Effects of explanations communicated in announcements of alleged labor abuses on valuation of a firm’s stock

2017 ◽  
Vol 22 (1) ◽  
pp. 93-112 ◽  
Author(s):  
Joseph Patrick Daly ◽  
Richard W. Pouder ◽  
Chris R. McNeil
Keyword(s):  
Negative Impact ◽  
Negative Influence ◽  
Share Price ◽  
General Category ◽  
Content Type ◽  
Fairness Judgments ◽  
Study Methodology ◽  
The Impact ◽  
Practical Implications ◽  
Labor Abuses

Purpose The purpose of this paper is to gauge the impact of the following on the share price of a firm that has allegedly committed labor abuses: the allegation itself, explanations (justifications and excuses) offered by the company spokesperson, and denials of responsibility for the alleged abuse. Design/methodology/approach The study uses archival data and an event study methodology. Findings Labor abuse allegations have a negative impact on the firm’s share price. Allegations that are accompanied by an explanation (a justification or excuse) have a less negative impact than those that are not accompanied by an explanation. Denials of responsibility have a negative influence on the share price. Practical implications If managers want to avoid a negative hit on the share price from an allegation of wrongdoing, they should provide an explanation (a justification or excuse) and avoid the use of denials. Originality/value Prior research has shown a negative impact from several types of labor abuse. This study extends prior research by showing a negative impact for all forms of labor abuse as a general category; it also extends findings from lab research on the impact of explanations on fairness judgments to a new context and a new dependent variable (the financial performance of the firm), which is on an organizational scale. It adds to the extreme paucity of empirical findings relative to the impact of denials and also adds to a small but growing literature on fairness judgments by third parties and their consequences.

To be or not to be equal: the impact of pride on brands associated with dissociative out-groups

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yue Lu ◽  
Zhanqing Wang ◽  
Defeng Yang ◽  
Nakaya Kakuda
Keyword(s):  
Design Methodology ◽  
Negative Impact ◽  
Important Determinant ◽  
Social Groups ◽  
Underlying Mechanism ◽  
Brand Attitudes ◽  
Content Type ◽  
The Impact ◽  
Authentic Pride ◽  
Practical Implications

Purpose Brands are increasingly reflecting social values, and many brands have begun to embrace equality and inclusivity as a marketing strategy. Accordingly, consumers are increasingly being exposed to brands associated with different social groups. This paper aims to examine how consumers who have experienced pride respond to brands associated with dissociative out-groups. Design/methodology/approach Four studies were conducted. Study 1 tested the basic effect of how the experience of different facets of pride affects consumers’ brand attitudes toward a brand associated with a dissociative out-group. Studies 2 and 3 examined the underlying mechanism of consumers’ psychological endorsement of egalitarianism using both mediation and moderation approaches. Study 4 derived implications of our findings for marketers. Findings The results show that consumers respond differently to a brand associated with a dissociative out-group based on the facets of pride they experience. When consumers experience authentic (vs hubristic) pride, they exhibit a more favorable attitude toward the brand associated with the dissociative out-group. This is because authentic (vs hubristic) pride increases consumers’ psychological endorsement of egalitarianism, which enhances consumers’ brand attitudes toward the brand associated with the dissociative out-group. Practical implications The findings suggest that brand managers should think about ways to elicit consumers’ authentic pride to minimize the potential backlash from consumers when promoting equality and inclusivity in their brand communications, particularly when such communications contain cues of dissociative out-groups. Originality/value This paper contributes to the branding literature by identifying pride as an important determinant that can help brands overcome the negative impact of dissociative out-groups on consumers’ brand reactions, enriches the literature on pride by documenting a novel effect of the two facets of pride on consumer behavior and extends the literature of egalitarianism by demonstrating pride as a driver of consumers’ psychological endorsement of egalitarianism.

How does mobile social media affect knowledge sharing under the “Guanxi” system?

2020 ◽  
Vol 24 (6) ◽  
pp. 1343-1367 ◽  
Author(s):  
Xi Zhang ◽  
Jiaxin Tang ◽  
Xin Wei ◽  
Minghui Yi ◽  
Patricia Ordóñez
Keyword(s):  
Social Media ◽  
Knowledge Sharing ◽  
New Product Development ◽  
Negative Impact ◽  
Negative Influence ◽  
Content Type ◽  
Close Cooperation ◽  
The One ◽  
Explicit And Implicit Knowledge ◽  
The Impact

Purpose The purpose of this paper is to explore the impact of mobile social media functions on explicit and implicit knowledge sharing under the “Guanxi” system based on the framework of stimulus–organism–response (SOR). Design/methodology/approach Combined with Guanxi theory, this paper designs an experiment to collect data from the new product development (NPD) teams. Findings Interestingly, the results show that the effect of social media communication function on employees is greater than the impact of collaboration on employees. Specifically, on the one hand, the more employees communicate in social media, the better their feelings will be, the less they will share knowledge. On the other hand, the collaboration function has a significantly negative impact on the psychological factors of employees. Excessively close cooperation and contact may instead create a contradiction between the employees, which is not conducive to the occurrence of knowledge sharing. Originality/value This paper extends SOR framework by combining Guanxi theory to examine the relationship between social media functions and knowledge sharing behavior (KSB). In practical, companies should pay attention to the frequency of employee using social media when it is introduced for NPD teams to control the negative influence of social media functions on employee KSB.

The bidirectional relationship between ESG performance and earnings management – empirical evidence from Germany

2019 ◽  
Vol 10 (4) ◽  
pp. 322-338 ◽  
Author(s):  
Patrick Velte
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Negative Impact ◽  
Social Performance ◽  
Negative Influence ◽  
Content Type ◽  
Thomson Reuters ◽  
Tier System ◽  
Bidirectional Relationship ◽  
The Impact

Purpose This study aims to focus on environmental, social and governance (ESG) performance as a whole and individually in its three pillars and their influence on earnings management. Design/methodology/approach Companies listed on the German Prime Standard (DAX30, TecDAX and MDAX) for the business years 2011-2017 (548 firm-year observations) are included in the empirical quantitative study. A correlation and regression analysis is conducted to analyze the impact of ESG performance as determined by the Asset4 database of Thomson Reuters on accruals-based earnings management (AEM) and real earnings management (REM). Findings ESG performance has a negative influence on AEM but not on REM. Moreover, by dividing the three different factors of ESG performance, governance performance has the strongest negative impact on AEM in comparison to environmental and social performance. This study also suggests a bidirectional relationship between ESG performance and earnings management. Originality/value The analysis makes a key contribution to research as the link between ESG performance and their three components and earnings management are analyzed for the German two-tier system for the first time. Corporate practice, regulators and researchers should recognize that ESG performance and financial reporting should be discussed together.

scholarly journals Tensions and territoriality: the dark side of servitization

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Scott Wagstaff ◽  
Jamie Burton ◽  
Judith Zolkiewski
Keyword(s):  
Negative Impact ◽  
Dark Side ◽  
Management Support ◽  
Structured Interviews ◽  
Supplier Relationships ◽  
Content Type ◽  
Strategic Intent ◽  
Management Commitment ◽  
The Impact ◽  
Practical Implications

Purpose This paper focusses on the darker side of the dynamics of servitization by exploring the tensions and territoriality that emerge between manufacturers and customers during the servitization process in the oil industry. Design/methodology/approach The Delphi method is used to explore the perspectives of three management tiers in oil organisations and the manufacturers who work with them. The views of these managers were synthesized over three iterations: semi-structured interviews, a questionnaire and resolution/explanation, where consensus was not obtained. Findings The findings of the study highlight perceptions of change, resulting tensions and territoriality and the impact of management commitment, resources and strategy. They reveal significant differences between customers and their suppliers and different management levels and highlight territorial behaviour and the negative impact this has on buyer supplier relationships during the implementation of servitization. Research limitations/implications Further research is required to explore why there is a variation in understanding and commitment at different managerial levels and the causes of tensions and territoriality. Practical implications Servitization is not a “quick fix” and management support is essential. A fundamental element of this planning is to anticipate and plan for tensions and territoriality caused by the disruption servitization creates. Originality/value The research provides empirical evidence of tensions and territoriality relating to servitization that potentially can damage supplier–buyer relationships and suggest that there is a darker side to servitization. It also shows that differences in strategic intent across organizations and between different managerial layers impedes to servitization efforts.

Forecasting the fiber penetration based on copper access regulation

Info ◽  
2014 ◽  
Vol 16 (1) ◽  
pp. 17-31
Author(s):  
François Jeanjean
Keyword(s):  
Negative Impact ◽  
Logistic Function ◽  
Point Of View ◽  
Cable Modem ◽  
Broadband Access ◽  
Content Type ◽  
Access Regulation ◽  
Access Charges ◽  
The Impact ◽  
Practical Implications

Purpose – This paper aims to investigate the impact of copper access regulation on broadband household adoption for each technology (xDSL on copper infrastructure, FTTx on fiber infrastructure and cable modem). It provides a forecast of the penetration rate of broadband access for each technology (copper xDSL, fiber, FTTx and cable modem) through 2020. Design/methodology/approach – This paper uses an empirical approach using a dataset covering 15 European countries. The dynamic of the adoption path is modeled by a logistic function. Copper access regulation is measured by two variables: copper access charge and copper wholesale access share, i.e. the ratio of copper wholesale access provided by the incumbent to alternative operators out of the total number of copper accesses. Findings – This paper shows that tough copper access regulation has a negative impact on fiber and cable modem adoption. Low copper prices decrease consumer adoption of other technologies. This reduces their profitability and thus the incentives to invest in alternative platforms. Practical implications – This paper highlights that an increase in copper access charges or a decrease in copper wholesale access shares could help to achieve the objectives of the Digital Agenda for Europe. Originality/value – This paper provides an empirical evidence of the impact of the copper access regulation on the fiber and ultra-fast broadband adoption from a dynamic point of view.

Goodwill hunting

2019 ◽  
Vol 37 (5) ◽  
pp. 597-609 ◽  
Author(s):  
Lucy Cradduck ◽  
Clive M.J. Warren
Keyword(s):  
Negative Impact ◽  
Academic Discourse ◽  
Property Value ◽  
Real Property ◽  
Content Type ◽  
Mixed Methods Approach ◽  
Retirement Village ◽  
Valuation Process ◽  
The Impact ◽  
Practical Implications

Purpose The purpose of this paper is to add to the academic discourse by developing a methodology by which a block of land’s goodwill, or lack of goodwill, can be factored into its valuation. Design/methodology/approach The research was undertaken utilising a mixed-methods approach, which involved doctrinal research, together with qualitative and quantitative analysis of the impact of neighbourhood disputes on real property value. The disputes engaged with for exemplar purposes were those of tree disputes resolved by QCAT order. Findings A dispute can adversely affect a property’s goodwill, which can impact both its saleability and value. Research limitations/implications Due to the sensitive nature of the valuation process and the potential negative impact that any identification of a property may have on its value, it was not appropriate to identify any properties specifically or the area in which these are located. Further, as regards the available details of disputes, the authors were only able to engage with disputes for which an order existed. Practical implications The methodology developed can be applied to other real property interests, for example, lots in freehold retirement village complexes or those within other strata title schemes of either residential or commercial use. Social implications As the number of neighbourhood disputes throughout Australia grows, addressing the impact that a dispute has for property value is a concern relevant to all valuers and owners. Originality/value The authors add to the academic discourse by developing a methodology by which a property’s goodwill, or lack of goodwill, can be factored into its valuation.

scholarly journals Business intelligence systems and operational capability: an empirical analysis of high-tech sectors

2020 ◽  
Vol 120 (6) ◽  
pp. 1195-1215
Author(s):  
L.M. Daphne Yiu ◽  
Andy C.L. Yeung ◽  
Abe P.L. Jong
Keyword(s):  
Firm Size ◽  
Business Intelligence ◽  
Contextual Factors ◽  
High Tech ◽  
Content Type ◽  
Operational Capability ◽  
Business Intelligence Systems ◽  
Study Methodology ◽  
The Impact ◽  
Practical Implications

PurposeIn this research, we empirically examine the impact of Business Intelligence (BI) systems on operational capability in high-tech sectors. We also seek to understand the contextual factors that facilitate the adoption of BI systems.Design/methodology/approachWe adopt Propensity Score Matching (PSM) and event study methodology, and analyze the financial data for a sample of 144 US firms which adopted BI systems from 2005–2014, and compare them to control firms without BI systems.FindingsWe find that the implementation of BI systems leads to higher operational capability, particularly for large high-tech firms with high technology intensity. We further show that technology intensity and firm size are important contextual factors for firms to reap the benefits of BI systems.Practical implicationsWe demonstrate how benefits from the adoption of BI systems are likely to be strengthened. The benefits of BI systems depend on firms' technology intensity and firm size of high-tech firms. Accessing relevant and timely reports for decision-making is particularly important in the highly dynamic, volatile and competitive high-tech sectors.Originality/valueWe contribute to the literature by providing empirical evidence that the adoption of BI systems can improve firms' operational capability and show that technology intensity and firm size are important contextual factors for firms to reap the benefits of BI systems. We advance the understanding regarding the contextual factors in which firms are more likely to gain additional benefits from their adoptions of BI systems.

scholarly journals An investigation of the impact of 2017 business rates revaluation on independent high street retailers in the north of England

2019 ◽  
Vol 37 (3) ◽  
pp. 241-254 ◽  
Author(s):  
Paul Michael Greenhalgh ◽  
Lynn Johnson ◽  
Victoria Huntley
Keyword(s):  
Design Methodology ◽  
Negative Impact ◽  
Content Type ◽  
The North ◽  
Alternative Perspective ◽  
High Street ◽  
The Impact ◽  
Practical Implications ◽  
Orthodox View ◽  
Market Towns

Purpose Many national retailers have complained about increases in business rates tax bills since the 2017 revaluation. What impact has the 2017 business rates revaluation had on independent high street retailers in market towns in the north of England? The paper aims to discuss these issues. Design/methodology/approach The study uses Valuation Office Agency rating list data to determine rateable value and business rates payable for independent high street retailers in eight northern market towns either side of the 2017 rating revaluation. The data were analysed using business rates matrices to reveal the impact of the new rating list on independent retailers in the eight locations. Findings Analysis reveals that the majority of independent retailers in the northern market towns sampled have experienced reductions in both the rateable value of their premises and business rates payable. Increase in the rates relief threshold has extended relief to almost half of the independent retailers in the study, most of whom receive 100 per cent relief. Practical implications Charity shops receive at least 80 per cent rates relief which means they are able to afford to pay higher rents. This “sets the tone” for landlords setting market rents in that location which are then used as comparable evidence by the VOA when determining rateable values at revaluation further polarising the gap between rate payers and those to are exempt. Originality/value Focussing on independent retailers on high streets in markets towns in north of England, this study provides an alternative perspective to the orthodox view of business rates revaluations having a negative impact on retailers.

scholarly journals The impact of social influence on the perceived helpfulness of online consumer reviews

2018 ◽  
Vol 52 (3/4) ◽  
pp. 619-636 ◽  
Author(s):  
Hans Risselada ◽  
Lisette de Vries ◽  
Mariska Verstappen
Keyword(s):  
Social Influence ◽  
Design Methodology ◽  
Negative Impact ◽  
Positive Impact ◽  
Content Type ◽  
Online Consumer Reviews ◽  
Online Consumer ◽  
The Impact ◽  
Practical Implications ◽  
Perceived Helpfulness

Purpose This study aims to study to what extent the helpfulness votes others attach to a review affect a consumer’s perceived helpfulness of that review. In addition, the purpose of this study is to investigate whether this social influence moderates the relationships among several content presentation factors and perceived helpfulness. Design/methodology/approach A choice-based conjoint experiment was carried out in which 201 respondents evaluated different reviews and chose the review they perceive as most helpful. Findings Consumers perceive reviews as more (less) helpful in the presence of clearly valenced positive (negative) helpfulness votes. In addition, helpfulness votes of others diminish the positive impact of structure and the negative impact of spelling errors. Research limitations/implications The experimental setup may limit the external validity of the study. Practical implications Providing a helpfulness button gives firms an instrument to offer content that consumers perceive as more useful and to exert some influence on the effects of content presentation factors on the review’s helpfulness. Social implications Consumers tend to follow other consumers’ opinions without forming their own opinion. Firms could misuse this tendency by hiring people to vote on reviews that are not necessarily helpful for consumers, but are helpful for the firm. Originality/value This study is the first to assess the extent to which social influence affects consumers’ evaluation of reviews. Given that consumers use helpfulness votes to distinguish reviews, it is important to understand to what extent these votes reflect the actual helpfulness of the information in the review and to what extent they reflect previous helpfulness votes.

The impact of internal and external reinsurance on insurers' performance and price

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jin Park ◽  
Byeongyong Paul Choi ◽  
Chia-Ling Ho
Keyword(s):  
Capital Markets ◽  
Negative Impact ◽  
Positive Impact ◽  
Insurance Industry ◽  
Least Square ◽  
Internal Capital Markets ◽  
Content Type ◽  
Internal Capital ◽  
The Impact ◽  
Practical Implications

PurposeThis study is designed to investigate how the use of reinsurance affects the primary insurers' profitability and pricing on their insurance products.Design/methodology/approachThis study examines the impact of reinsurance on the insurers’ profitability using a two stage least square to control the endogeneity problem with a reinsurance variable. The study analyzes 11,894 firm-year observations between 2001 and 2009.FindingsThe study finds that the use of reinsurance in general has a negative impact on property/casualty insurers' performance. However, reinsurance obtained from affiliated firms has a positive impact on profitability, which supports the existence of internal capital markets in the insurance industry.Research limitations/implicationsThe finding of study implies that reinsurance transactions are used among affiliated insurers for not only managing underwriting risk and increasing underwriting capacity but also subsidizing capital through internal capital markets. In term of limitation, due to the availability of price data, this study uses only one insurance cycle of 9 years, albeit not weakening the findings.Practical implicationsEspecially for non-affiliated insurers, the finding suggests that they need to find an alternative way to transfer underwriting risk without having to use costly reinsurance.Originality/valueThis paper directly investigates the impact of reinsurance utilization on insurers' profitability and pricing.

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