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The purpose of this paper is to examine the relationship between stock prices and exchange rates in 12 OECD countries.

The authors examine the nexus of stock prices and exchange rates for 12 OECD countries by using the vector error correction model, the bounds testing methodology and linear and non‐linear Granger causality methods.

The empirical results substantiate that a long‐run level equilibrium relationship among the exchange rates and stock prices exists in only seven out of twelve countries. The results of the linear causality tests indicate that significant short‐run and long‐run causal relationships exist between the two financial markets. The results of the tests for non‐linear Granger causality suggest that unidirectional and bidirectional non‐linear causal relationships exist between stock prices and exchange rates among these OECD countries.

The findings from this paper suggest the causal relationships between stock prices and exchange rates are not only linear, but also non‐linear.

The purpose of this research is to develop a new key performance index (KPI) and its interval estimation for measuring the service quality from customers' perceptions, since most service quality data follow non‐normal distribution.

Based on the non‐normal process capability indices used in manufacturing industries, a new KPI suitable for measuring service quality is developed using Parasuraman's 5th Gap between customers' expectation and perception. Moreover, the confidence interval of the proposed KPI is established using the bootstrapping method.

The quantitative method for measuring the service quality through the new KPI and its interval estimation is illustrated by a realistic example. The results show that the new KPI allows practising managers to evaluate the actual service quality level delivered within each of five SERVQUAL categories and prioritize the possible improvement projects from customers' perspectives. Moreover, compared with the traditional method of sample size determination, a substantial amount of cost savings can be expected by using the suggested sample sizes.

The paper presents a structured approach of opportunity assessment for improving service quality from a strategic alignment perspective, particularly in the five dimensions: tangibles, reliability, responsiveness, assurance, and empathy. The new approach provides practising managers with a decision‐making tool for measuring service quality, detecting problematic situations and selecting the most urgent improvement project. Once the existing service problems are identified and improvement projects are prioritized, it can lead to the direction of continuous improvement for any service industry.

Given a managerial target on any desired service level as well as customers' perceptions and expectations, the new KPI could be applied to any non‐normal service quality and other survey data. Thus, the corporate performance in terms of key factors of business success can also be measured by the new KPI, which may lead to managing complexities and enhancing sustainability in service industries.