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Article
Publication date: 4 October 2022

Gang Zhao, Xin Yu and Kailun Ni

The findings suggest that reducing information processing costs as a result of better transportation is an important ingredient in promoting the pricing of firm-specific…

Abstract

Purpose

The findings suggest that reducing information processing costs as a result of better transportation is an important ingredient in promoting the pricing of firm-specific information. This study aims to discuss the aforementioned issue.

Design/methodology/approach

The authors adopt a difference-in-difference (DID) research design to examine the impact of information processing costs on stock price synchronicity with a sample of firms listed in the Chinese A-share market during 2007 and 2017.

Findings

This paper shows that the launch of the high-speed railway (hereafter HSR) in China is associated with lower stock price synchronicity, consistent with the theory that the HSR reduces investors’ information processing costs (cost of monitoring, acquiring and analyzing firm disclosures). This effect is more pronounced for companies located in remote areas than for those located in large cities. Further tests show that the negative association between the launch of HSR and stock price synchronicity is stronger for companies with higher information asymmetries, proxied by higher equity concentration, higher complexity and lower internal control quality.

Originality/value

This study contributes to the literature in the following three ways. First, prior literature relates the effects of geographic distance to information transmission and information asymmetry between insiders and outside investors (e.g. Coval and Moskowitz, 2001; Kang and Kim, 2008; Malloy, 2005). The authors supplement the literature by providing new empirical evidence from an exogenous shock (natural experiment), that is, the launch of HSR, that facilitates transportation and reduces information transmission costs. Second, prior studies have shown that new airline routes that facilitate transportation improve investment and productivity (e.g. Bernstein et al., 2016; Giroud, 2013). The authors extend this stream of studies by showing that the development of HSR networks reduces information processing costs, and promotes the incorporation of firm-specific information in the asset pricing. More importantly, in this study, the authors explicitly incorporate disclosure processing costs theory into our framework thus enhancing our understanding of how and why improvements in transport relate to better market outcomes.

Details

Asian Review of Accounting, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 28 May 2021

Fei Teng, Xue Xia and Yu Xin

Close relationship with major customers, by curtailing opportunistic behaviors during private placements (PPs) and guaranteeing the production and sales of products after…

Abstract

Purpose

Close relationship with major customers, by curtailing opportunistic behaviors during private placements (PPs) and guaranteeing the production and sales of products after, is expected to facilitate the realization of PP’s strategic goals. However, major customers, on the contrary, may impair PP’s performance because of their strong bargaining power. Based on the transaction cost theory and relational contract theory, this paper aims to investigate the impact of major customers on firms’ strategic development in the context of private placements. The mechanisms of such impact are analyzed from the prospect of economies of scale, supervision and the rip-off effect by major customers. Further, the moderating role of the customer relationship investment (CRI) is considered.

Design/methodology/approach

Using a sample of China’s non-financial A-share listed firms during 2010-2016, this paper empirically investigates the impact of customer relationships on firms’ operating performance following PPs. In the main regressions, the sales growth rate serves as the dependent variable to measure PP’s operating performance, while the customer concentration proxies for the closeness of customer relationship. This study captures the impact of customer relationships on PPs’ performance by looking at the coefficient of the interaction term of post PP dummy and customer concentration. In the additional tests, selling and management expenses along with entertainment and traveling expenditures are used to measure customer relationship investment.

Findings

Results show that major customers help improve PPs’ strategic performance. The more concentrated the customer portfolio is, the higher operating performance will be after the PPs. Such a relationship is stronger when CRI is at a higher level. However, CRI also incurs costs, which impairs the effect of major customers on net profit. Further research finds that the effect of major customers is more pronounced in situations of extensional PPs, with actively interactive customers and in non-state-owned firms. In addition, state-owned customers with strong bargaining power have impaired the role of customers in promoting PP’s operating performance.

Originality/value

This paper validates the role of customers in firms’ strategic development. The study not only contributes to the research on the economic consequences of customers but also adds to the evolving literature of factors affecting the performance of PPs. The findings of the study have important practical implications for both customer relationship management and the supervision of PPs.

Details

Nankai Business Review International, vol. 12 no. 2
Type: Research Article
ISSN: 2040-8749

Keywords

Article
Publication date: 24 January 2020

Xin Yu and Ying Zheng

The purpose of this paper is to examine whether the political connections of listed firms in China affect how the market reacts to cases of financial misrepresentation…

Abstract

Purpose

The purpose of this paper is to examine whether the political connections of listed firms in China affect how the market reacts to cases of financial misrepresentation investigated by the regulatory authorities.

Design/methodology/approach

The authors use an event study method and the financial misrepresentation events in China stock markets as research setting and empirically test the association between market reactions to the announcement of financial misrepresentations and the presence of political connections.

Findings

The results show that on average, there is no significant market reaction to financial misrepresentation for politically connected firms. In contrast, however, there is a significantly negative market reaction for non-connected firms, which suggests that investors do not punish politically connected firms for financial misrepresentation. The authors argue that politically connected companies use the altered financial information to gain legitimacy and obtain benefits from the government. Consistent with the argument, the authors find that in the years after they disclose their financial misrepresentation, firms with political connections are more likely to increase their bank loans than firms without political connections.

Originality/value

The authors provide a new explanation for the low-earnings quality of politically connected firms.

Details

Accounting Research Journal, vol. 33 no. 1
Type: Research Article
ISSN: 1030-9616

Keywords

Article
Publication date: 9 March 2021

Xin Yu

In heterogeneously segmented markets, collaborating with product users in product innovation is important for business success. End user innovators and embedded user…

Abstract

Purpose

In heterogeneously segmented markets, collaborating with product users in product innovation is important for business success. End user innovators and embedded user innovators differ in terms of their prior embeddedness in the target industry. The purpose of this study is twofold. First, the authors empirically compare these two types of user innovators in terms of their diffusion channel selection. Second, the authors analyze how the technological advances of their innovations affect this difference.

Design/methodology/approach

Using an online questionnaire survey, this study collected a sample of 237 user-generated innovations in Japan and analyzed several hypotheses using quantitative statistical approaches.

Findings

The analysis shows that embedded user innovators are more likely than end user innovators to transfer their innovations to producers rather than peers. As the technological advances of their innovations increase, end user innovators' likelihood of transferring their innovation to producers increases more significantly than that of embedded user innovators.

Originality/value

This is the first paper to investigate the difference between end user innovators and embedded user innovators with respect to their diffusion channel selection as well as the moderating role of technological advances. The findings bring new perspectives to the domains of user–producer collaboration and technology transfer.

Details

European Journal of Innovation Management, vol. 25 no. 4
Type: Research Article
ISSN: 1460-1060

Keywords

Article
Publication date: 26 November 2021

Anran Zhang, Zhengliang Xu and Xin Yu

Cause-related marketing (CRM) is an increasing popular marketing strategy in which a firm donates a specific amount to a designed cause when customers engage in…

Abstract

Purpose

Cause-related marketing (CRM) is an increasing popular marketing strategy in which a firm donates a specific amount to a designed cause when customers engage in revenue-providing exchanges. Based on balance and attribution theory, this paper aims to explore the interaction effect of donation amount and ad orientation, two important factors of formulation and communication of CRM, respectively, on consumer response and the mediating effect of consumers’ perceived company motives.

Design/methodology/approach

Two 2 (donation amount: small vs large) × 2 (ad orientation: product- vs cause-oriented) between-subjects experimental studies were conducted in marketing course with 284 and 157 Chinese undergraduate students participating in Studies 1 and 2, respectively. ANOVA and regression were used to test the hypotheses.

Findings

Study 1 shows the significant interaction effects of donation amount and ad orientation on consumers’ response. When CRM has a large donation amount, cause-oriented (vs product-oriented) ad leads to consumers’ more positive company attitude and higher purchase intention. The opposite is true for the small donation amount condition. Study 2 shows that the above interaction effect is mediated by consumer-attributed company motives. The attributed motive of sincerely caring about social cause has significant positive effect on consumer response, whereas the attributed motive of increasing sales or improving corporate image does not.

Originality/value

This paper contributes to the literature by empirically examining the interaction effect of donation amount and ad orientation on consumer-inferred motives and behavioral response. The findings are valuable because they indicate the importance of matching between factors at formulation and communication stage. In addition, this paper found that consumers are “tolerant” of companies using CRM to promote product sales and improve brand image.

Details

Nankai Business Review International, vol. 13 no. 3
Type: Research Article
ISSN: 2040-8749

Keywords

Article
Publication date: 16 September 2020

Alya Hanisah Omar, Chin Siang Kue, Roza Dianita and Ke-Xin Yu

Traditional Malaysian vegetables, also known as ulam, are believed to have healing properties among the local community. Ulam is commonly reported to have high antioxidant…

Abstract

Purpose

Traditional Malaysian vegetables, also known as ulam, are believed to have healing properties among the local community. Ulam is commonly reported to have high antioxidant content which makes it a popular food. The purpose of this paper is to determine the teratogenic potential of eight ulam, using zebrafish model. The tested ulam were Cosmos caudatus, Gynura procumbens, Labisia pumila var. alata, Phaleria macrocarpa, Polygonum minus, Piper sarmentosum, Premna foetida and Sauropus androgynous.

Design/methodology/approach

Methanol extract of ulam was prepared using the maceration method. Various concentrations of extracts were tested against fish embryo short-term toxicity test. The lethal concentration (LC50) and teratogenic effect of the ulam were determined.

Findings

Among all tested species, L. pumila, P. foetida and S. androgynous showed 100% lethal effect towards zebrafish embryos at concentrations of 10 µg/mL, 1,000 µg/mL and 100 µg/mL, respectively. The three ulam have exhibited teratogenic effect on zebrafish embryos after 72 h post-fertilization. L. pumila had induced yolk sac edema at 1.0 µg/mL for normalized measurement of 108.3 ± 2.0% (which is higher than negative control, p < 0.05, median = 110.7%), while P. foetida had induced pericardial edema at 100 µg/mL for normalized measurement of 124.0 ± 4.6% (which is higher than negative control, p < 0.05, median = 124.3%). On the other hand, S. androgynus induced curve trunk at 30 µg/mL for the presence of 70.9 ± 4.2%.

Originality/value

The teratogenic effect of L. pumila, P. foetida and S. androgynous suggests the possible disruption in the embryogenesis in zebrafish, namely Notch, vascular endothelial growth factor (VEGF) and retinoic acid pathways. The results of ulam gave possible implications and insights on the cancer pathways involved, which could be a useful target for cancer research. This is the first report on teratogenicity evaluation of Malaysian ulam showing relationship to cancer pathways by using zebrafish embryo model.

Details

British Food Journal, vol. 122 no. 10
Type: Research Article
ISSN: 0007-070X

Keywords

Open Access
Article
Publication date: 10 June 2022

Xinyi Huang, Fei Teng, Yu Xin and Liping Xu

This paper aims to study the effect of the establishment of bankruptcy courts on bond issuance market. This paper helps to predict that the introduction of bankruptcy…

Abstract

Purpose

This paper aims to study the effect of the establishment of bankruptcy courts on bond issuance market. This paper helps to predict that the introduction of bankruptcy courts in China can mitigate price distortions caused by the implicit government guarantees and promote the development of the high-risk bond market.

Design/methodology/approach

This paper exploits the staggered introduction of bankruptcy courts across cities to implement a differences-in-differences strategy on bond issuance data. Using bonds issued in China between 2018 and 2020, the impact of bankruptcy courts on the bond issuance market can be analyzed.

Findings

This paper reveals that bond issuance credit spreads increase and is more sensitive to firm size, profitability and downside risk of issuance entity after the introduction of bankruptcy courts. It also reveals a substantive increase in bond issuance quantity and a decrease in issuer credit ratings following the establishment of bankruptcy courts. In addition, the increase of credit spreads is more prominent for publicly traded bonds, those whose issuers located in provinces with lower judicial confidence, bonds issued by SOEs and bonds with stronger government guarantees. Finally, the role of bankruptcy courts is more pronounced in regions with higher marketization.

Originality/value

This paper relates to previous studies that investigate the impact of laws and institutions on external financing. It helps provide new evidence to this literature on how improvements of efficiency and quality in bankruptcy enforcements relate to the marketization of bond issuance. The results provide further evidence on legal institutions and bond financing.

Details

China Accounting and Finance Review, vol. 24 no. 3
Type: Research Article
ISSN: 1029-807X

Keywords

Article
Publication date: 25 October 2021

Liu-Qing Li, Yi-Tian Gao, Xin Yu, Gao-Fu Deng and Cui-Cui Ding

This paper aims to study the Gramian solutions and solitonic interactions of a (2 + 1)-dimensional Broer–Kaup–Kupershmidt (BKK) system, which models the nonlinear and…

Abstract

Purpose

This paper aims to study the Gramian solutions and solitonic interactions of a (2 + 1)-dimensional Broer–Kaup–Kupershmidt (BKK) system, which models the nonlinear and dispersive long gravity waves traveling along two horizontal directions in the shallow water of uniform depth.

Design/methodology/approach

Pfaffian technique is used to construct the Gramian solutions of the (2 + 1)-dimensional BKK system. Asymptotic analysis is applied on the two-soliton solutions to study the interaction properties.

Findings

N-soliton solutions in the Gramian with a real function ζ(y) of the (2 + 1)-dimensional BKK system are constructed and proved, where N is a positive integer and y is the scaled space variable. Conditions of elastic and inelastic interactions between the two solitons are revealed asymptotically. For the three and four solitons, elastic, inelastic interactions and soliton resonances are discussed graphically. Effect of the wave numbers, initial phases and ζ(y) on the solitonic interactions is also studied.

Originality/value

Shallow water waves are studied for the applications in environmental engineering and hydraulic engineering. This paper studies the shallow water waves through the Gramian solutions of a (2 + 1)-dimensional BKK system and provides some phenomena that have not been studied.

Details

International Journal of Numerical Methods for Heat & Fluid Flow, vol. 32 no. 7
Type: Research Article
ISSN: 0961-5539

Keywords

Article
Publication date: 19 August 2013

Andrew Adamatzky, Xin-She Yang and Yu-Xin Zhao

– The purpose of this paper is to study the slime mould Physarum polycephalum

Abstract

Purpose

The purpose of this paper is to study the slime mould Physarum polycephalum

Design/methodology/approach

The paper proceeds by representing major urban areas of China by oat flakes, inoculating the slime mould in Beijing, waiting till the slime mould colonises all urban areas, or colonises some and cease further propagation, and analysing the protoplasmic networks formed and comparing with man-made motorway network and planar proximity graphs. Findings

Findings

Laboratory experiments found that P. polycephalum

Originality/value

The paper demonstrated the strong component of transport system built by slime mould of P. polycephalum

Details

International Journal of Intelligent Computing and Cybernetics, vol. 6 no. 3
Type: Research Article
ISSN: 1756-378X

Keywords

Article
Publication date: 15 May 2017

Hong Yu Xin Pan and Jun Song

Using volatility cones as the estimate of actual volatility instead of GARCH models, the purpose of this paper is to explore whether volatility arbitrage strategy can…

Abstract

Purpose

Using volatility cones as the estimate of actual volatility instead of GARCH models, the purpose of this paper is to explore whether volatility arbitrage strategy can provide positive profits and how the transaction costs existed in the real market affect the effectiveness of volatility arbitrage strategy.

Design/methodology/approach

A number of hedging approaches proposed to improve the hedging results and final returns of Black-Scholes model are analyzed and compared.

Findings

The general finding is that volatility arbitrage strategy can provide satisfactory returns based on the samples in Chinese market. Regarding transaction costs, the variable bandwidth delta and delta tolerance approach showed better results. Besides, choosing futures together with ETFs as hedging underlying can increase the VaR for better risk management.

Practical implications

This paper offers a new method for volatility arbitrage in Chinese financial market.

Originality/value

This paper researches the profitability of the volatility arbitrage strategy on ETF 50 options using volatility cones method for the first time. This method has advantage over the point-wise estimation such as GARCH model and stochastic volatility model.

Details

China Finance Review International, vol. 7 no. 2
Type: Research Article
ISSN: 2044-1398

Keywords

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