Showing papers by "Xueming Luo published in 2015"
TL;DR: In this article, the authors argue that analyst recommendations mediate the relationship between corporate social performance and firm stock returns, and uncover an information-based underlying mechanism for the link between Corporate Social performance and financial performance.
Abstract: This study posits that security analysts heed corporate social performance information and factor it into their recommendations to general investors. In particular, as corporate social performance is often uncertain and ambiguous to general investors, analysts may serve as the informational pathway connecting corporate social performance to firm stock returns. Thus, we argue that analyst recommendations mediate the relationship between corporate social performance and firm stock returns. On the basis of not only a qualitative study with literature searches and interviews of stock analysts but also a quantitative study with two longitudinal samples of large firms, we find support for these arguments. Our findings uncover an information-based underlying mechanism for the link between corporate social performance and financial performance.
368 citations
TL;DR: In this paper, the authors demonstrate the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor's location, based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations).
Abstract: As consumers spend more time on their mobile devices, a focal retailer's natural approach is to target potential customers in close proximity to its own location. Yet focal (own) location targeting may cannibalize profits on inframarginal sales. This study demonstrates the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor's location. The analysis is based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results show that competitive locational targeting can take advantage of heightened demand that a focal retailer would not otherwise capture. Competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization. These findings are important for marketers, who can use compet...
252 citations
TL;DR: Findings suggest that LMP treatment has a significantly stronger impact on contemporaneous same-day purchases and delayed subsequent-days purchases than the controls, suggesting novel implications on the sales value of LMP in the mobile era.
Abstract: Can location-based mobile promotion LMP trigger contemporaneous and delayed sales purchases? As mobile technologies can reach users anywhere and anytime, LMP becomes a promising new channel. We unravel the dynamic sales impact of LMP on the basis of a randomized field experiment with 22,000 mobile users sponsored by one of the largest mobile service providers in the world. Our identification strategy is to gauge the marginal increases in consumer purchases of the geo-fenced treatment group of users who received LMP, above and beyond the baseline control groups. There are two controls: one group who received the same LMP but not in the virtual geo-fencing locational range nongeo-fenced control, and the other who did not receive the LMP but in the geo-fencing range geo-fenced control. The latter control serves as an organic holdout baseline from the similar population, i.e., counterfactual test of what if without the mobile LMP intervention, to identify the actual "lift" of incremental purchases caused by the treatment with the mobile LMP intervention. Findings suggest that LMP treatment has a significantly stronger impact on contemporaneous same-day purchases and delayed subsequent-days purchases than the controls. The randomized experiment design renders these findings robust to alternative explanations such as mobile usage behavior heterogeneity, product effects heterogeneity, nonrandomized sample-selection bias, and endogeneity concerns. Follow-up surveys with the field experiment users explore the nuanced mechanisms via which LMP may induce the impulsive, same-day purchases, and create product awareness for the planned subsequent-days purchases. LMP can generate six times more purchases than nongeo-fenced control with the LMP intervention, and 12 times more than geo-fenced control without the LMP intervention. LMP has a delayed sales effect for 12 days after the mobile promotions. The total sales impact of LMP could be underestimated by 54% if excluding the delayed sales impact and only including the contemporaneous impact. These findings are new to the literature and often neglected in mobile promotion practices, proffering novel implications on the sales value of LMP in the mobile era.
80 citations
TL;DR: In this paper, a self-signaling theory was used to test the effect of price discounts and charitable donations on movie ticket demand in a large-scale, randomized controlled field experiment.
Abstract: We test a self-signaling theory using two large-scale, randomized controlled field experiments. Smartphone users are randomly sampled to receive promotional offers for movie tickets via SMS technology. Subjects are exposed to different pre-determined levels of price discounts and charitable donations tied to the ticket purchase. The main effects of price discounts and charitable donations increase ticket demand. However, the combination of both discounts and donations can decrease ticket demand. In a post-purchase survey, the same subjects self-report lower ratings of “feeling good about themselves” as the motivation for buying a ticket when discounts and donations are both large. These findings are consistent with a self-signaling theory, whereby the discount crowds out the consumer's “warm-glow” feeling from the charitable donation. Alternative behavioral explanations are ruled out. A structural model of demand with self-signaling is fit to the data using a constrained optimization algorithm to handle the potential multiplicity of equilibria. The estimated preferences reveal that consumers do not derive consumption utility from donations bundled with the ticket. However, they derive significant diagnostic utility: the warm-glow feeling of the self-perception of valuing charitable donations.
31 citations
TL;DR: In this paper, the authors analyzed the stock market reactions to horizontal collaborations in the initiation, development, and commercialization phases of new product development (NPD) and found that on average, stock market reacts favorably to NPD-related horizontal collaboration in the early stages, but unfavorably in the later stages.
Abstract: Firms are increasingly collaborating with their competitors for new product development (NPD), yet the literature is almost silent on stock market reactions to these horizontal collaborations. Given the different skills and activities needed in each NPD phase, we analyze the differential stock market reactions to horizontal collaborations in the initiation, development, and commercialization phases of NPD. Analyses of a unique and comprehensive dataset with 831 NPD announcements of horizontal collaborations over 12 years reveal that, on average, the stock market reacts favorably to NPD-related horizontal collaboration in the initiation phase, but unfavorably in the development and commercialization phases. Further, these effects are asymmetrically moderated by the innovativeness of the new product and the collaborating competitor’s relative market and technological powers. Overall, our results highlight that failing to examine the specific NPD phase leads to an incomplete understanding of stock market reactions to horizontal collaboration for NPD. We offer theoretical and managerial implications regarding horizontal collaboration for each NPD phase, along with the relevant NPD project and competitor contingencies.
28 citations
TL;DR: In this article, the authors developed and tested a conceptual framework that predicts the impact of product alliance activity and the broader network it engenders on shareholder value: stock returns, systematic risk, and idiosyncratic risk.
22 citations
TL;DR: The authors empirically test an information economics based theory of social preferences in which ego utility and self-signaling can potentially crowd out the effect of consumption utility on choices and find that bundling relatively large charitable donations with a consumer good can generate non-monotonic regions of demand.
Abstract: We empirically test an information economics based theory of social preferences in which ego utility and self-signaling can potentially crowd out the effect of consumption utility on choices. Two large-scale, randomized controlled field experiments involving a consumer good and charitable donations are conducted using a subject pool of actual consumers. We find that bundling relatively large charitable donations with a consumer good can generate non-monotonic regions of demand. Consumers also self-report significantly lower ratings of “feeling good about themselves” when a large donation is bundled with a large price discount for the good. The combined evidence supports the self-signaling theory whereby price discounts crowd out a consumer’s self-inference of altruism from buying a good bundled with a charitable donation. Alternative theories of motivation crowding are unable to fit the non-monotonic moments in the data. A structural model of self-signaling is fit to the data to quantify the economic magnitude of ego utility and its role in driving consumer decisions.
17 citations
TL;DR: In this article, the authors exploited a field dataset with ten million smartphone users to identify the role of weather in mobile ad effectiveness and found that mobile purchases are significantly higher on days with more sunshine (precipitation) than those on cloudy days.
Abstract: Although weather may profoundly affect people’s daily life, marketers rarely commit resources for launching weather-related business strategies due to the fleeting nature of weather. However, mobile technology is now changing the speed of business and the business of weather. Facebook and Twitter, who earn the majority of their advertising revenue from mobiles, are contemplating on how to target customers based on specific weather conditions. This study exploits a field dataset with ten million smartphone users to identify the role of weather in mobile ad effectiveness. Our empirical identification strategy is to isolate the effects of weather after controlling for geographic locations which have different latitudes and altitudes that are naturally correlated with weather conditions. We also check the robustness in results by testing the effects over and beyond wind direction, wind power, temperature extremes and ranges, using different measures for weather, and accounting for weekday vs. weekend conditions, competitive effects, and hazardous conditions. In further dealing with endogenous concerns and ruling out alternative explanations, our identification strategy includes the use of forecasts and unexpected changes in weather. The results indicate that mobile purchases are significantly higher (lower) on days with more sunshine (precipitation) than those on cloudy days. In terms of the odds ratio of purchase likelihood, there is a 31% increase in sunny weather and a 9% decrease in wet weather when compared with cloudy weather, holding other things constant. Survival model analyses at the hourly level suggest that the hazard rate or purchase speed would be 41.93% faster (49.87% slower) in sunny (rainy) weather. With over 150 million users of weather apps, there are 2 billion checks of weather each day. Managers may take actionable steps of avoiding prevention-framing on sunny days but using it on rainy, snowy, foggy, and stormy days to boost the purchase of digital goods on smartphones.
12 citations
Posted Content•
TL;DR: In this article, a randomized field experiment was conducted to evaluate the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor's location, and the results showed that targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization.
Abstract: As consumers spend more time on their mobile devices, a focal retailer’s natural approach is to target potential customers in close proximity to its own location. Yet focal (own) location targeting may cannibalize profits on inframarginal sales. This study demonstrates the effectiveness of competitive locational targeting, the practice of promoting to consumers near a competitor’s location. The analysis is based on a randomized field experiment in which mobile promotions were sent to customers at three similar shopping areas (competitive, focal, and benchmark locations). The results show that competitive locational targeting can take advantage of heightened demand that a focal retailer would not otherwise capture. Competitive locational targeting produced increasing returns to promotional discount depth, whereas targeting the focal location produced decreasing returns to deep discounts, indicating saturation effects and profit cannibalization. These findings are important for marketers, who can use competitive locational targeting to generate incremental sales without cannibalizing profits. Although the experiment focuses on the effects of unilateral promotions, it represents an initial step in understanding the competitive implications of mobile marketing technologies.
7 citations
Journal Article•
TL;DR: In this paper, a mobile service company (which wishes to stay anonymous) discussed in this article has partnerships with cinemas and sells movie tickets via mobile phones, and provided data about more than 3.2 million consumers who had been exposed to the company's mobile-ad app for movies over the course of a year.
Abstract: An Asian mobile service company (which wishes to stay anonymous) discussed in this article has partnerships with cinemas and sells movie tickets via mobile phones. The mobile company provided us with data about more than 3.2 million consumers who had been exposed to the company's mobile-ad app for movies over the course of a year. In response to the location-targeted mobile ads, consumers could inquire about movie information, book tickets and select seats from the app. If consumers were physically within a given geographic proximity of participating cinemas, they received location-targeted mobile ads via text messages that informed them about what movies were playing in the nearby cinema and how to purchase tickets by phone. Besides location-targeted advertising, the mobile company also promoted movie ticket sales via mobile ads that were targeted by behavior but not consumer location; the company randomly selected and sent mobile-ad messages to those consumers who had responded to previous mobile ads and who had purchased movie tickets in the past three months. The mobile advertising with behavior targeting had the highest impact on sales. Nonetheless, the location- targeted advertising was substantially more effective than the instant message ads. However, location-targeted advertising was not equally effective with all consumers
5 citations
TL;DR: In this article, an integrated methodology for identifying and tracking company-specific news topics as well as topic-specific sentiments from news media text data is presented. But the main contribution and novelty of the methodology lies in its ability to identify not only company specific news topics but also to track the topic specific sentiments (i.e. positive vs. negative tone/valence) over time.
Abstract: Due to the highly voluminous, heterogeneous, and unstructured nature of global business news streaming at a fast pace, it has become increasingly difficult for marketing executives, corporate communications managers, and market analysts to make sense and track news media stories addressing the company and its brand. This paper responds to this challenge by developing an integrated methodology for identifying and tracking company-specific news topics as well as topic-specific sentiments from news media text data. The main contribution and novelty of the methodology lies in its ability to identify not only company-specific news topics but also to track the topic-specific sentiments (i.e. positive vs. negative tone/valence) over time. This extends prior methods and models, which have only focused on the identification of either topics or aggregate sentiments from news text data, not being able to identify and track the disaggregated topic-specific sentiments (i.e., whether the news media stories treat the firms in a positive vs. negative tone for each separate topic, over time). In addition to developing the integrated topic-sentiment model, we demonstrate the utilization value of the methodology for executives, in terms of its predictive ability for firm performance metrics. That is, we demonstrate, with a set of time-series regression models, that the topic-specific sentiments identified by the model (on Thomson Reuters Newswire data with over 300,000 news items) have the ability to predict firm performance in terms of brand ratings as well as stock returns.
01 Jan 2015
TL;DR: In this article, the authors propose an integrated framework that conceptualizes multifaceted antecedents of emerging entrepreneurship and the significance of entrepreneurship to business performance in transition economies, which is similar to our work.
Abstract: Investigating entrepreneurial firms in transition economies has received great attention worldwide and has become an important literature stream for scholarly research. However, most previous studies lack an integrated framework that conceptualizes multifaceted antecedents of emerging entrepreneurship and the significance of entrepreneurship to business performance.
Posted Content•
TL;DR: The authors empirically test an information economics based theory of social preferences in which ego utility and self-signaling can potentially crowd out the effect of consumption utility on choices and find that bundling relatively large charitable donations with a consumer good can generate non-monotonic regions of demand.
Abstract: We empirically test an information economics based theory of social preferences in which ego utility and self-signaling can potentially crowd out the effect of consumption utility on choices Two large-scale, randomized controlled field experiments involving a consumer good and charitable donations are conducted using a subject pool of actual consumers We find that bundling relatively large charitable donations with a consumer good can generate non-monotonic regions of demand Consumers also self-report significantly lower ratings of “feeling good about themselves” when a large donation is bundled with a large price discount for the good The combined evidence supports the self-signaling theory whereby price discounts crowd out a consumer’s self-inference of altruism from buying a good bundled with a charitable donation Alternative theories of motivation crowding are unable to fit the non-monotonic moments in the data A structural model of self-signaling is fit to the data to quantify the economic magnitude of ego utility and its role in driving consumer decisions
01 Jan 2015
TL;DR: Wang et al. as discussed by the authors examined the effectiveness of an institutional policy-Tax-reduction for Low-emission Vehicles Policy-implemented in China automobile market and found that the institutional policy has positive targeted effect on small engine cars and negative spillover effect on big-engine cars.
Abstract: To bolster the automobile industry while stemming environmental side-effects, governments worldwide have developed various institutional policies. this study, we examine the effectiveness of an institutional policy-Tax-reduction for Low-emission Vehicles Policy-implemented in China automobile market. We find that the institutional policy has positive targeted effect on small-engine cars and negative spillover effect on big-engine cars. We also find the positive targeted effect was driven by sales in smaller cities, while the negative spillover effect was attributed to sales in larger metropolitan cities and occurred mostly for non-indigenous car brands.
Posted Content•
TL;DR: In this paper, a randomized field experiment with 22,000 mobile users sponsored by one of the largest mobile service providers in the world was conducted to investigate the effect of location-based mobile promotion (LMP) on contemporaneous and delayed sales purchases.
Abstract: Can location-based mobile promotion (LMP) trigger contemporaneous and delayed sales purchases? As mobile technologies can reach users anywhere and anytime, LMP becomes a promising new channel. We unravel the dynamic sales impact of LMP on the basis of a randomized field experiment with 22,000 mobile users sponsored by one of the largest mobile service providers in the world. Our identification strategy is to gauge the marginal increases in consumer purchases of the geo-fenced treatment group of users who received LMP, above and beyond the baseline control groups. There are two controls: one group who received the same LMP but not in the virtual geo-fencing locational range (nongeo-fenced control), and the other who did not receive the LMP but in the geo-fencing range (geo-fenced control). The latter control serves as an organic holdout baseline from the similar population, i.e., counterfactual test of what if without the mobile LMP intervention, to identify the actual “lift” of incremental purchases caused by the treatment with the mobile LMP intervention. Findings suggest that LMP treatment has a significantly stronger impact on contemporaneous (same-day) purchases and delayed (subsequent-days) purchases than the controls. The randomized experiment design renders these findings robust to alternative explanations such as mobile usage behavior heterogeneity, product effects heterogeneity, nonrandomized sample-selection bias, and endogeneity concerns. Follow-up surveys with the field experiment users explore the nuanced mechanisms via which LMP may induce the impulsive, same-day purchases, and create product awareness for the planned subsequent-days purchases. LMP can generate six times more purchases than nongeo-fenced control with the LMP intervention, and 12 times more than geo-fenced control without the LMP intervention. LMP has a delayed sales effect for 12 days after the mobile promotions.
The total sales impact of LMP could be underestimated by 54% if excluding the delayed sales impact and only including the contemporaneous impact. These findings are new to the literature and often neglected in mobile promotion practices, proffering novel implications on the sales value of LMP in the mobile era.
01 Jan 2015
TL;DR: In this article, the authors investigate how integrated web-based knowledge management (IKM) strategy affects the company's customer contact activities and find that it is beneficial to treat knowledge as a significant organizational resource for attaining sustainable competitive advantage.
Abstract: In the Internet era, organizations are compelled to transform themselves because of technological advancement and changing business models. Concomitantly, there has been growing interest in treating knowledge as a significant organizational resource for attaining sustainable competitive advantage (Argote and Ingram 2000; Grant 1996; Rulke et al. 2000; Teece et al. 1997). The research intends to investigate how integrated web-based knowledge management (IKM) strategy affects the company’s customer contact activities.