Mavis T. Adjei

The Impact of Service Fairness Perceptions on Relationship Quality

The success of marketing has increasingly become more dependent on the service quality of marketing. It is important that marketers understand how the service provided affects the future quality of the relationship. The overall goal of this study is to understand the relationships between justice perceptions, transaction-specific postrecovery satisfaction and relationship quality in a service failure/recovery encounter. Based on a sample of 138 respondents in the restaurant industry, we found that distributive, procedural, and interactional justice all positively impact the customers transaction-specific postrecovery satisfaction with the service organization, and ultimately, the quality of the customer-firm relationship. Managerial and theoretical implications are provided.

Economic policy uncertainty, market returns and expected return predictability

Purpose - Using the economic policy uncertainty (EPU) index as a proxy for the level of EPU, we study the impact of the level of EPU on the conditional mean of market returns and we examine the predictive power of EPU on future market returns. Design/methodology/approach - We employ a GARCH-in-Mean model with exogenous variables. Findings - The results show that even after controlling for business cycle effects, EPU is inversely related to contemporaneous market returns. Particularly, the authors find that the negative impact of EPU subsists only during recessions or recessionary states of the economy, and has no discernible effects during expansionary periods. Originality/value - This is the first study to examine the predictive power of EPU on future market returns.

The Collateral Damage of C2C Communications on Social Networking Sites: The Moderating Role of Firm Responsiveness and Perceived Fairness

Social networking sites are important to firms as firms use them to communicate with their customers. This study investigates the overlooked collateral damage (the accidental negative outcomes that occur when customers communicate with each other via social networking sites) that customer-to-customer communications, through social networking, has for firms. Based on 3 experimental surveys with 614 participants, we found that information that is received publicly by way of social networking sites elicit higher levels of betrayal than information that is received via nonsocial networking platforms. Further, perceived betrayal increased negative word-of-mouth and patronage reduction. Fortunately, the study finds that perceived firm responsiveness and perceived fairness mitigate the negative impact of betrayal on both negative word-of-mouth and patronage reduction. Managerial and theoretical implications are provided.

Corporate Governance and Corporate Performance Dispersion

This study, using a fixed effects model, empirically investigates the relationship between corporate governance and corporate performance dispersion. Suggesting a negative relationship, [1] theorize that when corporate governance improves there is a decrease in shareholder oversight which could permit greater managerial discretion to execute conservative investment policies leading to a decrease in corporate risk taking and hence a decrease in performance dispersion. For a positive link, [2], employing agency theory, contend that with poor corporate governance, managers may choose conservative investment policies for career preservation concerns, giving up value-enhancing risky projects. Our findings indicate that the Gompers and Bebchuk governance indices (institutional ownership) are negatively (positively) associated with the standard deviation of monthly stock returns. The results also indicate that better corporate governance is associated with higher as well as more variable capital expenditures and R&D spending. These findings are consistent with the argument that management of better governed firms behave optimally, follow more aggressive investment policies, leading to the increased dispersion of corporate performance.

Gompers versus Bebchuck Governance Measure and Firm Value

This study compares the two primary measures of corporate governance quality, [1], GIM index and [2] E index using tests for comparing two nonnested models. We find that the GIM index has statistically significantly more power than the E index in explaining the variability in firm value, as measured by Tobin’s Q. This finding suggests that the IRRC provisions excluded from the E index may have a statistically significant incremental power in explaining the variability in firm value.