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Does in-Store Recommendation Work? The Moderating Effect of Brand-Store Image Congruence

Chia-Yi CHEN/Ting-Yi LU/Xiu-Mei YANG/Jing-Ya HONG/Yu-Jyun JHENG/Jie-Sih JHENG

Keywords: In-store Recommended, Store Image, Brand Image, Congruence Theory

In order to stimulate consumer purchase intention, in-store recommendation is one of the frequently used marketing campaigns. To fulfill the research gap of past literature that lacking of exploring the effectiveness of in-store recommendation, this study suggests that the image congruence between brand and store affect the effectiveness of in-store recommendation based on congruence theory. In order to examine hypotheses, this study conducted a 2 (Store Image: Professional vs. Ordinary) by 2(Brand Image: Medical vs. Over-the-counter) experimental design. Credibility of recommendation, purchase intention, and product attitudes are the dependent variables. One hundred and twenty university students are recruited as experimental subjects. The results show that when the store image and the brand image are congruent, customers have higher purchase intention and product attitude toward the recommended products. However, when the store image and the brand image are incongruent, customers show relatively low purchase intention and product attitude toward recommended products. Additionally, the image congruence between brand and store has no impact on credibility of recommendation. Based on these findings, this study suggests that retailers should understand their store image in the minds of customers before conducting in-store recommendations, and promote products with brand image congruent with the store image in order to better enhance purchase intention and product attitude. When the brand image and store image are incongruent, the retailers should develop other promotion campaigns.

The Research of Corporate Social Responsibility on Performance Based on the Degree of Green Building

Henry HSIEH/Zih-Yu LIN/Ting-Fang LIU/An-De HSU/ Mei-Chin CHEN

Keywords: Construction Industry, Green Building, Degree of Green Building, Corporate Social

This research examines the influence of corporate social responsibility measured by the degree of green building on the performance. The research model is based on the theory of Industrial Organization Theory, i.e. Structure-Conduct-Performance. We use the Balanced Scorecard to measure strategic performance. The operational costs, Inventories, and Number of employee are input variables and Operational turnover and Net Income are output variables. Data Envelop Analysis is used to position strategic performance of 30 listed construction companies in Taiwan in 2013. The construction companies are categorized into four groups by Pure technical efficiency (PTE) and Scale efficiency (SE), i.e. Scale efficient, Low performing, Technically efficient, and Outperforming companies. All groups have low degree of green building indicating that corporate social responsibility is insignificant to performance. Moreover the degree of green building of all companies declined since 2011. Further a Pooled Cross-Sectional Time-Series of 30 listed construction companies during 2009-2013, an observation of 150, is used to test the corporate social responsibility influencing company’s performance by Tobit regression model. Surprisingly the degree of green building, a proxy of corporate social responsibility, has negative influence on performance instead of increasing performance. In addition, there is capital-intensive entry barrier in the construction industry, indicating scale advantages. Furthermore scale in-economy occurs due to vast inventories. Yet the attractiveness of this industry is still high and enjoys a positive performance.
There are two advantages if the developer increased green building, to differentiate with others and to ascend to higher commitment of corporate social responsibility. Based on the propensity of Scale efficiency (SE) and Pure technical efficiency (PTE) we suggest that Technically efficient companies can increase scale economy, Scale efficient companies should improve internal process to acquire technical efficiency, Low performance companies can improve scale efficiency first and then pure technical efficiency.

An Empirical Study of VAR on Dynamic Structure between Financial Indices and Stock Return of Investment in Taiwan Stock Market

Alex K.H. CHANG/Chia-Jung WU/Yu-Hsiang TSENG/Yu-Sheng GAO/Zheng-Zhe LAI/Jun-Wei YANG/Mei-Xuan LIN

Keywords: Taiwan 50 Index, Taiwan Mid-Cap 100 Index,  Financial Indices,  Vector Auto Regression Model(VAR)

This research sampled data from Taiwan 50 Index and Taiwan Mid-Cap 100 Index’scomponent stocks in Taiwan stock market from 2010 to 2014. The seasonally, half yearly and yearly closing stock indicescalculated stock return and financial indices are sampled from Taiwan Economic Journal. This research’s purpose is realizing the VAR on dynamic structure between financial indices and stock return of investment.
Using Granger causality, this researchhrealize the causality between stock return of investment and financial indices in Taiwan. With forecast error variance decomposition and the impulse response analysis, this research realize the existence of the dynamic structure between stock return of investment and financial indices in Taiwan. During to the time difference between variables in VAR model, this study doesn’t support aSemi-strong form efficiency market hypothesis in Taiwan stock market.

Diversified Operation, Liquidity Creation, Capital Buffer and Risk Reduction: A Case of the Banking Industry

Rhung-Jieh WOO/Pai-Lung CHOU/Tsung-kai LEE

Keywords: Diversification, Liquidity Creation, Capital Buffer, System GMM

This research aims on the impact of financial sector diversification and liquidity creation to capital buffer and management risk from the perspective of bank diversification with standardized indicator of liquidity management proposed by Basel III. We build up simultaneous equations partial adjustment model, and use system generalized method of moments (system GMM) to estimate Dynamic Panel Data (DPD) from 2004 to 2012. The estimation reveals that the increase of bank’s non-interest income and loan diversification can all meet the effect of capital saving. However, the revenue diversification and the capital buffer show a positive correlation after the consideration of macroeconomic environment. In such circumstance, we should not diversify all the sources of bank revenue. Moreover, they do not raise capital buffer to improve their debt-paying ability when banks face insufficient liquidity. In terms of management risk, both non-interest revenue share and the revenue diversification have obvious negative impact on non-performing loan ratio. It indicates that financial sectors could support their revenue through diversification so that they do not need to rely on traditional loan business anymore. This helps them cautiously maintain better lending quality and also decrease non-performing loan ratio.

Constructing a Stock Selection Model for Portfolio that can Beat the Market

Te-Ping KOU/Li-Hui CHEN/Tsung-Han WU

Keywords: Portfolio, Stock Selection Model, Return on Assets, Return on Equity, Sharpe Ratio

The business environment is rapidly changing and some enterprises have announced unexpected restructurings, leading to stagnating stock prices and increases investment risk. To prepare for calamity, this paper based on profitability index such as price to earnings per share, price to book value ratio and price to sales ratio for constructing a stock selection model to improve portfolio return. A positive research was made and found the return on assets, return on equity and Sharpe ratio of the portfolio were beat the market. Results of this study demonstrate that the proposed model can effectively assist investors in selecting target stocks to improve portfolio performance.

The Impact of Mutual Fund Preference to Disposition Effect, Escalation of Commitment, Momentum

Tzu-Chuan KAO/Shao-Wei LUAN

Keywords: Momentum, Contrarian, Disposition Effect, Escalation of Commitment, Performance

Mutual fund managers should pursue excess return with rational momentum, but the fund managers will be affected by sunk costs. These two deviant behaviors while the implementation of momentum brings out the disposition effect or the escalation of commitment would affect performance is an issue worth to explore. Therefore, this paper has researched momentum (contrarian) from the perspective of behavioral finance theory. The impact of the disposition effect and escalation of commitment to fund performance, including fund flow control variables, turnover ratio, cash holding ratio, size and cost ratio, together to form a regression model. This research results listed as following. First, Momentum for the performance of a mutual fund has a negative relationship. Second, Disposition effect for the performance of a mutual fund has a positive relationship. Escalation of commitment to the performance of a mutual fund has a negative relationship. Third, under the interaction between disposition effect and contrarian, disposition effect decreases the performance of the contrarian.

The Relationship between Purchase Intention and Relative Knowledge of Intangible Commodity: An Evidence from Life Medical Insurance

Rhung-Jieh WOO/Pai-Lung CHOU/Mei-Jiao LUO

Keywords: Life Medical Insurance, Purchase Intention, Intangible Commodity

From 2010, National Health Insurance Administrator Implement diagnosis related groups (DRGs) to reduce unnecessary expenditure of national health insurance (NHI). For such an implementation, it may cause people’s medical rights and interests affect. Commercial medical insurance and national health insurance are complementary, commercial medical insurance can compensate for the lack of national health insurance. After all, this paper investigates the relationship between life medical insurance purchase intention and relative knowledge of intangible commodity.
This paper conducts an empirical survey to examine significance of individual socio-economic variables on knowledge and purchase intention of medical insurance. The sample size for this study is 328. The results indicated that people who are 31 years old (or more), married, engaged in finance and insurance, high-seniority, high income, living in the north of Taiwan have the higher knowledge of medical insurance. And people who are engaged in finance and insurance, high-seniority, people living in the north have the higher purchase intention of medical insurance.