This article examines the informational content of credit default swap (CDS) net notional for future stock and CDS prices. Using the information on CDS contracts registered in…
Abstract
This article examines the informational content of credit default swap (CDS) net notional for future stock and CDS prices. Using the information on CDS contracts registered in DTCC, a clearinghouse, I construct CDS-to-debt ratios from net notional, that is, the sum of net positive positions of all market participants, and total outstanding debt issued by the reference entity. Unlike the ratio using the sum of all outstanding CDS contracts, this ratio directly indicates how much of debt is insured with CDS and therefore, is a natural measure of investors’ concern on a credit event of the reference entity. Empirically, I find crosssectional evidence that the current increase in CDS-to-debt ratios can predict a decrease in stock prices and an increase in CDS premia of the reference firms in the next week. Greater predictability for firms with investment grade credit ratings or low CDS-to-debt ratios suggests that investors pay more attention to firms in good credit conditions than those regarded as junk or already insured considerably with CDS.
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This article investigates the effect of the performance evaluation period on the long-term investment portfolio choice and the agency problem of outsourced investments. Though…
Abstract
This article investigates the effect of the performance evaluation period on the long-term investment portfolio choice and the agency problem of outsourced investments. Though investors with the prospect utility are required to raise the portfolio weight on risky assets such as stocks for a long investment horizon, institutional investors and professional fund managers cannot help lowering the portfolio weight on risky assets to minimize the loss and to avoid disappointing clients with a short evaluation period. We find empirical evidence in the Korean capital market that stocks and bonds are indifferent to investors with the prospect utility for an evaluation period with 16 months and the optimal portfolio weight of stocks and bonds is 30% to 70%. Therefore there exists the agency problem between investors (principal) and managers (agent) due to frequent performance evaluations, which is able to explain current excessive investment in fixed income markets of most national pension funds. Our result implies that we need to consider extending the evaluation period of the investment performance to achieve the goal of asset and liability management (ALM) of national long-term funds in this low-interest-rate environment.
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Jungkun Park, Dongyoup Kim and Hyowon Hyun
The purpose of this study is to investigate the evaluation of desirability/feasibility and adoption intention for the self-service technology of “older” consumers. This study also…
Abstract
Purpose
The purpose of this study is to investigate the evaluation of desirability/feasibility and adoption intention for the self-service technology of “older” consumers. This study also aims to show that the evaluation of desirability/feasibility and adoption intention varies depending on the type of customer value provided by self-service technology. Moreover, the authors improve the understanding of “older” consumers by comparing the adoption behavior through three proxies that express consumer aging: chronological age, subjective age and future time perspective.
Design/methodology/approach
This study was performed as an experimental design by manipulating advertisement messages of self-service technology for online grocery shopping according to customer values. There are two analytic methods applied in this study. First, the current study compares the effects of chronological age, subjective age and the future time perspective on the evaluation and adoption intention of self-service technology by using structural equation modeling. Second, this study examines the moderation effect of customer values by conducting a multi-group analysis.
Findings
The results of current research indicate that the future time perspective explains participants’ evaluation and adoption intention of self-service technology compared to chronological age and subjective age. Specifically, participants who perceive their future time to be limited, rather than expansive, negatively assess the expected desirability and feasibility of self-service technology. In addition, the results of the moderation test show that the future time perspective affects more significantly the evaluation and adoption intention of self-service technology when the functional value is emphasized rather than emotional or social value.
Research limitations/implications
The results of this study showed that the effect of future time perspective on expected desirability and feasibility was almost significant in each sub-dimension, but there were relatively few factors influencing trial intention. In this respect, it is necessary to look into the impact of the details of desirability and feasibility along with other variables known to influence the adoption of self-service technology related to aging. It would be meaningful to find and operationalize items that are valid for older consumers, rather than the desirability and feasibility elements typically applied to self-service technology.
Originality/value
This study contributes to the extension of the socioemotional selectivity theory that has been suggested to interpret older consumers’ behaviors. This research applies the concept of future time perspective to the assessment of desirability and feasibility and adoption intention. At the same time, for the marketing managers, the comparison between proxies that represent aging proposes the ways to attract “older” consumers with appropriate emphasis on customer values.
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Hyowon Hyun, Dongyoup Kim and Jungkun Park
The purpose of this study is to develop a conceptual model to examine the effect of word-of-mouth in the retailing of Chinese consumer electronics in the US. This study aims to…
Abstract
Purpose
The purpose of this study is to develop a conceptual model to examine the effect of word-of-mouth in the retailing of Chinese consumer electronics in the US. This study aims to show that word-of-mouth affects directly or indirectly consumer trust-loyalty link for Chinese consumer electronics.
Design/methodology/approach
A research framework was designed to test the direct and indirect relationships with structural equation modelling regarding how word-of-mouth affects consumer trust and loyalty for Chinese consumer electronics in the US consumers.
Findings
The results indicate that word-of-mouth increases consumer trust directly whereas decreases consumer trust through two types of consciousness (i.e. health and price consciousness), resulting in loyalty. The results also show that ethnocentrism moderates the effect of word-of-mouth. For those with low ethnocentrism, the effect of word-of-mouth on trust exists only in the direct route.
Research limitations/implications
The result suggests that retail managers need to carefully consider the positive and negative influences of word-of-mouth to build consumer trust and loyalty when promoting Chinese consumer electronics. Further cross-cultural research should be explored to generalize the moderating influence of ethnocentrism on the relationship between word-of-mouth and trust-loyalty link.
Originality/value
This study contributes to a better and wider understanding of consumer loyalty regarding Chinese consumer electronics by investigating the effect of word-of-mouth and the differential mediating role of multidimensional consumer consciousness with ethnocentrism.
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Dongyoup Kim, Jungkun Park, Hoang T.P.M Le and Duckyeon Choi
This study examined how consumer competition affects purchase intention. The anticipated loss of not buying and the anticipated gain of buying are considered the underlying…
Abstract
Purpose
This study examined how consumer competition affects purchase intention. The anticipated loss of not buying and the anticipated gain of buying are considered the underlying mechanism. This research also demonstrated the moderating effects of situational factors such as purchase importance and prior brand attitude.
Design/methodology/approach
In total, 200 responses were collected from an experiment that manipulated the level of consumer competition in the retail environment. Structural equation modeling (SEM) and multigroup analysis were used to test the hypotheses.
Findings
The results indicated that perceived competition positively affects both the anticipated loss of not buying and the anticipated gain of buying. Among these, only the anticipated gain of buying significantly increased purchase intention. However, for participants with lower purchase importance or prior brand attitude, both the anticipated loss of not buying and the anticipated gain of buying significantly affected purchase intention.
Research limitations/implications
The findings suggest an appropriate communication method when practicing retail strategies related to competition. In particular, the consideration of intervention of purchase importance and prior brand attitude helps retail managers execute marketing strategies more effectively.
Originality/value
This study verified the effect of consumer competition on purchase intention in terms of anticipated losses and gains related to buying. Moreover, the moderation effects of situational factors such as purchase importance and prior brand attitude were initially examined in the context of consumer competition.