Macro Corporate Research Articles

Micro vs. Macro Corporate Tax Incidence

Micro vs. Macro Corporate Tax Incidence

Increasing customer loyalty through customer engagement in the retail banking industry

Purpose This study aims to determine the main antecedents of customer engagement (market orientation, satisfaction, emotions and self-brand connection) and the relationship between customer engagement and customer loyalty in the retail-banking context. Design/methodology/approach A theoretical model of effects is tested using dyadic methodology, based on 225 dyads (bank branch manager–average of five branch customers). The authors use structural equation modelling (EQS 6.1) to test the relationships. Findings The results reveal a strong relationship between customer engagement and customer loyalty. Satisfaction is the main antecedent of customer engagement. Self-brand connection and emotions during the service also have a significant influence. Finally, branch market orientation has a positive influence on satisfaction and emotions. Research limitations/implications The first concerns the transversal data used. Geographical context is the second limitation. Third, the study sample only included customers with experience of the financial services of a specific bank (online customers are not included). Finally, the dyads are based on the opinion of the branch manager, on one hand, and an average of five customers per branch, on the other. Practical implications The combination of the branding strategy at the corporate level and the relationship marketing strategy at branch office level creates a situation in which customer engagement and customer loyalty can thrive. The communication campaigns designed to promote the brand image and associate brand values with the personality of the banks’ current and potential customers help to create an emotional bond that represents a switching cost for the customer. The moments of truth in branch offices are crucial aspects in the retail bank strategy. Originality/value First, from the conceptual perspective, it establishes a direct relationship between customer engagement and customer loyalty. Second, it empirically tested Pansari and Kumar’s (2017) customer engagement framework, which establishes customer satisfaction and customer emotions as the antecedents of customer engagement. Third, the study took an innovative step in establishing two levels of customer emotions in the retail bank context: emotions generated by corporate branding and emotions that arise during the experience of purchase and consuming. Fourth, the study shows that the market orientation adopted not at the macro corporate level but at the individual branch level is crucial to the generation of positive relational outcomes in the service the customer receives. The fifth contribution is related to the fact that the research streams associated with market orientation and relationship quality have traditionally been studied in isolation.

Settling for second best?

PurposeThe paper seeks evaluate to the comparative progress of Asda in the UK since its surprise takeover by Wal‐Mart in 1999. Wal‐Mart expected to become the number 1 retailer in the UK and many commentators saw massive problems ahead for local retailers. These expectations were not met; this paper investigates why.Design/methodology/approachAsda's progress is considered through a brief discussion of the company's history to 1999, an investigation of the changes Wal‐Mart subsequently made to Asda's operations, the comparative impact of these changes and then a consideration of the restrictions on impact deriving from organisational, competitive and environmental factors.FindingsDespite the strong rhetoric on entry, the commercial reality has seen only moderate success for Asda and a widening gap to the market leader, Tesco. Explanation for this includes competitive strategy and reactions, market restrictions particularly in land‐use planning and unwillingness by Asda (Wal‐Mart) to alter their focused store format strategy in line with competitor actions and market directions.Research limitations/implicationsThe analysis is at a macro corporate and national level, drawing mainly on published data. Research implications include the rebalancing of considerations of organisational competence and market environment factors on international success. A focus on political and non‐market activities is suggested, though an unwillingness of companies to reconsider strategic directions is also indicted as a key factor.Practical implicationsImplications for national and international strategic decision making at the corporate and governmental levels are identified. Businesses can use the findings to re‐consider their positioning and actions. Reflections on hyperbolic reactions to takeovers might also be provoked.Originality/valueNo other paper has considered the market level changes in connection with Asda since its take‐over by Wal‐Mart and sought explanations for the relative (lack of) performance. The conclusion, that Asda has not been as successful as reported in the literature and the media, is original.

Macro Corporate Governance and Price Sensitivity of Rivals at Acquisition Announcements

Macro Corporate Governance and Price Sensitivity of Rivals at Acquisition Announcements

Corporate Governance in the ten new EU member states (EU-10) as a determinant of Japanese FDI

The economic history of the ten new EU member states (EU-10) has been offering economists for some time interesting perspectives on what contributes to a successful transition to the market economy. Since 1990 the ten countries have built new systems and have made progress towards growth and development.It is clearly understood that foreign direct investment (FDI) plays a key role in contributing to the growth of economies; especially for countries undergoing transition FDI is an effective tool because it transfers knowledge and technology, increases productivity, improves state budgets, balances deficits, and most important in the case of the EU-10, it contributed to privatisation and reform. At present the EU-10 economies are competing to attract more FDI since they have outgrown the privatisation-led type. In order to attract higher inflows they need to either offer new attractive determinants or develop existing ones.In trying to find new relevant determinants to attract FDI, corporate governance is signalled out as belonging to a new type of determinants that are part of competitive economies. The aim of this paper is to support the hypothesis that good macro corporate governance principles attract Japanese FDI in the EU-10 countries; corporate governance matters for foreign investors, especially for the Japanese investors who take into careful consideration a number of determinants before entering new markets. An empirical analysis employing OLS pooled regression is carried out to observe the correlation between Japanese direct investments in the EU-10 and corporate governance.Japanese investments are of a high importance for the EU-10 countries since Japan represents a major part of the automotive hub in Central and Eastern Europe. The subcontractors that follow the big corporations are a significant source of inflows. In order to attract Japanese corporations, the EU-10 countries must present attractive determinants for FDI.

When Financial Institutions Are Large Shareholders: The Role of Macro Corporate Governance Environments

ABSTRACTWhile financial institutions' aggregate investments have grown substantially worldwide, the size of their individual shareholdings, and ultimately their incentive to monitor, may be limited by the free‐rider problem, regulations, and a preference for diversification and liquidity. We compare institutions' shareholding patterns across countries and find vast differences in the extent to which they are large shareholders. These variations are largely determined by macro corporate governance factors such as shareholder protection, law enforcement, and corporate disclosure requirements. This suggests that strong governance environments act to strengthen monitoring ability such that more institutions are encouraged to hold concentrated equity positions.