HKEJ Column

In light of the critical role of price information in consumers’ decision making, this study investigates the effect of price rank on consumers’ responses to product list advertising (PLA) throughout the purchase funnel, as well as the moderating effects of two keyword attributes. A hierarchical Bayesian model, using a unique data set from a leading electronic shopping platform and a simulated experiment, reveals that in the early phases of the purchase funnel, consumers are more likely to click on extremely priced options (i.e., the highest or lowest), which consumers use as anchors to evaluate the broad range of options. Later in the purchase funnel, when clicks tend to convert to purchases, consumers instead are more likely to click on moderately priced options, which usually offer a compromise between price and quality. The effects of price rank diminish among advertisements that sponsor more specific keywords and increase among those that sponsor more popular keywords. These findings provide new insights into the role of price information in the PLA context, as well as managerial implications for devising effective PLA strategies.

One important benefit of teamwork is the exchange and integration of diverse knowledge, experience, and opinions group members bring to the table. However, demographic attributes, such as race, gender, and functional background, may create asymmetric influence patterns between group members in diverse groups, because these demographic characteristics are often associated with status differences. In the current research, we examine how to attenuate this disparity in member influence in diverse groups by focusing on the role of a leader’s gazing behavior. Across two studies, we found that asymmetric influence patterns in which high-status members tend to wield greater influence in group decision-making processes were attenuated when a leader increased visual attention toward low-status members in the group. This reduced disparity in member influence in turn improved group information elaboration and group performance in a collective decision-making task. Theoretical and practical implications for leaders’ visual attention, diversity, group decision-making processes, and group performance are discussed.

This study assesses a new mechanism, the deposit channel, in the transmission of interest rate shock to household consumption using an administrative panel data set of financial transactions for Turkey. Our empirical strategy exploits variation in consumers' adherence to the Islamic laws that forbid earning interest and employs a standard difference-in-difference design. Following an unanticipated announcement of interest rate hike, rate-sensitive consumers significantly reduce their overall spending, and the response persists throughout the post-announcement period. The response of debt payment, disparate exposure to inflation, exchange rate, and the demographic difference can hardly fully account for the documented consumption response heterogeneity.

Using comprehensive administrative data from the UK, we examine trading by different investor types in government bond markets. Our sample covers virtually all secondary market trading in gilts and contains detailed information on each transaction, including the identities of both counterparties. We find that hedge funds’ daily trading positively forecasts gilt returns in the following one to five days, which is then fully reversed in the following month. A part of this short-term return predictability is due to hedge funds’ ability to predict other investors’ future demand. Mutual fund trading also positively predicts gilt returns, but over a longer horizon of one to two months. This return pattern does not revert in the following year and is partly due to mutual funds’ ability to forecast changes in short-term interest rates.

From 1580, the Jesuits introduced European sciences to China--an autarkic civilization whose intelligentsia was dominated by Confucian literati. Drawing upon prefectural distributions of the Jesuits and Chinese scientific works, this paper demonstrates that the Jesuits stimulated Confucian literati to study science. On average, the literati’s scientific works increased four times in prefectures with Jesuit scientists after 1580. But this effect shrank after the Jesuits were expelled by the emperor of China in 1723. Since China’s scholar-official system remained unchanged, the literati’s scientific research aimed to serve the needs of statecraft rather than translating into economic progress.

After peaking around the mid-eighteenth century, grain market integration in China declined by a colossal 80 percent amid a twofold increase in population and remained at low levels for well over a century. Markets only resumed their growth momentum after the largest peasant revolt—the Taiping Rebellion—wiped out roughly one-sixth of the Chinese population starting 1851. This U-shaped pattern of grain market integration distinguished China from Europe in their trajectories of market development. Using grain prices to divide China into grain-deficit and grain-surplus regions, we find that the negative relationship between population growth and market integration originated from the grain-surplus-cum-exporting regions.

Environmental protection is widely perceived as a state responsibility, but market-based solutions such as green investing have emerged in the financial sector. Little research has addressed whether green investing can affect corporate environmental performance and how the state would moderate such an impact. Using an institutional logics perspective, we extend the literature on institutional complexity by exploring the factors leading to compatibility of logics and practices. We theorize that the success of green investing as a novel hybrid practice combining financial means and environmental goals depends on the legitimacy it achieves as an appropriate solution to the stated goal, and this legitimacy can be boosted or dampened by other hybrid practices in the field. Analyzing a panel dataset of 3,706 firms from 20 countries between 2002 and 2013, we find a positive relationship between the relative size of green investment in the economy and firm-level environmental performance in that country. This relationship is moderated by state policies: a strong environmental protection policy weakens the positive relationship between green investing and corporate environmental performance, and a strong shareholder protection policy strengthens the relationship. We contribute to research on institutional complexity, logic compatibility, and public–private cooperation in pursuing the common good.

We study the global diffusion of culture through multinationals, focusing on gender norms. Using data on manufacturing firms in China from 2004 to 2007, we find that foreign affiliates from countries with a more gender-equal culture tend to employ proportionally more women and appoint more female managers. They also generate cultural spillovers, as we find that domestic firms' female labor share increases with the prevalence of foreign affiliates in the same industry or city. Based on a multi-sector model that accounts for firm heterogeneity in productivity, gender bias, and learning, we perform counterfactual exercises. By hypothetically eliminating firms' gender biases, we observe a 5% increase in China's aggregate total factor productivity, 19% of which is due to spillovers from foreign affiliates.

Inspired by the recent health science findings that air pollution affects mental health and cognition, we examine whether air pollution can intensify the cognitive bias observed in the financial markets. Based on a proprietary data set obtained from a large Chinese mutual fund family consisting of complete trading information for more than 773,198 accounts in 247 cities, we find that air pollution significantly increases investors’ disposition effects. Analysis based on two plausible exogenous variations in air quality (the vast dissipation of air pollution caused by strong winds and the Huai River policy) supports a causal interpretation. Mood regulation provides a potential mechanism.