Journal of Applied Business and Economics
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Journal of Applied Business and Economics North American Business Press Atlanta - Seattle – South Florida - Toronto Journal of Applied Business and Economics Editors Dr. Adam Davidson Dr. William Johnson Editor-In-Chief Dr. David Smith NABP EDITORIAL ADVISORY BOARD Dr. Nusrate Aziz - MULTIMEDIA UNIVERSITY, MALAYSIA Dr. Andy Bertsch - MINOT STATE UNIVERSITY Dr. Jacob Bikker - UTRECHT UNIVERSITY, NETHERLANDS Dr. Bill Bommer - CALIFORNIA STATE UNIVERSITY, FRESNO Dr. Michael Bond - UNIVERSITY OF ARIZONA Dr. Charles Butler - COLORADO STATE UNIVERSITY Dr. Jon Carrick - STETSON UNIVERSITY Dr. Min Carter – TROY UNIVERSITY Dr. Mondher Cherif - REIMS, FRANCE Dr. Daniel Condon - DOMINICAN UNIVERSITY, CHICAGO Dr. Bahram Dadgostar - LAKEHEAD UNIVERSITY, CANADA Dr. Deborah Erdos-Knapp - KENT STATE UNIVERSITY Dr. Bruce Forster - UNIVERSITY OF NEBRASKA, KEARNEY Dr. Nancy Furlow - MARYMOUNT UNIVERSITY Dr. Mark Gershon - TEMPLE UNIVERSITY Dr. Philippe Gregoire - UNIVERSITY OF LAVAL, CANADA Dr. Donald Grunewald - IONA COLLEGE Dr. Samanthala Hettihewa - UNIVERSITY OF BALLARAT, AUSTRALIA Dr. Russell Kashian - UNIVERSITY OF WISCONSIN, WHITEWATER Dr. Jeffrey Kennedy - PALM BEACH ATLANTIC UNIVERSITY Dr. Dean Koutramanis - UNIVERSITY OF TAMPA Dr. Malek Lashgari - UNIVERSITY OF HARTFORD Dr. Priscilla Liang - CALIFORNIA STATE UNIVERSITY, CHANNEL ISLANDS Dr. Tony Matias - MATIAS AND ASSOCIATES Dr. Patti Meglich - UNIVERSITY OF NEBRASKA, OMAHA Dr. Robert Metts - UNIVERSITY OF NEVADA, RENO Dr. Adil Mouhammed - UNIVERSITY OF ILLINOIS, SPRINGFIELD Dr. Shiva Nadavulakere – SAGINAW VALLEY STATE UNIVERSITY Dr. Roy Pearson - COLLEGE OF WILLIAM AND MARY Dr. Veena Prabhu - CALIFORNIA STATE UNIVERSITY, LOS ANGELES Dr. Sergiy Rakhmayil - RYERSON UNIVERSITY, CANADA Dr. Fabrizio Rossi - UNIVERSITY OF CASSINO, ITALY Dr. Robert Scherer – UNIVERSITY OF DALLAS Dr. Ira Sohn - MONTCLAIR STATE UNIVERSITY Dr. Reginal Sheppard - UNIVERSITY OF NEW BRUNSWICK, CANADA Dr. Carlos Spaht - LOUISIANA STATE UNIVERSITY, SHREVEPORT Dr. Ken Thorpe - EMORY UNIVERSITY Dr. Robert Tian – SHANTOU UNIVERSITY, CHINA Dr. Calin Valsan - BISHOP'S UNIVERSITY, CANADA Dr. Anne Walsh - LA SALLE UNIVERSITY Dr. Thomas Verney - SHIPPENSBURG STATE UNIVERSITY Dr. Christopher Wright - UNIVERSITY OF ADELAIDE, AUSTRALIA Volume 16(5) ISSN 1499-691X Authors have granted copyright consent to allow that copies of their article may be made for personal or internal use. This does not extend to other kinds of copying, such as copying for general distribution, for advertising or promotional purposes, for creating new collective works, or for resale. Any consent for republication, other than noted, must be granted through the publisher: North American Business Press, Inc. Atlanta - Seattle – South Florida - Toronto ©Journal of Applied Business and Economics 2014 For submission, subscription or copyright information, contact the editor at: [email protected] Subscription Price: US$ 360/yr Our journals are indexed by UMI-Proquest-ABI Inform, EBSCOHost, GoogleScholar, and listed with Cabell's Directory of Periodicals, Ulrich's Listing of Periodicals, Bowkers Publishing Resources, the Library of Congress, the National Library of Canada. Our journals have been used to support the Academically Qualified (AQ) faculty classification by all recognized business school accrediting bodies. This Issue The Use of Voluntary Public Disclosure and Patent Strategies to Capture Value from Product Innovation ............................................................................................................... 11 Sharon D. James Firms make tradeoffs in voluntarily and publicly disclosing R&D information. Disclosure can deter competition by signaling a technological advantage. However, such disclosures might signal technological opportunity and encourage competitors to develop competing innovations. This study investigates the effect of industry- and firm-specific advantages on the influence of voluntary public disclosure on competitors’ patenting in the same technology space. Theoretical predictions are tested on a sample of 322 publicly traded firms between 1991 and 2004. The results are consistent with industry and firm-specific advantages moderating the effectiveness of disclosure along with patents as a strategy for capturing value from product innovation. The New Normal: Fundamental Shifts for 21st Century Organizations and for the CIOs Who Lead Them ................................................................................. 27 Mark W.S. Chun, Charla Griffy-Brown, Harvey Koeppel The New Normal (the business climate following the 2008 economic crisis) has ushered in fundamental changes to the structure and governance of many organizations and, therefore, to the executives who lead them. The Chief Information Officer (CIO) remained at the epicenter of organizational evolution and enablement. Shifts within the Information Technology (IT) landscape have created significant opportunities and challenges for organizations and for their CIOs. Through our research, we learned that effective IT leaders typically possessed six key competencies: Leadership; Innovation and Growth; Business Strategy and Process; Relationship Management and Communication; Business Management; Risk Management. Country Risk and Macroeconomic Factors: Evidence from Asian Markets ...................................... 51 Rahul Verma, Priti Verma Using international version of capital asset pricing model (ICAPM), we analyze the response of country risk in Asia to a set of domestic and global macroeconomic factors. Specifically in a two-step process, we first estimate country beta models for Hong Kong, Indonesia, Malaysia, Philippines and Singapore and generate separate series of country risk variables for each market. In the second step we analyze the response of these country risks to five local factors and seven global factors. The local factors are: money supply, inflation, economic growth, interest rate and exchange rate while the international factors are: value of U.S. dollar against currencies of 15 industrialized countries, spread between 90-day Euro dollar deposit rate and 90 day U.S. Treasury Bill yield, weighted average inflation of G-7 countries, weighted average short term interest rates of G-7 countries, U.S. dollar price per barrel of crude oil, U.S. interest rate and U.S. inflation. The results indicate strong and significant effects of the global risk factors on country risk of all these Asian markets. The price of dollar has significant positive effects in all except in the case of Malaysia’s country risk. In addition, the dollar euro spread, real interest rates and inflation of G-7 countries have a significant negative impact on country beta in all the cases. On the other hand, exchange rate (in case of Malaysia and Singapore) and to some extent money supply (only in case of Hong Kong) are the only local factors, which have a significant effect on country risk of these markets. Our results are consistent with previous findings that sensitivity to global risk factors increases as the markets become more integrated. The U.S.-China Trade Friction: Causes and Proposed Solutions ........................................................ 63 Suk Hi Kim, Mario Martin-Hermosillo, Junhua Jia The U.S.–China trade relationship has undergone tremendous growth since 1979, when the United States and China established their diplomatic relationship. The trade volumes have increased dramatically after China joined the World Trade Organization in 2001. However, the trade relationship between the two countries has recently experienced some setbacks—specifically in terms of the huge U.S. trade deficit with China, currency manipulation by the Chinese government, and China’s failure to enforce laws to protect the intellectual property rights of U.S. companies. This article discusses the three major issues of the US- China trade relations: burdens, causes, and solutions. Social Media Marketing: A Myth or a Necessity ................................................................................... 74 Anne Whiting, Anant Deshpande Social Media Marketing (SMM) is a heavily debated topic in marketing circles today. Opponents claim that it does not work well as a marketing agent, cannot bring new customers to a company/brand, and may alienate customers if blatant advertising/marketing tactics are used. Proponents maintain that the relationships built, maintained, and grown and the brand pride developed outweigh the negative factors that can occur through using social media in marketing campaigns. This study asserts that both sides have legitimate arguments, but that, when used with care, SMM can be a valuable, or even necessary, tool for an organization. Innovation in the Automobile Industry: How the Changing Face of Global Competition Affects Motor Vehicle Patenting ....................................................................................... 82 Gerald P. W. Simons, Paul N. Isely There is much interest in how the increase in high valued added manufacturing in emerging economies is affecting established manufacturers in high income economies. One area of analysis is industry innovation. We analyze how innovation in the automobile industry has been impacted by competition in a North-South setting. North-South innovation models indicate that greater production by the South will encourage North companies to engage in more innovation to stay ahead of the new competition. In contrast, our analysis suggests that greater competition from