Asymmetry Issues Research Articles

Use of a Refined Corporate Social Responsibility Model to Mitigate Information Asymmetry and Evaluate Performance

While the importance of Corporate Sociable Responsibility (CSR) has been widely acknowledged, research on how to guide a company in evaluating and improving its CSR performance is relatively under-explored. This paper adopts the predominant framework from the United Nations (UN) and proposes a refined CSR model by using a hybrid multiple criteria decision-making (MCDM) approach. The proposed approach is expected to mitigate the potential information asymmetry issue that might deteriorate the CSR performance of a company. To illustrate the hybrid approach, this study analyzes the CSR performance of four publicly listed information technology (IT) manufacturing companies with the participation of senior domain experts, by using the proposed approach. The CSR performance ranking results are consistent by using various experiments, which is similar to the annual CSR contest held by a prominent organization from Taiwan in 2019. In addition, we illustrate how to apply this refined model to gain managerial insights and pursue sustainable CSR improvement with a priority.

The Strategic Drivers of Proactive Investor Attention

Publicly-listed companies increasingly face pressures from the public equity market. Recently these market pressures have arisen from activist hedge funds who buy blocks of shares in a firm’s stock with the intent to intervene in the firm’s management. Despite the growing presence of activist investors, the nature of strategies that garner attention from these investors is not well known. This study uses the theoretical lens of a lemons problem in strategies, arising from information asymmetry and adverse selection issues in public equity markets, to argue that as companies’ strategies are incongruent with the expectations of market participants and therefore more difficult to understand, they are prone to public market dissent and likely to garner more attention from investors seeking involvement in management. Using a hand-collected proprietary database of SEC 13D filings and proxy statements, we find that companies’ increasing levels of strategic incongruence tend to be positively associated with attracting proactive investor attention.

Coordination of elderly healthcare service supply chain with information asymmetry: Designs of option contracts under different demand distribution statuses

This paper studies the issue of demand information asymmetry in an elderly healthcare service (EHS) system represented by a two-echelon elderly healthcare service supply chain (EHSSC) comprising an elderly service integrator (ESI) and a service provider (ESP). The goal of the ESI is to decide on how much service capacity is required for placing orders to the ESP, who directly serves the customers. Considering discrete and continuous demand distribution statuses, a centralised model with symmetric demand information and decentralised models with asymmetric demand information are developed to analyse the optimal ordering decisions and discuss the influence of information asymmetry. Furthermore, option contracts are applied to help coordinate the supply chain under asymmetric demand information based on different demand distribution statuses. Optimal option contract menus are designed for the ESP to promote the information sharing. Results show that the option contract can coordinate the EHSSC with asymmetric demand information under both discrete and continuous demand distribution statuses. The exercise price will be higher under lower demand information than that under higher demand information and the transfer payment will be less under lower demand information than that under higher demand information. Moreover, although the ESI has demand information superiority and can make use of opportunistic behaviour to maximise its own profit, the ESP as the leader can design the option contract to incentive the ESI to achieve true information sharing, and even obtain nearly all of the channel profit.

Organization theory in humanitarian operations: a review and suggested research agenda

PurposeThe purpose of this paper is to review the current application of organization theory (OT) in the humanitarian supply chain (HSC) and identify the future OT-based research opportunities that can advance knowledge of humanitarian operations.Design/methodology/approachThe study uses a systematic literature review methodology to identify the current status and future direction of the OT-based study in HSC literature. The applied theories are those that have been mentioned in at least two research articles in the HSC literature. The proposed theories are either adopted from the top four referred organizational theories in the supply chain literature or those that can explain the issue of information asymmetry in HSC.FindingsThe study identifies and describes eight organizational theories and their possible future research questions in HSC. Among these, the first four theories (i.e. resource-based theory, resource dependence theory, social exchange theory and contingency theory) have already been initially applied in the humanitarian field, while the remaining theories (i.e. institutional theory, stakeholder theory, transactional cost theory and information theory) have potential for future application.Research limitations/implicationsThe reviewed literature is limited to peer-reviewed journals listed in Thomson Reuters’ journal citation reports.Practical implicationsThis study may help future researchers better understand and solve, using organizational theory, the behavioral challenges faced by humanitarian operations.Originality/valueThe study presents current applications of and future prospects for OT-based research in HSC, effectively providing the first review of OT applications in this area. The novel framework and new theories proposed herein may enable fresh directions for HSC research.

Market Access and Issues of Data Gaps and Transparency and Information Asymmetry: A Case of RCEP Negotiations

Doubling India’s exports by 2025 has been a declared policy of the government of India and is one of the critical goals of trade policy. The process has been adopted from the developed world without much change or adapting it to the local realities of higher presence of unorganised sector. In this context, the paper analyses the RCEP market as one of the means to achieve the goal. One of the methods to achieve the goal which may look achievable, but for lack of correctly understanding the issues which have occurred in the analysis as part of the study (data gaps) and systemic aspects of the trade agreements and information asymmetry in international trade dealings. Firstly, in terms of data gap, the non-inclusion of the Ad Valorem Equivalent tariff for the Non-Ad Valorem tariff is the data gap in the calculation of duties that can influence an FTA. It stresses the need for a thorough ex-ante and ex-post analysis of FTA with the view of cost and benefits to be neutral. Secondly, the data gaps which have been identified is the by way of the application of non-tariff measures, like the SPS and TBT measures. The NTMs are notified to the WTO without the HS codes and therefore misses the essential market access link that is trading link as records show that close to 85 percent of this notification is with the critical trade-link. Further, there are other methodological issues like how the NTMs has taken up for analysis are often treated as one-time impact vis-a-vis the ideal method of taking a cumulative impact assessment. There is a considerable difference across the presently available global database on NTMs, like SPS and TBT measures. One of the web-based databases is integrated trade intelligence portal (I-TiP) the WTO database on NTMs provides information on SPS and TBT only in the case for notified notifications with HS codes already provided by the member, or ISO, IEC codes indicate - the data available therefore for researcher is not complete for the analysis of market access. A curtail link is the HS code which the members do not notifies, in this case, the RCEP market access. Thirdly, the issues of information asymmetry can also be observed, in the RCEP market particular and across the developed world, which is particularly onerous for micro, small and medium enterprises (MSME). The precise requirements used could have been challenged if the notifications are better notified with full disclosure like the tariffs – which is the other significant trade barrier for an exporter.

Contract Design for Enhancing Green Food Material Production Effort with Asymmetric Supply Cost Information

In order to improve green performance and achieve sustainability goals, food companies see the need to adopt green supply chain management. However, ensuring a green supply is a tough task since food companies do not always have full information of their suppliers’ efforts in improving their green performance. This information asymmetry issue will lead the food producers to make poor decisions and cause a profit loss. Therefore, to fill this research gap, this study investigates a two-stage supply chain, which consists of one dominated food producer and a food supplier who has private knowledge of its green food material producing (GFMP) cost. To figure out how green performance is the major parameter that influences the decision-making of supply chain members under information asymmetry, this study first expands demand functions for both a food supplier and a producer, considering their influence on the green degree of the food products and associated consumer acceptance. It is found that under certain conditions, information sharing will improve the supplier’s green performance and increase the food producer’s profit. This study then presents the prerequisite of green cost information sharing by the food supplier. Furthermore, a newly designed menu of contracts, which combine the wholesale price contract and cost sharing contract, is proposed for the asymmetric information case to incentivize the food supplier to disclose the green effort information and improve the environmental and economic performance of the food supply chain. Numerical experiments are conducted through a case analysis to illustrate and validate the proposed models.

The choice of SEO method in Korea: Rights vs. public offers

Using South Korean data for 2000–2015, we find that firms with less information asymmetry and larger issue size are more likely to choose rights issues over public offerings and that control considerations also affect the flotation choice. We also find that rights offerings are met with more negative announcement returns than public offerings, and that stockholders of rights issuing firms seem to be compensated for the initial adverse market reaction by large issue-day returns. We contribute to the literature with an intra-market analysis of the SEO method choice, which cannot be done in markets with a dominant flotation type.

Will urban migrants formally insure their rural relatives? Family networks and rainfall index insurance in Burkina Faso

Abstract Large segments of the population in developing countries, especially in rural areas, have a high level of vulnerability to weather-related shocks but have limited means to insure themselves against them. In recent years, microfinance institutions have experimented with micro-insurance products, including rainfall index insurance, but the uptake of these products has generally been very low. We present findings from a pilot study exploring whether and how existing ties between urban migrants and rural farmers may be used to provide the latter improved access to formal insurance. Urban migrants in Ouagadougou (the capital of Burkina Faso) originating from nearby villages were offered, at the prevailing market price, a rainfall index insurance product that can potentially protect their rural relatives from adverse weather shocks. The product had an uptake of 22% during the two-week subscription window. Half the urban migrants in the study were randomly offered an insurance policy in which payouts would be made, not to the subscriber, but directly to the intended beneficiary. This feature increased uptake rates by 17–22 percentage points. We argue that rainfall index insurance can complement informal risk-sharing networks by mitigating problems of informational asymmetry and self-control issues.

Personal Data and Power Asymmetries in U.S. Collegiate Sports Teams

Collaborations increasingly draw on personal data. We examine personal-data-supported collaborations in a high stakes, high-performance environment: collegiate sports. We conducted 22 interviews with people from four common roles within collegiate sports teams: athletes, sport coaches, athletic trainers, and strength and conditioning coaches. Using boundary negotiating artifacts as a lens for analysis, we describe an ecology of personal data in collaborations among these four roles. We use this ecology to highlight tensions and foreground issues of power asymmetry in these collaborations. To characterize these power asymmetries in the collaborative use of personal data, we propose an extension of boundary negotiating artifacts: extraction artifacts.

The Effect of Information Asymmetry on the Method of Payment and Post-M&A Involuntary Delisting

Purpose - This paper shows an unexplored area related to involuntary delisting. Specifically, this research investigates the effect of target firm information asymmetry on the likelihood that the acquirer or newly merged firm will be forcibly delisted post-merger. Design/methodology/approach - The research uses a sample gathered on local US mergers and acquisitions from the Thomson Reuters Securities Data Company (SDC) Platinum Mergers and Acquisitions database. It applies the logistic regression with industry and year effects and corrects the error term using clustering at the industry level. The research also matches the forced delisted firms to control firms based on industry, acquisition completion year, and firm size and then employs a matched sample analysis. Findings - Findings show that M&As between firms where the target firm is opaque and burdened with high information asymmetry issues are likely to be paid for using majority stock and that M&As involving such opaque targets also have a higher likelihood of getting delisted post-merger. Research implications or Originality - Our results are relevant given the very nature of M&As which involve two players: the acquirer and target who both may have different incentives. Acquirers especially have the tendency to suffer losses and even get delisted if they over-pay for or get merged to a poor target which conceals its poor performance evidenced by higher accruals quality.

Does change in the market structure have any impact on different types of bank loans in the EU?

The aim of this paper is to investigate the issue of asymmetry of credit market determinants of bank loans (corporate, consumer, and residential mortgage loans) between the CEE-11 countries (Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Romania) and other EU countries (Austria, Belgium, Denmark, Finland, France, Greece, Italy, Spain, the Netherlands, Ireland, Luxembourg, Germany, Portugal, Sweden, United Kingdom, Malta, and Cyprus) after the global financial crisis (GFC) of 2007–09 in the context of market structure and foreign bank presence. Using the dynamic panel model, this study finds differences in the determinants of growth in loans for two groups of countries after the global financial crisis. Furthermore, a panel data analysis of CEE-11 countries against other EU countries also finds differences between determinants of different types of bank loans. The influence of foreign capital and concentration on credit growth is different depending on the type of loans. Finally, this paper complement the evidence for support for sectoral and country specific approach in a macroprudential policy tools.

A Machine Learning Portfolio Allocation System for IPOs in Korean Markets Using GA-Rough Set Theory

An initial public offering (IPO) is a type of public offering in which a company’s shares are sold to institutional and individual investors. While the majority of studies on IPOs have focused on the efficiency of raising capital and price adequacy in IPOs, studies on portfolio allocation strategies for IPO stocks are relatively scarce. This paper develops a machine learning investment strategy for IPO stocks based on rough set theory and a genetic algorithm (GA-rough set theory). To reduce issues of information asymmetry, we use nonfinancial data that are publicly available to individual and institutional investors in the IPO process. Based on the rule sets generated from the training sets, we conduct 120 tests with various conditions involving the target days and the partition of the training and testing sets, and we find excess returns of the constructed portfolios compared to the benchmark portfolios. Investors in IPO stocks can formulate more efficient investment strategies using our system. In this sense, the system developed in this paper contributes to the efficiency of financial markets and helps achieve sustained economic growth.

Drawing on indigenous governance and stewardship to build resilient coastal fisheries: People and abalone along Canada's northwest coast

Small-scale indigenous abalone fisheries on the northwest coast of Canada persisted for at least two millennia prior to modern commercial and recreational fisheries that lasted for four decades before collapsing, causing a coast wide closure that remains today. What traditional governance and stewardship practices fostered resilient fisheries along Canada's northwest coast and how might they inform collaborative institutions that foster ecologically sustainable and socially just coastal fisheries in future? In collaboration with two coastal First Nations, a policy analysis of northern abalone (GaalGuuhlkyan –Skidegate Haida, ǧaɫǧṇ̓íq̓ –Heiltsuk, Haliotis kamtschatkana) stewardship was conducted to assess where traditional and modern fisheries governance and management aligned or failed to align with seven theoretical principles of social-ecological resilience. The analysis revealed that traditional principles of reciprocity and contingent proprietorship of clan-based fishing areas aligned with resilience principles whereas contemporary centralized decision-making and region-wide management policies did not. Moreover, current issues of power asymmetry and lack of trust need to be addressed to build a future indigenous-state governance approach to coastal fisheries. This research demonstrates how indigenous resource governance and stewardship practices generated over millennia of social learning and experimentation offer insights that could be broadly applied to foster resilient coastal fisheries today.

Seeking procedural equity in global environmental governance: Indigenous participation and knowledge politics in forest and landscape restoration debates at the 2016 World Conservation Congress

The importance of meaningful participation of Indigenous Peoples in global environmental governance is widely recognised. Yet, debates persist on the extent to which Indigenous perspectives and interests are included in environmental decision-making, including concerns about what constitutes procedural equity, issues of participation asymmetry, and hierarchies in forms of knowledge. While these questions have been extensively explored at the local governance level, the ways in which current structures of decision-making at the global level shape Indigenous participation and knowledge remains under-examined. The IUCN, World Conservation Congress (WCC) is a key site of global environmental decision-making. This paper examines how prevailing structures of power at the most recent (2016) WCC shape Indigenous participation and use of Indigenous knowledge, and thus procedural equity in this policy context. We examine participation and knowledge in relation to debates and discussions about forest and landscape restoration (FLR). We applied Collaborative Event Ethnography (CEE) methodology to collect data over 10-day intensive period. This included i) semi-structured interviews with 17 Congress participants, including Indigenous Peoples' representatives, international non-governmental organisation (INGO) and non-governmental organisation (NGO) specialists, and state agency representatives and ii) participant observation at 27 events relating to forest and landscape restoration. Our findings show that the structure of the WCC upheld prevailing power relations among actors and more powerful actors hold limited views about what constitute meaningful participation and pervasive view of Indigenous knowledge as a supplementary knowledge form in FLR debates. This study makes visible the ways by which prevailing structures of power within global environmental governance shapes access, consideration of different knowledge forms and thus procedural equity in the context of FLR debates.

Passion for complementary alternative medicine/therapies: midwives’ education and training

While always an interdisciplinary endeavour, rapid growth in the fields of Ethnomethodology (hereafter EM) and Conversation Analysis (hereafter CA) has led to the broader application of EM/CA methodologies and the engagement of researchers from beyond the more traditional fields of sociology and linguistics. EM/CA methodologies are being used to both understand the orderliness of social interaction and also to address specific institutional issues, in this instance in higher education settings. This paper explores the challenges inherent in using these approaches to researching institutional relationships, particularly when a primary aim of the research is to inform practitioners of practices used within institutional settings. We argue the need to draw on a variety of analytical tools to understand in situ practices alongside other lenses to translate these understandings of institutional practice to practitioners. Drawing on data from a study of audio-recorded conversations between supervisory and preservice teachers during the school-based professional experience component of initial teacher education, our analysis illustrates how the tools of conversation analysis and membership categorization analysis reveal the intricacies of how supervising and preservice teachers negotiate issues of asymmetry and position themselves through references to specific institutional documents. We then use the work of Dorothy Smith to support the translatability of descriptive findings to support interventions in the field. We use this example to demonstrate the affordances of using various analytic tools in complementary ways to overcome methodological challenges and provide new insights into institutional relationships and inform future practice.

Bonus Plan Choices During an Economic Downturn

ABSTRACTWe use survey data to estimate the effect of the 2008–2009 recession on three fundamental bonus plan choices. We find robust evidence that the recession (1) reduced incentive strength, (2) increased the relative incentive weight on financial performance measures, and (3) increased the perceived difficulty of financial performance targets, not only in absolute terms but also relative to the perceived difficulty of nonfinancial targets. To assess the extent to which these findings can be explained by standard theoretical explanations, we review prior agency literature and discuss several channels through which an economic downturn can affect firms' bonus plan choices. Our review highlights that contracting issues rarely examined in prior empirical work such as retention concerns and information asymmetry issues are likely to play an important role during an economic downturn.

Local Differential Private Data Aggregation for Discrete Distribution Estimation

For the purpose of improving the quality of services, softwares or online services are collecting various of user data, such as personal information and locations. Such data facilitates mining statistical knowledge of users, but threatens users’ privacy as it may reveal sensitive information (e.g., identities and activities) about individuals. This work considers distribution estimation over user-contributed data meanwhile providing rigid protection of their data with local $\epsilon$e-differential privacy ($\epsilon$e-LDP), which sanitizes each user's data on the client's side (e.g, on the user's mobile device). Our privacy protection covers both qualitative data (e.g., categorical data) and discrete quantitative data (e.g., location data). Specifically, for categorical data, we derive an optimal $\epsilon$e-LDP mechanism (termed as $k$k-subset mechanism) from mutual information perspective, and further show its optimality over existing approaches within the context of discrete distribution estimation; for discrete quantitative data that have arbitrary distance metric, we provide an efficient extension of $k$k-subset mechanism by proposing a variant of the popular Exponential Mechanism (EM) to tackle the asymmetry issue on the data domain. Experiments on real-world datasets and simulated scenarios show that our mechanism is highly efficient and reduces nearly a fraction of $\exp (-\frac{\epsilon }{2})$exp(-e2) error for distribution estimation when compared to existing approaches.

The Impact of Debt Covenants on Earnings Announcement Returns

We study the impact of debt covenants on earnings announcement returns by creating 10 covenant groups and a covenant index using event-study methodology. We find that during bad news, whether it stems from a bad earnings surprise or a negative average market reaction, both the index and most covenant groups display a significantly negative impact on announcement returns. For good news, particularly when the market reaction is positive on average, we also observe a significantly positive effect from some covenant groups, but not the index. One exception is the debt issue restriction covenant which shows significant effects in the opposite direction of the market reaction. The strongest impact on returns comes mostly from debt-related covenants such as leverage tests, cross-default clause and debt issue restrictions. Among the merger-related (shareholder payout) covenants, poison put (share repurchase) exhibits the largest impact. Finally, we also show that regardless of firm characteristics, risk measures or exposure to information asymmetry, covenants have a negative impact on announcement returns for all firms when the news is bad. For the full sample and the good news subsample, however, we find that small, risky firms with high information asymmetry issues are rewarded by the market and vice versa.

The Effect of CSR, Tax Avoidance, and Information Asymmetry Issues on Corporate Reputation

The purpose of this study was to determine whether corporate social responsibility has an effect on corporate reputation with information asymmetry and tax avoidance as moderating variables, for companies listed on the Stock Exchange for the period 2014-2017. In this study, using descriptive statistical data analysis techniques, classical assumption test, normality test, multicolloniearity test, heteroscedasticity test, and autocorrelation test. While hypothesis testing uses multiple linear regression, F test, and determinant coefficient test. The research sample is disclosure of corporate social responsibility through financial reports or sustainability reports in the 2014-2017 period.

Thinking beyond collateral in value chain lending: access to bank credit for smallholder Vietnamese bamboo and cinnamon farmers

Using case studies of the bamboo and cinnamon value chains in rural areas of northern Vietnam, this paper contributes to the existing literature by analyzing barriers and suggests conditions under which value chain lending would be an effective tool for improving smallholder farmers’ access to credit. A mixed method using both in-depth interviews with relevant stakeholders and a two-stage Heckman model is employed to explain the existing credit gap. Findings show that in both chains, bank decision-making on lending is typically limited to individual chain actors instead of considering the whole chain. Commercial banks predominately use conventional lending approaches heavily dependent on collateral which typically results in a shortage of credit available to the chain actors. Value chain lending is constrained by weak chain linkages and limited ownership of private bank accounts. Drawing from these cases in Vietnam, the article concludes by arguing that status quo value chain lending in lower-income countries merits considerable rethinking. The lending approaches of banks require innovation to ‘think beyond collateral’ in improving chain cohesion. Multi-stakeholder partnerships are important for successful value chain lending. In addition, farmer-based unions have the potential to address issues of information asymmetry in the credit market.