Search results

This study aims to inform prospective listing firms, investors and regulators of the unique drivers of Chinese initial public offering (IPO) pricing on the Hong Kong Exchange.

Using a hand-collected IPO dataset, we investigate whether information uncertainty or investor exuberance drives underpricing and Chinese IPOs’ performance from 2002 to 2015, including 114 state-owned enterprises (SOEs).

Contrasting with the “listing bubble” in the China domestic stock market, generated by the overoptimism of retail investors, we highlight a “placing bubble” among Chinese firms listed in Hong Kong. This is driven by institutional investors’ buoyant demand for Chinese IPO shares, particularly those of SOEs. Chinese listing firms employ discreet earnings management strategies with their working capital accounts to smooth pre-IPO earnings, which becomes apparent to the market only in the long term.

This study is the first to examine the pricing of sought-after Chinese IPOs among international investors, who face various restrictions when investing in the Chinese domestic stock market. Additionally, it is the first study to measure earnings management using hand-collected pre-IPO data in IPO underpricing studies.

This case study is designed to enable students to understand the reasons behind the launch of a beauty brand grounded on traditions and culture, understand the strategies adopted by Florasis to establish its presence in the C-beauty space and emerge successful, analyze the positioning of a C-beauty brand in a highly competitive beauty market, identify the issues and challenges faced by a C-beauty brand in its efforts to disrupt the C-beauty space and suggest strategies that Florasis can adopt to emerge as a market leader in the global beauty industry.

Set in 2021, the case study discusses about the emerging C-beauty brand Florasis innovative strategies to promote the brand. Florasis was founded in 2017 with a vision to become a century old national makeup brand of China. Florasis was successful in getting on board a story-telling experience that featured traditional Chinese culture, aesthetics and heritage. It sold cosmetic products with retro packaging, concepts derived from traditional Chinese style, promoting a sense of national pride and nostalgia. The case study highlights the innovative strategies Florasis adopted like influencer marketing through key opinion leaders and key opinion customers, celebrity endorsements, user co-creation programs, social content and network marketing, brand crossovers and collaborations, etc. In April 2021, Florasis became the No. 1 cosmetic company in China with a gross merchandise value of 218m yuan and further the total sales for second quarter of 2021 reached 830m yuan, endorsing its supremacy over other global and local beauty brands in China. However, with success came along a set of challenges. Some analysts pointed that the brand was slow in innovating its product line-up, it focused more on promotions and advertisements and the brand positioning with a single sales channel, the cost performance and quality of the products and excessive marketing campaigns targeting a niche segment. Going forward, what should Florasis do to conquer the global beauty space? Can Florasis aspire to become a digitally empowered global beauty brand? Has it got the momentum? Will its direct-to-consumer model and unprecedented marketing and promotion gimmicks, help it achieve the lead in the global beauty space?

This case study is suitable for students of the graduate and undergraduate programs in management.

Teaching notes are available for educators only.

CSS 8: Marketing.

Through the subject of business network dynamics, this study aims to examine how business network relationships impact company entry market and development within fast growing economies as China. The paper looks at business network relationships in a fast-growing economy and provides an understanding of the relational perspectives in internationalisation of three luxury fashion companies and their entry models affected by the China context-related variables.

The methodology is following a qualitative approach, based on multiple case-studies research, proposing three cases of companies entering the Chinese market in the luxury and fashion industry.

The research analyses the local business network paths and how they affect the entry strategy through the socio-cultural and political players. The paper adds knowledge to studies in market entry and business networks, in the fast-growing economies area, with its new norms and values.

This study tries to analyse how business networks and related relationships “with Chinese characteristics” affect the market entry strategy in the internationalisation path from the perspective of the luxury fashion industry sector. In so doing it tries to provide an original further development of business network models within the new Chinese context.

The research aims to assess the Russian automobile market before and after the imposition of sanctions, analyze the positions of Chinese automobile brands in the Russian market, and assess trends and prospects for the development of China's presence in this segment. The authors use the statistical method and the method of comparative analysis to determine the position of Chinese automakers in the Russian automotive market. The research determines that most Western and Japanese brands left the Russian market due to the strengthening of sanctions in 2022. Due to problems in the supply of components and spare parts, most of the Russian automotive market was filled with Chinese automobile companies planning to expand their presence. This research examines the trend of the presence of Chinese automobile brands in the automotive industry of Russia. Under sanctions, the economy of the Russian Federation is forced to look for other opportunities to develop technology and production. The relevance of this topic is due to the significant role of the automotive industry in the economy of any country, as well as the importance of this industry for the employment of the able-bodied population. To achieve this goal, the authors formulated the tasks to assess the automotive market before and after the imposition of sanctions, to analyze the Chinese automotive market, and to assess the prospects for its development in Russia.

This paper investigates the relationship between institutional ownership and idiosyncratic volatility in Chinese and the USA stock markets and explores the potential explanations.

In this paper, the authors use the panel data regressions and the dynamic tests of two-way Granger causality in the panel VAR model to examine the relationship between institutional ownership and idiosyncratic volatility in Chinese and the USA stock markets.

The authors find that the institutional ownership in the Chinese (the USA) stock market is significantly and positively (negatively) related to idiosyncratic volatility through various tests. This paper indicates that institutional investors in the USA are more prudent and risk-averse, while the Chinese institutional investors are not because of high risk-bearing capacity.

This paper deepens the authors’ understanding on the relationship between institutional ownership and idiosyncratic volatility and in the USA and the Chinese stock markets. This paper explains the opposite relationships between institutional ownership and idiosyncratic volatility in the stock markets in China and USA.

Investigation of the anomalies associated with crashes and jackpots in the Chinese stock market.

We propose a logit model to predict the events of crashes and jackpots in the Chinese stock market. The model introduces a new variable of the price-to-sales ratio and takes into account the market states, Up and Down.

The anomalies associated with crashes and jackpots are not related to variations in economic conditions, but are associated with limits to arbitrage. High-liquidity stocks have strong mispricing effects. The institutions’ speculative trading will push liquid stock prices further away from their fundamentals but avoid buying illiquid stocks with a higher probability of price crashes and jackpots.

We propose a logit model to predict the extreme events of both crash and jackpot in the Chinese stock market. Our model effectively disentangles from CRASHP and JACKP. Compared with the traditional model, it substantially enhances in-sample and out-sample predictions. Based on the predictions of the extreme events, we find two strong and robust pricing effects associated with ex ante CRASHP and JACKP in the Chinese stock market.

Teaching wine tasting online is challenging, even given the curated digital tools of the Wine and Spirit Education Trust, a highly renowned online wine certification system is used. This paper aims to initially explore wine experts’ opinions about online wine education and subsequently examine the feasibility of customizing wine appreciation lexicons for Chinese learners.

A two-study multimethod approach was adopted. Study 1, a two-stage Delphi study, was conducted with 17 wine experts representing a number of countries, using a mix of closed/open-ended questions in an online survey. Data was collected in a market study in Study 2, conducted at agricultural markets in Thailand (pilot test) and China. Dialogues with market sellers were undertaken, evoking mental imagery of wine descriptors to explore the relevance of traditional versus local aromas and flavors in describing wine.

Findings concentrate on three main areas: general advantages/disadvantages of online wine education, reactions toward asynchronous/synchronous methods of wine tasting and, finally, the feasibility of customizing a wine appreciation lexicon for Chinese learners.

The study presents novel insights into the role of online wine education in China.

The aim of this study is to understand how digital platforms and context-specific characteristics of China – such as swift guanxi – affect opportunities for small and medium enterprises (SMEs) entering this market.

This study adopts a qualitative approach based on a multiple-case study of Italian SMEs in the wine industry that have activated international activities in China. Primary data consist of 32 interviews with SMEs’ managers, local consumers and other stakeholders involved in firm internationalization.

The findings of this study highlight that in SMEs’ internationalization, the process of knowledge/learning on digital platforms takes place in a bidirectional way thanks to the interactions among multiple stakeholders, which activate consumer education and knowledge sharing.

While previous research has emphasized firms' knowledge acquisition in the internationalization process, this study incorporates both the consumer perspective and the firm perspective, along with considering interactions with various stakeholders.

Chinese consumers' brand preferences are shifting from foreign sportswear brands to domestic ones. This indicates an increasingly strong relationship between Chinese consumers and domestic sportswear brands. The purpose of this study is to explore the spillover effect of Chinese domestic sportswear brands’ relationship quality to uncover the psychological mechanisms driving this preference shift.

The study used a brand relationship quality scale based on Chinese Confucian yuanfen culture, considering it as a second-order reflective-formative construct. The survey generated 326 valid responses online. Due to the presence of second-order reflective-formative construct in the variables, SmartPLS 4.0 was used for hypothesis testing.

Interaction belief, intimate interaction and happiness as formative dimensions of Confucian yuanfen brand relationship quality are validated, while emotional expression and tolerance are not. The Confucian yuanfen brand relationship quality has a spillover effect on product origin image and domestic sportswear brand preference. Product origin image has a mediating role between Confucian yuanfen brand relationship quality and domestic sportswear brand preference. However, consumer xenocentrism does not moderate the spillover effect of Confucian yuanfen brand relationship quality on domestic sportswear brand preference.

This study tests brand relationship quality from Confucian yuanfen perspective as a second-order reflective-formative construct. It contributes to understanding how Chinese consumers perceive their relationships with domestic sportswear brands. The results advance the current body of knowledge on brand relationship quality and spillover effect in sports marketing, indicating that Chinese sportswear brands can explore the possibility of co-opetition to achieve mutual benefits.

This study aims to explain the market-oriented transformation dilemma of Chinese urban investment and development companies (UIDCs; also known as local government investment and financing companies) and objectively evaluate their transformation efficiency from both static and dynamic perspectives. The results of the research provide methodological bases for improving the transformation efficiency of UIDCs, thus pointing out the direction for the rational planning of their transformation path.

This study takes Chinese UIDCs in market transformation during 2015–2019 as the research object and uses principal component analysis to screen the index system for measuring the efficiency of market transformation. It then uses a three-stage data envelopment analysis model and the Malmquist productivity index to evaluate the market transformation efficiency of these companies during 2015–2019 and comprehensively analyzes the influence of external environmental factors on the market transformation of Chinese UIDCs.

Research results show that the transformation efficiency of Chinese UIDCs is low and slow overall and that large spatial and temporal differences exist. The transformation efficiency of UIDCs located in eastern China is higher than that of UIDCs in central and western China. The higher the external environmental factors of regional GDP, local debt service pressure and credit rating, the more likely they are to cause input redundancy in the transformation process of Chinese UIDCs, which is not conducive to their market-oriented transformation. In addition, the higher the urbanization rate, the more effective it is to improve the efficiency of market-oriented transformation of UIDCs. If the influence of environmental factors is stripped away, both the overall efficiency value and pure technical efficiency value of market-oriented transformation of Chinese UIDCs will increase while the scale efficiency value becomes smaller.

This research measures the transformation efficiency of Chinese UIDCs and comprehensively analyzes the influence of external environmental factors on their market-oriented transformation. The goal is to enrich the study of the market-oriented transformation efficiency evaluation index system of Chinese UIDCs at the theoretical level and provide important reference values for improving the efficiency of market-oriented transformation of Chinese UIDCs at the practical level.