Search results

The purpose of this study is threefold: to examine the impact of a remuneration committee (RC) on the level of chief executive officer (CEO) remuneration; whether firms with a RC, pay a premium to CEOs with different skill sets (general or specific); and whether a pay premium mitigates the potential for CEO turnover.

This study uses a sample of 5,305 firm-year observations on a data set drawn from companies listed on the Australian Securities Exchange for the period 2007 to 2014. The authors use ordinary least squares as well as logit regression techniques to test the formulated hypotheses. Difference in difference and propensity score matching techniques were undertaken to address the endogeneity concerns.

The findings show that firms with a RC pay a higher total remuneration to CEOs compared to firms without a RC. Furthermore, firms with a RC, value and reward CEOs with general skills by paying a premium not offered to CEOs with industry-specific skills. Paying a premium, in turn, mitigates CEO turnover by strengthening the CEO’s commitment to the organisation.

The study helps us to understand the critical role played by the RC in the remuneration of CEOs. The findings show that RCs act as an effective governance mechanism to deal with issues of executive remuneration and to retain skilled CEOs. Additionally, CEOs who acquire and develop general managerial skills will be able to extract higher pay from improved bargaining power. The findings will be of relevance to shareholders, regulators and company management who have an interest in executive pay and performance.

The purpose of this paper is to study the effects of sports sponsorship on brand equity using two managerially related outcomes: price premium and market share.

This study uses a best–worst discrete choice experiment (BWDCE) and compares the outcome with that of the purchase intention scale, an established probabilistic measure of purchase intention. The total sample consists of 409 fans of three soccer teams sponsored by three different competing brands: Nike, Adidas and Puma.

With sports sponsorship, fans were willing to pay more for the sponsor’s product, with the sponsoring brand obtaining the highest market share. Prominent brands generally performed better than less prominent brands. The best–worst scaling method was also 35% more accurate in predicting brand choice than a purchase intention scale.

Future research could use the same method to study other types of sponsors, such as title sponsors or other product categories.

Sponsorship managers can use this methodology to assess the return on investment in sponsorship engagement.

Prior sponsorship studies on brand equity tend to ignore market share or fans’ willingness to pay a price premium for a sponsor’s goods and services. However, these two measures are crucial in assessing the effectiveness of sponsorship. This study demonstrates how to conduct such an assessment using the BWDCE method. It provides a clearer picture of sponsorship in terms of its economic value, which is more managerially useful.

This study aims to analyse how multinational corporations (MNCs) organise value chain activities to penetrate new market segments. It contributes by expanding traditional decisions regarding the vertical fine-slicing of value chain activities (whether performed internally or externally) and the consideration of resource-sharing decisions (integration or separation) for each value chain function.

The authors draw on primary data collected from two case study firms operating in the large emerging Chinese market: Volvo Construction Equipment AB and Epiroc AB. In-depth cases illustrate how foreign MNCs expand into new market segments and simultaneously target both the lower-priced mid-market and the premium segments in the Chinese mining and construction industry.

The results reveal that product diversification creates challenges for managers who must oversee new (vertical) value chains, often simultaneously. Beyond geography and modes of governance, managers must decide whether to integrate or separate value chain activities for the new product lines. The study identifies four main strategic choices for firms to address this complexity, focusing on the decision to internalise or externalise (i.e. within or across organisational boundaries) and integrate or separate value chain activities between different product lines.

This study builds upon the internalisation theory and recent international business contributions that focus on value chain configurations to explain MNCs’ product diversification as a growth strategy in a host emerging market. It also sheds light on the choice of conducting new activities in-house or externally and elucidates firms’ managerial decisions to operationally integrate or separate individual value chain activities. The study provides insights into the drivers explaining managerial decisions to configure value chain activities across product lines and contributes to the growing body of literature on MNC activities in emerging economies by highlighting that product diversification impacts entry mode diversity and resource sharing across units.

The effects of country-of-origin (COO) cues on product evaluations are well documented. However, research on the relative effects of COO compared to other geographical indicators, such as region-of-origin (ROO), on food purchases is still limited. This study investigates how geographical origin labels influence consumers' perceptions of product value and authenticity of foreign food, as well as subsequent purchase intention (PI) and willingness to pay premium prices (WTPPP). The moderating role of health consciousness on these relationships is also examined due to the coronavirus disease 2019 (COVID-19) pandemic.

This study uses a between-subjects experimental design conducted with 300 middle- and high-income Chinese consumers aged between 25 and 50 years. Hypotheses were tested using structural equation modelling.

Whilst under both COO and ROO cues, all five product values positively influenced consumers' WTPPP, only functional, economic and novelty values influenced PI. The ROO cue performed significantly better than the COO cue in eliciting functional, economic and novelty value perceptions, which triggered stronger PI and willingness to pay a premium price. These relationships were mediated by product authenticity (PA) and moderated by consumers' health consciousness (HC).

Because food labels provide salient product information that facilitates consumers' evaluation of products, marketers should assess which product value perceptions they wish to enhance and then choose the appropriate geographical indicators for their labelling strategies.

This study identifies the effects of COO and ROO cues on product values, authenticity, PI and WTPPP. It also provides valuable insights into the role of HC on consumers' purchase decisions, which also aids in understanding the impact of global crises on food purchases.

The use of over-the-top (OTT) platforms grew substantially after the declaration of the COVID-19 pandemic in 2020. With the pandemic receding, there is a concern that users may not continue with their subscriptions. To counter this, OTT service providers must strategize proactively to retain and acquire new users once the pandemic abates. Positing that understanding the consumption values that users ascribe to OTT platform usage can provide useful customer retention insights, the purpose of this paper is to use the theory of consumption value (TCV) to study the values that users derived from their use of OTT following the onset of the pandemic.

The mixed-method approach is used to collect qualitative and quantitative data. Analysis of qualitative responses collected through interviews of 12 current OTT platform users helped identify two categories of OTT platform-specific values: attribute-level and benefit-based. Next, the study examined the association of values thus identified with one another, as well as with continued intentions to use OTT platforms, by analyzing data collected from 371 existing users.

The findings indicated that functional value quality and social value, representing the attribute-level values, were positively associated with two benefit-based values – functional value price and emotional value (EMV). Next, EMV was not only associated with intentions but also partially mediated the association of attribute-level values with intentions. Premium subscription purchased and increased viewing time were confirmed to have moderating effects on the association between attribute-level and benefit-based values.

The study is amongst the foremost research initiatives to examine consumption values derived from OTT platform usage after the onset of the pandemic. Its novelty also comes from its identifying OTT platform-specific consumption values for the first time and adding a new dimension to the TCV by examining the interplay of these values in the OTT platform context.

The cost of agricultural loans is a major constraint to the growth of the agriculture sector. This paper examines agricultural loan pricing by banks in Ghana using panel data analysis.

Data were obtained from audited financial reports of 15 agricultural loan lending banks from 2010 to 2017. The study applies the random-effect model and the fixed-effect model in the analysis and uses the system generalized system method of moment to check the robustness of the results from the baseline models.

The study found that agricultural loan pricing by banks is significantly influenced by risk premium, cost of funds, loan impairment, agricultural growth rate and food inflation. Banks should leverage emerging technologies to de-risk agriculture loan pricing to allay the fear of default. Farmers should look for long-term and relatively cheaper funds to support agricultural loans. Increasing credit to the agricultural sector could increase output, thereby reducing food inflation uncertainty for competitive pricing of agricultural loans.

Agriculture employs about 52% of Ghana's labor force, contributing about 20% to GDP. But it is “under” financed. This study leads the way in unraveling the factors accounting for the high prices of agricultural loans in Ghana. This study further contributes to policy development toward increasing credit to the agricultural sector.

The paper proposes a research method to verify the perception bias of consumers on the freshness preservation effects of vacuum packaging (VP) and modified atmosphere packaging (MAP) chilled pork packages, the influence of “sensory experience” on correcting consumers' perception bias of packaging performance and willingness-to-pay (WTP) enhancement channels.

Using data from 458 and 188 participants who completed the contingent valuation method (CVM) and auction experiment, respectively, the study aimed to uncover consumers' packing quality perception bias and WTP, and investigated the societal factors that contribute to variations in WTP.

The CVM experiment revealed that although consumers' high perception bias rate toward MAP to maintain freshness, as compared to lab test results, came along with low WTP premium to cost rate with sensory experience in the auction experiment, the proportion of consumers with quality perception bias decreased from 49.85% to 34.46%, while the WTP premium to cost rate for MAP increased largely by 36.7%. Perceptive embedding has a positive effect on chilled pork packaging WTP, while normative embedding decreases WTP.

The findings emphasize the need of public policies to promote positive consumption attitudes, while whittling the negative consumption norms, to increase the WTP for packaged child pork and promote the chilled pork market formation.

Although the value effect is comprehensively investigated in developed markets, the number of studies examining the Vietnamese stock market is limited. Hence, the first aim of this research is to provide empirical evidence regarding returns on value and growth stocks in Vietnam. The second aim is to explain abnormal returns on Vietnamese growth and value stocks using both risk-based and behavioral points of view.

From the risk-based explanation, the Capital Asset Pricing Model (CAPM), Fama–French three- and five-factor models are estimated. From the behavioral explanation, to construct the mispricing factor, this paper relies on the method of Rhodes-Kropf et al. (2005), one of the most popular mispricing estimations in the financial literature with numerous citations (Jaffe et al., 2020).

While the CAPM and Fama–French multifactor models cannot capture returns on growth and value stocks, a three-factor model with the mispricing factor has done an excellent job in explaining their returns. Three out of four Fama–French mimic factors do not contain additional information on expected returns. Their risk premiums are also statistically insignificant according to the Fama–MacBeth second-stage regression. By contrast, both robustness tests prove the explanatory power of a three-factor model with mispricing. Taken together, mispricing plays an essential role in explaining returns on Vietnamese growth and value stocks, consistent with the behavioral point of view.

There are several value-enhancing aspects in the field of market finance. First, this paper contributes to the literature of value effect in emerging markets. While the evidence of value effect is obvious in numerous developed as well as international markets, both growth and value effects are discovered in Vietnam. Second, the explanatory power of Fama–French multifactor models is evaluated in the Vietnamese context. Finally, to the best of the author's knowledge, this is the first paper that incorporates the mispricing estimation of Rhodes-Kropf et al. (2005) into the asset pricing model in Vietnam.

This paper aims to estimate a statistical model of the country risk determination as represented by the country price earnings ratio (PE) to identify potentially mispriced countries. It uses the gross domestic product (GDP) growth rate and a dummy indicator for market-related events (i.e. financial crises), both approximating the business cycle. The model is used to compare a major Asian country’s (i.e. Japan) risk with Western countries’ risk.

The model used finance variables such as the systemic, non-diversifiable, risk and foreign direct investments to characterize any country risk. A random effects model with panel data estimated the effects of macroeconomic and financial variables on PE. The simultaneity problem was checked using two stage least squares and some lagged independent variables.

The results explained to investors the country risk contributing factors: PE was positively correlated with variables that may increase dividends and market risk premia similar to GDP growth rates and total risk and negatively correlated with variables that increase market risk, namely, nominal risk-free interest rates and financial crises. Japan’s PE seemed to exceed most of the Western countries considered here, implying lower risks, lower interest rates and higher growth in the major Asian country Japan.

This paper focuses on the effectiveness of country risk measures in predicting periods of intense instability, similar to financial crises. This study contributes a model to measure market risk premium, using PE (or inversely, the earnings yield) as a proxy variable. Investors can use this risk measure in picking less risky stocks to include in their portfolio, calling for liberalizing Asian countries’ financial markets to improve their stock market capitalization.

While the existing studies largely suggest that valuation uncertainty benefits acquirers, who apply discounts to targets' value attributable to information asymmetry, the authors argue that the opposite may be the case.

Through multivariate econometric analysis of transaction data, the authors establish the link between the degree of valuation uncertainty measured by targets' track of public listing and acquisition premia. The authors use text-mining tools to measure acquirer–target similarity and control for its role in intermediating the posited empirical relationships.

Having analyzed 618 acquisitions involving listed targets from China, the authors find that acquirers pay higher valuation premia for the more recently listed and relatively younger companies than for those with a longer history since floatation. Similar patterns apply to valuation multiples. Higher valuations are partially attributable to premia for control, as acquirers are likelier to buy a majority stake in the recently listed firms, especially if the latter are similar to them. Such transactions take less time to complete and involve a transfer of larger share blocks despite the higher degree of information asymmetry and a frequent lack of targets' operational profitability. The authors also observe a significant premium for target–acquirer similarity: acquirers appear to rush deal completion due to possible overestimation of targets' potential and familiarity bias.

The authors show that acquisition premia may be driven by acquirers' proclivity to place risky investment bets on the growth potential of opaque targets. This pattern may partially explain frequent failures of mergers and acquisitions (M&A).