Looking at the taxation effect on cross-state smuggling using rational addiction models

2019 ◽  
Vol 46 (3) ◽  
pp. 652-670
Author(s):  
Tina Ting Swan ◽  
Bruce Qiang Sun ◽  
Frederick Floss
Keyword(s):  
Instrumental Variable ◽  
Design Methodology ◽  
Rational Addiction ◽  
Extended Model ◽  
Content Type ◽  
Price Series ◽  
Price Differentials ◽  
Future Consumption ◽  
Financial Consequences ◽  
Rational Addiction Model

Purpose The purpose of this paper is to show how the taxation effect on cross-state smuggling can be a valid instrumental variable for lagged and future consumption together with the local price series. Design/methodology/approach On the same grounds, the authors raise the question using the rational-addiction model by noticing that the neighboring price differentials really capture the possible smuggling or bootlegging effects. Findings Moreover, the authors look into the extended model to test the key condition that the expected future financial consequences will affect the current consumptions. Originality/value This supports the rational-addiction model, which can be used to plan the taxation for the forward-looking consumptions.

Service recovery for moderate and high involvement services

2015 ◽  
Vol 29 (5) ◽  
pp. 331-343 ◽  
Author(s):  
Silke Bambauer-Sachse ◽  
Landisoa Eunorphie Rabeson
Keyword(s):  
Customer Satisfaction ◽  
Design Methodology ◽  
Service Failure ◽  
Service Recovery ◽  
Level Of Service ◽  
High Involvement ◽  
Content Type ◽  
Failure Severity ◽  
Future Consumption ◽  
Practical Implications

Purpose – The purpose of this study is to determine which level of tangible compensation for a service failure leads to high levels of customer satisfaction for moderate- versus high-involvement services as well as for different conditions of responsibility for the failure and failure severity. Design/methodology/approach – The study is based on a 4 (tangible compensation: gift, discount, credit for future consumption, refund) × 2 (responsibility for the failure: restaurant vs customer) × 2 (failure severity: low vs high) × 2 (involvement: moderate vs high) design using scenarios in a restaurant context. Findings – The results reveal that, for moderate-involvement services, all types of compensation are equally appropriate, except for when customers are responsible for a severe failure. In this condition, they expect tangible compensation of higher benefit. For high-involvement services, the more severe the failure, the higher the benefit of tangible compensation should be, independent of responsibility. Practical implications – The findings suggest that managers should consider the level of service involvement as well as responsibility for and severity of the failure when choosing the level of tangible compensation. Originality/value – The results of this study provide new insights into how to choose appropriate and efficient service recovery measures.

Is bribing a good strategy? Imbalanced interdependence and hazard of opportunism in bribery

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ho Wook Shin ◽  
Jinsil Kim ◽  
Seung-hyun Lee
Keyword(s):  
Instrumental Variable ◽  
Design Methodology ◽  
Resource Dependence ◽  
Business Environment ◽  
Government Officials ◽  
Content Type ◽  
Relational Contract ◽  
Current Resource ◽  
The Government ◽  
A Current

PurposeIn fragile institutional environments, firms often have no choice but bribery as the means to access the services monopolized by the government. Corrupt government officials whose resources are valuable to many different firms can easily find other firms willing to offer bribes. The purpose of this paper is to examine whether and how this imbalanced interdependence exposes the bribing firm to the hazard of opportunism from the bribed officials.Design/methodology/approachThis study draws on World Business Environment Survey (WBES) data and the instrumental variable (IV) Probit estimator with Heckman correction for the potential selection bias.FindingsThe authors find that the more firms depend on bribery to acquire governmental resources, the severer the level of opportunism they encounter from the government officials. In addition, the authors find that although the presence of a legal alternative to bribery reduces the level of a corrupt government official's opportunism that a bribing firm experiences, the more firms depend on bribery despite the presence of a legal alternative, the higher the level of the corrupt official's opportunism that the firm will experience. Finally, the authors find that establishing a relational contract with government officials reduces the hazard of opportunism.Originality/valueThe study contributes to the resource dependence literature by finding that a greater imbalance in the interdependence between two parties in bribery exposes the more dependent party to a larger hazard of opportunism. The finding that an ineffective alternative to a current resource provider would not strengthen but weaken a resource seeker's bargaining power expands the literature. The authors also contribute to the corruption research by showing the significant strategic, not legal, risk to bribing firms of engaging in bribery, which to date has not been sufficiently discussed.

Confucianism and corporate fraud

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Xudong Tang ◽  
Yan Gu ◽  
Ruoyu Weng ◽  
Kungcheng Ho
Keyword(s):  
Instrumental Variable ◽  
Design Methodology ◽  
Cultural Perspective ◽  
Corporate Fraud ◽  
Content Type ◽  
Chinese Traditional Culture ◽  
Instrumental Variable Regression ◽  
Ming And Qing Dynasties ◽  
The Relationship ◽  
Foreign Enterprises

PurposeConfucianism underpins Chinese traditional culture and the values of the Chinese people. The purpose of this study is to examine the relationship between adherence to Confucianism and corporate irregularities.Design/methodology/approachThe authors use the historical numbers of Jinshi (Imperial Scholars) in the Ming and Qing dynasties within 200 km of a company's location to proxy for the influence of Confucianism on the company, presenting strong evidence that Confucianism significantly reduces corporate irregularities.FindingsThe authors' findings are robust even when criticized with alternative definitions of Confucianism, sensitivity analysis and instrumental variable regression. The authors also discover that this effect is weaker in state-owned and foreign enterprises and weakened by the influence of Western culture.Originality/valueThis paper brings a new traditional-cultural perspective to the understanding of corporate irregularities and contributes to the literature on culture and finance. This paper also helps the authors understand the “China Puzzle” that is China's rapid economic development under an imperfect legal system.

Measuring the motivation to avoid duping: scale development and validation

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Robert Madrigal ◽  
Marcus Wardley ◽  
Catherine Anne Armstrong Soule
Keyword(s):  
Regulatory Focus ◽  
Design Methodology ◽  
Deception Detection ◽  
Content Type ◽  
Consumer Motivation ◽  
Scale Development And Validation ◽  
Standard Scale ◽  
Financial Consequences ◽  
Test Retest Reliability ◽  
Development And Validation

Purpose This paper aims to develop and validate a psychometrically sound scale measuring buyers’ motivation to avoid being duped (MAD) in a marketplace transaction. Design/methodology/approach Standard scale construction methodology was followed in developing the MAD Scale. Eight studies were conducted. Findings Three underlying MAD factors were discovered: suspicion of sellers, anticipated aversive emotions and deception detection. For purposes of analyses, data were collapsed across factors. High MAD individuals exhibited more vigilance in decision-making, were less trusting of strangers and displayed a greater desire to appear perfect to others. Those high in MAD were also more apt to have a prevention regulatory focus. Test-retest reliability was satisfactory, and no social desirability bias was observed. Finally, in an economic game with real financial consequences, those higher (vs lower) in MAD invested less after being duped, thus supporting criterion validity. Originality/value Marketplace deception has been identified as an existential threat facing consumers. Yet, few studies have examined how consumers cope with this threat. There currently exists no scales to measure consumer motivation to avoid being duped. The current research defines MAD and differentiates it from related constructs. The MAD scale will be useful in a variety of research contexts related to marketplace deception.

Chinese traditional village residents’ behavioural intention to support tourism: an extended model of the theory of planned behaviour

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ke Shen ◽  
Huawen Shen
Keyword(s):  
Design Methodology ◽  
Theory Of Planned Behaviour ◽  
Critical Factor ◽  
Subjective Norms ◽  
Behavioural Intention ◽  
Extended Model ◽  
Limited Evidence ◽  
Planned Behaviour ◽  
Content Type ◽  
The Relationship

Purpose Based on the theory of planned behaviour (TPB), this paper aims to investigate the effects of residents’ place attachment (PA), subjective norms (SNs) and perceived behavioural control (PBC) on their attitudes towards behaviour (AB) and behavioural intention to support tourism (BI). This paper aims to examine whether residents’ AB mediate the relationships between BI and PA, SNs and PBC. Design/methodology/approach The results are obtained using a quantitative method based on data gathered from self-administered questionnaires completed by 406 residents of Hongcun, a Chinese traditional village. Findings The TPB is successfully used to explain Chinese traditional village residents BI. The findings extend the extant research and render the TPB more widely applicable. This study confirms that the inclusion of PA within the framework of the TPB is valid and satisfactory, demonstrating continued support for the coupling of complementary theories to explain tourism development from a resident perspective. Finally, this study extends the literature on residents’ PA and demonstrates its impact on their attitudes and consequent reactions, thus supplementing the limited evidence on PA as a direct predictor of residents’ BI. Specifically, SNs are the critical factor affecting residents’ AB and their BI. Residents’ AB only mediate the relationship between SNs and their BI. Research limitations/implications This paper only includes PA within the framework of the TPB. More constructs should be incorporated to deepen the understanding of residents’ BI. In addition, the data were only collected in a traditional village. Originality/value This paper is one of the first studies to combine PA with the TPB in research on residents’ BI in a developing country – in this instance, China.

Does economic freedom matter for risk-taking? Evidence from MENA banks

2016 ◽  
Vol 8 (2) ◽  
pp. 114-136 ◽  
Author(s):  
Saibal Ghosh
Keyword(s):  
Risk Taking ◽  
Instrumental Variable ◽  
Design Methodology ◽  
Economic Freedom ◽  
Bank Risk ◽  
Cross Sectional ◽  
Content Type ◽  
Level Data ◽  
Risk Appetite ◽  
The Impact

Purpose The relevance of economic freedom in influencing bank risk taking has not been adequately addressed in the literature. In this connection, employing bank-level data for 2000-2012, the purpose of this paper is to examine the impact of economic freedom on risk taking by MENA banks. Design/methodology/approach Given the cross-sectional time-series nature of the data, the author employs panel data techniques to explore this issue. In addition, the author examines the robustness of the results using instrumental variable techniques. Findings The findings appear to suggest that economic freedom exerts a significant and non-negligible impact on bank risk taking. Among the sub-components of economic freedom, it is observed that higher levels of both business and monetary freedom increase variability of profits and, thereby, raise the risk appetite of banks. Risk taking by banks appears to be reliably lower after the crisis than in the period prior to it, although there was a substantial increase in bank risk taking during the crisis. Originality/value To the best of the author’s knowledge, this is one of the earliest studies to explore the interlinkage between economic freedom and bank risk taking for MENA banks.

Disclosure of intangible liabilities: comparative study of the banking sectors in Panama and Colombia

2020 ◽  
Vol 21 (4) ◽  
pp. 635-656
Author(s):  
Edila Eudemia Herrera Rodríguez ◽  
Iván Andrés Ordóñez-Castaño
Keyword(s):  
Voluntary Disclosure ◽  
Design Methodology ◽  
Age And Growth ◽  
Future Research ◽  
Stock Exchanges ◽  
Intangible Asset ◽  
Extended Model ◽  
Content Type ◽  
Practical Implications ◽  
Activity Information

PurposeThis research examines the likelihood that Panamanian and Colombian banks listed on their respective stock exchanges voluntarily disclose intangible liabilities based on such variables as their size, profitability, indebtedness, age and growth. The presented findings concur with agency theory, signalling theory and the owner-cost theory.Design/methodology/approachThe authors propose a probabilistic model to test the influence of size, profitability, indebtedness, age and growth on the disclosure of intangible liabilities. The dependent variable, the disclosure index, was constructed from a dichotomous approach using Harvey and Lusch's (1999) model, which has 24 characteristics, plus six that we added in our research. These were grouped into four categories: procedures, human activity, information and organisational structure.FindingsBanks in Panama and Colombia with a larger size, higher profitability, lower age and higher growth are more likely to disclose more information about their intangible liabilities. However, indebtedness does not serve as a determinant of the disclosure of these liabilities, even though its relationship is negative.Research limitations/implicationsThe limitation of the research was the voluntary disclosure of information about these liabilities on firms' websites.Practical implicationsThe contributions of this research are as follows. First, we used an intangible asset disclosure methodology to verify the disclosure of intangible liabilities, in line with Harvey and Lusch's model, as well as providing another six indicators, thereby producing an extended model. Second, being the first empirical research to study the disclosure of intangible liabilities in Panama and Colombia opens a door to future research on this topic.Social implicationsThis research provides a significant practical contribution to society because banks listed on public stock markets, understanding that undisclosed intangible liabilities lead to opportunity costs in their profitability, might tend to disclose more information, thus promoting greater transparency in the market.Originality/valueThe main contribution of this research is applying an intangible asset disclosure methodology to the disclosure of intangible liabilities, following Harvey and Lusch's (1999) model, as well as the creation of an expanded model.

scholarly journals Should we increase average income, or the poor’s income to reduce infant and child mortality?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Johan Rewilak
Keyword(s):  
Child Mortality ◽  
Instrumental Variable ◽  
Fixed Effects ◽  
Design Methodology ◽  
Average Income ◽  
Content Type ◽  
Infant And Child Mortality ◽  
Key Policy ◽  
Unexplored Area ◽  
New Literature

PurposeThis article examines whether increasing the income of the poor – measured as the income of the lowest quintile – is more beneficial in reducing infant and child mortality rates compared with increases in average income. Given the global importance in reducing infant mortality, the value of this research is important to academics, policymakers and practitioners alike.Design/methodology/approachUsing a sample of 86 countries from 1995–2014 inclusive, our preferred estimation strategy uses an instrumental variable fixed-effects estimator.FindingsOur results propose that the elasticity of the income of the lowest quintile never exceeds that of average income. Therefore, if reducing infant and child mortality is a key policy goal, then boosting average income may be preferable to raising incomes at the lower end of the distribution.Originality/valueGiven these findings, we open a gateway for new literature to add to this unexplored area of research in the income and health relationship.

scholarly journals Are multiple brand endorsements economically effective?

2018 ◽  
Vol 27 (5) ◽  
pp. 523-533 ◽  
Author(s):  
Arpita Agnihotri ◽  
Saurabh Bhattacharya ◽  
Satya Prasad V.K.
Keyword(s):  
Economic Performance ◽  
Instrumental Variable ◽  
Design Methodology ◽  
Content Type ◽  
Instrumental Variable Regression ◽  
Total Proportion ◽  
Brand Portfolio ◽  
Market Valuations ◽  
The Impact

Purpose The purpose of this study is to examine the impact of multiple brand celebrity endorsement strategies on firms’ performance and different attributes associated with celebrities on firms’ performance. In this regard, the present study specifically explores the role of celebrity reputation and experience, as well as social media as a promotion platform in influencing the economic effectiveness of multiple brand endorsement strategies, i.e. proportion of brands endorsed in a firms’ brand portfolio. Design/methodology/approach Study is based on instrumental variable regression analysis approach and is conducted in one of the emerging markets, i.e. India. Findings The findings indicate that firms’ market valuations increase as its proportion of brands endorsed by celebrities increases. Furthermore, popularity reputation of celebrity also influences market valuation, and relationship is positively moderated by celebrity’s experience. Originality/value Extant studies have considered one endorsement news of a firm at a time. However, how total proportion of firms’ brand endorsed by celebrities impacts its performance has not been investigated. Furthermore, impact of celebrity traits has been examined only in consumer behavior studies and has been rarely investigated in context of firms’ economic performance.

M&A deal initiation: the case of the unwelcome suitor

2018 ◽  
Vol 14 (4) ◽  
pp. 433-461 ◽  
Author(s):  
Frederick Davis ◽  
Thomas Walker ◽  
Linyi Zhou
Keyword(s):  
Instrumental Variable ◽  
Design Methodology ◽  
Multivariate Analyses ◽  
Estimation Procedure ◽  
Content Type ◽  
Variable Approach ◽  
Long Run ◽  
Two Step Estimation ◽  
The Relationship ◽  
Instrumental Variable Approach

Purpose Within the context of mergers and acquisitions, the purpose of this paper is to clarify the relationship between the deal initiator and various outcomes of the deal, particularly in consideration of the cash position of the acquiring firm. Design/methodology/approach Using hand-collected deal initiation data from various filings on the Securities Exchange Commission EDGAR online database, this paper performs a series of event study analyses, multivariate analyses, a Heckman two-step estimation procedure, and an instrumental variable approach to examine merger outcomes. Findings This paper finds that many merger and acquisition (M&A) outcomes (target and acquirer announcement returns, acquirer long-run returns, premiums, and the method of payment) are significantly related to deal initiation, particularly in consideration of the cash position of the acquiring firm. Overall, evidence is seen as consistent with the theory that “lemons” selectively approach cash-rich acquirers, often to the acquirers’ detriment. Originality/value This paper finds that target-initiated deals are not necessarily associated with poorer transaction outcomes for targets as contemporaneous studies suggest, and presents the first empirical evidence of M&A outcomes related to the deal initiator which are dependent on the cash position of the acquiring firm.

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