Y.H. Wong

The application of data mining techniques in financial fraud detection: A classification framework and an academic review of literature

This paper presents a review of - and classification scheme for - the literature on the application of data mining techniques for the detection of financial fraud. Although financial fraud detection (FFD) is an emerging topic of great importance, a comprehensive literature review of the subject has yet to be carried out. This paper thus represents the first systematic, identifiable and comprehensive academic literature review of the data mining techniques that have been applied to FFD. 49 journal articles on the subject published between 1997 and 2008 was analyzed and classified into four categories of financial fraud (bank fraud, insurance fraud, securities and commodities fraud, and other related financial fraud) and six classes of data mining techniques (classification, regression, clustering, prediction, outlier detection, and visualization). The findings of this review clearly show that data mining techniques have been applied most extensively to the detection of insurance fraud, although corporate fraud and credit card fraud have also attracted a great deal of attention in recent years. In contrast, we find a distinct lack of research on mortgage fraud, money laundering, and securities and commodities fraud. The main data mining techniques used for FFD are logistic models, neural networks, the Bayesian belief network, and decision trees, all of which provide primary solutions to the problems inherent in the detection and classification of fraudulent data. This paper also addresses the gaps between FFD and the needs of the industry to encourage additional research on neglected topics, and concludes with several suggestions for further FFD research.

A model of close business relationships in China (guanxi)

Examines the antecedents and consequences of close business relationships (guanxi) in China. We hypothesize that decision‐making uncertainty and perceived similarity positively affect guanxi, whereas opportunism negatively affects guanxi. We also hypothesize that guanxi positively affects business performance, mediated by relationship quality and interdependence. An empirical study of Hong Kong and mainland China business relationships generally supports the model. The managerial implications are discussed.

Relationship Marketing in China: Guanxi, Favouritism and Adaptation

One of the hot research topics today is relationship marketing. However, little research has been carried out in understanding the complex concepts of Guanxi (relationship) in a Chinese society. This research describes a study to operate the constructs of guanxi and explores the importance of guanxi in relationship development in order to present a new Guanxi framework. A study of both Western and Chinese literature provides foundations of the Guanxi perspectives. The constructs of adaptation, trust, opportunism and favour are identified. Adaptation and trust are found to be positively correlated with sales stability and quality. Whilst, adaptation is negatively correlated with relationship termination costs. Both theoretical framework (a new perceptual map) and managerial implications are given. In addition, recommendations for future research are made.

Consumer complaint behaviour of Asians and non‐Asians about hotel services: An empirical analysis

Purpose – This paper aims to test the differences in the consumer complaint behaviour of Asian and non‐Asian hotel guests in terms of culture dimensions. It also aims to examine the relationship between demographic factors (age, gender and education level) and complaint behaviour.Design/methodology/approach – The paper adopts the Hofstedes typology of culture as a framework to investigate cultural differences and demographic characteristics in the complaint behaviour of hotel guests. A face‐to‐face interview survey is conducted to collect data in this research. Data are then analyzed by various statistical methods such as two‐way contingency table analysis, non‐parametric Mann‐Whitney U and Chi‐square tests.Findings – The survey reveals that older complainants tend to resort to “public actions,” but people with a higher level of education tend not to complain publicly. In addition, Asian guests are less likely to complain to the hotel for fear of “losing face” and are less familiar with the channels for ...

The effectiveness of environmental claims for services advertising

Purpose – The purpose of this study is to explore how different types of environmental claims may affect the communication effectiveness of environmental advertising. Two two moderating variables include the perceived eco‐friendly image of the originating country and consumer involvement.Design/methodology/approach – The examination involves the analysis of the responses of 1,200 subjects in Shanghai, China, to mock advertisements containing environmental claims using a 2 x 3 factorial design.Findings – Environmental claims enhance the communication effectiveness of advertisements for both high‐ and low‐involvement services. For high‐involvement services, substantive environmental claims generate more favorable attitudinal responses than do associative environmental claims.Research limitations/implications – This research focused on a single Chinese city and on two service categories with contrasting degrees of involvement. While such a confinement can enhance the internal validity of the findings, their ...

Cronyism: One possible consequence of guanxi for an insider: how to obtain and maintain it?

Purpose – The purpose of this paper is to determine a model of how a foreign businessman obtains and maintains cronyism from his Chinese counterpart that emphasizes on an insider perspective to convert him from a new friend to an old friend of his Chinese counterpart through a guanxi adaptation mechanism. Design/methodology/approach – A vigorous analysis of extant literature and an investigation of insider dynamics within a new friend/old friend perspective. Findings – Gift‐giving is strategic and a foreign businessman must manage its monetary value very cautiously in order to alleviate the “face” and provide renqing so as to generate ganging and to obtain cronyism from his Chinese counterpart. In saying that, relativism prevails. A foreign company must establish a zone of ethical tolerance so that its executive knows the limits when practicing gift‐giving. In China, an old friend is a supporter and therefore a foreign business should not openly criticize his Chinese counterpart. Frequent visits to China must be maintained. Practical implications – A foreign businessman needs to understand the guanxi dynamics of renqing and ganging and their sequential arrangement in the adaptation mechanism. He should use gift‐giving to offer renqing so as to establish ganging with his Chinese counterparts. Originality/value – Provides a depth analysis of two emotional aspects in the guanxi adaptation mechanism, i.e. renqing and ganging which is a definitive device to convert a foreign businessman from a new friend to an old friend of his counterpart in the Chinese market.

Design and development of a context-aware decision support system for real-time accident handling in logistics

This paper describes the design and development of a context-aware fleet management system (CFMS) prototype for real-time accident handling in logistics using a design science approach. One of the most important decisions in fleet management is the optimization of vehicle scheduling during an accident, such as a vehicle breakdown and mechanical failure during delivery. The schedule planner has to assign another vehicle to take over the task; thus, accident handling needs the reassignment or re-scheduling of vehicles. The large number of available vehicles for reassignment and numerous trips in a day make rescheduling complicated and difficult to resolve. In this paper, we propose a CFMS integrated with global positioning system (GPS) for real-time vehicle positioning and eSeal enabled by the RFID technology, to help human planners with rescheduling. A CFMS prototype was built and evaluated in a real-world setting. The system prototype was satisfactory during evaluation. The system was found to be more effective by its potential users and field logistics experts in aiding real-time accident handling in logistics. The design science approach used to develop the prototype could form a basis for further research.

Managing information diffusion in internet marketing

Purpose – Information has created a new segment of knowledgeable customers. Marketers should pay attention to the reversed information sharing by this active group of customers. The major aims of this article are to provide the results of an in‐depth investigation of the relationship between antecedents of information diffusion and perceived cyber segments in the financial services industry and to discuss the importance of the perceived positioning of different segments. This study investigates how information diffusion antecedents and consequences affect the interconnectedness between customers and financial services providers.Design/methodology/approach – This study analyzes corporate attitudes towards using the internet to share information and identifies the major factors behind the information diffusion process. An investigation into information competence and information sharing was undertaken to examine how information was related to six factors, i.e. relevancy, readiness, response, recklessness, r...

Commitment and vulnerability in B2B relationship selling in the Hong Kong institutional insurance service industry

Purpose – The purpose of this paper is to understand the impact of the antecedents of the exchange domain (use of coercive influence, ideational favor exchange, calculative resource‐dependence, and decision uncertainty) on relationship building. The paper examines the link between the two mediating dynamics of embedded trust and relationship‐specific customization and loyalty by developing a model of vulnerability‐based commitment.Design/methodology/approach – The links between the model elements are tested using data from a survey of clients in the Hong Kong insurance service. Structural equation analysis is used to test research hypotheses and to examine the extent to which vulnerability‐based commitment leads to the development of loyalty.Findings – The degree of embedded trust between parties is enhanced by the use of coercive influence, favor, and resource‐dependence. Embedded trust has a negative relationship with decision uncertainty. The antecedents of coercive influence, favor, and resource‐depen...

The Software Piracy Decision-Making Process of Chinese Computer Users

Drawing on Joness ethical model and Ajzens theory of planned behavior, this study proposes and tests an integrative model for the decision-making process underlying software piracy. Survey data collected from computer users in Guangzhou, China, in accordance with two software piracy scenarios under study—end user piracy and software counterfeiting—provide general support for the model. Consistent with major propositions of the theory of planned behavior, the findings show that Chinese computer users’ perceived moral intensity of software piracy significantly affects their corresponding moral recognition, judgment, and intention in both scenarios. Moreover, a direct influence of moral judgment on attitude toward software piracy is found in both scenarios. With regard to end-user piracy specifically, the findings further echo the theory of planned behavior by demonstrating a direct influence of attitude, subjective norm, and perceived behavioral control on intention to pirate. As in the case of software counterfeiting, the findings, however, show that only attitude and subjective norm but not perceived behavioral control significantly influence this intention. Implications derived from this study suggest the potential to synthesize ethical and general social psychological concepts to explain software piracy behavior, and also furnish insights on how to deter software piracy in China.