Market Discipline Research Articles

Over half a decade into the adoption of IFRS 9: a systematic literature review

PurposeIn 2018, the International Financial Reporting Standard 9-Financial Instruments became mandatory, effectively changing the underlying accounting principles of financial instruments. This paper systematically reviews the academic literature on the implementation effects of IFRS 9, providing a coherent picture of the state of the empirical literature on IFRS 9.Design/methodology/approachThe study thrives on a systematic review approach by analyzing existing academic studies along the following three broad categories: adoption and implementation, impact on financial reporting, and risk management and provisioning. The study concludes by providing research prospects to fill the identified gaps.FindingsWe document data-related issues, forecasting uncertainties and the interaction of IFRS 9 with other regulatory standards as implementation challenges encountered. Also, we observe cross-country heterogeneity in reporting quality. Furthermore, contrary to pre-implementation expectations, we find improvement in risk management. This suggests that despite the complexities of the new regulatory standard on financial instruments, it appears to be more successful in achieving the intended objective of enhancing better market discipline and transparency rather than being a regulatory overreach.Originality/valueAs the literature on IFRS 9 is burgeoning, we provide state-of-the-art guidance and direction for researchers with a keen interest in the economic significance and implications of IFRS 9 adoption. The study identifies gaps in the literature that require further research, specifically, IFRS 9 adoption and firm’s hedging activities, IFRS 9 implications on non-financial firms. Lastly, existing studies are mostly focused on Europe and underscore the need for more research in under-researched jurisdictions, particularly in Asia and Africa. Also, to standard setters, policymakers and practitioners, we provide some insight to aid the formulation and application of standards.

Change management in business organization: A literature review

BACKGROUND: The effectiveness of the paper’s bibliometric analysis and systematic assessment of change management research in administrative and technological studies may open the way for more study in this field. This study may be the first of its type, and its findings will be useful to other academics working in the subject of change management. OBJECTIVE: The goal of this literature study is to identify essential ideas that might influence change management and to lay the groundwork for future research in change management that uses bibliometric analysis. The evaluation determines the most important and frequently used terms connected with change management. METHODS: The method used in this study is a systematic review of change management publications from Web of Science. RESULTS: The most often used terms in change management research, according to the survey, were Leadership, Organizational Change, Organizational Development, Organizational Culture, Performance, Innovation, Framework, Technology, and Transformation. Change management papers were mostly published in the United States, China, Pakistan, Germany, Australia, and Finland. IMPLICATIONS: The study’s findings may be used to generate articles on change management in the market discipline, notably in the domains of business and technology.

How do depositors respond to banks' discretionary behaviors? Evidence from market discipline, deposit insurance, and scale effects

We investigate how depositors respond to the U.S. bank's discretionary behaviors. We document higher deposit rates for banks that engage more in earnings management, suggesting evidence of market discipline. The quantile regressions, which dissect bank behavior at the right tail of deposit costs distribution, point out that the leveraged effect of earnings management is more significant in low- and high-deposit costs banks. Additionally, we note that depositors monitor banks' discretionary behavior to a greater extent before and during the crisis; however, they become less severe after the crisis. Interestingly, there is strong evidence of depositors monitoring large banks before, during, and after the crisis, suggesting the “too-big-to-fail” perception does not hold for our sample. The study also documents evidence of monitoring by insured and uninsured depositors over the sample period. After the crisis, we find a “wake-up call” for uninsured depositors, and more importantly, insured depositors remain sensitive to banks' reporting quality despite a weakening of incentives due to the increase of deposit insurance limit. The evidence is crucial when confirming that a deposit insurance scheme does not completely remove the deposit discipline. Our findings are useful for regulators and policymakers concerned about strengthening the market discipline.

Sports ambassadors and destination image: a fuzzy set analysis

PurposeThis paper aims to identify different combinations of causal conditions (celebrity attributes) that explain our outcome: destination image. More specifically, three main research questions guide our work: (1) Which attributes should an outstanding sportsperson have to enhance the image of his/her country as a destination image? (2) Are these the same for different product categories? (3) Do tourists and residents differ?Design/methodology/approachTo this end, the fuzzy-set Qualitative Comparative Analysis (fsQCA) was used with a sample of 187 participants (105 tourists and 82 residents).FindingsResults show that some attributes of a sports celebrity are more critical than others in enhancing destination image. Those attributes of sports celebrities appearing in the intermediate and parsimonious analysis should be prioritized. This is the case of trustworthiness. Second, experience is a peripheral requirement (only appeared in the intermediate analysis). Third, attractiveness is unnecessary and an even and undesired attribute in many solutions. Fourth, when comparing tourists and residents, both groups value the role of football players, while residents also appreciate the role of marathon runners. Tennis players are the less relevant sports celebrities to build Spain’s destination image.Originality/valueFirst, a new statistical analysis in the marketing discipline, QCA, has been used. The use of qualitative approaches to investigate destination images has been scarce. Second, the study of the role of sports celebrity endorsement on brand–place attachment has yet to be investigated. Third, studies about the role of residents in the image of a tourism destination/city are scarce. Tourists and residents must be investigated because they can benefit from sports celebrities' activities.

The impact of credit risk on market discipline: Exploring the moderating role of corporate governance through Generalized Method of Moments (GMM) analysis in banking companies

High credit risk poses a significant threat to banks, underscoring the necessity to examine the effectiveness of good corporate governance in mitigating such risks. This study aims to assess the impact of credit risk, represented by non-performing loans (NPLs), on market discipline, reflected through deposit growth, and the moderating role of good corporate governance, focusing on board size and institutional ownership, in this dynamic. Data for the study were sourced from the financial reports of banking companies on their official websites, IDN Financial, and the Indonesia Stock Exchange. The study used a purposive sampling method to analyze a sample comprising 30 banking companies and yielded 300 observations. The research methodology involved dynamic panel regression analysis using the Generalized Method of Moments (GMM) technique. The findings reveal that non-performing loans negatively impact deposit growth. However, it was also found that board size and institutional ownership could positively moderate the adverse effects of non-performing loans on deposit growth. This suggests that market discipline, manifesting as a reduction in deposits and an escalation in credit risk within the Indonesian banking sector, can be effectively managed and mitigated through the strategic implementation of good corporate governance practices, particularly by optimizing board size and enhancing institutional ownership. These mechanisms enable more robust market discipline, contributing to better credit risk management and promoting healthier deposit growth.

Are fund managers rewarded for taking cyclical risks?

The investment fund sector has expanded dramatically since 2008, increasing the capacity for its risk-taking to generate negative spillovers. This paper provides empirical evidence for the existence of wide-spread risk-taking incentives in the investment fund sector, with a particular focus on incentives for synchronized, cyclical risk-taking which could have systemic risk implications. Incentives arise from the positive response of investors to returns achieved through cyclical risk-taking and non-linearities in the relationship between fund returns and fund flows. The fact that market discipline may not be sufficient to ensure prudent behavior among managers creates a clear case for macroprudential regulatory intervention.

Financial technology and banking market discipline in Indonesia banking

PurposeThis study aims to assess the effectiveness of the banking market discipline in relation to the development of Financial Technology (FinTech) startups.Design/methodology/approachUsing panel data collected from 144 banks in Indonesia from 2004 to 2018, this study’s regression models were estimated using fixed effects with robust standard errors.FindingsThis study finds that FinTech startups disturb bank deposits. Meanwhile, market discipline exists in Indonesian banks, as indicated by depositors’ behavior with higher credit and liquidity risks. However, market discipline does not exist for bank insolvency risk, which is indicated by a significant and positive relationship with the dependent variable. Therefore, the higher the number of FinTech startups, the more effective the market discipline. Empirical findings also revealed that the joint impact between FinTech startups and bank risk is also important in explaining the difference in the effectiveness of banking market discipline.Practical implicationsThis study has policy implications for banks in mitigating risk associated with market discipline and instability of financial intermediation.Originality/valueThis study offers a significant contribution to the empirical literature because it specifically explores the effectiveness of the banking market discipline by focusing on the joint impact of FinTech startups and bank risk on deposits. Furthermore, this study contributes to providing empirical evidence that links between FinTech startups and bank risk affect depositor behavior at government-owned, private, large and small, as well as nonmobile and mobile adoption banks.

Assessment of Indonesian Life Insurance Customer Behavior: Investment Return Potential For Evaluating Market Discipline

Market discipline, which concerns aspects of monitoring and the ability of market participants to play a role in influencing management behavior, is an aspect of the financial industry that has not yet clearly existed in the life insurance industry in Indonesia. This condition is the background of a study that aims to determine the possibility of market discipline in the life insurance industry in Indonesia through observation of the relationship between the acquisition of investment returns of life insurance companies with the acquisition of new business and termination of contracts or lapse policies. Testing based on sample data from 27 life insurance companies (Financial Statements published by OJK) resulted that: can accept the hypothesis of a positive correlation (unidirectional) trend between investment returns and new businesses, but cannot accept the hypothesis that there is a negative tendency (not in the same direction) between investment returns and policy lapse. The market (life insurance consumers) has not been able to express disapproval of the company's performance that is not in accordance with the wishes.

COMPONENTS OF SERVICE-DOMINANT LOGIC IN B2B MARKETING

Introduction. In the dynamic landscape of contemporary business, the traditional marketing concept undergoes critique due to its limitations concerning B2B interactions. The incongruity between theoretical developments and practical market needs has spurred the emergence of supplementary marketing disciplines, such as service marketing, relationship marketing, etc. The fragmentation of marketing theory has necessitated the formulation of a unifying paradigm that encompasses a multitude of aspects and challenges inherent to modern economics.
 Scholars S. Vargo and R. Lusch have proposed the concept of service-dominant logic as a unifying paradigm that emphasizes the central role of service, the concept of value, and co-creation as opposed to the mere exchange of products. In our view, within the debate regarding the role of service in marketing, attention should be directed toward the fundamental components of service-dominant logic, the role and influence of customers on value creation and service provision. Crucial questions include the alignment of market participants into networked structures (service ecosystems) and the search for sources of competitive advantage amidst rapid commoditization of almost any offering.
 The hypothesis of the scientific research consists in substantiating the prevalence of the service-dominant logic in B2B marketing compared to the traditional marketing concept and the decisive role of the customer experience as a source of competitive advantage.
 The purpose of the study is to examine the components of the service-dominant logic, to identify key distinctions from the traditional marketing paradigm, and to substantiate the significance of the customer experience in B2B marketing.
 The methodology of scientific research is general scientific research methods, including: induction and deduction, comparison, expert analysis, classification and description, evaluation grouping, and comparison methods.
 Conclusions and prospects for further research. Theoretical provisions of the service-dominant logic and its key distinctions from the traditional marketing paradigm were analyzed. The importance of the customer experience in B2B interactions was substantiated. Further research should focus on empirical validation and implementation issues of service logic, customer experience management and the principles of creation and functioning of service network structures.
 Keywords: service-dominant logic; customer experience; value co-creation; value proposition; resource integration; service ecosystem.

An organizational behavior/human resource management perspective on the roles of people in a service organization context: frameworks and themes

PurposeThis article overviews some key contributions to service research from the organizational behavior/human resource management (OB/HRM) discipline with its strong focus on the role of employees. This focus complements the Marketing discipline’s heavy emphasis on customers, largely true of service research, overall.Design/methodology/approachTen OB/HRM frameworks/perspectives are applied to analyzing the roles of people (with a focus on employees and modest consideration of customers as “partial” employees who co-create value) in a service organization context. Also, commentary is offered on how the frameworks relate to six key themes in contemporary service research and/or practice. The article concludes with five reflections on the role and status of employees in service research—past, present and future.FindingsEmployee roles in evolving service contexts; participation role readiness of both employees and customers; role stress in participating customers; an employee “empowered state of mind”; an emphasis on internal service quality; “strong” HRM systems link individual HRM practices to firm performance; service-profit chain with links to well-being of employees and customers; a sociotechnical system theory lens on organizational frontlines (OF); service climate as an exemplar of interdisciplinary research; emotional labor in both employees and customers; the Human Experience (HX); specification of employee experience (EX).Originality/valueService remains very much about people who still guide organizational design, develop service strategy, place new service technologies and even still serve customers. Also, a people and organization-based competitive advantage is tough to copy, thus possessing sustainability, unlike with imitable technology.

The role of emotions in food consumption choice: Systematic review and directions for future studies

AbstractMarketing researchers have extensively studied the causal influence of emotional state on food consumption. The present study offers a comprehensive systematic review of 111 articles related to the effect of emotions on unhealthy consumption over the past three decades—from 1993 to 2023. Applying the bibliometric coupling method identifies four main research themes in the marketing discipline: emotional eating: food as a coping mechanism, emotional eating: food as a reward, emotional eating: emotion as a multidimensional structure, and emotional eating: moderating effects of food sensory cues. Theoretical richness within each cluster is presented. In addition, the findings indicate that the marketing discipline has mainly relied on the proximate reasoning approach—explaining the causation and development of consumers' behavior—to describe the association between emotional state and food consumption choices. To broaden the scope of each research theme, we adopt the ultimate approach—explaining why a behavior exists—and focus on why unhealthy food consumption becomes a pattern of behavior. This study concludes by discussing the findings and offering several avenues for future research.

Qualitative Disclosure and Market Discipline – Evidence from Bank MD&As

Qualitative Disclosure and Market Discipline – Evidence from Bank MD&As

Rules versus Disclosure: Prudential Regulation and Market Discipline

Rules versus Disclosure: Prudential Regulation and Market Discipline

Loan Restructuring and Deposit Growth: Evidence from the Market Discipline during the COVID-19 Outbreak

Loan Restructuring and Deposit Growth: Evidence from the Market Discipline during the COVID-19 Outbreak

Constitutionalising the BBC

AbstractThis article argues that BBC policy needs a change of emphasis. In the last two BBC Charter periods the emphasis has been on marketisation and market failure. The aim has been to harness market discipline to hold the BBC to account and ensure it does not chill investment. In an era of almost limitless choice, faltering democratic institutions, and new business models based on monetising data and attention, this approach is no longer appropriate. Whilst media users will always be able to choose not to consume BBC services, policy makers should accept that the BBC should be a permanent, privileged part of the communications landscape and enact reforms that reflect this. Policy should focus on overhauling and improving the ‘constitutional’ checks and balances of the BBC rather than accountability through the market. This requires new policies that actively facilitate new forms of accountability to citizens.

The evolution of the marketing discipline up to version 5.0

Purpose: The article examines the evolution of the concept of marketing in the last decades, characterized by the intensive use of new technologies. Methodology: up-to-date literature review on the marketing field, as well statistical information derived from the Official Institute of Statistics (INE Instituto Nacional de Estadisticas in Spanish). Findings: The results show that the current concept of marketing does not oppose previous trends; instead, it complements it.Implications: The evolution of the concept has gone through a series of different stages before reaching the current 5.0 version, mainly supported on digitalization and the establishment of long-term relationships.Value: The present analysis shows a general vision about how the discipline has adapted to the changes in the marketing landscape, both theoretically and practically.Keywords:Marketing 5.0New technologiesRelational marketingBusiness strategy

Capital Requirements in Pillar 1 or Pillar 2: Does it Matter for Market Discipline?

Capital Requirements in Pillar 1 or Pillar 2: Does it Matter for Market Discipline?

Critical success factors of co-innovation platforms: a systematic literature review

PurposeCollaborating with consumers during new product development can provide companies with significant benefits and competitive advantages. Although several studies have been conducted on the design of co-innovation platforms, there is still a need for a more comprehensive understanding of the co-innovation phenomenon. To address this gap, this research aims to identify the critical success factors of co-innovation platforms and provide an extensive analysis of the variables that determine their effectiveness.Design/methodology/approachThis study presents a systematic literature review of co-innovation platforms based on an analysis of 89 articles published in 50 scholarly journals in the disciplines of information systems, marketing and business, covering the years from 2006 to 2022.FindingsThe review synthesizes the current state of scientific knowledge and groups prior studies thematically as critical success factors of co-innovation platforms. As a result, eight success factors have been identified in terms of quantity and quality of contributions. These factors include product involvement, perceived fairness, sense of community, interactive environment, employee involvement, participant diversity, assessment structure and task design.Originality/valueThe study consolidates existing research about the critical success of co-innovation platforms. It also provides a research framework that incorporates a diverse set of variables that can be used to assess co-innovation performance in future studies.

Market discipline and policy loans

We examine the conditions under which life insurer customers can use a policy loan to protect the unguaranteed cash value in their life insurance policies and annuity contracts from insurer insolvency, and thereby provide market discipline for life insurers. Consistent with policyholders using policy loans to protect their cash value, our empirical evidence indicates that insurers’ policy loan growth rates are negatively associated with measures of insurers’ financial strength, specifically their capital ratios. We also find evidence that the negative association is stronger for insurers that focus on selling annuities.

Do regulatory penalties reduce risk-taking of banks?

This paper analyzes the impact of regulatory penalties on risk-taking of Chinese commercial banks during the period of 2009–2019. Our results reveal that regulatory penalties significantly reduce bank risk-taking, and the results still hold after taking endogeneity and robust tests into consideration. As mechanism test uncovers, regulatory penalties exert much pronounced effect on banks with better corporate governance and stronger market discipline. Furthermore, regulatory penalties enforce banks to improve asset structure in which the proportion of quasi-credit shadow-banking activities has decreased. On the other hand, the structure of bank lending also has changed by penalties with more funds flowing to the real estate sector, and less to the manufacturing sector. Based on those, this paper proposes to optimize regulatory penalty designation further, with the goal of stabilizing bank operating, reducing risk exposure, and providing better financial service for high-quality development in real sector.