Richard Lu, Vu Tran Hoang and Wing-Keung Wong
The literature has demonstrated that lump-sum (LS) outperforms dollar-cost averaging (DCA) in uptrend markets while DCA outperforms LS only when the asset price is mean-reverted…
Abstract
Purpose
The literature has demonstrated that lump-sum (LS) outperforms dollar-cost averaging (DCA) in uptrend markets while DCA outperforms LS only when the asset price is mean-reverted or downtrend. To bridge the gap in the literature, this study aims to use both Sharpe ratio (SR) and economic performance measure (EPM) to compare the performance of DCA and LS under both accumulative and disaccumulative approaches when the asset price is simulated to be uptrend.
Design/methodology/approach
This study uses both disaccumulative and accumulative approaches to compare DCA with LS and uses both SR and EPM to evaluate their performance when the asset price is simulated to be uptrend. Instead of using the annualized returns that are commonly used by other DCA studies, we compute the holding-period returns in the comparison in this paper.
Findings
The simulation shows that no matter which approach is used, DCA outperforms LS in nearly all the cases in the less uptrend markets while DCA still performs better than LS in many cases of the uptrend markets, especially when the market is more volatile and investment horizon is long, regardless which approach the authors used. The authors also find more evidence supporting DCA over LS by using EPM, which is more suitable in the analysis because the returns generated by DCA are positive skewed and flat-tailed that are ignored when SR is used.
Research limitations/implications
The authors conclude that DCA is a better trading strategy than LS for investment even in the uptrend market, especially on high risky assets.
Practical implications
Investors could consider choosing DCA instead of LS as their trading strategy, especially when they prefer long term investment and investing in high-risk assets.
Social implications
Fund managers could consider recommending DCA to their customers, especially when they prefer long term investment and investing in high-risk assets.
Originality/value
This is the own study and, as far as the authors know, this is the first study in the literature uses both SR and EPM to compare the performance of DCA and LS under both accumulative and disaccumulative approaches when the asset price is simulated to be uptrend.
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Anthony Chen and Hung-Yuan (Richard) Lu
In this study, the authors extend upon Brockman et al. (2008), who provide evidence that managers opportunistically accelerate bad news prior to share repurchases, but provide…
Abstract
Purpose
In this study, the authors extend upon Brockman et al. (2008), who provide evidence that managers opportunistically accelerate bad news prior to share repurchases, but provide limited evidence that managers withhold good news until after repurchases. The authors examine management forecasts surrounding share repurchases in periods when companies must disclose detailed repurchase information. The authors argue these disclosures increase managers' legal and reputation risks of accelerating bad news, but have a lesser effect on delaying good news.
Design/methodology/approach
First, the authors examine whether managers alter the information released to the market before buying back shares by comparing managerial forecasts made within 30 days before the beginning of a repurchasing period with those made outside of this window. Second, the authors examine whether managers are more likely to provide good news forecasts, in terms of both magnitude and frequency, after buying back shares. Lastly, the authors examine the impact of CEO stock ownership on managerial forecasting behavior surrounding share buybacks.
Findings
Consistent with the authors’ hypotheses and contrary to Brockman et al. (2008), the authors find limited evidence that the likelihood or magnitude of bad news forecasts is greater in the period before share buybacks. Instead, the authors document that the frequency and magnitude of good news forecasts increase in periods following share buybacks and that these associations are positively moderated by managerial equity incentives. The authors also find that the withholding of good news is associated with lower average repurchase prices and greater repurchase volume. The authors further show that, when litigation risk is greater, managers are less likely to accelerate bad news prior to repurchases and more likely to withhold good news until after. Overall, the study results are consistent with managers balancing the benefits of opportunistic repurchase behavior with the costs.
Originality/value
This study contributes to the management forecast and share repurchase literatures by providing evidence consistent with managers opportunistically releasing earnings forecasts in the period after buying back shares. Most importantly, the authors show that after the rule revision, managers refrain from actively disclosing bad news that carry higher legal costs. Instead, they opt for the omission of good news to repurchase stocks at lower prices. The study results reconcile the conflicting evidence of Brockman et al. (2008) and Ge and Lennox (2011).
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Hung-Yuan (Richard) Lu and Vivek Mande
This study aims to examine whether banks are compliant with the Financial Accounting Standards Board’s standard Accounting Standards Update (ASU) 2010-06 requiring disaggregated…
Abstract
Purpose
This study aims to examine whether banks are compliant with the Financial Accounting Standards Board’s standard Accounting Standards Update (ASU) 2010-06 requiring disaggregated fair value hierarchy information. It also identifies institutional and firm-specific factors that are associated with compliance or non-compliance.
Design/methodology/approach
Using quarterly reports of banks for the first quarters of 2009 (pre- ASU 2010-06) and 2010 (post- ASU 2010-06), we hand-collect information on disclosures about fair values from the footnotes. Using a logistic regression with compliance/non-compliance as the dependent variable, we examine factors associated with compliance/non-compliance.
Findings
Results show that 23 per cent of banks do not comply with ASU 2010-06 and that the non-compliant banks tend to be small, lack effective internal controls and are more likely to be audited by non-specialist auditors.
Research limitations/implications
This study only considers one type of non-compliance with ASU 2010-06, i.e. whether or not firms provide disaggregated fair value hierarchy information. There may be other forms of non-compliance that the authors do not examine because of the difficulties involved in objectively defining non-compliance.
Practical implications
The findings suggest firms may need to increase training for internal personnel and hire high-quality auditors for ensuring compliance with fair value accounting rules. The authors also suggest that smaller firms may find compliance to be onerous and recommend additional research to examine whether smaller firms should be exempted from some or all of the fair value rules.
Originality/value
This study provides some of the first evidence on the level of compliance with mandated fair value disclosures.
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Laura Caprioli, Mia Larson, Richard Ek and Can-Seng Ooi
This paper aims to focus on the re-presentation of the cultural phenomena hygge in Denmark and fika in Sweden in destination branding and address the inevitability of their…
Abstract
Purpose
This paper aims to focus on the re-presentation of the cultural phenomena hygge in Denmark and fika in Sweden in destination branding and address the inevitability of their essentialization through the branding process.
Design/methodology/approach
Three relevant semi-structured interviews with destination marketing organisation’s employees were conducted, as well as a content-based analysis of three social media channels (Facebook, Twitter, Instagram). A total of 465 posts in total were analysed (140 Facebook posts, 109 Twitter posts, 216 Instagram posts).
Findings
This study demonstrates how, when communicated through social media, intangible cultural assets are transformed into tangible elements. It explains why the re-presentation and place branding processes necessarily simplify and essentialize the destination.
Originality/value
Destination branding scholars have traditionally criticised the flattening and essentialization of culture in destination branding and have called for a more nuanced approach to presenting a destination. This paper situates destination branding as a process that necessitates the manipulation of the presentation of the destination, which inevitably essentializes the place; this is intended. Critical destination branding researchers need to rethink their criticisms and acknowledge the inherent essentialization goal of destination branding.
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Harsandaldeep Kaur and Harmeen Soch
The purpose of this study is to develop an understanding of the factors influencing Indian consumers’ loyalty toward mobile phone service providers by exploring the mediating…
Abstract
Purpose
The purpose of this study is to develop an understanding of the factors influencing Indian consumers’ loyalty toward mobile phone service providers by exploring the mediating roles of commitment, corporate image and switching costs on causal relationships between customer satisfaction, trust and loyalty.
Design/methodology/approach
A survey of 855 Indian mobile phone users was carried out to test the hypothesized relationships using structural equation modeling. The results support most of the proposed hypotheses.
Findings
The direct linkages in the model are found to be statistically significant. Of these relationships, corporate image emerged as the strongest determinant of attitudinal loyalty. Calculative commitment and corporate image are found to be partial mediators between satisfaction and attitudinal loyalty. Calculative commitment and switching costs are each proven to be partial mediators between trust and attitudinal loyalty, while corporate image is proved to be a complete mediator.
Research limitations/implications
The study is limited to examining the impact of relationship variables on Indian consumers’ loyalty toward mobile phone companies. Future research can examine the impact of variables such as rate plans, value-added services, billing experience and voice quality on customer loyalty.
Practical implications
The results have implications for retaining customers in highly competitive and maturing Indian mobile telecommunications. The research provides some initial insights into corporate brand building as an important area for mobile phone companies.
Originality/value
This is one of the first studies to test the mediating role of commitment, switching costs and corporate image in the relationship between satisfaction, trust and loyalty in the Indian context.
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The purpose of this paper is to apply a postcolonial perspective on the findings from ethnographic research in a multi-national corporation in Shanghai and shed light on the ways…
Abstract
Purpose
The purpose of this paper is to apply a postcolonial perspective on the findings from ethnographic research in a multi-national corporation in Shanghai and shed light on the ways that western creativity narratives are deployed as a means to mobilise and transform workers into self-governing, obedient corporate subjects.
Design/methodology/approach
The research applied ethnographic approaches to understand how creativity narratives are enacted in cross-cultural settings.
Findings
Creativity discourses in China often provoke anxieties around national capacity, economic growth and indigenous innovation. Locally trained knowledge workers in China are often assessed as less creative than their western counterparts and the reason attributed to cultural, pedagogical and political differences. However, these factors are not static in China’s fluid economic landscape and neither do Chinese workers uniformly accept that they are less creative.
Originality/value
This paper sheds light on a previously unexamined aspect of dominant western creativity discourses, which may be useful in future work amongst practitioners in international business settings.