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Article
Publication date: 15 May 2017

Gianfranco Walsh, Mario Schaarschmidt and Stefan Ivens

Given the strategic importance of firm reputation because of its potential for value creation, extant reputation research focuses on favorable customer outcomes. This…

Abstract

Purpose

Given the strategic importance of firm reputation because of its potential for value creation, extant reputation research focuses on favorable customer outcomes. This study proposes and tests a model that relates the customer-based corporate reputation (CBR) of fashion retailers to customer-perceived risk and two relational outcomes – trust and commitment. In addition, this study aims to test whether or not the hypothesized paths are equally strong for male and female shoppers.

Design/methodology/approach

Data for this study were collected through an online survey approach. Using a sample of more than 300 retail customers and structural equation modeling, the authors tested the hypotheses.

Findings

Drawing on previous research, the commitment–trust theory of relationship marketing and signaling theory, the authors find support for direct and indirect links between retailers’ reputation and relational outcomes, the intervening role of perceived risk and the partially moderational role of gender.

Practical implications

The findings of this research suggest that a retailer’s positive reputation can reduce customers’ risk and engender trust, which in turn promotes customer commitment.

Originality/value

A growing number of examples suggests that retailers (specially fashion retailers) need to manage their reputation, which can come under threat in myriad ways, and its outcomes. However, so far, no individual study empirically investigated any of these reputation outcomes simultaneously or considered gender differences. Thus, the authors address an important research gap by examining the mechanism through which CBR affects relevant customer outcomes and by considering contextual factors.

Details

Journal of Product & Brand Management, vol. 26 no. 3
Type: Research Article
ISSN: 1061-0421

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Content available
Article
Publication date: 7 February 2018

Xin Li

The purpose of this paper is to comment on Professor Ming-Jer Chen’s recent publication titled “Competitive dynamics: Eastern roots, Western growth” and present an…

Abstract

Purpose

The purpose of this paper is to comment on Professor Ming-Jer Chen’s recent publication titled “Competitive dynamics: Eastern roots, Western growth” and present an asymmetry reversing perspective on the competitive dynamics between two nonobvious, invisible or indirect competitors, namely, how emerging market resource-poor firms compete and outcompete advanced country resource-rich rivals.

Design/methodology/approach

The author first identifies an important neglect in Professor Chen’s scholarship on competitive dynamics, i.e., the neglect of the ubiquity of the less visible competition between two actors who initially would not be considered as competitors. Then, the author proposes an asymmetry reversing theory (ART) of competitive dynamics to redress this neglect. The theory is presented in two parts. The first part describes the competitive dynamics between the two actors as a three-stage process of reversing the asymmetry in resource possession and market position between the resource-poor firm and its resource-rich rivals. The second part explains the key success factors for the resource-poor firm to go through each of the three stages.

Findings

The growth process of the resource-poor firm can be broadly divided into three stages: surviving, catching-up, and outcompeting. For ambitious yet pragmatic resource-poor firms, in the surviving stage, they often (have to) accept the asymmetry between themselves and their resource-rich rivals in terms of resource possession and market position, and try to avoid any direct competition with the strong incumbents. They often tactically appear to pursue different paths of development from those of the strong incumbents by focusing on particular product categories and market segments. Doing so allows the resource-poor firms to win times and spaces for non-interrupted growth. Once they have accumulated sufficient resources and market experiences, they start to reduce the asymmetry between themselves and their better-endowed rivals by entering the similar or same product categories and market segments. To effectively catch up and outcompete the incumbents, they often differentiate themselves from their rivals by offering cheaper products or services, adding new features to their products, providing extra services to their customers, inventing new business models, etc.

Research limitations/implications

One limitation of this paper is that the ART framework has so far been built on anecdotal evidences. It needs to be tested by empirical studies and refined further in the future. Another limitation is that the proposed theory is based on competitive dynamics between emerging market resource-poor firms and advanced country resource-rich firms. It needs to be tested whether this theory has applicability to any other firms.

Originality/value

This paper fills an important research gap in the competitive dynamics literature by proposing an asymmetry reversing theory of competitive dynamics between a weak latecomer and a strong incumbent in a competitive field.

Details

Cross Cultural & Strategic Management, vol. 25 no. 3
Type: Research Article
ISSN: 2059-5794

Keywords

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Article
Publication date: 31 May 2018

Yun Yeong Jung and Rae Soo Park

This paper investigates the effects of information asymmetry and Credit Rating Agency's reputation on bond yield spread, which is caused by the split bond rating of CRAs…

Open Access

Abstract

This paper investigates the effects of information asymmetry and Credit Rating Agency's reputation on bond yield spread, which is caused by the split bond rating of CRAs. For analysis, We do multivariate analysis, using bond rating and bond yield spread data in Korea from 2004 to 2015. The empirical results are as follows.

First, we examines whether information asymmetry affects the bond yield spread. using split rating data. As a result, the information asymmetry measured by split rating variable is significant, which supports the information asymmetry hypothesis. Additionally we can find bond yield spread is decided by negative credit grade rather than positive credit grade under split rating condition.

Next, we examines the relationship between the CRA’s reputation and the bond yield spread in case of split rating. Here, samples were divided into full samples and split rating samples. Summarizing the result, both samples are suggest similar result, the bond yield spread is changed depending on the specific CRA’s grading which having conservative rating tendency.

Thus, This result suggest information asymmetry caused by split rating and CRA’s reputation measured by CRA’s rating tendency affect bond yield spread in Korea

Details

Journal of Derivatives and Quantitative Studies, vol. 26 no. 2
Type: Research Article
ISSN: 2713-6647

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Content available
Article
Publication date: 20 November 2020

Sangeetha K. Prathap and Sreelaksmi C.C.

Consumers often face a dilemma regarding the purchase decisions of traditional handloom apparel because of the non-availability of information cues that would enable them…

Abstract

Purpose

Consumers often face a dilemma regarding the purchase decisions of traditional handloom apparel because of the non-availability of information cues that would enable them to assess the quality of the product. The spread of counterfeit products in the market adds to information asymmetry. The study aims to examine factors influencing purchase intention of traditional handloom apparel that have Geographical Indication (GI) certification, which follows the certification procedure specified by the World Intellectual Property Organisation (WIPO).

Design/methodology/approach

A survey was conducted among 202 traditional handloom apparel consumers in India and the data was analysed using structural equation modelling. The purchase intention of GI certified handloom apparels was examined as the dependent variable, whereas quality consciousness, product diagnosticity, perceived information asymmetry were placed as independent variables. The mediating role of perceived quality and product trust in the relation between perceived information asymmetry and purchase intention was also looked into.

Findings

Results reveal that quality consciousness positively influences product diagnosticity (facilitated by the GI label certification) which in turn reduces perceived information asymmetry. Further, a reduction in perceived information asymmetry was found to increase the purchase intention of traditional handloom apparel, fully mediated by the perceived quality and product trust.

Research limitations/implications

The customers who are facing a dearth of information while making purchase of traditional handlooms will be benefitted from the GI certification label which provides authenticity regarding product attributes confirming quality. Further, the study adds to the theory by establishing the relation between quality consciousness and perceived information asymmetry.

Practical implications

The findings imply that GI handloom apparel sellers should design marketing strategies that would project GI certification labels for traditional handloom apparel to effectively communicate product quality attributes, thus enhance product diagnosticity reducing information asymmetry. While organic certification for agricultural products is done at the individual producer’s level, GI certification is done under the producer’s collective label. Further, studies may be extended to agricultural products (Darjeeling tea, Alphonso mangoes, etc.), food items (rasgulla, Thirupathi laddoo, etc.) and handicrafts (Aranmula Mirror, Payyannur pavithra ring) that have acquired GI label in India. GI certification is adopted worldwide and studies may be extended to such products also [example Parma ham (Italy), Hessian wine (Germany)].

Originality/value

Empirical research on determinants of consumer purchase intentions of GI certified traditional handloom apparel is a novel attempt done in the context of a developing country such as India. The study brings out the importance of the GI certification label envisaged by the WIPO, which can serve as a tool for reducing uncertainties faced by consumer in framing purchasing intentions. This can be extended to any product type such as agricultural, food products and handicrafts that has acquired GI certifications in different countries. The study revealed that product diagnosticity (through GI certification) could reduce perceived information asymmetry that leads the consumer to the perception of quality and product trust which results in the purchase intention of traditional handloom apparel. The outcomes of the study can be instrumental in designing marketing strategies for capturing market share.

Details

Journal of Humanities and Applied Social Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN:

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Book part
Publication date: 24 March 2005

Jonathan M. Godbey and James W. Mahar

Audits are a means of reducing the information asymmetry between managers and investors. If the quality of the audit is in question, outside investors may face a larger…

Abstract

Audits are a means of reducing the information asymmetry between managers and investors. If the quality of the audit is in question, outside investors may face a larger informational disadvantage. We test the hypothesis that this informational disadvantage is manifested in the implied volatilities associated with the equity options of the audited firms. We find that volatilities increased for Andersen audited firms relative to firms audited by other Big Five accounting firms. This finding is consistent with the view that auditors help lessen the information asymmetry problem and that some of this reduction is accomplished by auditor reputation.

Details

Research in Finance
Type: Book
ISBN: 978-0-76231-161-3

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Article
Publication date: 28 May 2020

Chui Zi Ong, Rasidah Mohd-Rashid and Kamarun Nisham Taufil-Mohd

The purpose of this study is to examine the influence of underwriter reputation on the valuation of Malaysian initial public offerings (IPOs).

Abstract

Purpose

The purpose of this study is to examine the influence of underwriter reputation on the valuation of Malaysian initial public offerings (IPOs).

Design/methodology/approach

This study employed cross-sectional multiple regression models to analyse the relationship between underwriter reputation and IPO valuation that included 466 IPOs listed on Bursa Malaysia from 2000 to 2017.

Findings

The results revealed that underwriter reputation had a significant negative association with IPO valuation. Firms that engaged the services of reputable underwriters had their IPO offer prices set lower than the intrinsic values during the listing. After incorporating firms' size, this study found a positive relationship between underwriter reputation and IPO valuation. Big firms (high quality) hired reputable underwriters for certification purposes as issuers were aware that the cost of hiring a reputable underwriter would be justified by increased transparency after listing. Therefore, firms that engaged reputable underwriters had approximately fair values since issuers assumed that the price would be close to the intrinsic value following enhanced transparency post-listing.

Research limitations/implications

Future studies should focus on other non-financial factors, such as auditor reputation.

Originality/value

The present study provides new insights into the certification role of underwriters in valuing IPOs in the Malaysian market.

Details

Managerial Finance, vol. 46 no. 10
Type: Research Article
ISSN: 0307-4358

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Book part
Publication date: 3 October 2007

Matthew Haigh

Despite speculation from legislators and practitioners, no studies have investigated the reasons for social funds’ marginal market penetration. More generally, calls for a…

Abstract

Despite speculation from legislators and practitioners, no studies have investigated the reasons for social funds’ marginal market penetration. More generally, calls for a greater understanding of investors’ motivations, needs and purchasing intentions have not been met. By identifying what attracts consumers to social mutual funds and the information-processing difficulties consumers face when considering a purchase, this paper claims to make a meaningful contribution to the literature on social investment and mutual funds. In 2004 an Internet questionnaire survey attracted 382 interested, current and former social investors from Australasia, North America and Europe. The questionnaire measured motivations to invest in social funds and attitudes towards information sources and selection criteria. A restricted data set was used to test a set of propositions relating to respondents’ investment intentions and information asymmetries. Results were largely as expected. Respondents were attracted to social funds from moral conviction and from desires to influence corporate behavior. One in two respondents had chosen not to invest on the basis of informational concerns. Unexpectedly, social investment styles, portfolio listings and perceived accuracy of information were considered more important to an investment decision than management expenses. Findings underline a need for careful product design and management.

Details

Envisioning a New Accountability
Type: Book
ISBN: 978-0-7623-1462-1

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Article
Publication date: 7 June 2019

Tassilo Schuster, Dirk Holtbrügge and Franziska Engelhard

The purpose of this study is to analyze the effects of inpatriates’ abilities, motivation and opportunities on knowledge sharing and the moderating role of boundary…

Abstract

Purpose

The purpose of this study is to analyze the effects of inpatriates’ abilities, motivation and opportunities on knowledge sharing and the moderating role of boundary spanning in this context.

Design/methodology/approach

By integrating the ability–motivation–opportunity framework with the concept of boundary spanning four hypotheses are developed, which are tested against the data of 187 inpatriates working in Germany.

Findings

The study reveals that inpatriates’ motivation and certain opportunities are positively related to knowledge sharing, whereas inpatriates’ abilities do not show a positive effect. Moreover, it is shown that inpatriate boundary spanning has a moderating effect on this relationship.

Originality/value

Based on the results, the study enhances the current literature by introducing the concept of reputation asymmetry. Moreover, requirements of how inpatriates’ assignments should be designed and implications for further research are outlined.

Details

Employee Relations: The International Journal, vol. 41 no. 5
Type: Research Article
ISSN: 0142-5455

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Article
Publication date: 5 October 2012

Marietta Peytcheva and Peter R. Gillett

The purpose of this paper is to investigate practicing auditors' beliefs regarding the effect of prior involvement on the occurrence of quality threatening behaviour (QTB…

Abstract

Purpose

The purpose of this paper is to investigate practicing auditors' beliefs regarding the effect of prior involvement on the occurrence of quality threatening behaviour (QTB) during an audit. The authors examine the extent to which auditors' beliefs about QTB are consistent with the theoretical framework of Kanodia et al., according to which prior involvement in audit work would increase the likelihood of auditors suppressing evidence inconsistent with earlier audit decisions.

Design/methodology/approach

The authors conduct an experiment in which auditors assess the likelihood of perceived reputation threats associated with encountering disconfirming evidence late in the audit, and the likelihood that such evidence will be suppressed.

Findings

Auditors participating in the study believe that prior involvement will induce a perception of personal reputation threats in an auditor encountering evidence inconsistent with the conclusions of earlier audit work. Participants perceive an auditor with prior involvement in the audit work to be more likely to suppress audit evidence than an auditor with no prior involvement; this effect is largely explained by the personal reputation threats believed to be induced by prior involvement.

Research limitations/implications

The findings provide important information, from the perspective of practicing auditors, about a situational antecedent of QTB that is present on most audit engagements. Prior involvement is perceived by auditors to induce a conflict of interest in reporting troublesome evidence uncovered late in the audit. These perceptions suggest it is important to raise reviewers' awareness of the possibility of undesirable behavior in such situations. Potential limitations of the study relate to generalizability of the results under different levels of misstatement risk and under different environments in audit practice. Also, the authors do not measure auditors' actual behaviour, but their assessment of hypothetical situations and beliefs about others' actions. Future research can examine actual auditor behaviour in the presence of prior involvement.

Originality/value

The paper provides evidence on auditors' beliefs about the effects on QTB of prior involvement, a factor that has not been previously studied in this line of research. The authors show that auditors' beliefs about QTB are consistent with Kanodia et al.'s theoretical framework. The study is the first to measure auditors' assessments of perceived reputation threats and to show their mediating effect on the predicted behavior of audit professionals.

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Article
Publication date: 17 August 2020

Yawei Fu and Sin Huei Ng

The purpose of this paper is twofold to examine the factors that contribute to local bias of venture capital in China and to explore the relationship between local bias…

Abstract

Purpose

The purpose of this paper is twofold to examine the factors that contribute to local bias of venture capital in China and to explore the relationship between local bias and performance of venture capital institutions.

Design/methodology/approach

Local bias was measured in line with the model developed by Cumming and Dai (2010). Regression techniques were performed for our long-term cross-sectional data to analyse the potential determinants of local bias. This is followed by the Probit model to test the relationship between local preference and successful exit.

Findings

The overall finding indicated that local bias in China increased over time. The stiff competition among venture capital institutions reduced local bias, but the enhanced innovation capabilities of a particular geographical area amplified local bias because of the knowledge spillover effect. Finally, the results suggested that venture capital institutions with less local bias enjoy a greater likelihood of making successful exits.

Research limitations/implications

This study used successful venture capital exit as a proxy for venture capital institution’s performance because of the unavailability of information such as internal rate of return. Future research should try to adopt other way of measuring venture capital institution’s performance.

Practical implications

This study sheds light on the various possible causes of local bias that the policymakers need to be aware of. Despite the rapid rise of China’s venture capital market in recent years, venture capital institutions have yet to make inroads into the local high-tech industry. This study implies to the policymakers that to reverse this trend, they should formulate policies that foster the long-term performance of venture capital institutions, mitigate the severity of local bias and raise the competitiveness of the Chinese venture capital market.

Originality/value

Because of data limitations, there is currently lack of prior empirical research on local bias of Chinese venture capital institutions based on large-scale data. This study intends to fill the gap.

Details

Journal of Asia Business Studies, vol. 15 no. 1
Type: Research Article
ISSN: 1558-7894

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