Search results

1 – 10 of over 65000
Article
Publication date: 29 January 2020

Olivia Johnson and Veena Chattaraman

Using identity theory, this paper aims to explore differences in socially responsible signaling behavior based on the salience of a personal or social identity.

Abstract

Purpose

Using identity theory, this paper aims to explore differences in socially responsible signaling behavior based on the salience of a personal or social identity.

Design/methodology/approach

Structural equation modeling was used to study the relationship among identity commitment, salience, and signaling behavior.

Findings

Findings revealed personal identity salience mediated the relationship between socially responsible commitment and socially responsible social-signaling consumption behavior.

Practical implications

The results of the study suggest that Millennials engage in socially responsible activities as a result of a salient personal identity. Millennials use socially responsible behavior to signal their benevolence to themselves and others.

Originality/value

This is the first research that has examined the relationship between Millennials’ socially responsible consumption behavior and a salient personal or social identity.

Details

Social Responsibility Journal, vol. 17 no. 1
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 3 May 2016

Lars Moratis

The purpose of this paper is to shed light on some important limitations of the ISO 26000 standard for corporate social responsibility (CSR) for the credible communication…

1456

Abstract

Purpose

The purpose of this paper is to shed light on some important limitations of the ISO 26000 standard for corporate social responsibility (CSR) for the credible communication of corporate CSR claims. The paper aims to identify and explore firm-level strategies to signal adherence to the standard effectively and their legitimacy consequences for the standard.

Design/methodology/approach

The identification of firm-level signaling strategies is mainly derived from an institutional description of the ISO 26000 standard and based on anecdotal evidence from current business practice, initiatives that have been taken worldwide by organizations such as national standards institutes, the ISO 26000 text and adjacent ISO documents, including ISO post-publication surveys. The paper is grounded in signaling theory.

Findings

Five signaling strategies for firms are derived and explored which may reduce information asymmetries and engage in efficacious signaling of their underlying CSR quality and thus guide the communication of firms’ adherence to the ISO 26000 standard.

Research limitations/implications

The findings urge to empirically investigate the use of ISO 26000 signaling strategies including their legitimacy consequences for firms.

Practical implications

The findings of this paper have implications for decisions firms make when considering working with ISO 26000 and communicating their adherence, notably regarding the enhancement of the credibility of their CSR claims. Also, it offers suggestions for certification organizations, national standards bodies and policy makers that want to encourage the adoption of CSR standards, ISO 26000 in particular.

Social implications

This paper may have implications for evaluating the CSR claims of firms by stakeholders and broader society.

Originality/value

This paper is the first one to address inherent signaling problems of ISO 26000 and to identify signaling strategies to counter these problems in a structured way.

Details

International Journal of Operations & Production Management, vol. 36 no. 5
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 21 September 2012

Stergios Leventis, Panagiotis E. Dimitropoulos and Asokan Anandarajan

The purpose of this paper is to investigate whether bank managers of countries within the European Union (EU) engage in signalling, especially after implementation of…

1339

Abstract

Purpose

The purpose of this paper is to investigate whether bank managers of countries within the European Union (EU) engage in signalling, especially after implementation of international financial reporting standards (IFRS) commencing 2005.

Design/methodology/approach

Signaling” is the use of loan loss provisions (LLPs) to convey signals of fiscal prudence and future profitability to investors. The authors use data from 18 countries across the EU covering the pre and post IFRS regimes and apply univariate and multivariate tests in order to test signaling behavior under both accounting regimes.

Findings

The findings indicate insufficient evidence that financially healthy banks engage in signaling behavior. However, banks facing financial distress appear to engage in aggressive signaling relative to healthy banks. Finally, the propensity to engage in signaling behavior is more pronounced for financially distressed banks in the post IFRS regime. While IFRS, under IAS 39 sort to mitigate the discretionary component of LLPs, our finding may be attributable to lax enforcement of IFRS.

Practical implications

The findings have implications for both investors and regulators. Investors should be aware that troubled banks engage in signaling to convey positive information about their future prospects. Regulators should be aware that financially stressed banks have a greater propensity to engage in signaling and need to ensure that the provisions of IFRS (which attempts to limit discretion in estimating LLPs) are enforced more stringently.

Originality/value

The paper contributes to the growing literature on bank signaling in a number of ways. First, the authors use a sample from 18 countries within the EU which has not been done before. Second, unlike prior studies which only examined healthy banks, the authors also include financially distressed banks in the sample. Third, the authors examine signaling behavior in the pre and post IFRS regimes to understand the influence of IFRS on the propensity to engage in signaling by bank managers.

Details

Journal of Economic Studies, vol. 39 no. 5
Type: Research Article
ISSN: 0144-3585

Keywords

Book part
Publication date: 1 October 2008

Magnus Lofstrom and John Tyler

In this paper, we develop a simple model of the signaling value of the General Educational Development certificate (GED) credential. The model illustrates necessary…

Abstract

In this paper, we develop a simple model of the signaling value of the General Educational Development certificate (GED) credential. The model illustrates necessary assumptions for a difference-in-differences estimator that uses a change in the GED passing standard to yield unbiased estimates of the signaling value of the GED for marginal passers. We apply the model to the national 1997 passing standard increase, which affected GED test takers in Texas. We utilize unique data from the Texas Schools Micro Data Panel (TSMP) that contain demographic and GED test score information from the Texas Education Agency linked to pre- and post-test-taking Unemployment Insurance quarterly wage records from the Texas Workforce Commission. Comparing Texas dropouts who acquired a GED before the passing standard was raised in 1997 to dropouts with the same test scores who failed the GED exams after the passing standard hike, we find no evidence of a positive GED signaling effect on earnings. However, we find some evidence suggesting that our finding may be due to the low GED passing threshold that existed in Texas for an extended period.

Details

Work, Earnings and Other Aspects of the Employment Relation
Type: Book
ISBN: 978-1-84950-552-9

Article
Publication date: 18 June 2019

Angelina Christie and Daniel Houser

The purpose of this paper is to test whether underpricing can serve as a signal of quality in a financing-investment environment and to compare it under the two…

Abstract

Purpose

The purpose of this paper is to test whether underpricing can serve as a signal of quality in a financing-investment environment and to compare it under the two institutions for financing offers that are commonly observed in corporate financial markets: take-it-or-leave-it offer (TLO) and the competitive bidding offer (CBO).

Design/methodology/approach

The research paper uses experimental economics methodology and laboratory experiments to investigate the research question.

Findings

The results suggest that underpricing can serve as a signal of quality but not sustainable as a repeat strategy. Over time, the high-quality firms converge to a pooling strategy rather than bearing the cost of signaling. Additionally, underpricing is lower under CBO than under TLO institution due to competitive bidding. Signaling under CBO institution may be less salient due to possible mimicking by the low-quality firms.

Originality/value

This paper presents a first experimental investigation of the underpricing-signaling hypothesis in a financing-investment environment under asymmetric information. The choice of institution in a financing environment produces qualitatively and strategically different behavior among firms and investors.

Details

Review of Behavioral Finance, vol. 11 no. 2
Type: Research Article
ISSN: 1940-5979

Keywords

Open Access
Article
Publication date: 18 March 2019

Sheela Devi D. Sundarasen

This paper aims to provide empirical evidence on the extent of alteration institutional characteristics, i.e. legal origin and corruption levels, may have on the signaling

1714

Abstract

Purpose

This paper aims to provide empirical evidence on the extent of alteration institutional characteristics, i.e. legal origin and corruption levels, may have on the signaling effects of auditors’ reputation, underwriters’ reputation and ownership retention on initial public offering (IPO) initial returns in OECD countries.

Design/methodology/approach

Cross-sectional data composed of 6,182 IPOs from 30 OECD countries are used for 2003-2012. Ordinary least square with multiple linear regressions is used to test the hypotheses.

Findings

The findings indicate that the legal framework and corruption level of a country alters the signaling effects of underwriters’ reputation, auditors’ reputation and ownership retention in an IPO environment. These three variables mitigate information asymmetry, signal firm value to potential investors and ultimately decrease IPO initial returns. This relationship is more significant in the civil law countries. Corruption levels negatively moderate the relationship in the common law and Scandinavian civil law countries but have no significance in the German and French civil law countries, indicating the importance of the signaling variables in these two civil law countries.

Originality/value

This study examines the extent of the alterations that the legal framework and the corruption levels cause to the signaling relationship between auditors’ reputation, underwriters’ reputation and ownership retention on IPO initial returns in selected OECD countries.

Details

PSU Research Review, vol. 3 no. 1
Type: Research Article
ISSN: 2399-1747

Keywords

Article
Publication date: 6 July 2010

Robert M. Hull, Sungkyu Kwak and Rosemary L. Walker

The purpose of this paper is to examine the impact of insider ownership decreases on stock returns for firms undergoing seasoned equity offerings (SEOs).

Abstract

Purpose

The purpose of this paper is to examine the impact of insider ownership decreases on stock returns for firms undergoing seasoned equity offerings (SEOs).

Design/methodology/approach

Insider data were gathered for firms undergoing SEOs and this information used to compute the insider ownership percentage decreases caused by the SEOs. These insider percentage decreases and standard compounded abnormal return methodology were used to test signaling theory.

Findings

It was discovered that the short‐run and long‐run stock returns accompanying SEOs are not consistent with what signaling theory predicts. In particular, for greater decreases in insider ownership percentages, a superior market response for both short‐run tests and long‐run post‐SEO tests was often found.

Research limitations/implications

Prior research has not examined how the change in insider ownership caused by a corporate event influences stock returns. Future research can build on the univariate tests by examining the impact of insider ownership within a multivariate framework.

Practical implications

Investors cannot profit by following the behavior of insiders by selling shares in companies where insiders lower their ownership percentages. This is because insiders appear to have personal agendas that they follow when decreasing their holdings.

Originality/value

This is the first study to examine how changes in insider ownership caused by a significant corporate event affect stock returns. The findings of this empirical examination challenge signaling theory as regards insider knowledge, the ability of insiders to convey their privileged knowledge (if it exists), and the capacity of outsiders to decipher and act on insider actions.

Details

Managerial Finance, vol. 36 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 29 June 2020

Husni Kharouf, Donald J. Lund, Alexandra Krallman and Chris Pullig

Drawing on signaling theory, the purpose of this study is to investigate the effects of the strength and framing of firm signals sent to repair relationships following…

1090

Abstract

Purpose

Drawing on signaling theory, the purpose of this study is to investigate the effects of the strength and framing of firm signals sent to repair relationships following relationship violations.

Design/methodology/approach

Three 2 × 2 scenario-based experiments (total n = 527) manipulate signal strength × violation type (Study 1); signal frame × violation type (Study 2); and signal strength × brand familiarity (Study 3) to examine their dynamic impacts on relationship recovery efforts.

Findings

Stronger signals are more effective at relationship repair and are especially important following integrity (vs competence) violations. Signals framed as customer gains (vs firm costs) lead to more favorable relationship outcomes. Finally, brands that are less (vs more) familiar see greater benefits from strong signals.

Research limitations/implications

The three experiments were scenario-based, which may not replicate real-life behavior or capture participants’ actual emotions following a violation, thus future research should extend into real-world recovery efforts.

Practical implications

Managers should send strong signals (communicating the level of resources invested in the recovery efforts) framed as benefits to the customer, rather than costs to the firm. Strong signals are especially important when brand familiarity is low or an integrity violation has occurred.

Originality/value

This is the first research to directly apply signaling theory to the relationship recovery process and contributes to theory by examining the role of signal strength; framing of the signal as a customer gain vs firm cost; and the interplay of signal strength and brand familiarity on the relationship recovery effort.

Article
Publication date: 8 February 2011

Anthony Celani and Parbudyal Singh

The purpose of this paper is twofold. First, to discuss the application of a multi‐level perspective to signaling theory in a recruitment context. Then to discuss how the…

13904

Abstract

Purpose

The purpose of this paper is twofold. First, to discuss the application of a multi‐level perspective to signaling theory in a recruitment context. Then to discuss how the integration of signaling theory and the social identity approach may provide an improved understanding of the associations between an organization's recruitment activities and applicant attraction outcomes. The paper, first, summarizes the existing research and theoretical developments pertaining to signaling theory, multi‐level theory, and the social identity approach. From this literature a theoretical model from which research propositions are developed is suggested.

Design/methodology/approach

This is a literature review, within recruitment contexts, on signaling theory, the association between market signals and applicant attraction outcomes, and the integration of signaling, social identity, and self‐categorization theories as a theoretical foundation for research propositions.

Findings

Despite widespread acceptance of signaling theory in recruitment research, surprisingly little is known about the boundary conditions in the association between an organization's recruitment activities and applicant attraction outcomes.

Practical implications

A greater understanding of the application of signaling theory will enable managers to design and administer recruitment activities and processes in order to improve applicant attraction to recruiting organizations.

Originality/value

This paper fills a void in the recruitment literature by integrating signaling theory, social identity theory, and self‐categorization theory and providing avenues for future work.

Details

Personnel Review, vol. 40 no. 2
Type: Research Article
ISSN: 0048-3486

Keywords

Article
Publication date: 1 June 1994

Paul Herbig and John Milewicz

Describes market signals and market signaling, provides examples oftheir use in service‐oriented industries and, through a marketsimulation, examines their implications…

1938

Abstract

Describes market signals and market signaling, provides examples of their use in service‐oriented industries and, through a market simulation, examines their implications for profitability and competitive behavior. Marketing signals by firms within an industry are positively related to the profitability of the industry and the profits of the individual firms within the industry. However, there is a negative incentive for a firm to be the only signaler within an industry. This “lone man out” phenomenon puts a firm at a competitive disadvantage to the other firms within its industry. A “temporal pattern‐recognition deficiency” also seems to exist which tends to inhibit managers in finding patterns of behavior over time.

Details

Journal of Services Marketing, vol. 8 no. 2
Type: Research Article
ISSN: 0887-6045

Keywords

1 – 10 of over 65000