Frontiers of Business Research in China

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Abusive Supervision and Psychological Capital: A Mediated Moderation Model of Team Member Support and Supervisor-Student Exchange
Zhenyu Liao,Yuchuan Liu
Front. Bus. Res. China    2015, 9 (4): 576-607.
Abstract   PDF (387KB)

Embedded in higher educational settings, this study examines the relationship between abusive supervision and psychological capital and the mechanism through which abusive supervision and team member support interact to influence psychological capital with supervisor-student exchange mediating the interaction with psychological capital. Data collected from 222 graduate students in six Chinese universities supports our mediated moderation model: abusive supervision negatively relates to psychological capital and supervisor-student exchange mediates the positive moderating effect of team member support on the relationship between abusive supervision and psychological capital. Theoretical and practical implications of these findings are discussed.

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Enterprise WeChat Groups: Their Effect on Work-Life Conflict and Life-Work Enhancement
Shengming Liu,Ye Zhang,Lifan Chen,Li Guo,Dongling Yu
Front. Bus. Res. China    2015, 9 (4): 516-535.
Abstract   PDF (444KB)

Social media technologies have made it increasingly feasible for employees to be connected to work. WeChat, a newly emerging social media platform, is widely used in daily life, yet there is still little understanding of the consequences of the use of WeChat groups in enterprise. Based on boundary theory, we suggested that the use of WeChat groups in enterprise have both pros and cons for employees. We gathered data from an online survey of 202 employees. Results show that posting work-related content in enterprise WeChat groups had a beneficial impact on work for employees but also caused work-life conflict (WLC). However, posting life-related content in enterprise WeChat groups contributes to employees’ life-work enhancement (LWE). Contributions and future study directions of these findings are discussed.

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Organizational Ambidexterity and Innovation Performance: The Moderating Effect of Entrepreneurial Orientation
Jingkun Bai, Jimei Ren
Front. Bus. Res. China    2016, 10 (4): 664-693.
Abstract   PDF (814KB)

The influence of organizational ambidexterity on innovation and the growth of enterprises has gradually become an important research topic in the field of strategic management and organization theory. This paper builds up a theoretical framework of the relationship between organizational ambidexterity and innovation performance with regards to corporate entrepreneurship orientation. We select 175 companies from high and new technology industries in China’s three large cities, Beijing, Tianjin and Dalian, as samples to carry out an empirical test. We find that the balance and complement of organizational ambidexterity are positively correlated with the innovation performance of enterprises; a corporate entrepreneurial orientation has a significantly moderating effect on the relationship between the balance dimension of organizational ambidexterity and innovation performance, yet it has no significant positive moderating effect on the relationship between the combined dimension of organizational ambidexterity and innovation performance.

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Followers’ Innovative Behavior in Organizations: The Role of Transformational Leadership, Psychological Capital and Knowledge Sharing
Chunling Zhu, Rong Mu
Front. Bus. Res. China    2016, 10 (4): 636-663.
Abstract   PDF (512KB)

This study develops and tests a conceptual model of followers’ perceptions of transformational leadership as an antecedent to their innovative behavior in organizations. Specifically, we hypothesize that followers’ innovative behavior can be directly and indirectly influenced by their perceptions of transformational leadership. Knowledge sharing has a mediating effect and followers’ psychological capital has a moderating role in the relationship between transformational leadership and followers’ innovative behavior. A total of 212 employees from a diverse range of industries filled out questionnaires. Hierarchical linear modeling is used to analyze the relations. Results reveal that transformational leadership produces positive and significant impacts on followers’ innovative behavior and this relationship is fully mediated by knowledge sharing. Results also indicate that the positive relationship between transformational leadership and followers’ innovative behavior is enhanced only when followers possess high psychological capital. This paper adds to innovation literature by empirically testing the moderating role of psychological capital and the mediating role of knowledge sharing on the link between transformational leadership and followers’ innovative behavior. Implications of the findings for theory, research, and practice are discussed.

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Do Arbitragers Exploit the January Effect?
Dennis J. Lasser,Xue Wang
Front. Bus. Res. China    2015, 9 (4): 481-515.
Abstract   PDF (879KB)

The January effect has been well documented since the 1970s. This study examines whether the January effect still exists and if it does, whether arbitrageurs exploit it. We find that the January effect is still persistently significant. Furthermore, we find that arbitrageurs appear to exploit the January effect, especially in good market years when the number of losing firms is limited and are therefore more easily identifiable. We also find that the January effect tends to be higher for losing stocks with high arbitrage costs relative to those with low arbitrage costs.

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The Impact of Environment Uncertainty and Effectual Flexibility on Entrepreneurial Resource Combination: The Moderating Effect of Entrepreneurial Self-efficacy
Xuebing Peng,Yi Lin,Yueling Liu
Front. Bus. Res. China    2015, 9 (4): 559-575.
Abstract   PDF (439KB)

Entrepreneurial resource combination is widely recognized as a key enabling factor to a new venture’s survival and growth, but how and why resources are integrated remain elusive. Borrowing from the theory of resource combination proposed by Sirmon, Hitt and Ireland (2007), this study empirically examines how environmental uncertainty impacts entrepreneurial resource combination. We also examine the mediating effect of effectual flexibility on the relationship between environmental uncertainty and entrepreneurial resource combination to see how new ventures utilize flexibility to neutralize the threat of environmental uncertainty. The moderating effect of entrepreneurial self-efficacy is also examined to see how entrepreneurs’ self-cognition affects these relationships. Examining data from 287 new ventures, we find that both environmental dynamism and environmental hostility have significantly positive influence on entrepreneurial resource combination (including entrepreneurial resource cohesion and entrepreneurial resource coupling). We also find that flexibility mediates the relationship between environmental uncertainty (including environmental dynamism and environmental hostility) and entrepreneurial resource combination. Empirical studies also show that entrepreneurial self-efficacy positively moderates the relationship between environmental dynamism and flexibility but negatively moderates the relationship between environmental hostility and flexibility. Theoretical and practical implications are discussed.

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The Business Cycle and Profitability of Trading Strategies
Yuxing Yan, Shaojun Zhang
Front. Bus. Res. China    2016, 10 (4): 525-547.
Abstract   PDF (492KB)

Recent studies show that investor participation in the stock market rises during economic expansion and drops in economic recession. When investor participation is high, investors’ cognitive and behavioral biases are likely to have a strong influence on stock prices. We consider four trading strategies that are based on well-known market anomalies and examine their profitability under different economic conditions. For all four strategies, the portfolios that are formed in the months when the economy is expanding obtain significant profits, whereas the portfolios formed in economic recession months are not profitable. This finding is robust to different ways of classifying recession months.

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The international harmonization progress of China Accounting Standards: A review of quantitative research
QU Xiaohui , GAO Fang
Front Bus Res Chin    2008, 2 (4): 483-496.
Abstract   HTML   PDF (236KB)

In recent years, an increasing number of quantitative researches have been conducted in the field of international harmonization of China Accounting Standards(CAS). However, differences even contradictions do exist in the conclusions due to different research perspectives, samples, variable and period selection as well as the method adopted. Firstly, this paper systematically reviews the quantitative research literature on the international harmonization progress of CAS from the following four aspects: the degree of harmonization of specific items in CAS with that of in International Accounting Standards (IAS), differences in accounting numbers, accounting information, and earnings quality in various financial reports compiled based on CAS or IAS respectively. Lastly, suggestions for future research are provided.

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The Social Identity Approach to Effective Leadership: An Overview and Some Ideas on Cross-Cultural Generalizability
Rolf van Dick,Rudolf Kerschreiter
Front. Bus. Res. China    2016, 10 (3): 363-384.
Abstract   PDF (492KB)

When employees identify with the groups and organizations they work for, this typically has positive implications for work-related attitudes and behaviors. The present paper provides a focused overview of the social identity approach to leadership and some ideas on its cross-cultural generalizability. To this end, we will first outline the basic tenets of the social identity approach and summarize the relations of organizational identification with work-related variables. Then, we will discuss the role of social identity-related concepts for effective leadership. In particular, we will present empirical studies on the following three aspects: (1) the transfer of leader identification onto their followers, (2) the role of leader prototypicality, and (3) the ways for leaders to actively manage the identities of the groups they lead. Finally, we will provide some suggestions on how to implement the principles of identity management into practice and offer suggestions for future research, with a special focus on China.

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Reputation in China’s online auction market: Evidence from
LI Wei′an , WU Desheng , XU Hao
Front. Bus. Res. China    2008, 2 (3): 323-338.
Abstract   HTML   PDF (262KB)
Using data on prepaid cards for an online game listed on, this paper examines the impact of sellers’ reputation on their sales in China’s online market. It is found that sellers’ good reputation has a positive impact on their sales volume, but the marginal effect of this impact decreases severely. We also find that sellers’ affiliation with seller coalitions can increase their sales in a given period. Results show that individual and collective reputation can function well in the absence of mature law and social credit system related to online trade, and that private order can substitute public order in a market with immature laws as in China.
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Related party transactions, benefits of control and earnings quality
TONG Yan , WANG Huacheng
Front. Bus. Res. China    2008, 2 (2): 187-203.
Abstract   HTML   PDF (255KB)
Controlling shareholders pursue benefits of control (private benefits and shared benefits) via related party transactions, which result in different levels of earnings quality. Using data from all A-share listed companies in Shenzhen and Shanghai stock markets in the year 2001 and 2002, we found that when the share ratio of controlling shareholder is less than 50%, they prefer pursuing private benefits of control via related party transactions, giving rise to deterioration in earnings quality. By comparison, when the share ratio is more than 50%, controlling shareholders prefer pursing shared benefits of control through related party transactions, which improve earnings quality as a result.
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An empirical evaluation of a customer-based brand equity model and its managerial implications
YU Chunling , ZHAO Ping , WANG Haizhong
Front Bus Res Chin    2008, 2 (4): 553-570.
Abstract   HTML   PDF (254KB)

In recent years, customer-based brand equity (CBBE) has been extensively studied in the marketing community. Central to the study of CBBE are its structure and the measurement. This paper focuses on the dimensions of CBBE, the interrelationships among them, and the analytical methodology of the measurement model. The authors empirically analyze 15 brands with data from 3928 consumers of four industries including toothpaste, roll film, cell phone, and gym shoes. A CBBE measurement model is constructed and the application of the model is discussed. Suggestions are also provided for brand management and directions for future research.

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TOOR: A Novel Product Title Optimization Method Based on Online Reviews in E-commerce
Liye Wang,Jin Zhang,Wei Yan
Front. Bus. Res. China    2015, 9 (4): 536-558.
Abstract   PDF (369KB)

Titles of online products play an important role in attracting consumers and promoting product sales in e-commerce. However, current online product titles only cover basic features and cannot reflect the preferences of consumers exactly. To address this problem, this research proposed an online title optimization method based on the analysis of online reviews, which is called TOOR (Title Optimization based on Online Reviews). In this research, we analyzed and compared product features extracted from online product titles and online reviews from the point of view of consumers and applied features extracted from reviews to title optimization. In order to verify the effectiveness of the proposed method, two experiments were conducted in this paper, selecting four typical smartphones as experiment samples and as the data resources. The experimental results indicated that features extracted from online reviews can better reflect the consumers’ concern, and the titles optimized by the TOOR method are more appealing to consumers and have higher click-through rates.

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Corporate organizational capital, strategic proactiveness and firm performance:An empirical research on Chinese firms
LIU Haijian, CHEN Chuanming
Front Bus Res Chin    2009, 3 (1): 1-26.
Abstract   HTML   PDF (551KB)

Organizational capital is an institutional arrangement in a firm’s production and management activities, which helps integrate all resources in the firm and affect the firm’s strategic choice and performance. This paper classifies organizational capital into three subtypes, namely power orientated capital, norm orientated capital and knowledge orientated capital. Moreover, strategic proactiveness is also brought into this influencing process. Results show that strategic proactiveness fully mediates the effect of power orientated capital on firm performance, but partially mediates that of norm orientated capital. It is also found that neither power nor norm orientated capital affects innovative performance, whereas knowledge orientated capital affects directly both financial performance and innovative performance. The significance of this research is to provide a meaningful supplement to the theory of decision-making-process for the top management team. Suggestions on how to cultivate organizational capital are provided for Chinese enterprises.

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An empirical study on critical success factors for electronic commerce in the Chinese publishing industry
HUANG Jinghua, ZHAO Chunjun, LI Jingting
Front. Bus. Res. China    2007, 1 (1): 50-66.
Abstract   PDF (465KB)
Critical success factors for electronic commerce (e-commerce) have been a hot topic in both the academe and industry. This paper puts forward hypotheses on success factors for e-commerce of traditional companies first. Then, it conducts an empirical study on the Chinese publishing industry in order to verify the hypotheses. After testing the validity and reliability of the data, this paper verifies the hypotheses with regression analyses, and finally identifies factors impacting e-commerce success such as leadership, strategy, organization, management, IT, customers, comprehensive functions of website and customeroriented functions. In addition, customers, strategy, IT and comprehensive functions of website are identified as the critical factors impacting e-commerce success. This research not only stimulates e-commerce research in China, but also has an instructional effect on the implementation of e-commerce so that Chinese publishing enterprises can increase the success rate of their e-commerce objectives.
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Corporate Donations in China: A Strategic- Political Perspective
Sihai Li,Wenbin Long,Xianzhong Song
Front. Bus. Res. China    2015, 9 (4): 608-632.
Abstract   PDF (261KB)

This paper explores how the political identity of top managers influences corporate donations, based on upper echelons theory (UET). The results show that the political identity of the top manager has a significant impact on the donation behavior of a company, especially in areas with poor institutional environments. Corporate donations depend not only on whether the top manager has a political identity but also the type of this identity. Furthermore, the impact differs significantly between companies with different ownership structures. This study enriches our knowledge of corporate philanthropy by demonstrating that corporate donation practices are shaped by a range of contextual factors. Corporate giving behaviors in emerging economies such as China are differently motivated according to the fundamentally different aspects of their institutional settings.

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Stock market behavior and investor sentiment: Evidence from China
LI Xindan , ZHANG Bing
Front. Bus. Res. China    2008, 2 (2): 277-282.
Abstract   HTML   PDF (207KB)
The relationship among stock returns, market volatilities and individual investor sentiment is an important topic in behavioral economics and finance. This paper uses a unique data set—China’s newly opened stock trading accounts to test the relationships among stock returns, volatilities and individual investor sentiment in the Chinese stock market. It is found that there is a positive relationship between shifts in sentiment and stock returns, and that shifts in sentiment are negatively correlated with market volatility, that is to say, volatility increases (decreases) when investors become more bearish (bullish).
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The Performance of Chinese Private Firms in Coping with a Global Financial Crisis: Who Is Best Positioned?
Na Shen, Kevin Au, Thomas Birtch
Front. Bus. Res. China    2016, 10 (4): 548-575.
Abstract   PDF (461KB)

Using organizational flexibility as a research lens, we investigate how private firms, especially SMEs, in China cope with the 2008 financial crisis. Testing data from a large sample of private firms (N=3,459) by difference-indifferences analysis, we find that firms with industrial diversification, geographic expansion and political connections perform better during the crisis than those without. These results are less affected by self-selection problems (as the abrupt crisis provides a natural experiment) and hold up against endogeneity and several other challenges in robustness tests. The findings offer important implications for researchers, business owners, policy makers and future research.

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Transference or severance: An exploratory study on brand relationship quality of China’s time-honored brands based on intergenerational influence
HE Jiaxun
Front Bus Res Chin    2008, 2 (4): 518-552.
Abstract   HTML   PDF (313KB)

Using an indigenous model of Chinese brand relationship quality (CBRQ), the author analyzes the transfer phenomenon of the time-honored brand equity between parents and children from the perspective of combining intergenerational influence and brand equity. Results show that the time-honored brand equity from parents basically has no way to pass on to their children besides trust. Moreover, the positive relationships between parents and the time-honored brands are even destroyed to some extent. Implications related to the revitalization of the time-honored brands are also discussed.

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In search of the best human resource practices in chain stores in China
LIU Shanshi, CHAO Gang, Irene Hau-siu Chow
Front. Bus. Res. China    2007, 1 (1): 155-166.
Abstract   PDF (278KB)
This paper is based on a recent survey of human resources (HR) practices from 83 chain stores in China. It differentiated managerial staff and operating employees according to different types of HR configurations. It also identified high and low adoption based on bundling of HR practices using cluster analysis. The impact of HR practices alignment on enhancing firm performance was evaluated using high adoption cluster. The findings advance our knowledge in the High Performance Work Systems literature and offer important insights for executives in formulating effective HR management strategies.
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A study on risk perception and risk identification in the internationalization process of Chinese hi-tech enterprises —A case study of Huawei Technologies
XU Hui , WAN Yiqian , PEI Degui
Front. Bus. Res. China    2008, 2 (3): 458-481.
Abstract   HTML   PDF (307KB)
This paper constructs an integrated model of international risk perception, and then conducts a pattern match to the model through a descriptive case study of Huawei. Huawei’s internationalization process is divided into three stages, namely challenging initial exploration, horizontal expansion and all-round expansion. The key risks and prevention measures at each stage are observed on the macroscopic level, industrial level and corporate level respectively, and the model base on an analysis of Huawei’s risk perception and prevention effort is tested. Implications and suggestions are discussed with regard to the management of internationalization risks for hi-tech enterprises.
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Ethical Characteristics of Human Resources Management in Chinese Enterprises: An Empirical Study Based on Content Analysis of Employee Manuals
Ming Feng, Yali Guo
Front Bus Res Chin    2010, 4 (4): 562-579.
Abstract   HTML   PDF (475KB)

This paper identifies five dimensions of human resource management ethics (HRME) from the extant literature, namely ethical values, rights, fairness and justice, openness, and ethical care. Based on employee manuals of 160 companies, this paper conducts a content analysis to identify the characteristics and differences of HRME in various types of firms and different industries. Results indicate that the status quo of HRME in Chinese firms is far from being satisfactory due to the lack of ethical care, unfair and nontransparent employee appraisal procedures and outcomes. The results also show that there are significant differences in the five dimensions of HRME among state-owned enterprises, private enterprises, joint ventures, and foreign companies. It is also found that there is no significant interaction effect between enterprise ownership type and industry on HRME.

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The Effects of 2-tier Store Brands’ Perceived Quality, Perceived Value, Brand Knowledge, and Attitude on Store Loyalty
Defeng Yang, Xinxin Wang ,
Front. Bus. Res. China    2010, 4 (1): 1-28.
Abstract   PDF (286KB)
This paper divides store brands into generic ones versus individual ones. Accordingly, two types of store brand loyalty are discussed, namely general versus individual brand loyalty. It also analyzes perceptions of 2-tier store brands in terms of perceived quality and value, and explores the respective effects of consumer knowledge and brand attitude on store loyalty. Results show that both low-priced and medium-priced store brands are able to build individual store brand loyalty and store loyalty among customers. Managerial implications are also provided.
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Entry Mode Choice of Chinese Enterprises: The Impacts of Country Risk, Cultural Distance and Their Interactions
Yuehua Xu, Songhua Hu, Xu’ang Fan
Front Bus Res Chin    2011, 5 (1): 63-78.
Abstract   HTML   PDF (389KB)

Recent years have witnessed a phenomenal growth in the number of Chinese enterprises “going global.” Drawing on three leading theoretical perspectives including the transaction cost theory, organizational capability theory and eclectic theory, this paper develops hypotheses to test how country risk and cultural distance are associated with entry mode choices of enterprises from China. Based on a sample of 167 Chinese companies, an empirical investigation has been conducted employing logistic regression and hierarchical regression analyses. Our results show that country risk and cultural distance have significant impact on entry mode choice. With the increase of country risk or cultural distance, businesses prefer non-ownership-based entry modes such as trade and licensing. However, entry mode choice is also noticeably influenced by the interaction between country risk and cultural distance, which is a new finding of international entry mode research. Furthermore, private enterprises are more likely to adopt high-involvement entry mode than the state-owned enterprises, and service enterprises are less likely to use high-involvement entry mode, which suggests that different approaches are used to deal with country risk and cultural distance by various types of enterprises.

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The formation and management of virtual teams in T Telecom Company
ZHANG Kai , WANG Jin’ai
Front Bus Res Chin    2008, 2 (4): 591-620.
Abstract   HTML   PDF (337KB)

Virtual marketing teams have emerged in T Company, a regional branch of China Telecom, and led to tremendous success in recent years. It is beneficial to explore the reasons behind such a phenomenon and to identify the factors leading to high performance. Investigating these issues also helps deepen our understanding of managerial experience and some important organizational changes that Chinese state-owned enterprises are going through. In this case study, analysis of the characters of high performing virtual marketing teams in T Company concentrates on four main team processes, namely virtuality and communication, personnel selection, trust, and motivation. Key factors contributing to the team’s high performance are analyzed, and the implications of the results for management and future research directions are also discussed.

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Dimensions and influencing factors of customer loyalty in the intermittent service industry
LU Juan, LU Yan
Front Bus Res Chin    2009, 3 (1): 63-78.
Abstract   HTML   PDF (457KB)

This research empirically studies customer loyalty in the intermittent service industry with samples from the catering business in Beijing. Results show that customer loyalty in the intermittent service industry is composed of three causally related dimensions, namely cognitive loyalty, affective loyalty, and behavioral loyalty. Factors influencing customer loyalty in the intermittent service industry are customer satisfaction, service quality, and customer perceived value (CPV), in descending order of significance. These factors vary in their function mechanisms and effects on different dimensions of customer loyalty.

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The impact of a fi rm’s internal control mechanisms on the choice of innovation mode
LIU Xinmin, LI Yuan, SU Zhongfeng, FENG Jinlu
Front. Bus. Res. China    2007, 1 (1): 91-101.
Abstract   PDF (298KB)
A firm s internal control mechanisms may have a significant influence on the choice of innovation mode. Therefore, based on the research on the internal control mechanisms of companies, we developed a model to explore the relationship between a firm s internal control mechanisms and the choice of innovation mode. Using a sample of 585 Chinese firms, this study tests the proposed model. Results show that strategic control has a positive relationship with radical innovation, but a negative relationship with incremental innovation, while financial control has a negative relationship with radical innovation, but a positive relationship with incremental innovation.
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Determining the optimal capital structure based on revised definitions of tax shield and bankruptcy cost
ZHANG Zhiqiang
Front Bus Res Chin    2009, 3 (1): 120-144.
Abstract   HTML   PDF (585KB)

For half a century, no consensus has been reached on optimal capital structure after numerous intensive studies. This paper develops three alternative simple models to derive optimal capital structure. Because the optimal leverage ratio determined by the models is close to most survey data, some relevant puzzles, such as “financial conservatism”, are easily explained. In addition, the new models can be extended to accommodate various decision situations, for instance, abnormal growth, bankrupt expectancy, debt guarantee, transaction cost, and personal income tax.

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How to measure brand relationship quality?
ZHOU Zhimin
Front. Bus. Res. China    2007, 1 (2): 300-318.
Abstract   PDF (351KB)
The aim of this research is to develop a new evaluation approach based on a brand relationship index model (BRI model), which includes a three stage study on the indicator system; indicator weight; and indicator integration. Based on brand identity theory and interpersonal relationship theory, four-brand relationship participants and three-brand relationship natures are put forward to make up a hypothesis of twelve-dimension brand relationships. Through a series of empirical studies based on exploratory factor analysis (EFA) and confirmatory factor analysis (CFA), a five-dimension structure of brand relationships is obtained, which is the basis of the indicator system. Indicator weight is calculated by the normalization of path coefficients derived from a second order factor analysis of the five dimensions. Indicator integration is based on the Weighted Sum method. Based on these three ingredients, the brand relationship index (BRI) model is developed. According to analysis of data on ten mobile phone brands, the BRI model is tested.
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Corporate strategic management: Static and dynamic paradigms
LAN Hailin
Front Bus Res Chin    2009, 3 (1): 50-62.
Abstract   HTML   PDF (349KB)

Based on an analysis of the dynamic trend of the environment in which Chinese enterprises operate and the theory of dynamic competition, this paper seeks to propose a new strategic management pattern—the “dynamic paradigm”, which has mainly resulted from an integration of the theoretic contributions of the two strategic management streams. It ultimately aims at enhancing the effectiveness and efficiency of strategic management in an environment full of uncertainties. The dynamic paradigm designed to explore today’s real business world is characterized by: 1) viewing strategic management as a process of both proactive plans and in-the-process reaction, both point and process decision-making and both rational and non-rational decision-making; 2) stressing the roles played by speed and innovation in the dynamic competition; 3) highlighting the inherent ties and the interaction among the three phases of strategic management; 4) emphasizing the critical impacts on the effectiveness and efficiency of strategic management by corporate governance, organizational structure, managerial mechanism, mode of control, composition of top-management team and corporate culture.

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