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Purpose Country of origin has profound effects on consumer behavior; yet few studies have examined an antecedent of these effects: why some countries enjoy a positive image while others suffer a negative one. Developing an institutional theory of country image, the authors argue that weak legal institutions at the country level increase firm opportunistic behavior that expropriates consumers and decrease the product quality of local brands, thus decreasing the country’s image regarding its products and brands. Design/methodology/approach This study measures country image for products and brands using the number of valuable brands (i.e. brands included in the top 500 brands from 2008 to 2016) in a particular home country. Data concerning the rule of law in each country come from the World Bank, and data on the efficiency of countries’ judicial systems comes from Djankov et al. (2007). We also collect patent data from the US Patent and Trade Office, national culture from Hofstede Insights and GDP and GDP per capita from the World Bank as control variables. Panel Poisson regression, Tobit regression and truncated regression are used in the analyses. Findings Supporting the institutional theory of country image, both the rule of law and efficiency of the judicial systems show positive and significant effects on country image, even when economy size (GDP), degree of economic development (GDP per capita), level of technology and skill (patents) and culture are controlled. Practical implications To improve their country’s image and the brand value of local firms, policymakers should strive to strengthen legal institutions aimed at punishing firm opportunistic behavior in their countries. Originality/value Previous research on the country-of-origin effect has not yet appreciated the role of legal institutions in developing the construct of country image.

This paper introduces a concept named ‘signaling re-interpretation,’ which aims to improve the decision-making quality and keep the decision maker from losses ex-ante. Signaling re-interpretation includes the essence of signaling theory and systems thinking by taking the idea of signaling effect and other essential components in the system sequentially into consideration. Thus, signaling re-interpretation may overcome the obstacles signaling effect confronts in the application, such as the deferred correction of interpretation and the blind spots from an objective perspective. The expected contribution for practitioners lies in providing a perspective which tallies with decision makers’ needs, and the logic is easier for practitioners to understand. Thus, it increases the convenience for practitioners to apply and the decision is made from a well-thought-out consideration. As for researchers, signaling re-interpretation shows a more comprehensive framework which may reveal more crucial components affecting the decision quality. Applying signaling re-interpretation into empirical testing may also help the result become more representative and answer more to the research context. Accordingly, signaling re-interpretation will extend the application of the signaling effect.

This study develops a model arguing that corruption and weak corporate governance institutions magnify economic fluctuations. Corruption increases the difficulty of corporate governance and decreas...

This article, based on ongoing fieldwork on collaborations between rice farmers and processors in Taiwan, develops the local-embeddedness framework. Contextually, antecedents of spatial localness and temporal cross-generational ties are important features, involving minor powerholders, word of mouth (face-to-face channels) and cooperative spirit. These features enhance local readiness for risk-sharing and long-term win-win value creation, while diminishing bargaining and adaptation costs, as well as goal incongruence and conflict at the dyad level; collectively, they benefit local performance at the network level. Our framework posits common Asian collaborative contexts differently from previous studies from a western perspective.

This study argues that in emerging economies where formal institutions are weak, firms pursuing shareholder value may decrease other stakeholders’ interests and corporate social performance (CSP). Using data from Taiwan, an Asian emerging economy, this study finds that board ownership – which aligns board members’ incentives with those of shareholders and increases board members’ incentives to pursue shareholder value – decreases CSP, suggesting that firms pursuing shareholder value may decrease CSP in an emerging economy. However, independent outside directors, not being large shareholders, may balance shareholders’ influence on the board and protect other stakeholders, which may increase CSP.

Research has demonstrated that trusting belief in one's ability is critical to coproducer selection; however, the importance of trusting belief in dedication has been ignored. This study aims to explore how reputation (i.e., word-of-mouth, certification, and recommendation) affects trusting belief in a potential coproducer's ability and dedication and examines its mediating effects in coproducing with a potential partner.Empirical results show significant mediating effects of trusting belief in a potential coproducer's ability from certification, word-of-mouth, and recommendation, which in turn motivate coproduction, whereas certification leads to the motivation for coproduction through trusting belief in a potential coproducer's dedication. The findings refer to a unitary acceptance of ability but a divergent recognition of dedication. The focal party may regard certification as factual without personal distortion, while the recommendation is an evaluation worth considering. In considering dedication, the focal party may be unable to assess the extent of distortion from second-hand information (e.g., word-of-mouth).

This study has extended existing research on CEO power, pay structure, and firm performance, offering models based mainly on agency theory and managerial power theory, and testing hypotheses using data from 112 companies across a five-year span (2001–2005) in computer-related industry groups in the United States. The results indicated that power from executive directorship positively impacts a firm's return on assets and return on equity, and that CEO power from duality negatively impacts CEO long-term pay and total pay, while CEO power from tenure positively impacts CEO long-term pay and pay leverage, and composite power negatively impacts short-term pay. Evidence for CEO pay as a mediator between CEO power and firm performance revealed that CEO short-term pay positively impacts a firm's return on assets and international performance but negatively impacts its market value, regardless of which source of power is being controlled. CEO total pay positively impacts a firm's return on assets and international performance, with power from CEO duality, directorship, or composite power being controlled. Hence, and in general, CEO pay fails to significantly mediate the relationships between CEO power and firm performance. The contributions include a multiple-perspective study of CEO power, compensation, and firm performance to comprehensively discover each of their respective relationships. This study has further extended the debate over agency perspectives with stewardship perspectives to fill knowledge and theoretical gaps. Thus, evidence-based findings provide boards of directors with practical knowledge for sound governance with another avenue for future research in corporate governance.

Manuscript Type: Empirical Research Question/Issue: Recent research from the United States has advocated increasing ownership concentration and aligning ownership and control to mitigate principal-agent conflicts for entrepreneurial firms. By contrast, this study aims to demonstrate that the major governance problem in an emerging economy is principal-principal conflicts, and that increasing ownership concentration and aligning ownership and control will instead reinforce such conflicts and IPO underpricing. Research Findings/Insights: Using data from 525 IPO firms in Taiwan, an emerging economy, this study finds that increasing family ownership and institutional ownership and introducing CEO duality increase IPO underpricing, while employing independent outside directors mitigates IPO underpricing. These results are consistent with our hypotheses concerning principal-principal conflicts. Theoretical/Academic Implications: Our results are quite different from those of prior research using US data, in that institutions are weaker in an emerging economy than in the United States, where principal-agent conflicts are the main concern. Consequently, corporate governance research, particularly when conducted outside the US, should consider institutional contexts, which agency theory fails to do. As such, institutional theory offers a promising approach. Practitioner/Policy Implications: Government policies designed to address principal-agent conflicts, such as increasing ownership concentration and aligning ownership and control, may make principal-principal conflicts worse and increase IPO underpricing in an emerging economy. To mitigate principal-principal conflicts and IPO underpricing, regulatory reforms need to reduce ownership concentration, separate ownership, and control, and strengthen formal institutions that help minority shareholders monitor firm decisions.

Based upon the resource-based view and national culture perspectives, this paper investigates the two-way relationship between R&D investment and company performance. We propose that company performance and R&D investment have mutual effects, and the magnitude of these mutual effects varies with different national cultures, different company rewarding systems, and different decision-making patterns of management teams. Related hypotheses are developed and tested on the data of the US and Taiwanese technology-intensive companies during 1998–2003, and are generally supported by the statistical results.

The strategic importance of learning and knowledge development in alliances has been widely recognized and discussed in literature, though focusing mainly from the view of the demand side and leaving the equally important ingredient of knowledge owners’ incentives-to-teach intact. This paper blends the perspectives of the transaction-costs economics (TCE) and the knowledge-based view (KBV) in a hypothesized governance model that illustrates how knowledge and location factors of international partners jointly impact alliance strategies. We first identify the relevant knowledge and location factors affecting incentives-to-teach in alliances, and then incorporated them into a framework explaining the choice of contractual or equity-based mode governing an alliance. Eight hypotheses are developed and then tested on a sample of 640 international alliances, with at least a partner from a focal emerging economy, Taiwan. Our research findings show that the contractual mode is usually aligned with higher incentives-to-teach of the knowledge owners, especially in knowledge-asymmetric and location-symmetric alliances. In a contrast, the equity-based mode, offering additional safeguarding mechanisms for the knowledge owner, is often selected in the alliances associated with a severe concern of competition, especially in knowledge-symmetric and location-asymmetric alliances.

Social capital is the goodwill available to individuals or groups from their network of relationships. It is widely believed that social capital is useful in facilitating and governing hazardous transactions. But how social capital, in the context of a financial holding company (FHC), actually facilitates cross-selling is unknown, especially in an emerging economy. This article maintains that effective cross-selling requires an FHC to first access and accumulate comprehensive and tacit customer-specific knowledge (the “where from” condition) and then share and leverage this knowledge to other applicable business opportunities (the “where to” condition). The role of social capital and embedded ties is found to be critical to this process. Finally, we argue that the major route for the effective cross-selling within an FHC is from the commercial banking division to the underwriting division. Hypotheses are tested on the transactional data collected from Taiwan, and empirical results provide broad support for our arguments.

Facing strong global competition and a growing demand for international legal advice in the host and home countries, it is crucial for local law firms to acquire and develop expertise and skills via international collaboration with experienced foreign law firms. This paper addresses the emergence of the global legal service industry and studies the international collaboration between Taiwanese and foreign law firms. A formal collaboration provides Taiwanese law firms with a high efficiency in acquiring strategic asset via know-how transfer, training and expatriate lawyers. Market-seeking law firms, on the other hand, tend to use informal collaboration. Further research is suggested.

Contract is regarded as knowledge repositories in governing inter-organizational exchanges, and transaction partners can learn from prior interactions to have the contract to be specified in greate...