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Article
Publication date: 4 December 2018

Xue Chen, Bo Li and Simin An

A lack of visibility into the manufacturer’s production cost information impedes a retailer’s ability to maximize her own profits, especially when market demand is uncertain. The…

392

Abstract

Purpose

A lack of visibility into the manufacturer’s production cost information impedes a retailer’s ability to maximize her own profits, especially when market demand is uncertain. The purpose of this paper is to investigate the use of an option contract within a one-period two-echelon supply chain in the presence of asymmetric cost information.

Design/methodology/approach

Based on the principal-agent model, the retailer, acting as a Stackelberg leader, offers a menu of option contracts to mitigate the risk of uncertain demand and reveal asymmetric production cost information. The optimal contract in asymmetric and symmetric information scenarios is derived. Finally, the impact of production costs on the optimal contracts and the actors’ profits is explored by numerical experiments.

Findings

By comparing the optimal equilibrium solutions in two scenarios, the authors show that asymmetric cost information has a large impact on the optimal option contract and profits. In addition, information rent is affected by the type differential. The results prove that the level of information asymmetry plays a vital role in option contracts and profits.

Originality/value

Different from the existing literature on private demand information, this paper considers a supply chain with asymmetric cost information in the context of option contracts. Interestingly, not only the production cost but also the probability of a low production cost can affect the option strike price. In addition, from the perspective of the manufacturer, a high cost does not always bring a high information rent. These findings can provide some guidance to decision-makers.

Details

Kybernetes, vol. 48 no. 5
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 2 February 2021

Tamanna Dalwai, Gopalakrishnan Chinnasamy and Syeeda Shafiya Mohammadi

The readability of annual reports is an important feature that determines the quality of communication between a firm and its stakeholders. Extant literature has demonstrated that…

1882

Abstract

Purpose

The readability of annual reports is an important feature that determines the quality of communication between a firm and its stakeholders. Extant literature has demonstrated that readability characteristics of annual reports are crucial in facilitating the investor's ability to process and analyze information, resulting in higher firm performance and lower agency costs. This study examines the relationship between annual report readability, agency costs and the firm performance of listed financial sector companies in Oman.

Design/methodology/approach

Using a sample of 150 firm-year observations of listed financial sector companies on the Muscat Securities Market (MSM) over the period 2014 to 2018, a panel regression analysis is used, along with the system generalized method of moments (GMM) estimation to address endogeneity concerns. The readability of annual reports is proxied by the length of the annual report, the Flesch reading ease and the Flesch–Kincaid index.

Findings

The ordinary least squares (OLS) results suggest that readability proxied by the length of the annual report has no significant relationship with agency cost, return on assets (ROA) or stock returns. The OLS results are confirmed through the system GMM estimation model for agency costs, Tobin's Q and stock returns. Easier-to-read annual reports measured by the Flesch reading ease demonstrate high asset utilization ratio and Tobin's Q. These results emphasize Flesch reading ease measure in explaining the economic significance of agency cost and Tobin's Q. In contrast, difficult-to-read annual reports are observed for firms with high ROA.

Research limitations/implications

The study is limited to the financial sector. Its generalizability could be extended to a similar sector or countries with features similar to Oman. Future studies on readability could be extended to other sectors of Oman, and financial firms with easier-to-read annual reports show a high Tobin's Q, which reflects the confidence of investors in the stock market. These findings may encourage policymakers to regulate the readability features of annual reports and influence the reporting quality of financials and disclosures also including cross-country comparisons.

Practical implications

Financial firms with easier-to-read annual reports show a high Tobin's Q, which reflects the confidence of investors in the stock market. These findings may encourage policymakers to regulate the readability features of annual reports and influence the reporting quality of financials and disclosures.

Originality/value

While the study extends prior literature on readability, agency costs and firm performance, it is also one of the first to examine the financial sector of an emerging country, namely, Oman. The study supports the obfuscation hypothesis through the association of readability measure with agency cost. Unlike prior research that has focused on common computational linguistic literature, this study uses three proxies for readability to assess information quality.

Details

Journal of Accounting in Emerging Economies, vol. 11 no. 2
Type: Research Article
ISSN: 2042-1168

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Article
Publication date: 5 May 2023

Senlin Zhao and Rongrong Mao

Asymmetric cost information exists between a supplier and a manufacturer regarding the manufacturer's process innovation for remanufacturing (PIR), which may hurt the supplier's…

202

Abstract

Purpose

Asymmetric cost information exists between a supplier and a manufacturer regarding the manufacturer's process innovation for remanufacturing (PIR), which may hurt the supplier's profit. The authors therefore seek to develop a menu of nonlinear pricing contracts for channel information sharing.

Design/methodology/approach

Based on principal–agent theory, the supplier, acting as a Stackelberg leader, designs a menu of nonlinear pricing contracts to impel the manufacturer to disclose its private cost information on PIR (i.e. PIR efficiency). In addition, the authors compare the equilibrium outcomes under asymmetric and symmetric information to examine the effects of asymmetric PIR information on the production policies and profits of the supplier and the manufacturer.

Findings

The proposed contract menu encourages th4e manufacturer to spontaneously share PIR efficiency information with the supplier. Asymmetric PIR information may distort the output of new products upward or downward, but the output of remanufactured products may only be distorted downward. In addition, the manufacturer with high PIR efficiency gains information rent, and interestingly, the increase in the probability of low PIR efficiency amplifies its information rent. Finally, an asymmetric information environment may increase the threshold for the manufacturer to enter remanufacturing.

Originality/value

The authors probe the issue of the supplier's contract design by jointly considering remanufacturing, process innovation and information asymmetry. The paper expands the influencing mechanism of process innovation information in the remanufacturing field. The authors also observe new results that may offer guidance to decision makers.

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Article
Publication date: 12 January 2024

Francesco Antonio Perotti, Zoltan Rozsa, Michal Kuděj and Alberto Ferraris

Drawing on the microfoundations theory and rational choice sociology, this study aims to investigate knowledge-sharing microfoundations through knowledge sabotage behaviours in…

466

Abstract

Purpose

Drawing on the microfoundations theory and rational choice sociology, this study aims to investigate knowledge-sharing microfoundations through knowledge sabotage behaviours in the workplace. As such, it aims to shed light on the adverse impact of knowledge sabotage on a knowledge-sharing climate.

Design/methodology/approach

As a quantitative deductive study, it is based on information collected from 329 employees of European companies by self-administered online surveys. Data validity and reliability has been assessed through a confirmatory factor analysis, and data analysis was carried out by using a covariance-based structural equation modelling technique.

Findings

The findings from the empirical investigation supported the baseline hypotheses of the multilevel conceptual model, which is the positive relationship between organizational trust and environmental knowledge sharing. Then, recurring to a microfoundational exploration, this study supports the mediating indirect effect of job satisfaction and knowledge sabotage in affecting knowledge sharing as a social outcome.

Research limitations/implications

This study concurs to broaden knowledge-sharing awareness among scholars and practitioners, by focusing on knowledge sabotage as its most pernicious counterproductive behaviour. Furthermore, this research provides valuable guidance for the future development of research based on multilevel investigations.

Originality/value

This study builds on the need to explore the numerous factors that affect knowledge sharing in economic organizations, specifically focusing on knowledge sabotage. Adapting Coleman’s bathtub, the authors advance the first multilevel conceptual model used to unveil the knowledge-sharing microfoundations from the perspective of a counterproductive knowledge behaviour.

Details

Journal of Knowledge Management, vol. 28 no. 5
Type: Research Article
ISSN: 1367-3270

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Article
Publication date: 5 July 2011

L.Z. Liu, L. Weng, Y.X. Song, L. Gao, H. Zhao and Q.Q. Lei

The purpose of this paper is to investigate the effects of coupling agents on the structure and properties of the nanocomposite films and clarify their mechanism. Polyimide (PI)/Al…

341

Abstract

Purpose

The purpose of this paper is to investigate the effects of coupling agents on the structure and properties of the nanocomposite films and clarify their mechanism. Polyimide (PI)/Al2O3 nanocomposite films were prepared using different coupling agents.

Design/methodology/approach

Poly(amic acid) (PAA) was firstly synthesised from appropriate pyromellitic diannanocomposite and oxydianiline in N‐dimethylacetamide. Calculated amount of nano‐Al2O3 particles modified by different coupling agents (KH550, KH560, KH570 and AE3012) were added to PAA solution by an ultrasonic‐mechanical method and PI/nano‐Al2O3 film was fabricated by heat curing. The microstructure, thermal stability, mechanical properties and electric breakdown strength of the films were characterised.

Findings

The addition of coupling agents could greatly improve the dispersion homogeneity of Al2O3 nano‐particles in PI matrix. Results of corresponding characterisations indicated that both the thermal stability and mechanical properties of PI/Al2O3 nanocomposite film with KH550 were greater/better than others, while AE3012 could improve the electric breakdown strength.

Research limitations/implications

In the present discussion, the effects of different coupling agents, KH550, KH560, KH570 and AE3012, were investigated. Results of this research work would be beneficial to an in‐depth understanding on the relationship between microstructure and properties of PI composites, and further promote the development of the high‐performance PI insulating materials.

Originality/value

The four coupling agents, KH550, KH560, KH570 and AE3012, were firstly used to disperse the nano‐Al2O3 particles in PI matrix. The effects of coupling agents on microstructure and properties of composites were discussed by the authors in detail.

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Article
Publication date: 17 March 2020

Rui Yang, Wansheng Tang and Jianxiong Zhang

Without proper treatment, waste cooking oil (WCO) will bring serious environmental and health hazards, which can be effectively alleviated by converting it into biofuel. Subsidies…

211

Abstract

Purpose

Without proper treatment, waste cooking oil (WCO) will bring serious environmental and health hazards, which can be effectively alleviated by converting it into biofuel. Subsidies from the government usually play a significant role in encouraging recycling activities and supporting sustainable supply chain. This paper aims to quantitatively investigate the incentive effects of government subsidies under asymmetric information.

Design/methodology/approach

This paper applies the principal–agent contract to compare the incentive effects of the two widely used subsidy modes (raw material price subsidy [MS] and finished product sale subsidy [FS]) in a management system which consists of the government and a bio-firm where the bio-firm’s conversion rate of the WCO remains as private information.

Findings

Results indicate that the two subsidy modes have the same performance under symmetric information, while under asymmetric information, the government always prefers the MS mode which is more environment-friendly. Besides, if the average conversion rate is large or the uncertainty level of the asymmetric information is moderate, the MS mode is Pareto-improving compared with the FS mode for the government and the high-type bio-firm. Only when the average conversion rate is small or the uncertainty level is very small/very large, the high-type bio-firm welcomes the FS mode.

Originality/value

Different from the existing literature, this paper applies the principal–agent contract into the WCO management system and quantitatively compares the two subsidy modes taking the practical problem of asymmetric information into consideration.

Details

Kybernetes, vol. 50 no. 2
Type: Research Article
ISSN: 0368-492X

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Article
Publication date: 23 November 2021

Ehsan Poursoleyman, Samira Joudi, Gholamreza Mansourfar and Saeid Homayoun

Previous literature posits that corporate governance and information asymmetry are the main factors in making efficient investments. Meanwhile, a growing body of studies is of the…

389

Abstract

Purpose

Previous literature posits that corporate governance and information asymmetry are the main factors in making efficient investments. Meanwhile, a growing body of studies is of the opinion that corporate governance can also mitigate the problem of information asymmetry and consequently exerts significant impacts on the association between information asymmetry and investment efficiency. This study aims to analyze the impact of corporate governance and information asymmetry on investment efficiency. It also tests the moderating role of corporate governance in the relationship between information asymmetry and investment efficiency.

Design/methodology/approach

The sample consists of 4,082 firms domiciled in 20 developed countries over the years from 2003 to 2019, including 33,812 firm-year observations. The bid–ask spread is used as a proxy for information asymmetry. To measure corporate governance performance, a proxy provided by ASSET4 is employed, and to determine the optimal levels of investments, we relied on the growth opportunity. To estimate the models, ordinary least squares and generalized method of moment are used.

Findings

The results reveal that information asymmetry is inversely related to investment efficiency, and, corporate governance mitigates this negative association.

Originality/value

This paper sheds light on the role of corporate governance in firms as a lever for mitigating information asymmetry and tries out information asymmetry and agency theories in relation to the impact of information asymmetry on investment efficiency. It also confirms the theory stating that corporate governance can be considered as a determinant of investment efficiency.

Details

Journal of Economic and Administrative Sciences, vol. 39 no. 4
Type: Research Article
ISSN: 2054-6238

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Article
Publication date: 11 August 2023

He Huang, Weining Wang and Yujie Yin

This study aims to focus on the clothing recycling supply chain and aims to provide optimal decisions and managerial insights into supply chain strategies, thereby facilitating…

270

Abstract

Purpose

This study aims to focus on the clothing recycling supply chain and aims to provide optimal decisions and managerial insights into supply chain strategies, thereby facilitating the sustainable development of the clothing industry.

Design/methodology/approach

Based on previous single- and dual-channel studies, game theory was employed to analyze multiple recycling channels. Concurrently, clothing consumer types were integrated into the analytical models to observe their impact on supply chain strategies. Three market scenarios were modeled for comparative analysis, and numerical experiments were conducted.

Findings

The intervention of fashion retailers in the clothing recycling market has intensified competition across the entire market. The proportions of various consumer types, their preferences for online platforms and their preference for the retailer’s channel influence the optimal decisions and profits of supply chain members. The diversity of recycling channels may enhance the recycling volume of clothes; however, it should meet certain conditions.

Originality/value

This study extends the existing theory from a channel dimension by exploring multiple channels. Furthermore, by investigating the classifications of clothing consumers and their influence on supply chain strategies, the theory is enhanced from the consumer perspective.

Details

International Journal of Clothing Science and Technology, vol. 35 no. 5
Type: Research Article
ISSN: 0955-6222

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Book part
Publication date: 23 October 2020

Zhiyong Yang, Ying Wang and Jiyoung Hwang

Generation Z makes up 20% of China’s population, and accounts for the highest share of household spend at 13% (vs. 3% for the United Kingdom and 4% for the United States). To…

Abstract

Generation Z makes up 20% of China’s population, and accounts for the highest share of household spend at 13% (vs. 3% for the United Kingdom and 4% for the United States). To advance marketers’ understanding about this group of consumers and capitalise on China’s booming market, this chapter uses rich statistics and information to show that China’s Generation Z has distinct behaviour patterns, which can be attributed to the unique background in which they grew up: (1) rigidity of social stratification, (2) abundance of materialism, (3) digital era, (4) limited (vs. extended) family, and (5) heavy schoolwork. Growing up in such a background, Generation Z’s lifestyle and consumption-related attitudes and behaviour are distinct from their predecessors. The chapter presents specific actions that marketers can take when targeting this distinct group of consumers in China, along with useful guidelines to HR managers for hiring them.

Details

The New Generation Z in Asia: Dynamics, Differences, Digitalisation
Type: Book
ISBN: 978-1-80043-221-5

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Article
Publication date: 25 March 2019

Wei Zhang, Peitong Cong, Kang Bian, Wei-Hai Yuan and Xichun Jia

Understanding the fluid flow through rock masses, which commonly consist of rock matrix and fractures, is a fundamental issue in many application areas of rock engineering. As the…

218

Abstract

Purpose

Understanding the fluid flow through rock masses, which commonly consist of rock matrix and fractures, is a fundamental issue in many application areas of rock engineering. As the equivalent porous medium approach is the dominant approach for engineering applications, it is of great significance to estimate the equivalent permeability tensor of rock masses. This study aims to develop a novel numerical approach to estimate the equivalent permeability tensor for fractured porous rock masses.

Design/methodology/approach

The radial point interpolation method (RPIM) and finite element method (FEM) are coupled to simulate the seepage flow in fractured porous rock masses. The rock matrix is modeled by the RPIM, and the fractures are modeled explicitly by the FEM. A procedure for numerical experiments is then designed to determinate the equivalent permeability tensor directly on the basis of Darcy’s law.

Findings

The coupled RPIM-FEM method is a reliable numerical method to analyze the seepage flow in fractured porous rock masses, which can consider simultaneously the influences of fractures and rock matrix. As the meshes of rock matrix and fracture network are generated separately without considering the topology relationship between them, the mesh generation process can be greatly facilitated. Using the proposed procedure for numerical experiments, which is designed directly on the basis of Darcy’s law, the representative elementary volume and equivalent permeability tensor of fractured porous rock masses can be identified conveniently.

Originality/value

A novel numerical approach to estimate the equivalent permeability tensor for fractured porous rock masses is proposed. In the approach, the RPIM and FEM are coupled to simulate the seepage flow in fractured porous rock masses, and then a numerical experiment procedure directly based on Darcy’s law is introduced to estimate the equivalent permeability tensor.

Details

Engineering Computations, vol. 36 no. 3
Type: Research Article
ISSN: 0264-4401

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