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1 – 10 of over 3000Chinese consumers’ cross-border internet shopping, so called “haitao” is an emerging popular trend in China. Haitao can be understood as service innovation process because it…
Abstract
Purpose
Chinese consumers’ cross-border internet shopping, so called “haitao” is an emerging popular trend in China. Haitao can be understood as service innovation process because it creates new market spaces and provides differentiated values for Chinese customers.
Design/methodology/approach
This study aims to explore the service innovation strategies and success factors of haitao business in the Chinese market. The authors selected two successful haitao sites of Amazon.cn and Gmarket.co.kr, as representatives of a global player and a niche player, and conducted a comparative case study to analyze their service innovation strategies and key success factors.
Findings
This comparative case analysis based on value chain framework revealed some common success factors such as trust, advanced system and alliances as well as their service innovation efforts. Amazon has advantages such as efficient logistics system and global sourcing, whereas Gmarket has advantages such as product category, sales promotions, and payment system.
Originality/value
This study provides some implications for managers with localization, alliances and platform strategies.
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Hua Deng and Wendong Liu
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.
Abstract
Purpose
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.
Design/methodology/approach
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).
Findings
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.
Originality/value
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.
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Hai-Yen Chang, Li-Heng Liang and Hui-Fun Yu
This study aims to understand the impact of market power and competition on earnings management, particularly discretionary accruals, in the Chinese and Taiwanese tourism…
Abstract
Purpose
This study aims to understand the impact of market power and competition on earnings management, particularly discretionary accruals, in the Chinese and Taiwanese tourism industries. China and Taiwan differ not only in their political and social systems but also in their economic systems. The research aims to provide managers and investors with stock selection strategy in the decision-making process.
Design/methodology/approach
Accounting data consisted of 60 publicly traded travel companies in China and Taiwan from 2000 to 2014. Methodology included correlation matrix for the variables, univariate and multivariate regression and competition analysis.
Findings
Based on empirical results, the authors found a significant negative correlation between market power and discretionary accruals and market concentration (or lower market competition) and discretionary accruals in both the Chinese or Taiwanese markets. Although the Chinese travel companies enjoyed higher market power and market concentration, they engaged in less earnings manipulation than their Taiwanese counterparts as a result of the Chinese Government regulation.
Research limitations/implications
Based on listed travel companies, generalization of the research results to entire tourism industry is limited. This study compares the travel companies’ practices of smoothing out earnings between China and Taiwan, thus helping managers and investors in making their financing, investment decisions.
Originality/value
This research contributes to the earnings management literature by examining a specific industry of tourism. This paper is original in two ways. The authors linked market power and market competition with earnings management simultaneously and then compared the Chinese and Taiwanese tourism industries in manipulating earnings.
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Jun Gao, Niall O’Sullivan and Meadhbh Sherman
The Chinese fund market has witnessed significant developments in recent years. However, although there has been a range of studies assessing fund performance in developed…
Abstract
Purpose
The Chinese fund market has witnessed significant developments in recent years. However, although there has been a range of studies assessing fund performance in developed industries, the rapidly developing fund industry in China has received very little attention. This study aims to examine the performance of open-end securities investment funds investing in Chinese domestic equity during the period May 2003 to September 2020. Specifically, applying a non-parametric bootstrap methodology from the literature on fund performance, the authors investigate the role of skill versus luck in this rapidly evolving investment funds industry.
Design/methodology/approach
This study evaluates the performance of Chinese equity securities investment funds from 2003–2020 using a bootstrap methodology to distinguish skill from luck in performance. The authors consider unconditional and conditional performance models.
Findings
The bootstrap methodology incorporates non-normality in the idiosyncratic risk of fund returns, which is a major drawback in “conventional” performance statistics. The evidence does not support the existence of “genuine” skilled fund managers. In addition, it indicates that poor performance is mainly attributable to bad stock picking skills.
Practical implications
The authors find that the top-ranked funds with positive abnormal performance are attributed to “good luck” not “good skill” while the negative abnormal performance of bottom funds is mainly due to “bad skill.” Therefore, sensible advice for most Chinese equity investors would be against trying to “pick winners funds” among Chinese securities investment funds but it would be recommended to avoid holding “losers.” At the present time, investors should consider other types of funds, such as index/tracker funds with lower transactions. In addition, less risk-averse investors may consider Chinese hedge funds [Zhao (2012)] or exchange-traded fund [Han (2012)].
Originality/value
The paper makes several contributions to the literature. First, the authors examine a wide range (over 50) of risk-adjusted performance models, which account for both unconditional and conditional risk factors. The authors also control for the profitability and investment risks in Fama and French (2015). Second, the authors select the “best-fit” model across all risk-adjusted models examined and a single “best-fit” model from each of the three classes. Therefore, the bootstrap analysis, which is mainly based on the selected best-fit models, is more precise and robust. Third, the authors reduce the possibility that findings may be sample-period specific or may be a survivor (upward) biased. Fourth, the authors consider further analysis based on sub-periods and compare fund performance in different market conditions to provide more implications to investors and practitioners. Fifth, the authors carry out extensive robustness checks and show that the findings are robust in relation to different minimum fund histories and serial correlation and heteroscedasticity adjustments. Sixth, the authors use higher frequency weekly data to improve statistical estimation.
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The socialist construction with Chinese characteristics must be based on history and reality. According to the requirements of liberation and development of productivity, efforts…
Abstract
Purpose
The socialist construction with Chinese characteristics must be based on history and reality. According to the requirements of liberation and development of productivity, efforts must be made to reform and improve the production relations, as well as continually consolidate the socialist system with Chinese characteristics. The purpose of this paper is to prove the necessity and superiority of a socialist system through China’s modernization achievements.
Design/methodology/approach
Marxist political economics is a critical legacy from classical economics. Its core question is also social production and distribution, which is epitomized in the labor theory of value and the theory of surplus value.
Findings
Regarding the significant principles that must be followed, these speeches summarized the logical system and prominent features of the socialist political system in the new normal from several significant and interrelated aspects such as basic methods, core propositions, main tasks and fundamental goals.
Originality/value
The socialist system with Chinese characteristics will gradually appear through further research and prove its superiority. How can a socialist system with Chinese characteristics innovate and develop? Does the system have a future? Is there any historical necessity for the socialist system to replace the capitalist system in human history? These are the questions that need urgent answers and in-depth exploration.
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Western economics came into being with the rise of the capitalist market economy. It had a nature of duality beginning from its birth: the justificativeness of providing…
Abstract
Purpose
Western economics came into being with the rise of the capitalist market economy. It had a nature of duality beginning from its birth: the justificativeness of providing theoretical pillars for the capitalist market economy system and the scientificity of revealing the internal relations and operating rules of the capitalist market economy. The paper aims to discuss this issue.
Design/methodology/approach
However, after the 1830s, this justificativeness gradually evolved into vulgarity. Since the 1930s, modern western mainstream economics has mainly explored the general market economy on the assumption that the capitalist system remains unchanged, and many outcomes of such research are positive and beneficial.
Findings
Political economy of socialism with Chinese characteristics, at the present stage, is mainly a Chinese socialist market economics. It is guided by the Marxist political economy and rooted in the great practice of China’s reform and opening up and socialist modernization.
Originality/value
According to political complexion, western economic theories can be divided into political economic theory, mainstream economic theory and basic economic theory. By subjecting these theories to what we term “elimination,” “transformation” and “transplantation” surgeries, respectively, we can absorb and accommodate their beneficial elements in building a political economy of socialism with Chinese characteristics, which in turn is conducive to the development and prosperity of such an economy.
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For Chinese companies that cross-list in Chinese A share and Hong Kong (H share) markets, the H share price has been consistently lower than the A share price by an average of 85…
Abstract
Purpose
For Chinese companies that cross-list in Chinese A share and Hong Kong (H share) markets, the H share price has been consistently lower than the A share price by an average of 85% in recent years. This is puzzling because most institutional differences between the two markets have been eliminated since 2007. The purpose of this study is to explain the puzzle of the price difference of A+H companies.
Design/methodology/approach
Using all A and H share Chinese firms in the period 2007–2013 and a simultaneous equations approach, this study identifies three new explanations for the recent price difference.
Findings
First, utilizing a unique earning quality measure that is directly related to non-persistent components of fair value accounting under International Financial Reporting Standards (IFRS), this study finds that the lower the earnings quality, the lower the H share price relative to the A share price, and hence the greater the price difference. Second, the higher the myopic investor ownership in A share firms, the larger the A share price relative to the H share price. Third, the short-selling mechanism introduced to the A share market since 2010 helps reduce the price difference.
Originality/value
First, this study identifies three new explanations for the puzzle of the AH price difference which remains substantial even after the institutional and accounting standards differences between the two markets were eliminated. Second, we examine the impact of the implementation of fair value accounting under IFRS in an emerging market on the pricing difference of cross-listed shares and reveal that it can induce an unintended negative consequence on the pricing difference of cross-listed shares. Third, this study contributes to the literature on short sales by providing its mitigating role in pricing differences across two different markets. Finally, this study makes improvements in research design, which utilizes a unique measure of earnings quality that is directly related to the implementation of IFRS and a simultaneous equations approach that minimizes endogeneity concern.
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Fenfang Lin, Jake Ansell, Alasdair Marshall and Udechukwu Ojiako
This paper aims to distil the management challenge pertaining to B2B SME branding strategy, communication and constraint in the emerging market context of Chinese manufacturing.
Abstract
Purpose
This paper aims to distil the management challenge pertaining to B2B SME branding strategy, communication and constraint in the emerging market context of Chinese manufacturing.
Design/methodology/approach
Complemented by 19 interviews, this paper adopted a novel methodological approach – netnographic analysis – to investigate a selection of Chinese manufacturing SMEs.
Findings
Findings revealed three managerial approaches to B2B brand management: conservative, flexible and integrated-exploratory.
Practical implications
Understanding the three approaches offers managerial implications for Chinese manufacturer SMEs to redesign their branding practice. Informed with a better understanding of the available option, they will be able to achieve high value-added production through branding to gain competitiveness. This study sheds light on B2B SME branding from an emerging market perspective, an area that has been largely neglected in the existing literature.
Originality/value
Findings make a novel contribution to B2B SME brand management literature by clarifying practical management issues pertinent to Chinese emerging market manufacturers in particular, and offering widely generalizable lessons for B2B brand management research.
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Lala Hu, Diana A. Filipescu and Albena Pergelova
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…
Abstract
Purpose
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.
Design/methodology/approach
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.
Findings
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.
Originality/value
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.
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Imran Yousaf, Hasan Hanif, Shoaib Ali and Syed Moudud-Ul-Huq
The authors aim to examine the mean and volatility linkages between the gold market and the Latin American equity markets in the entire sample period and two crises periods…
Abstract
Purpose
The authors aim to examine the mean and volatility linkages between the gold market and the Latin American equity markets in the entire sample period and two crises periods, namely the US financial crisis and the Chinese crash.
Design/methodology/approach
To examine the return and volatility spillovers, the authors employ VAR-BEKK-GARCH model on the daily data of four emerging Latin American equity markets which include Peru, Chile, Brazil and Mexico, which ranges from January 2000 to June 2018.
Findings
The results show that the return transmissions vary across the stock markets and the crises periods. The volatility transmission is found to be bidirectional between the gold and stock markets of Brazil and Chile during the US financial crisis. Furthermore, the volatility spillover is unidirectional from Brazil to gold and from gold to Peru stock market during the Chinese crash. We also calculate the optimal weights hedge ratios for gold and stock portfolio. The result suggests that portfolio managers need to increase the weight of gold for the equity portfolios of Peru and Mexico during the US financial crisis. Furthermore, during the Chinese crisis, investors may raise the investment in gold for the equity portfolios of Brazil and Chile. Finally, the cheapest hedging strategy is CHIL/GOLD during the US financial crisis, whereas MEXI/GOLD during the Chinese crash.
Practical implications
These findings have useful insights for portfolio diversification, asset pricing and risk management.
Originality/value
The study's outcome provides policymakers and investors with in-depth insights regarding hedging, risk management and portfolio management.
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