 2001). In contrast, consumers in positive mood may have less of such a need to regulate their mood through purchasing and consumption behaviors. In this case, consumers may be more inclined to consume hedonic products when they are in negative mood than when they are in positive mood. This prediction seemingly contradicts the predictions made based on mood assimilation literature. An interesting theoretical question that ensues is under what conditions mood assimilation effect would occur, and under what conditions mood regulation effect would occur. To address the question, we propose that the impact of mood on hedonic consumption depends on situational moderators as well as individual perception differences, including whether there are situational cues prompting consumers to form evaluations of hedonic products and whether consumers perceive the consumption of hedonic products as a means to repair their mood. To summarize, this proposed research attempts to achieve the following objectives: - investigating how marketers may influence consumer mood through the design of marketing activities; - examining the role of vicarious hedonic consumption and mental imagery in creating positive mood; - identifying the key moderators in the effect of mood on hedonic consumption - examining how mood influences consumers’ evaluation of and intention to consume hedonic products through different mechanisms (mood assimilation vs. mood regulation); - demonstrating the implications of the proposed theoretical framework for marketing practitioners and consumer well-being. References: Bruner II, Gordon C. (1990), “Music, Mood, and Marketing,” Journal of Marketing, October, 94-104. Erber, Ralph and Maureen W. Erber (2001), “Mood and Processing: A view from a Self-Regulation Perspective,” in Theories of Mood and Cognition, eds. Leonard L. Martin and MacInnis, Deborah J. and Linda L. Price (1987), “The Role of Imagery in Information Processing: Review and Extensions,” Journal of Consumer Research, 13 (March), 473-91. Petrova, Petia K. and Robert B. Cialdini (2005), “Fluency of Consumption Imagery and the Backfire Effects of Imagery Appeals,” Journal of Consumer Research, 32 (3), 442-52. Pham, Michel T. (1998), “Representativeness, Relevance, and the Use of Feelings in Decision Making,” Journal of Consumer Research, 25 (September), 144-59. Pham, Michel T. (2004), “The Logic of Feeling,” Journal of Consumer Psychology, 14 (4), 360-69. Wilson, Timothy D., David B. Centerbar, Deborah A. Kermer, and Daniel T. Gilbert (2005), “The Pleasures of Uncertainty: Prolonging Positive Moods in Ways Individuals Do Not Anticipate,” Journal of Personality and Social Psychology, 88 (1), 5-21. Yeung, Catherine W. M. and Robert S. Wyer (2004), “Affect, Appraisal, and Consumer Judgment,” Journal of Consumer Research, 31 (September), 412-24. |
| Project Title: | Disentangling the Dual Impact of Affect on Product Judgment: The Role of Marketing Stimuli Characteristics |
| Investigator(s): | Qiu C |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2008 |
| Abstract: |
| 1) Integrate and advance research on the impact of affect on consumer judgment through two different mechanisms—affect serves as direct, informational inputs and affect influences information processing style. 2) Identify the key moderating roles of marketing stimuli characteristics such as the composition of product information in the processes through which affect influences consumer judgment. 3) Examine how affect and marketing stimuli characteristics in combination would influence the judgments of products characterized by various types of information such as brand name, external appearance, and product attributes. 4) Examine the processes underlying the differential impact of affect on consumer judgment with respect to how consumers attribute their affect. |
| Project Title: | 2009 ACR North American Conference The Impact of Mood on Consumer Choice |
| Investigator(s): | Qiu C |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 10/2009 |
| Completion Date: | 10/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Lee Y.H. and Qiu C., When Uncertainty Brings Pleasure: The Role of Outcome Imageability and Mental Imagery, Journal of Consumer Research. 2009, 36 (4): 624-633. |
| Qiu C., 2009 JCP Young Contributor Award, Journal of Consumer Psychology. 2010. |
| Qiu C., Lee Y.H. and Yeung C., Suppressing Feelings: A Double-Edged Sword to Consumer Judgment and Choice, Journal of Consumer Psychology. 2009, 19 (3): 427-439. |
| Researcher : Ren J |
| List of Research Outputs |
| Chang E.C. and Ren J., Cross-listing and Pricing Efficiency: The Informational and Anchoring Role Played by the Reference Price, 2009 China International Conference in Finance (CICF2009), July 7-10, 2009, Guangzhou, China. 2009. |
| Chang E.C. and Ren J., Cross-listing and Pricing Efficiency: The Informational and Anchoring Role Played by the Reference Price, 2009 Financial Management Association Conference in Finance, October 2009, Reno, Nevada, U.S.A.. 2009. |
| Researcher : Tam SKW |
| Project Title: | Rencontres de St. Gall 2002 The Nature of Entrepreneur-environment Relations - A Participant Reconstruction Perspective |
| Investigator(s): | Tam SKW |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 09/2002 |
| Abstract: |
| N/A |
| Researcher : Tao Z |
| Project Title: | An economic analysis of the bi-sourcing strategy for organizing production in the global economy: a property rights theory approach |
| Investigator(s): | Tao Z, Du J |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2007 |
| Completion Date: | 02/2010 |
| Abstract: |
| We propose to use the property-rights theory of the firm to analyze the relative optimality of bisourcing strategy over insourcing and outsourcing. We shall first lay out an incomplete-contracting framework that is general enough for us to analyze insourcing, outsourcing and bisourcing. Intuitively, firms adopt outsourcing to obtain cost advantage and also push the internal production units to be productive, and meanwhile they use insourcing to minimize the risk of holdup by the independent suppliers. Such an intuition needs to be formally derived, and its robustness be examined. In particular, we will find out the conditions under which bisourcing emerges as the optimal organizational form. In today's increasingly globalized economy, firms have a new dimension through which to optimize their organization of production. That is, no matter whether it is outsourcing or in-house production or bisourcing, firms could do it in their home countries or in other countries. We thus propose to further explore the complexity of the various sourcing strategies in the setting of a global economy. In particular, the location choice could be used to fine tune the balance between external suppliers and internal suppliers, which is critical to the success of the bisourcing strategy. Our research results will be used to understand some recent trends in world trade such as the growing vertical specialization, intrafirm trade and complementarity between foreign direct investment and trade. |
| Project Title: | Property Rights Protection and Firm Horizontal Scope |
| Investigator(s): | Tao Z |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 03/2008 |
| Completion Date: | 08/2010 |
| Abstract: |
| Diversified business groups, i.e., firms that are well diversified in horizontally related or unrelated industries, are prevalent in many emerging markets (Khanna and Palepu, 1997; Ghemawat and Khanna, 1998). This is in contrast to the trend in the developed economies where firms adopt focused strategies for their businesses. Indeed a voluminous literature has documented the existence of diversification discount in the developed countries, i.e., the detriment of the unrelated corporate diversification strategy to shareholder value. This is mainly because much of the diversification in those developed countries is driven by agents whose interests could be divergent from those of shareholders, and such agency costs outweigh the traditional arguments for diversifications such as economy of scope (Penrose, 1959) and risk sharing (Chandler, 1990). Why are diversified strategies prevalent in the emerging markets? Studies have shown that diversified firms have better performance in the emerging markets (e.g., Khanna and Palepu, 2000; Khanna and Yafeh, 2005). It has been suggested that diversified firms may overcome the obstacles caused by the lack of economic institutions, including property rights protection, contract enforcement, and sophistication of markets for various inputs in those markets (Khanna and Palepu, 1997; Ghemawat and Khanna, 1998). However, there is limited empirical support or theoretical analysis for this argument. To fill in the gap, we propose to study the effects of property rights protection on the horizontal scope of firms, both theoretically and empirically. Protection of private properties is arguably the most central aspect of economic institutions in the emerging markets. Numerous studies have shown that property rights protection provides incentives for investment (e.g., Besley, 1995), and plays a key role in economic development (e.g., Acemoglu, Johnson, and Robinson, 2001, 2002). In studying the impacts of property rights protection on the horizontal scope, this project focuses on the case of private enterprises, for they are particularly disadvantaged by poor institutional environments in China. Unlike state-owned or collectively-owned enterprises that conduct business under the auspices of national and regional governments, private enterprises have to fight for their survival and growth. In addition, as private firms are mostly closely held firms, the agency costs are not as significant as in those of publicly listed firms, which allow us to focus on determinants of diversification other than agency costs. |
| Project Title: | Do institutions not matter in China? Evidence from enterprise-level productivity growth |
| Investigator(s): | Tao Z |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2009 |
| Abstract: |
| Numerous cross-country and within-country studies have shown that institutions are fundamental to economic growth (Besley 1995; Knack and Keefer 1995, 1997; Mauro 1995; Hall and Jones 1999; La Porta et al. 1999; and Acemoglu, Johnson, and Robinson 2001, 2002). Indeed, the World Bank and International Monetary Fund have stressed the importance of sound institutions in the growth of developing economies (Carothers 2006; Economist, March 15, 2008). However, the record of the Chinese economy over the past thirty years seems to contradict the scholarly finding that institutions are essential to economic growth. Until recently, China provided little formal protection of private property, and, moreover, its legal system was far from independent (Blanchard and Kremer 1997; Rodrik 2004a and 2004b; Allen, Qian, and Qian 2005; Economist, March 15, 2008). Nevertheless, the growth of the Chinese economy has been nothing less than spectacular. Do institutions not matter for the growth of the Chinese economy? One possible explanation is that institutional quality varied widely across China (Du, Lu, and Tao, 2007 and 2008), and that China’s growth was concentrated in the coastal regions, where institutions are reasonably good. Another possible explanation is that the importance of institutions varied across industries and that China’s growth was concentrated among industries for which institutions are less important. These two explanations might possibly explain the apparent contradiction between the poor state of China’s institutions and the country’s rapid growth rate at the macro level. To investigate if there is really a China puzzle (i.e., the unimportance of institutions for economic growth) we propose to study the issue at the microeconomic level and apply the approach of Rajan and Zingales (1998) and Rajan and Subramanian (2007). Focusing on the variation of labor productivity growth among enterprises within China, we will examine whether productivity growth is relatively higher among enterprises that are more reliant on the external environment in cities with better institutional quality. |
| Project Title: | An Economic Analysis of Economic Institutions and FDI Location Choice |
| Investigator(s): | Tao Z, Du J, Lu Y |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2009 |
| Abstract: |
| 1) Understand how the economic institutions in China affect location choices of FIEs from different source countries/areas. 2) Investigate the interaction between the economic institutions in China and the source countries/areas' cultural and/or institutional proximity to China. 3) Generate policy implications for the governments in FDI recipient countries on the importance of strengthening economic institutions to attract FDI. 4) Help the Hong Kong SAR government and Hong Kong multinational enterprises understand better the investment patterns of FIEs in China. |
| Project Title: | NBER China Working Group Meeting Do institutions not matter in China? Evidence from manufacturing enterprises |
| Investigator(s): | Tao Z |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 10/2009 |
| Completion Date: | 10/2009 |
| Abstract: |
| N/A |
| Project Title: | The Impacts of Financial Repression on Economic Efficiency and Equality: The Case of China |
| Investigator(s): | Tao Z |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2010 |
| Abstract: |
| 1. 'We reexamine the potential efficiency losses caused by financial repression in Chinese enterprises. By comparing systematically the relative importance of bank loans and trade credit in sustaining firm performance and promoting firm growth, we will be able to see whether trade credit could truly replace bank loans. If yes, China's experience suggests that financial repression is not that costly. If not, we typically have underestimated the inefficiency caused by financial repression, and then dismantling the financial repression regime is an imperative. 2. 'We investigate the impact of financial repression on income distribution inequality. Some studies found that financial development in the form of private credit growth has reduced inequality in income distribution and poverty. However, there is no study distinguishing the roles of formal financing and informal financing in affecting income distribution under a financial repression regime. In this project, we disentangle the differential effects of formal and informal finance access on promoting income distribution equality and poverty alleviation. If informal finance such as trade credit plays a more important role in reducing inequality, we expect that the negative effects of financial repression on equality may not be that large. if bank loan still plays a more significant role, it could reflect that financial repression does have substantial equality costs. In this sense, eradicating financial repression could help promote equality in income distribution. |
| Project Title: | Exporting Behavior of Foreign Affiliates: Theory and Evidence |
| Investigator(s): | Tao Z |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 03/2010 |
| Abstract: |
| Traditional trade theories treat firms as homogeneous. Since mid-1990s, however, there has been increasing evidence suggesting that exporting behavior varies significantly across firms even after controlling for industry effects (see, for example, Bernard and Jensen, 1995, 1999). A unanimous finding in the literature is that exporters are more productive than non-exporters (called export premium). A dominant theoretical explanation for the export premium result is based on the existence of fixed costs of exporting, under which more productive firms self-select to become exporters (e.g., Bernard, Eaton, Jensen, and Kortum, 2003; Melitz, 2003; and Bernard, Redding, and Schott, 2007). However, almost all the existing studies implicitly focus on the exporting behavior of domestic firms, or at least they do not explicitly differentiate domestic firms from foreign affiliates (foreign-invested firms operating in those countries). As transport and communications costs decrease, firms have increasingly conducted different stages of production in different countries. In particular, firms may set up their production plants in low-cost countries such as Brazil, China, India, and Russia as their export platform, which is referred to as vertical foreign direct investment (or FDI) in the literature. As a result, a significant percentage of export from those low-cost countries is made by foreign affiliates in the countries. Is the exporting behavior of foreign affiliates similar to that of domestic firms? The proposed research is to fill the void by investigating empirically the exporting behavior of foreign affiliates using data from China, and then offer a theoretical explanation for the empirical findings. |
| List of Research Outputs |
| Lu J., Wei S., Li Y., Tao Z. and Chan P., Foxconn V BYD (A): Commercial Espionage or Learning by Hiring? Foxconn V BYD (A): Commercial Espionage or Learning by Hiring? Foxconn v. BYD (A): Commercial Espionage or Learning by Hiring? , Asia Case Research Center. 2010, 22. |
| Lu J., Wei S., Li Y., Tao Z. and Chan P., Foxconn v. BYD (B): Strategic Approach to Intellectual Property Management in Emerging Markets, Asia Case Research Center . 2010, 28. |
| Lu J., Wei S., Li Y., Tao Z. and Chan P., Viagra in China: A Prolonged Battle over Intellectual Property Rights, Asia Case Research Center. 2010, 32. |
| Researcher : Tian F |
| Project Title: | The contagion effects of earnings management |
| Investigator(s): | Tian F |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 11/2008 |
| Abstract: |
| The contagion effects of earnings management In this project, we intend to investigate how accounting irregularities (i.e., earnings management) spread across companies through three types of networking ties: auditors, geographical proximity and board interlocks. We also attempt to explore how regulators’ locations such as SEC locations play a role on restricting such a spreading. In addition, we plan to examine whether auditors’ quality can be influenced by their neighbouring auditors at the local office level. Previous studies have shown that managerial behaviour is significantly affected by their peers (e.g., Hirshleifer and Teoh 2008). Prior research indicates that social interactions affect crime rates significantly (e.g.,Glaeser et al. 1996; Sah 1991), and the seminal work by Bikhchandani et al. (1992) shows that a person optimally ignores his own information and follows mass behaviour around him (i.e., information cascades). Recent studies (e.g., Shive 2008; Hong et al. 2004) further suggest that individual stock trading and stock market participation are related to social interactions and networks. In this project, we expect that three different social interactions (i.e., auditors, board interlocks, and geographical proximity) will significantly affect managers’ propensity to manage earnings. In particular, we anticipate that the most egregious accounting irregularities, which lead to restatements eventually, will trigger a high incidence of earnings management within each of the social interactions. Similar to our project, recent research in finance has found that egregious corporate behaviour can spread through auditors, geographical proximity and board interlocks. For instance, Bizjak et al. (2007) find that interlocked boards play an important role in the spread of CEO option backdating across a wide range of companies and industries. In addition, auditors and geographic location links influence such as the spread of backdating. We conjecture that auditors can be an important channel to spread aggressive accounting (i.e., earnings management) because firms with the high propensity to manipulate earnings tend to choose a low quality auditor or because aggressive accounting is encouraged by a low quality auditor. Addressing whether auditors can be a channel to spread aggressive accounting is quite interesting. Previous studies (e.g., Chaney and Philipich 2002; Krishnamurthy et al. 2006) document that investors perceive the clients of Arthur Andersen’s as the companies with low earnings quality after the Enron audit failure, which implies that investors believe that aggressive accounting can be spread to companies through auditors. However, to our best knowledge, there is no direct evidence to support this conjecture. Moreover, the prior research shows that the geographical distance between the SEC and the county where a company is located and the existence of a lax local auditor office are associated with a greater rate of income-decreasing restatements (e.g., Kedia and Rajgopal 2008a). DeFond et al. (2008) further find that the distance between the SEC offices and the locations of auditors can largely explain auditor independence. Our project extends these studies by exploring how aggressive accounting is spread across a variety of companies and industries. Finally, we study whether board interlocks can explain earnings management behaviour. Prior studies examine how board interlocks influence acquisition activity, strategic alliances, adoption of antitakeover provisions and executive option backdating (e.g., Davis 1991; Davis and Greve 1997; Bizjak et al. 2007), but there is no study examining the effect of board interlocks on the spread of earnings management. |
| Project Title: | 20th Anniversary Conference on Financial Economics and Accounting Board interlocks and the earnings management contagion |
| Investigator(s): | Tian F |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 11/2009 |
| Completion Date: | 11/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Tian F., Board Interlocks and Earnings Management Contagion, 20th Annual FEA Conference. 2009. |
| Tian F., Marketing spending and earnings quality in accounting, The 32nd INFORMS Marketing Science Conference . 2010. |
| Researcher : Tse DKC |
| Project Title: | Contract Enforcement Effects in China’s Marketing Channel: a Fairness Heuristic Theory Explanation |
| Investigator(s): | Tse DKC |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 02/2008 |
| Abstract: |
| In marketing channels, how a supplier firm manages its channel when contract violation occurs is becoming a core issue because distributors often violate their contracts (Hennart 1993; Williamson 1996). No matter how detailed a supplier specifies its distributor contracts, disputes frequently occur when distributors violate the terms they agreed to, causing major problems in channel relationship management and performance. This is a fundamental marketing channel issue with academic and managerial relevance. Against the current literature, the proposed research project assumes a complementary focus and examines how focal and observer distributors respond when suppliers try to enforce the contract and engage in punitive actions. By so doing, the study will offer academic insights publishable in top academic journals as well as providing managerial implications to firms operating in China. Conceptual Framework Contract enforcement is commonly defined as a supplier’s (principal’s) disciplinary action to a distributor’s (an agent’s) violation of a contractual obligation (Antia and Frazier 2001). Such actions may range from lenient actions, such as ignoring the violation, or making mild and informal attempts to gaining compliance, to punitive actions, such as strict cease or termination proceedings. Existing studies have examined some of the determinants of a supplier’s CE actions. Kumar, Scheer and Steenkamp (1998) found that supplier punitive capability and reciprocal capability enhance the effects of its CE strategies. Antia and Frazier (2001) also confirmed the positive effects of system and network factors including the salience of transaction specific investments, obligational criticality and network density and centrality. Yet studies on the resultant effects of CE strategies on focal and observer distributors are rare (Kumar, Scheer and Steenkamp 1998). Organizational Responses by Focal and Observer Distributors When a supplier chooses its CE actions, such actions would have impacts on both focal and observer distributors. It is necessary to separate the CE effects into those related to focal and to observer distributors because focal and observer distributors may likely differ in their responses to the supplier's CE strategies. The focal distributor (the one who violates the terms) will likely focus on the gain-and-loss that result from the supplier’s CE actions. Observer distributors, on the other hand, are concern whether the violations and subsequently the CE actions are relevant to them. Accordingly, they will pay more attention as to how the violations are derived, that is, the procedure involved. These cognitions (the causes of violations and how violations are judged) will affect how observer distributors respond. To understand the impacts of a supplier's CE strategies on focal distributor, past studies adopt either the transactional cost approach (by focusing on the costs and benefits of transaction specific investments) or the relational exchange paradigm (e.g., relative distributor interdependence). Such approaches have proved to be effective. Fairness Judgments Fairness is a key fundamental construct in building favorable inter-firm and channel relationships (Anderson and Weitz 1989, 1992; Dwyer, Schurr, and Oh 1987, Frazier 1983; Frazier, Spekman, and O’Neal 1988; Gundlach and Murphy 1993; Kaufmann and Stern 1988). Dwyer, Schurr, and Oh (1987) found fairness is necessary for developing trust between business partners. Anderson and Weitz (1989) observed that suppliers with a reputation for fairness engender greater trust and expectation of continuity. How fair channel members treat one another is known to a key to inter-firm trusts and channel stability (Frazier 1983, Griffith et. al. 2006). In reacting to supplier’s CE strategies, I postulate that fairness judgments will be a critical and salient cognition for both focal and observer distributors. Beyond Fairness Judgment: Fairness Judgments as Heuristics Lind (2001) proposed that fairness judgment is a pivotal cognition that individual and organization readily form towards other parties. Once a person or an organization forms a fairness judgment, they will readily use such judgment as critical heuristics to evaluate their exchange partners. This heuristics explanation provides a number of highly interesting postulates. Distributive and Procedural Fairness Extensive research has identified two distinct components of fairness – distributive fairness, that is, the fairness of outcomes received, and procedural fairness, that is, fairness of the process (Tyler and Lind 1992). Distributive fairness “relates to the division of benefits and burdens” (Frazier, Spekman, and O’Neal 1988) and can be viewed as an evaluation of the channel partner’s relative rewards (or losses) in comparison to its respective contributions (Frazier 1983). Procedural fairness refers to the distributor’s perception of the fairness of the supplier’s procedures and processes in dealing with its distributors. Fairness as Heuristics and Organizational Response The central tenet of Lind’s Fairness heuristics theory postulates that fairness is a pivotal cognition (Lind 2001) that summarizes one’s perception of the other party AND shapes one’s subsequent evaluation of the other party. In our project’s context, I postulate that: H0: Distributive fair judgment will have more effect on focal than observer distributor and vice versa for procedural fair judgment. H1: Procedural Fair Judgment will enhance the distributors’ perception of the supplier’s channel capability. When a supplier’s action is perceived to have high distributive fairness, that is, the rewards are shared in proportion to each party’s responsibility, effort, and contribution, such action will enhance supplier’s moral integrity. Thus: H2: Distributive Fair Judgment will enhance the distributors’ perception of the supplier’s moral integrity and its benevolence to share rewards. H3a: Perception of supplier channel capability will enhance channel relationship (distributor trust). H3b: Perception of supplier moral integrity will enhance channel relationship (distributor trust). Second Order Effects In an emerging economy like China, whose social institutions continuously evolve and change, market opportunities will emerge from time to time. Thus, H4a: Higher supplier trust will enhance distributor initiation of market opportunities to supplier; H4b: High supplier moral integrity (and willingness to share) will enhance distributor initiation of market opportunities to supplier; |
| List of Research Outputs |
| Yim B.C.K., Tse D.K.C. and Chan K.W., HKU Research Output Prize 2009, The University of Hong Kong. 2010. |
| Yim B.C.K., Tse D.K.C. and Chan K.W., “Customer–Staff Relationships as a Recovery Resource When Services Fail: A Coping Capacity Perspective.”, School of Hotel and Tourism Management, Chinese University of Hong Kong. 2010. |
| Researcher : Venkata Subban S |
| Project Title: | Academy of International Business Annual Conference (AIB 2005) Subsidiary Types, Activities, and Location: An Empirical Investigation |
| Investigator(s): | Venkata Subban S |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 07/2005 |
| Abstract: |
| N/A |
| Project Title: | Defining Strategic Groups: A Business Model Perspective |
| Investigator(s): | Venkata Subban S |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 05/2009 |
| Abstract: |
| From its origins in the 1970s, the concept of strategic groups has attracted significant scholarly interest. While one set of arguments advocated the salience of the strategic group as a concept, others took the view that some fundamental issues remain to be answered before the concept of strategic groups can be considered more than an analytical convenience. Researchers have then argued that after nearly two decades of research, there seems to be a crisis of confidence in the strategic group concept and what it signifies. One of the persistent problems has been the definition of strategic groups. Past studies have used a largely empirical approach to this task, and little theory has been advanced over the years in this regard. As a consequence, two key issues have been raised in past literature: a) whether strategic groups existed in reality or whether they were just artifacts of statistical clustering, b) in which case whether they had any performance implications. The underlying problem of strategic group definition is a basic problem that seems to have lead to a lack of theoretical clarity and empirical ambiguity. This study will focus on the definition of strategic groups, by advancing a different theoretical perspective. The paper proposes a business model perspective that brings together key concepts of strategy. We will also complement the theoretical propositions with empirical tests and examine whether such a definition is better able and more robust in delineating strategic groups than past studies. |
| Project Title: | Academy of International Business 2009 Annual Meeting Knowledge Sources and MNC Subsidiary Roles |
| Investigator(s): | Venkata Subban S |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 06/2009 |
| Abstract: |
| N/A |
| Project Title: | Strategic Groups: A Business Model Perspective |
| Investigator(s): | Venkata Subban S |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 11/2009 |
| Abstract: |
| 1) In the debate between the importance of external and internal determinants of performance, the external environment is the industry. A related conception of the external environment is in the form of strategic groups. These are intra-industry constructs that recognize heterogeneous patterns of rivalry within industries. A fundamental problem has always been a robust way to delineate strategic groups. Past research has used a variety of competing ways that show little consistency. Very often, such definitions have been conducted in a purely empirical manner, with little theoretical input. So, the major objective is to develop strategy-theory-based variables for identifying strategic groups. 2) There is also ambiguity in how strategic groups emerge or evolve within an industry. So, another objective is to examine the emergence of groups in a specific industry setting. 3) We will generate and employ a sample of firms in the European airline industry. The industry offers a unique testing ground for such a project, given the transformations it has been through since the 1990s. 4) We will also attempt to employ appropriate developments in the techniques of cluster analysis that should improve on the methodologies of past research on this topic. 5) Significance: Past research has used an industrial organization or managerial cognition perspective to define and evaluate groups. The approach, however, will employ an approach grounded in the core concepts of strategy, thereby providing an alternative approach. The project also attempts to examine the emergence and evolution of groups by looking at exogenous shocks and endogenous managerial choice as determinants of group emergence. The research outcomes, the, are likely to significantly contribute to the debate as to how to define strategic groups and also to the emergence of groups within an industry. |
| Project Title: | Diversification and Institutional Diversity: A Cross-Country Investigation |
| Investigator(s): | Venkata Subban S, Chan CMK |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 01/2010 |
| Abstract: |
| The purpose of the research is to study patterns of firm-level divreisfication across different institutional contexts. Much of the research on diversification have looked at individual country contexts, and not necessarily an institutional perspective. A few studies that have attempted to examine the effect of different country contexts on firm dievsrification have used data sets from primarily developed, and some what homogenous country contexts. Though promising, this research has not progressed into a braoder data sets and other theoretical lenses. In particular, diversification research has looked at various rationales such as transcation costs, agency problems and strategic rationales for firm-level product market diversification. One important factor that may also infleunce diversification choices is the institutional context of a country. Institutional diversity has been well documented in the literature, but a study of how (and why) such variation in institutional context infleunces firm-level product market diversification. This study will attempt to apply a broader data set and institutional diversity to examine patterns of product market diversification across different institutional country contexts. |
| Researcher : Wan EW |
| Project Title: | Culture, Message Framing, Attitude Certainty, and Consumer Behaviour |
| Investigator(s): | Wan EW |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2008 |
| Completion Date: | 07/2010 |
| Abstract: |
| A large body of research has found that culture orientation has a significant impact on consumer judgments and decisions (e.g., Aaker and Sengupta 2000; Han and Shavitt 1994). Majority of the research along this line has focused on the impact of culture on consumers’ information processing strategy, product attitudes, and choices and decisions. For example, studies have shown that consumers from the Eastern culture tend to employ the additive strategy in which all pieces of relevant information are used to form the evaluation of the target product whereas consumers in the Western culture tend to use solely the diagnostic information (Aaker and Sengupta 2000). However, relatively little attention has been devoted to examine how culture orientation affects consumers’ attitude certainty. Attitude certainty, like other dimensions of attitude strength (see Petty and Krosnick 1995), plays an important role in determining how influential consumer attitudes are in guiding decisions. It has been found that attitudes held with higher certainty predict behaviors better (Berger and Mitchell 1989; Fazio and Zanna 1978), are stronger in resisting persuasive attack (Babad et al 1987; Petrocelli et al. 2007), and persist for longer time (Bassili 1996). Moreover, existing literature has clearly established attitude certainty as an independent construct from the attitude itself (e.g. Bassili 1996; Berger and Mitchell 1989; Fazio and Zanna 1978). For example, prior research has shown that attitude certainty can increase or decrease independent of any changes in attitude valence or extremity (e.g., Rucker and Petty 2004; Rydell, Hugenberg, and McConnell 2006; Tormala and Petty 2002). Hence, consumers with the same attitudes can have different level of certainty associated with the attitudes and act differently on behaviors related to the attitudes. The current research examines how consumers in the Eastern culture (e.g., Chinese) and Western culture (e.g., Americans) differ in their attitude certainty when they receive the same product information from an advertisement with different message framing. Literature on culture psychology has found that individuals in the Eastern culture have a dominant interdependent self-view. They define the self as interrelating to close others and hence emphasize relationships and social contexts. In contrast, those in the Western culture have a dominant independent self-view. They portray the self as differing from others and emphasize the uniqueness and self-sufficiency (Markus and Kitayama 1991; Singelis 1994; Triandis 1989). Hence it is more important for consumers in the Eastern culture to have their in-group members to endorse the product information compared with consumers in the Western culture who deem it more important to have their own endorsement on the product information. Therefore, we propose that when the Eastern and Western consumers are exposed to the same product information in an ad, they will form the equal level of attitudes. However, consumers in the Eastern culture will be more certain about their attitude toward the target product when the ad framing indicates that the product features demonstrated are selected by others in their group than when the ad framing shows that the product features are selected by themselves, and the reverse would be true for consumers in the Western culture. The impact of culture on attitude certainty will be reflected in consumer behaviors such as purchase intention, actual purchase behavior, and ability to resist attitude attack. We further propose that the mechanism underlies such effects is related to consumers’ perception of the correctness, validity, and completeness of the information they have reviewed. In summary, this project has the following research objectives: 1. Demonstrate the Effects: This research aims to reveal a hidden effect of culture orientation on attitude certainty depending on the information framing when consumers report no difference in their attitudes toward the target product. 2. Reveal the actual consequence on consumption behaviors: This research examines the consumption behavioral consequence of the impact of culture on attitude certainty. That is, how consumers from different cultures differ in their actual purchase behavior, the durability of their attitudes, and the ability to their attitudes in predicting the actual consumption behaviors. 3. Reveal the psychological mechanism in theory: This research also investigates the psychological processes and mechanisms underlying such differences. Perceived correctness, validity, and completeness are potential factors that mediate the effect of culture orientation and information framing on attitude certainty. |
| Project Title: | When Controlling Risk Risks Control: Communicating Health Risk Perceptions and Consumer Self-control |
| Investigator(s): | Wan EW |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2008 |
| Abstract: |
| 1) Test the proposition that coping with health risk perceptions consumes substantial regulatory resources and undermine subsequent health behaviors involving self-control (a depletion effect). 2) Examine the mechanisms for why coping with health risk perceptions depletes regulatory resources. Multiple factors such as self-positivity maintenance (motivational), affect regulation (affective), and thoughts suppression (cognitive) will be tested. 3) Examine the moderators of the depletion effect associated with health risk perceptions such as health domain relevance, culture thought systems. |
| Project Title: | The Association for Consumer Research Annual North American Conference 2009 Dealing with Anxiety: How Effective Health Messages Undermine Self-Control |
| Investigator(s): | Wan EW |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 10/2009 |
| Completion Date: | 10/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Agrawal N. and Wan E.W., Dealing with Anxiety: How Effective Health Messages Undermine Self-Control?, In: Margaret C. Campbell, Jeff Inman, Rik Pieters, Advances in Consumer Research. 2010, 37. |
| Agrawal N. and Wan E.W., Goals or Means: How Psychological Distance Influences Depletion Effects, In: Margaret C. Campbell, Jeff Inman, Rik Pieters, Advances in Consumer Research. 2010, 37. |
| Agrawal N. and Wan E.W., Regulating Risk or Risking Regulation? Construal Levels and Depletion Effects in the Processing of Health Messages, In: John Deighton, Journal of Consumer Research. Chicago, USA, 2009, 448-462. |
| Wan E.W., Rucker D.D., Tormala Z.L. and Clarkson J.J., The Effect of Regulatory Depletion on Attitude Certainty, In: Tülin Erdem, Journal of Marketing Research. 2010, 47: 531-541. |
| Researcher : Wang J |
| List of Research Outputs |
| Lau A.H.L., Lau H.S. and Wang J., Usefulness of Resale Price Maintenance under Different Levels of Sales-Effort Cost and System-Parameter Uncertainties, European Journal of Operational Research. 2010, 203: 513-525. |
| Lau A.H.L., Lau H.S. and Wang J., When Should a Manufacturer Share Truthful Manufacturing Cost Information with a Dominant Retailer?, European Journal of Operational Research . 2009, 197: 266-286. |
| Researcher : Wang T |
| Project Title: | What Determines Multinationals’ Location Decision of Regional Headquarters in China? |
| Investigator(s): | Wang T |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2009 |
| Completion Date: | 07/2010 |
| Abstract: |
| The organizational reform of multinational corporations (MNCs) brought by simultaneous globalization and localization challenges MNCs’ capabilities to control and coordinate subsidiaries (Bartlett and Ghoshal, 2002; Birkinshaw et al, 2006). To achieve both global integration and local responsiveness, MNCs have increasingly set up regional headquarters (RHQs) to manage their complex production and marketing networks from a distance (Lasserre, 1996; Yeung, Poon, and Perry, 2001). The prominence of these activities is increasingly noticeable in China, where a growing number of MNCs have established RHQs that coordinate information intelligence activities and implement regional strategies. According to a survey by the Fortune magazine, more than 92% of 40,000 surveyed MNCs have established or have plans to establish RHQs in China (Gong, 2002). This growing trend has been called the “headquarter economy tide” in China (People’s Daily, December 07, 2005). An emerging stream of literature has offered pioneering insights on the roles and functions, as well as the organization, structure and responsibilities of RHQs in the corporate hierarchy of MNCs (Birkinshaw et al, 2006; Dicken and Kirkpatrick, 1991; Dunning and Norman, 1987; Heenan, 1979; Ho, 1998; Lasserre, 1996; Yeung, Poon, and Perry, 2001). However, almost all previous studies are conducted in the context of developed economies. These studies alone are insufficient to explain the location behavior of RHQs in transition economies because it is believed that the complex institutional change in a transition period of an economy would constitute a great impact on the location consideration for MNCs (Yeung and Lin, 2003; Child and Tse, 2001). In the paper, we aim to advance our understanding about the determinants of MNCs’ RHQ location decision in China, the largest and most singular transition economy in the world. Specifically, this study aims to examine two objectives. First, we aim to investigate what are the determinants for MNCs’ RHQs location in China. Integrating the literature of financial geography and MNC location within the transitional context of China, we propose that path dependency, institutional support, and proximity to superior information are key considerations in MNCs’ RHQs location in China. The three sets of determinants take into account the MNCs’ legitimacy consideration, efficiency pursuit, and more importantly, the information-laden, socialistic market system of the location context— the transitional China. Second, we aim to delineate what different roles these location determinants play in affecting RHQs location in China. In particular, we contrast RHQs located in Beijing with those in Shanghai as these two cities account for more than 90% of RHQs established by the Fortune Global 500 companies in China (Ma and Delios, 2007; Zhao, 2005). Our purpose was not to exhaust variables that favor one city over the other, but (1) to empirically testify the predictive validity of our proposed location determinants, (2) to assess the central role of proximity to superior information, and (3) to unravel the idiosyncrasies of the transitional nature of China on the city level. We accomplish the two objectives using a large scale survey of MNCs RHQs in China. On the basis of a principal factor analysis, we identify the distinctive determinants that drive the RHQs location decision in China. We then select RHQs located in Beijing and Shanghai to perform a logistic regression to reveal the unique role each determinant plays in affecting location decisions. In all, this study seeks to validate, complement, and extend existing theories so as to gain a better understanding of RHQs location in China’s transition economy. |
| Project Title: | Assessing Positive and Negative Spillovers of Non-local Direct Investments in Chinese Cities: An Institutional-Based Model |
| Investigator(s): | Wang T, Tse DKC |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 10/2009 |
| Completion Date: | 07/2010 |
| Abstract: |
| 1) To comprehensively assess the spillovers of foreign investments in 287 Chinese cities over a 10-year period; 2) To contrast the nature and effects of spillovers by kinship-based and non-kinship based foreign investment (i.e. Hong Kong, Macau, and Taiwan versus other economies); 3) To investigate the salience of institutional mechanism that moderate FDI spillovers. |
| List of Research Outputs |
| Chen X., Zou H. and Wang T., How New Ventures Grow? Firm Capabilities, Growth Strategies and Performance, In: Donald R. Lehmann, International Journal of Research in Marketing. Amsterdam, The Netherlands, Elsevier, 2009, 26 (4): 294-303. |
| Researcher : Whitman JD |
| Project Title: | Asian Pacific Conference on International Accounting Issues Measuring Profitability in the Time of Comprephensive Income |
| Investigator(s): | Whitman JD |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 10/2001 |
| Abstract: |
| N/A |
| Researcher : Wong CH |
| List of Research Outputs |
| Chau M.C.L. and Wong C.H., Designing the User Interface and Functions of a Search Engine Development Tool, Decision Support Systems . 2010, 48: 369-382. |
| Chau M.C.L., Wong C.H., Zhou Y., Qin J. and Chen H., Evaluating the Use of Search Engine Development Tools in IT Education, Journal of the American Society for Information Science and Technology. 2010, 61: 288-299. |
| Researcher : Wu M |
| Project Title: | FROM EARNINGS MANAGEMENT INTO EARNIINGS MANIPULATION |
| Investigator(s): | Wu M |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 07/2007 |
| Completion Date: | 12/2009 |
| Abstract: |
| 1) To use net operating assets reported on the balance sheet as a measure of constraints on earnings management vs. GAAP violation. 2) To show that firms that are more constrained are more likely to severely violate GAAP and trigger SEC enforcement actions. 3) To confirm that earnings management constraints reinforce the previously known incentives for GAAP-violating actions. |
| Project Title: | Star Analysts Forecast on Earnings Restatement Firms |
| Investigator(s): | Wu M |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 10/2008 |
| Abstract: |
| In more than a decade, heightened capital market pressure has created additional incentives for firms to engage in earnings manipulation. Firms are under increasing pressure to maintain earnings momentum and hence market valuations (e.g., Barth, Elliot and Finn, 1999 and Myers and Skinner, 2002), and beat analyst targets (e.g., Burgstahler and Eames, 2001, DeGeorge, Patel and Zeckhauser, 1999, and Dechow, Richardson and Tuna, 2003). Interaction between companies and analysts is actually quite a subtle game. On one hand, firms have strong urge to beat or meet analysts forecast, especially those by star analysts and of investment banks with closer relationship (i.e., those who were firms’ underwriters), in order to avoid disappointing the stock market investors; on the other hand, analysts who follow the firms, especially those who are from investment banks with closer relationship, may “collude” with the firms so that they get more “accurate” forecast and reinstate deals underwritten by their investment banking arms. Hence the forecasts could be endogenous. To test such hypotheses could be difficult without direct evidence unless we know the true earnings. Restatement firms, which provide both reported earnings which were manipulated earlier and restated earnings which were later corrected and deemed true ones, allow testing those hypotheses possible. The purpose of this project is to investigate few motivations underlying companies who manipulated earnings and to examine analysts forecast endogeneity problem. Our objectives of the proposed project are (1) to demonstrate the pressure which U.S. companies usually confront from capital market, specifically, the market expectation on companies earnings performance. We will look into this issue in details from analysts forecast point of view and expect that those firms later restated their earnings and financial reports tend to have failed to beat or meet the market expectation had they not manipulated the earnings; (2) to prove the compensational and reputational incentives of managers to manipulate earnings; (3) to show the weakness of corporate governance which allows earnings manipulation; and (4) to explore the incentives of analysts’ (non-independent) forecast behavior. |
| Project Title: | 2009 Annual Meeting of the American Accounting Association The Quality of Financial Reporting in China |
| Investigator(s): | Wu M |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 08/2009 |
| Completion Date: | 08/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Wu M. and Wang X., The Quality of Financial Reporting in China , 2009 American Accounting Association Annual Conference. 2009. |
| Researcher : Xu D |
| Project Title: | The Interaction Effect of Firm-Level Diversification and Group-Level Diversification on Corporate Performance |
| Investigator(s): | Xu D |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 02/2008 |
| Completion Date: | 01/2010 |
| Abstract: |
| This study examines the interaction effect of firm-level diversification and group-level diversification on firm performance. Diversification is a long-lasting topic in strategic management. Empirical results on the relationship between firm diversification and firm performance in the past decades, mostly based on U.S. samples, have been rather mixed (Palich, Cardinal, & Miller, 2000). In recent years, there is a continued interest in the merit of diversification strategies in markets outside the U.S. (Wan & Hoskisson, 2003). It has been conjectured that diversification in emerging markets will bring institutional benefits to the firm (Li, Li, & Tan, 1998; Peng, Lee, & Wang, 2005). A separate research stream—business group diversification in emerging economies—has received even greater attention (Khanna & Palepu, 2000a, 2000b; Khanna & Rivkin, 2001, Kim, Hoskisson, & Wan, 2004). A central theme in the latter stream is that diversification through business groups is an effective strategy for filling “institutional voids” in emerging markets, and therefore will lead to higher performance (Khanna & Palepu, 1997). Despite a growing body of research in this area, a notable gap remains, which I aim to fill in this study. So far, no research has been able to examine both firm-level diversification and group-level diversification simultaneously. This deficiency leads to an interesting question: If both firm-level and group-level diversification can create value for firms, do these two strategies strengthen or weaken each other? It is highly likely that, while each of these two strategies has a positive effect on firm performance on its own, employing both strategies simultaneously may cause strategic redundancy. Thus this study attempts to examine these strategies simultaneously, with a focus on their interaction effect on firm performance. |
| Project Title: | Corporate Diversification, Group Diversification, and the Performance of Chinese Listed Firms |
| Investigator(s): | Xu D |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2008 |
| Completion Date: | 09/2010 |
| Abstract: |
| 1) Examine whether corporate diversification can bring additional benefits to a firm that is already affiliated to a diversified business group. 2) Examine whether business group diversification can create additional value to an affiliated firm when the firm's corporate diversification level is controlled for. 3) Examine the interaction effect of corporate diversification and group diversification on firm performance: How should a firm design its corporate level and group level diversification strategies simultaneously? |
| Project Title: | 2009 Academy of Management Annual Meeting Institutional Capital, Resource Capital, and the Ownership Structure of the Listed SOEs in China |
| Investigator(s): | Xu D |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 08/2009 |
| Completion Date: | 08/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Cui H. and Xu D., Controlling shareholder resources and listed firm performance: A network perspective, Academy of Management. 2009. |
| Gao Y., Xu D. and Pan Y., A real options perspective of ownership change in equity joint ventures, Academy of International Business. 2009. |
| Researcher : Yen BP |
| Project Title: | Modeling, Analysis and Evaluation of Website Design |
| Investigator(s): | Yen BP |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 04/2008 |
| Completion Date: | 03/2010 |
| Abstract: |
| Website design is critical to the success of e-commerce. However, the design of many website is not effective and thus draws little user satisfaction. Forrester Research showed that firms had lost approximately 50% of the potential sales on their websites because visitors could not find what they needed/wanted. Improved website design requires analysis of the nature of online business applications and key user requirements. The project focuses on integration of requirement analysis for Web applications, transformation to the application modeling, analysis of site performance, and improvement strategy on the information organization. The organization of product information for e-business on a Web site is similar to the shelf management for mortar-and-brick shops. However, the constraints and objectives for virtual shelf are very different from that of shop shelf, such as replenishment, space allocation, product accessibility, etc. By taking into account the major concerns in the performance of the shelf management, efficiency, utilization, and profitability are required in the tradeoff analysis. This evaluation focuses on the investigation of the modeling, evaluation and enhancement for electronic shelf management in e-commerce. By formulating the shelf structure as graphs, we aim at the accessibility of product information based on the organization of the Web pages to address the efficiency issue. The bottlenecks in the product information graph are identified. The tradeoffs between efficiency, utilization, and profitability are analyzed for the improvement guideline and strategy. In spite of the prevalence of e-commerce, both researchers and practitioners have been greatly challenged by such fundamental questions as “how to design a good website” and “how to improve an existing website design.” These questions are critical for firms interested in offering e-channels to serve customers, launching new services, or engaging in e-branding. The online transactions of HSBC Hong Kong increased by 34% in the first half of year 2005, showing a 32% growth from the same period in 2004. However, the design of many websites is far from being effective and often draws little satisfaction from users. To bridge the gap between designer’s expectation and the user’ perception, website designers need a methodology to examine the general design requirements and analyze essential user requirements. Effective website design is indispensable to the ultimate success of e-commerce and digital government. Considerable efforts have been undertaken to analyze, evaluate, and improve the design of different websites. Navigation guidance, assessment improvement models, and design guidelines are important website design issues common to most e-commerce applications. Navigation guidance provides visitors with optimal personalized directions to their targeted (interested) contents. The effectiveness of navigation guidance is dependent on key navigation patterns and analysis of website structure. Assessment and improvement models are crucial building blocks for sustainable effective Web applications. The performance of evaluation criteria is profoundly affected by website structure. In addition to key human factors, analysis and evaluation of website structure is critical cornerstone for design guideline. Central to navigation guidance, assessment improvement models, and design guidelines are systematic procedures and analytical models that support designers’ analyzing, evaluating and enhancing website designs according to key user requirements. The overall objective of the proposed research is to develop and empirically validate a streamlined process for seamless integration of Web design, evaluation and enhancement. Specifically, we will address important aspects of the modeling, analysis and evolutionary improvement of individual Web sites. The main thrusts of the project include adaptive Web design, dynamic Web site evaluation, and proactive Web site enhancement, described as follows. - Evolutionary Web enhancement: The design of a Web site is a continual endeavor rather than an on-off effort. By and large, a Web site supports and facilitates individuals’ search and retrieval of target information. A logical and intuitive way to improve Web site design should be incorporating the perspectives from both designers and users to examine site structure property and log information. - Web site evaluation: Typically, a Web site encompasses intrinsic property (e.g., structural characteristics) as well as extrinsic property (e.g., documented user browsing/navigation behaviors). In this vein, evaluations of individual designs should proceed along these fundamental dimensions. - Adaptive Web design: A Web site can be conceptualized and modeled as a fixed and finite graph-based structure. In general, a Web site is designed for some intended purposes explicitly or implicitly defined. Hence, the design quality of a site requires essential context knowledge and an adequate modeling framework, the absence of which will impede design enhancements based on prominent information access/search patterns documented. Central to the targeted streamlined process for Web design, evaluation and enhancement is an integrated approach for modeling, analyzing and augmenting the design quality of individual Web sites. Structurally, both accessibility and access frequency of individual pages are important to Web site design and need to be balanced. The main tasks to be addressed in the proposed project are as follows. - Development of a conceptual network model: This network model provides an overall Web site design framework whose instances are configured based on individual design constraints and criteria. From a modeling perspective, the model entails the schema for describing the design of individual Web sites. In addition, this meta model provides a basis for design analysis and improvement. - Accessibility models: Based on the conceptual network model described, we develop multiple accessibility models embracing both structural and behavioral properties. We will evaluate the quality of different Web site designs empirically. Included in our evaluations are multiple and conceivably complementary accessibility measures that indicate the ease of access to individual pages or clusters of pages. - Evolutionary improvement: We augment the design of a Web site using key analysis results to balance the popularity and the accessibility of individual or clusters of pages. We will also further analyze and evaluate the effect of structural changes suggested by key analysis results; e.g., relocated pages and readjusted hyperlinks or paths. |
| Project Title: | Analytical Modeling, Evaluation and Enhancement of Website Design |
| Investigator(s): | Yen BP |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 10/2009 |
| Abstract: |
| 1) Conceptual network model. The network model provides an overall website design framework that has been configured based on constraints and criteria that are derived from the design requirements. From a modeling perspective, the model entails the schema for describing and verifying the design of individual websites; 2) Analytical evaluation Criteria. The evaluation includes both static site properties (e.g. structure analysis) and dynamic site characteristics (e.g. usage assessment). The bottleneck identification and characterization of pages based on accessibility, popularity and profitability (or impact) provide the panorama for site assessment and improvement; 3) Evolutionary enhancement strategy. Trade-off analysis among efficiency, utilization, and profitability serves as the building block for improvement. The improvement strategy is also based on the page evolution policy, portfolio of page categorization, and the volatile site goals; 4) An integrated framework to streamline the proposed network model, evaluation method, and improvement strategy to systematically design, assess, and enhance the websites. |
| List of Research Outputs |
| Yen B.P., Associate Editor, Information and Management. 2009. |
| Yen B.P., Editorial Board, Asian Case Research Journal. 2010. |
| Yen B.P., International Journal of Applied Logistics. 2010. |
| Yen B.P., Making RFID work: The World's largest University Library RFID Implementation, Center of Asia Business Cases, The University of Hong Kong, 2009. |
| Yen B.P. and Huang M., Tug of war between the retailers and consumers: the phenomenon of group purchase in China, The 9th International Conference on Electronic Business (ICEB). 2009. |
| Researcher : Yeung JCK |
| List of Research Outputs |
| Lam S.S.K. and Yeung J.C.K., Staff Localization and Environmental Uncertainty on Firm Performance in China, Asia Pacific Journal of Management. 2009, In Press. |
| Researcher : Yim BCK |
| Project Title: | Effect of Coalignment of Service Strategy on Service Performance Metrics and Firm Performance Outcomes: An Integrative and Contingency Approach |
| Investigator(s): | Yim BCK, Tse DKC |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2007 |
| Abstract: |
| Identify the key dimensions of service strategy from an integrative perspective involving services marketing, service human resource management (HRM), and service operations. Identify key service performance metrics that mediate the relationships between service strategy and firm performance outcomes. Examine the service performance implications of strategic fit among services marketing, service HRM, and service operations strategies. Examine structural relationships among service strategy, service performance metrics and firm performance outcomes from a contingency perspective by including moderating roles of characteristics of services, service firms, and service industries. |
| Project Title: | Research Output Prize |
| Investigator(s): | Yim BCK, Tse DKC |
| Department: | School of Business |
| Source(s) of Funding: | Research Output Prize (in Faculty) |
| Start Date: | 12/2009 |
| Abstract: |
| To identify and recognize the best research outputs in different faculties. |
| Researcher : Zhao H |
| Project Title: | 2009 Financial Management Association International(FMA) Annual Meeting The Relation Between Physical and Risk-Neutral Cumulants |
| Investigator(s): | Zhao H |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 10/2009 |
| Completion Date: | 10/2009 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Chang E.C., Zhang J. and Zhao H., The Relation Between Physical and Risk-Neutral Cumulants, 2009 Financial Management Association (FMA) Annual Meeting, October 21-24, 2009, Reno, Nevada, U.S.A. 2009. |
| Zhang J., Zhao H. and Chang E.C., Equilibrium Asset And Option Pricing Under Jump Diffusion, In: Dilip B. Madan, Mathematical Finance. 2010. |
| Zhang J., Zhao H. and Chang E.C., Equilibrium Asset and Option Pricing under Jump Diffusion, Invited lecture at Risk Management Institute & Department of Mathematics in National University of Singapore, Singapore, 7 April. 2010. |
| Zhang J., Zhao H. and Chang E.C., The Relation Between Physical and Risk-neutral Cumulant, Invited presentation at the department of finance and business economics, Macau University, October, 2009. 2010. |
| Researcher : Zheng L |
| Project Title: | The valuation impact of reconciling pro forma earnings to GAAP earnings |
| Investigator(s): | Zheng L, Zhang H |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 09/2006 |
| Completion Date: | 08/2009 |
| Abstract: |
| To investigate whether there is any mis-pricing associated with pro forma earnings disclosure; to investigate whether voluntary reconciliations between GAAP earnings and pro forma earnings reduce the extent of the mis-pricing associated with pro forma earnings; to investigate whether the introduction of Regulation G, which mandates that companies quantitatively reconcile pro forma earnings with GAAP earnings, leads to more accurate security pricing |
| Project Title: | Short Sale Constraints, Asymmetric Price Movements, and Skewness: Evidence from Hong Kong |
| Investigator(s): | Zheng L |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 10/2008 |
| Abstract: |
| 1) We aim to identify more direct evidence regarding whether pessimistic opinions are kept out of the market by high short sale costs during the price discovery process. Specifically, built on the model in Xu (2007), we hypothesize price reactions are stronger to good news than to bad news when investors who become more pessimistic are short sale constrained. Our test is designed to suggest how the mispricing arises in the first place. 2) We offer a link between the asymmetry of price reaction to information (i.e., price convexity) under short sale constraints and the skewness of stock returns. The price convexity also has implications on the joint dynamics of returns and skewness under short sale constraints. The evidence contributes to our understanding of the determinants of stock return skewness. 3) Diamond and Verrecchia (1987) argue that short sale constraints reduce the speed of price adjustment to private information, especially to bad news. Similar to Bris, Goetzmann and Zhu (2007), we employ the recently developed measures of market efficiency (see Morck, Yeung, and Yu (2002); Hou and Moskowitz (2004)) to examine the effect of short sale constraints on the amount of private information incorporated in the price (especially negative news) and the speed of the price adjustment. The Hong Kong setting has the advantage over the international setting in the sense that it is free from the complications of the differences of country-specific characteristics. |
| Project Title: | Do institutions benefit from price runs? Some puzzling evidence |
| Investigator(s): | Zheng L |
| Department: | School of Business |
| Source(s) of Funding: | Small Project Funding |
| Start Date: | 09/2009 |
| Abstract: |
| This project examines the trading patterns and profitability of different types of investors around major waves of stock prices. Instead of identifying specific large value-relevant events, we simply rank stocks based on their stock performance to separate stocks into winners versus losers. We examine which types of investors trade in the right direction prior to the major price run to achieve desired profit. The evidence helps answer questions such as whether institutional investors achieve superior performance and whether insiders and institutional investors trade at the expense of small individual investors. The timing of trading activities could also shed light on the source of the superior investment performance: advantage from better “private information” or advantage from better fundamental stock picking skills. |
| Project Title: | CAAA Annual Conference 2010 Does Mandatory IFRS Adoption Impact Audit Fees? Theory and Evidence |
| Investigator(s): | Zheng L |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 05/2010 |
| Completion Date: | 05/2010 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Liu X., Zheng L. and Kim J.-.B., Does Mandatory IFRS Adoption Impact Audit Fees? Theory and Evidence, Canadian Academic Accounting Association annual meeting. 2010. |
| Researcher : Zhou KZ |
| Project Title: | Resolving Tensions and Disbelief in Trust Research: Calculative versus Relational Trust in Inter-Organizational Exchanges |
| Investigator(s): | Zhou KZ |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 02/2010 |
| Abstract: |
| Trust is a central focus for works examining cooperative inter-organizational exchanges. As a collective orientation toward the exchange that is based on honesty, predictability, and goodwill (Zaheer and Harris, 2005; McEvily and Tortoriello, 2007), trust fosters perceptions of stability, enhances bilateral coordination, and limits performance losses that would otherwise occur from self-interested and opportunistic parties. Empirical works confirm that trust and its related normative conventions decrease transaction costs (Larson 1992; Artz and Brush 2000), improve satisfaction with exchange performance (Poppo and Zenger 2002), and improve knowledge transfer (Li, Poppo, and Zhou, 2009; Szulanski, Gappetta and Jensen 2004). Despite the attention given to inter-organizational trust in the management literature (for a recent review see Zaheer and Harris, 2005), hotly debated is which type of trust, calculative versus relational, characterizes inter-firm exchanges. For transaction cost economics, trust in inter-organizational exchanges is inherently calculative, based on the calculation of benefits and costs associated with governance devices and structural safeguards (Williamson, 1993; see also Parkhe, 1993). In contrast, a social perspective emphasizes that trust can be non-calculative and relational, which stems from the goodwill of others, one’s honesty, and good-faith efforts (Barney and Hansen, 1994; Ring, 1996; Bromily and Harris, 2006; Zaheer and Harris, 2005). The social perspective further advances that relational trust represents a deep aspect of social relations and thereby can govern exchanges more effectively than calculative trust, whereas Williamson (1993) dismisses this position, countering that such forms of trust are best reserved for personal (non-business) relations. However, a particularly glaring gap is that empirical works measure trust as a collective set of beliefs and/or behaviors and therefore falls short of isolating the benefits of trust derived from economic calculation versus those derived from social relationships (e.g. Zaheer et al., 1998; Szulanski et al., 2004; Poppo, Zhou, and Ryu, 2008, 2008). In this project, we aim to examine calculative versus relational trust in buyer-supplier exchanges in China, with the following research questions and objectives: 1) What are the performance consequences of calculative and relational trust? We will investigate which type of trust, calculative or relational, have a stronger impact on exchange performance. 2) What are the significant drivers of calculative and relational trust? We will examine exchange- and organizational-level drivers to understand what lead to calculative versus relational trust in emerging economies. 3) What are the contingent conditions of calculative and relational trust? We will study the potential moderating effects of exchange characteristics and environmental factors on the value of calculative and relational trust. |
| Project Title: | The 2010 IACMR Conference Resolving Tensions and Disbelief in Trust Research: Calculative versus Relational Trust in Inter-Organizational Exchanges |
| Investigator(s): | Zhou KZ |
| Department: | School of Business |
| Source(s) of Funding: | URC/CRCG - Conference Grants for Teaching Staff |
| Start Date: | 06/2010 |
| Completion Date: | 06/2010 |
| Abstract: |
| N/A |
| List of Research Outputs |
| Bao Y., Fong E. and Zhou K.Z., Strategic Consensus and Firm Performance: Beyond Management Teams, Academy of Management 2009. |
| Ju M., Zhou K.Z. and Gao Y., Performance Implications of Marketing, Technological, and Production Capabilities: An Institutional Perspective, Academy of International Business . 2010. |
| Li J.J., Poppo L. and Zhou K.Z., Social Capital, Contractual Arrangement, and Local Knowledge Acquisition by International Subsidiaries, Strategic Management Journal. 2010, 31: 349–370. |
| Poppo L., Zhou K.Z. and Li J.J., Resolving Tensions and Disbelief in Trust Research: Calculative versus Relational Trust in Inter-Organizational Exchanges, International Association of Chinese Management Research. 2010. |
| Sheng S., Zhou K.Z. and Li J.J., Is More Knowledge Always Better? The Effect of Knowledge Breadth and Depth on New Product Performance, Summer American Marketing Association . 2009. |
| Zhou K.Z., Associate Editor, Asia Pacific Journal of Management. 2010. |
| Zhou K.Z., Governance, Fairness, and Performance in Interorganizational Exchanges: The Moderating Effects of Socialization and Monitoring , Hong Kong University of Science and Technology. 2010. |
| Zhou K.Z., Governance, Fairness, and Performance in Interorganizational Exchanges: The Moderating Effects of Socialization and Monitoring , Wuhan University. 2010. |
| Zhou K.Z. and Li B., How Strategic Orientation Influences the Building of Dynamic Capability in Emerging Economies, Journal of Business Research. 2010, 63: 224-231. |
| Zhou K.Z. and Wu F., Technology Capability, Strategic Flexibility, and Product Innovation, Strategic Management Journal. 2010, 31: 547–561. |
| Zhou K.Z., The Evolving Role of Managerial Ties and Customer Orientation in China, Shanghai Jitong University. 2010. |
| Researcher : Zhou W |
| Project Title: | Horizontal mergers among heterogeneous firms |
| Investigator(s): | Zhou W |
| Department: | School of Business |
| Source(s) of Funding: | General Research Fund (GRF) |
| Start Date: | 01/2007 |
| Completion Date: | 12/2009 |
| Abstract: |
| Economic analyses of mergers attempt to understand why mergers occur and what impact they have on the economy. A majority of existing models assume that single mergers take place, where participation is exogenous and non-participating firms remain independent. In other words, the merger structure (i.e. who merges with whom) is imposed from outside without any explanation; firms do not have the freedom to choose their merger partners. While important insights have been gained from such an approach, the assumption of an exogenous merger structure is obviously far from realistic. Individual firms should be able to freely choose their own merger partners and, as a result, the merger structure will be endogenously determined. Economists have recently started to take this more realistic approach. Following this new trend, we propose to study endogenous mergers with the following objectives. First, we would like to find a new way to model endogenous mergers. We think that the few existing models are either too restrictive in term of firms’ number or their decision choices, or too complicated to yield any definite merger structure or clear intuition. In our model, we would like to have an arbitrary number of firms that can freely choose whether, when and with whom to merge. At the same time, our model should be simple enough so that the merger equilibrium, ideally a unique one, can be clearly characterized. Second, we want to characterize the equilibrium merger structure. The literature so far has mainly focused on identical firms. As a result, the merger structure is characterized only by merger size. It is silent on who joins mergers, who remain independent, and how firms coordinate their choices. In reality, however, firms are often different in one way or another. Given the unique identity of each firm, it is important to investigate which firms tend to achieve the largest synergy and thus merge with one another. The conclusions are not only interesting theoretically, but also testable empirically. Third, we would like to study the interaction between mergers, in particular, the possibility that strategic considerations may lead to merger waves. Empirically, it has been found that mergers consistently occur in waves in the past century, but theoretically, economists have yet to find a model in which merger waves emerge as an equilibrium phenomenon. Last but not least, we want to investigate the impact of endogenous mergers on welfare. Economists are concerned about the possible anticompetitive effects of mergers. Recent economic studies (both theoretical and empirical) have emphasized the need to weigh the gain in production efficiency against consumer harm due to increased market power. In exogenous mergers, whether or not a merger improves social welfare depends on the merger size, which is exogenously determined. This indefiniteness is absent in endogenous mergers since merger size is determined from inside the model. |
| Project Title: | Mergers under cost uncertainty |
| Investigator(s): | Zhou W |
| Department: | School of Business |
| Source(s) of Funding: | Seed Funding Programme for Basic Research |
| Start Date: | 01/2008 |
| Completion Date: | 07/2010 |
| Abstract: |
| In economics, mergers are typically studied in a deterministic environment. In real life, however, merger decisions are often made when there is some uncertainty about the business environment. Profits may be uncertain because, for example, firms face future demand or supply shocks or because their investments in technologies have stochastic outcome. In this project, I will study exogenous mergers under cost uncertainty. Because of the uncertainty, firms’ technologies are necessarily heterogeneous when the costs are realized. When firms merge, they will allocate their total production among the members in an optimal way, which should give them a cost advantage over non-merged firms. By this intuition, mergers under cost uncertainty should be more profitable than those with deterministic costs, thus providing a solution to the puzzling finding made by Salant, et al (1983) that a merger is profitable only when more than 80% of the firms have participated in the merger. Once the profitability of mergers under cost uncertainty is thoroughly investigated, I will further study the driving force of the mergers. In addition to the uncertainty, there is also the issue of information because, by the time the costs are realized, firms may or may not know their competitors’ costs, which lead to a setting of private or public information. I would like to investigate the role of uncertainty and information asymmetry in determining merger incentives. |
| List of Research Outputs |
| Zhou W., Innovation, imitation and competition, The B.E. Journal of Economic Analysis & Policy. 2009, Vol. 9: No. 1, Article 27.. |
| Researcher : Zhou X |
| List of Research Outputs |
| Zhou X. and Schriesheim C.H.E.T., Supervisor-Subordinate Agreement on Leader-Member Exchange (LMX) Quality: Review and Testable Propositions. , In: Mary Uhl-Bien, The Leadership Quarterly. Elsevier, 2009, 20: 920-932. |