Search results

Short‐termism will not go away simply by thinking longer term.

We need to rethink the government regulations and managerial assumptions that influence our largest businesses. During the Reagan‐Bush years, undiluted free market economics brought disaster. An economic boom based on a consumer‐led borrowing binge transformed America from the world's largest creditor nation to the world's largest debtor nation with balance‐of‐payments problems that are still ballooning. Our national debt grew while our biggest firms, which form our industrial base, declined.

The impact of accounting earnings based compensation contracts an effort allocation is analyzed using an agency‐theoretic model. In this model, the CEO of a publicly traded firm expends effort on operational short‐run activities and strategic long‐run activities. The shareholders desire the CEO to expend more effort in the strategic long‐run activities because the return to shareholders depends more on long‐run than short‐run activities. More specifically, they desire the effort to be allocated between these two activities on the proportion of the sensitivity of stock returns to these two activities. Compensating the CEO based on the stock returns performance measure is shown to induce the CEO to exert the desired proportion of effort in the long‐run activities. Unlike stock returns, accounting earnings are believed to focus more on the short‐run performance of the firm and not reflect the full impact of a CEO's long‐run effort. Compensating the CEO based on accounting earnings, in addition to stock returns, is shown to induce the CEO to expend less than the desired proportion of effort in long‐run activities. As the emphasis placed on accounting earnings relative to stock returns increases, the CEO decreases the proportion of effort expended in long‐run activities. On the positive side, including accounting earnings in the contract increases the total effort that the CEO exerts in short‐run and long‐run activities. The benefit accruing from the increase in total effort more than offsets the dysfunctionality caused by the short‐run focus. More specifically, adding accounting earnings to the incentive contract is shown to increase the expected return to the shareholders. In summary, while accounting earnings cause the CEO to be short‐run focused, their use in the incentive contract improves the firm's performance by motivating the CEO to work harder overall.

Robert J. Antonio is Professor of Sociology at the University of Kansas, Lawrence, Kansas, USA. His e-mail address is anto@falcon.cc.ukans.eduArmando Bartra is a Sociologist, Historian, and President of the Instituto Maya, in Mexico City, Mexico. The Instituto Maya has worked for the past 30 years with peasant and indigenous groups on leadership, capacity building, micro-credit, and related rural development projects. His e-mail address is circo@laneta.apc.orgMichael Mayerfeld Bell is Associate Professor of Rural Sociology at the University of Wisconsin-Madison, Madison, Wisconsin, USA, and Collaborating Associate Professor of Sociology at Iowa State University, Ames, Iowa, USA. His e-mail address is michaelbell@wisc.eduGisela Landázuri Benı́tez teaches Rural Development at the Universidad Autónoma Metropolitana, Xochimilco, Mexico City, Mexico. Her e-mail address is giselalb@prodigy.net.mxAlessandro Bonanno is Professor of Sociology and Chair of Sociology at Sam Houston State University in Huntsville, Texas, USA. His e-mail address is soc_aab@shsu.eduLawrence Busch is University Distinguished Professor of Sociology at Michigan State University, East Lansing, Michigan, USA. He is also Director of the Institute for Food and Agricultural Standards, and a Past President of the Rural Sociological Society. His e-mail address is Lawrence.Busch@ssc.msu.eduJorge Calbucura is a Senior Researcher at the Department of Sociology at the University of Uppsala, Sweden. His e-mail address is Jorge.Calbucura@soc.uu.seMaria del Mar Delgado is Assistant Professor of Rural Development at the Department of Economics, Sociology, and Agriculture Policy, University of Cordoba, Cordoba, Spain. She is a member of the Rural Development Team at the University of Cordoba. Her e-mail address is mmdelgado@uco.esCornelia Butler Flora is Charles F. Curtiss Distinguished Professor of Agriculture and Professor of Sociology at Iowa State University, Ames, Iowa, USA. She is also Director of the North Central Regional Center for Rural Development and a Past President of the Rural Sociological Society. Her e-mail address is cflora@iastate.eduRosemary Elizabeth Gali is the coordinator of the Sociology Module of the Master’s Program in Development Management sponsored by the International Labour Organization (ILO) and the University of Torino, Italy. She has worked as a consultant for most of the major development agencies and was an adviser to the government of Mozambique during the 1990s. Her e-mail address is gallirose@hotmail.comFred T. Hendricks is Professor and Head of Department at the Department of Sociology, Rhodes University, Grahamstown, South Africa. He is also Managing Editor of the African Sociological Review. His e-mail address is f.hendricks@ru.ac.zaSusie Jacobs is Senior Lecturer at the Department of Sociology of Manchester Metropolitan University, Manchester, United Kingdom. She is co-director of the Institute of Global Studies there. Her e-mail address is s.jacobs@mmu.ac.ukThomas A. Lyson is Professor in the Department of Rural Sociology, Cornell University, Ithaca, New York, USA. He is also Director of Cornell’s Community, Food, and Agriculture Program, and a past editor of the journal Development Sociology. His e-mail address is tal2@cornell.eduLois Wright Morton is Assistant Professor of Sociology at Iowa State University, Ames, Iowa, USA. Her e-mail address is lwmorton@iastate.eduEduardo Ramos is Associate Professor at the Department of Economics, Sociology, and Agriculture Policy, University of Cordoba, Cordoba, Spain. He is also Head of the Co-operation for Development Chair. He is a member of the Rural Development Team at the University of Cordoba. His e-mail address is eduardo.ramos@uco.es

This research aims to model the relationship between the credit risk signals in the credit default swap (CDS) market and agency credit ratings, and determines the factors that help explain the variation in such signals.

A comprehensive analysis of the differences in the relative credit risk assessments of CDS-based risk signals and agency ratings is provided. It is shown that the divergence between credit risk signals in the CDS market and agency ratings is explained by factors which the rating agencies may consider differently than credit market participants.

The results suggest that agency credit ratings of relative riskiness of a reference entity do not always correspond with assessments by CDS spreads, as the price of risk is a function of additional macro and micro factors that can be explained using statistical analysis.

This research is unique in modeling the relationship between the credit risk assessments of the CDS market and the agency ratings, which to the best of the authors' knowledge has not been analyzed before in terms of their agreement and the level of discrepancy between them. This model can be used by investors in debt instruments that are not explicitly CDSs or which have illiquid CDS contracts, to replicate market-based, point-in-time credit risk signals. Based on both market-based and firm-specific factors in this model, the results can be used to augment through-the-cycle credit risk assessments, analyze issues surrounding the pricing of CDSs and examine the policies of credit rating agencies.

The purpose of this paper is to examine Chinese consumers’ perception of US-made clothing and purchase intention to US-made clothing; to explore the role of brand in the relationship between country of origin (COO) and consumer perception and purchase intention; and to investigate whether China is a potential market for US-made clothing.

A survey was conducted among college students in three cities in China. A 2×3 within-subjects design with two countries and three brands was performed.

For Chinese consumers, country equity of China is significantly higher than the USA. However, Chinese consumers hold significantly higher perceived quality and perceived price of product for US-made clothing for all American brands. Chinese consumers have significantly higher purchase intention for US-made clothing for popular American brands with average price points.

Further research could sample different groups which are better representative of the whole population. Different COOs and industrial sectors will be worth of studying. Future research also needs to quantify the potential price increase.

The conclusions can be applied to business practices by American companies identifying their brand category before developing effective sourcing strategies.

This study sheds light on policy making by bringing a new approach to position US-made products in China and address the trade imbalance between the two countries.

This study deeply examines how different brands affect Chinese consumers’ perception of US-made clothing and purchase intention to US-made clothing.

Uses Resnik and Stern’s content analysis criteria to examine audio and visual information of in‐cinema slide advertisements within one regional market in Australia to determine whether two types of cues are compatible or reinforce one another. Suggests that there was extensive information framing for a narrow set of information cues. States that there were also significant differences in the types of audio and visual cues, which might result in conflicting information being communicated or information overload.

The purpose of this study is to examine the effects of a Disney collaboration and Disney product line extension type on the perceptions of masstige brands and purchase intentions. By identifying masstige brands as two types (i.e. born-masstige versus luxury-masstige brands), this study investigates how consumers respond to a Disney collection across different types of masstige brands.

The authors conducted three studies using an experimental approach.

Study 1 shows that compared to a traditional collection, a Disney collection lowered perceptions of brand luxury, but the negative effect is stronger for born-masstige brands than luxury-masstige brands. Studies 2 and 3 revealed that an upward extension enhanced perceptions of luxury for the born-masstige brand more than it did with a horizontal extension, whereas there was no difference between upward and horizontal extensions for the luxury-masstige brand.

This study contributes to understanding how Disney collaborations influence consumers’ perceptions of masstige brands. It has implications for brand positioning and pricing strategies for practitioners collaborating with Disney or similar companies.

To the best of the authors’ knowledge, this study is the first of its kind to investigate consumer responses to a Disney collaborated collection across two types of masstige brands by exploring their type of product line extensions.