Min Liu

Bio: Min Liu is an academic researcher from Durham University. The author has contributed to research in topics: Collective identity & Economics. The author has an hindex of 2, co-authored 3 publications receiving 23 citations.

Trading Volume and Realized Volatility Forecasting: Evidence from the China Stock Market

Abstract: The existing contradictory findings on the contribution of trading volume to volatility forecasting prompt us to seek new solutions to test the sequential information arrival hypothesis (SIAH). Departing from other empirical analyses that mainly focus on sophisticated testing methods, this research offers new insights into the volume-volatility nexus by decomposing and reconstructing the trading activity into short-run components that typically represent irregular information flow and long-run components that denote extreme information flow in the stock market. We are the first to attempt at incorporating an improved empirical mode decomposition (EMD) method to investigate the volatility forecasting ability of trading volume along with the Heterogeneous Autoregressive (HAR) model. Previous trading volume is used to obtain the decompositions to forecast the future volatility to ensure an ex ante forecast, and both the decomposition and forecasting processes are carried out by the rolling window scheme. Rather than trading volume by itself, the results show that the reconstructed components are also able to significantly improve out-of-sample realized volatility (RV) forecasts. This finding is robust both in one-step ahead and multiple-step ahead forecasting horizons under different estimation windows. We thus fill the gap in studies by (1) extending the literature on the volume-volatility linkage to EMD-HAR analysis and (2) providing a clear view on how trading volume helps improve RV forecasting accuracy.

Davids against goliath? Collective identities and the market success of peripheral organizations during resource partitioning

Abstract: This paper contributes to the sociology of markets literature by arguing that collective identities sustain the market success of peripheral producers during the process of resource partitioning. Two conditions underlie the positive returns obtained by peripheral producers from their identity claims. First, the demise of near-center producers crystallizes the difference among classes of organizations which benefits the market success of peripheral producers. Second, individual peripheral producers (i) facing an audience that values their identity claims and (ii) exhibiting credible engagement with their claimed identity encounter greater market success. Our contributions to the literature are discussed.

Small is beautiful? Organizational identity and growth rates in a partitioned market.

Abstract: The present paper aims at contributing to the discussion on the determinants of organizational diversity by illustrating the process of identity-based resource partitioning observed in the German electricity market after deregulation from 2001 to 2008. We contend that the demise of regional utilities contributed to sharpen the identity of municipal utilities as oppositional identities to that of nation-wide utilities, ultimately creating durable boundaries among forms. Identity-based partitioning however heterogeneously affected the growth of municipal utilities due to the substantial differences in terms of strategies and endowments such firms. The potential ramifications of peripheral firms’ success on the distinctiveness of their collective identity and, thus, for the durability of diversity are discussed.

The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields (Chinese Translation)

Abstract: What makes organizations so similar? We contend that the engine of rationalization and bureaucratization has moved from the competitive marketplace to the state and the professions. Once a set of organizations emerges as a field, a paradox arises: rational actors make their organizations increasingly similar as they try to change them. We describe three isomorphic processes-coercive, mimetic, and normative—leading to this outcome. We then specify hypotheses about the impact of resource centralization and dependency, goal ambiguity and technical uncertainty, and professionalization and structuration on isomorphic change. Finally, we suggest implications for theories of organizations and social change.

How Cinderella Became a Queen Theorizing Radical Status Change

Abstract: Using a case study of the Italian spirit grappa, we examine status recategorization—the vertical extension and reclassification of an entire market category. Grappa was historically a low-status product, but in the 1970s one regional distiller took steps that led to a radical break from its traditional image, so that in just over a decade high-quality grappa became an exemplar of cultured Italian lifestyle and held a market position in the same class as cognac and whisky. We use this context to articulate “theorization by allusion,” which occurs through three mechanisms: category detachment—distancing a social object from its existing category; category emulation—presenting that object so that it hints at the practices of a high-status category; and category sublimation—shifting from local, field-specific references to broader, societal-level frames. This novel theorization is particularly appropriate for explaining change from low to high status because it avoids resistance to and contestation of such ch...

Oppositional Product Names, Organizational Identities, and Product Appeal

Abstract: At their core, markets are exchange structures between producers and consumers, and products are a key element that connects them together. Many new markets emerge in direct ideological opposition to incumbent industries. Yet, the ways in which ideology affects products in oppositional markets are not well understood. We propose that when audiences cannot easily differentiate between products based on physical attributes, they rely on ideological discourse about the production process. We argue that product names, by embodying linguistically the narrative of this discourse, shape the appeal of oppositional products to customers. When products have names that are congruent with the collective identity of an oppositional market, they have higher appeal. This beneficial effect is attenuated 1 when audience expectations about what type of product should have an oppositional name are violated and 2 when a firm develops a strong organizational identity and audiences rely on this identity to make inference about the firm's production process. We find support for this theorizing in the longitudinal analyses of product appeal in the U.S. craft beer industry, 1996-2012.

Little Fish in a Big Pond: Legitimacy Transfer, Authenticity, and Factors of Peripheral Firm Entry and Growth in the Market Center

Abstract: Research summary: How do peripheral firms compete and secure future growth? Building on literature in strategy and organizational theory, we test a model of peripheral entry and growth in the mainstream market segment. Using data from 289 craft breweries over 11 years, we find evidence that niche producers are increasingly entering the mainstream market and competing with market-center firms. We identify two mechanisms contributing to these actions: legitimacy transfer and cognitive claims of authenticity. As hypothesized, imitation of niche products by macro breweries facilitates craft beer entry into mainstream markets. Moreover, two authenticity-based identity codes are found to reliably influence craft brewery growth: a local identity (i.e., operating in one's local market) and a product proliferator identity (i.e., offering a more diverse set of products). Managerial summary: How can small niche firms compete with larger, more established organizations? By examining the rapidly expanding craft beer industry, this study explores how craft breweries are able to both enter the market space of these larger competitors and secure sustained patterns of growth. Specifically, we highlight two factors influencing the success of craft breweries. First, as major beer producers mimic niche products (i.e., faux craft beer), smaller niche firms are allowed to enter the market by exposing the typical consumer to the tastes of craft beer. Second, craft breweries enjoy increased success if they (a) emphasize the local elements of their company, and/or (b) offer a larger number of products. Copyright © 2017 John Wiley & Sons, Ltd.