Ph.D. - International Management

Permanent URI for this collectionhttps://hdl.handle.net/10125/2081

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The Meaning Of Generosity: A Subjective Culture Study In India
(University of Hawaii at Manoa, 2020) Narayanan, Anand Chandrasekar Chandrasekar; Bhawuk, Dharm P. S.; International Management
To understand the meaning of generosity or udAratA as conceptualized in the Indian culture, the Amar Chitra Katha series of children’s storybooks were examined in a series of five studies employing a grounded theory methodology. Each study resulted in a substantive model of generosity. Four expressions of generosity, dAnam or giving, tyAga or sacrificing, kSamA or forgiving, and tyAga or renouncing emerged from the study. Eleven antecedents to generosity (kartavya bhAva or sense of duty, saGga bhAva or sense of identity, karunA bhAva or sense of empathy, niSThA bhAva or sense of personal principle, santuSTa bhAva or sense of contentment, parasparatA bhAva or sense of reciprocity, mitratva bhAva or sense of friendship, utsava bhAva or sense of celebration, sammAna bhAva or sense of appreciation, deza bhakti or sense of patriotism, and pazcAttApa or sense of repentance), ten moderators of generosity (parAkrama or courage, dhRti or resilience, pAtratA or worthiness of receiver, aucitya or worthiness of given item, yajJa or giving together, prArthanA or asking, prayatna or efforts, parArtha or interceding, udAharana or role modelling, and dakSiNA or honorarium), and the consequences of generosity (positive outcomes like freedom from suffering, peace of mind, happiness, and honor and negative outcomes like loss of wealth, happiness, life) from the Indian worldview also emerged from the analysis. The synthesis of the five substantive models resulted in two formal models of generosity. These models were further synthesized in light of other Indian texts and by considering core aspects of Indian culture, which presented a thick description of udAratA or generosity in the Indian cultural milieu.
The Role of Rivals in the Foreign Divestments of International Healthcare Systems
(University of Hawaii at Manoa, 2018-05) Hildebrand, Charlotte L.; International Management
This study bridges the research gap between oligopolistic reaction and foreign divestment strategy. Based on a 40 year dataset that captured the divestment decisions of the largest American international healthcare systems operating foreign hospitals, the relationship between the number of rivals operating in a focal country and the number of previous rival divestments is analyzed on healthcare system divestment and market exit timing. The findings suggest that in the same host country a focal healthcare system’s decision to divest is positively related to both the number of rivals and their previous divestment decisions of their competitors. In the timing of the decisions, the more rivals operating in a host country, the faster the divestment decisions are. The divestment decisions of rivals, however, decelerated the decisions of focal hospitals to divest. Support exists for oligopolistic reaction in foreign divestments.
Two Essays in Asset Pricing
(University of Hawaii at Manoa, 2015-12) Vo, Hong
This research examines two matters in asset pricing in two essays. The first essay investigates the impact of firm size on return reversals using weekly returns from January 1980 to December 2013. Return reversals are greater for the largest size quintile than for the smallest size quintile in the first half of the sample period. However, the firm size effect on return reversals disappears in the second half sample. Return reversals during the up market period are significantly stronger than during the down market period for all stocks. The reversal difference between the largest and smallest size quintiles is also highly significant in the up market. Further analysis shows that a high institutional demand, mainly from the small stakeholders, for large-firm stocks results in high demand for immediacy as well as strong return reversals for these stocks in the first half sample. After institutions shifted their preferences to stocks of smaller firms since the mid-1990s, return reversals for large-firm stocks became insignificantly different from small-firm stocks in the second half of the sample period. The second essay explores the geographic dimension of the momentum effect. Using the data of the U.S. firms over a 34-year period from 1980 to 2013, the study shows that stocks in urban areas have stronger momentum effect than those in nonurban/rural areas. The result remains robust after controlling for stock and firm characteristics that are documented to affect momentum in previous studies together with time-varying state characteristics. Further analysis shows that geographic momentum concentrates in up markets. The geographic momentum in this study can be explained by two causes. First, the overreaction of risk-averse individual investors to bad news is stronger in nonurban/rural areas than in urban areas. The other is that some types of institutional investors trade on urban winners more strongly than winners in other areas.
Love in Translation: The Co-Creation of Valentine's Day as a Market-Mediating Ritual
(University of Hawaii at Manoa, 2015-05) Nariswari, Angeline
The purpose of this dissertation is to understand how market rituals spread within and between distinct cultural contexts, and how this process occurs in value co-creating service ecosystems. By integrating service-dominant (S-D) logic and the markets-as-practice framework, this study traces key micro, meso, as well as macro-level market practices to explore the systemic and collaborative aspects of market creation. The research project contributes to marketing scholarship by proposing a fractal model of market co-creation, which offers an alternative way of understanding markets that shifts away from a diffusion of goods perspective to a translation of practice approach. This study contributes to early efforts to conduct empirical work inspired by the S-D logic perspective. Specifically, the study explores the contested practice of Valentine’s Day in the emerging market of Indonesia as a means to investigate the dynamic multi-level processes of practice translation and institutionalization.
Return and report: the role of leadership and performance measurement systems in employee engagement
(University of Hawaii at Manoa, 2013-05) Staheli, Nathan
This dissertation integrates theories in accounting and organizational behavior to address the important issue of motivation and performance management. Specifically, the research draws on elements of agency theory, leadership theory, contingency theory, employee engagement and motivation, and management control and performance measurement system (PMS) literature. This study examines the effect the more comprehensive PMS has on employee engagement. In addition, it examines the role that contextual factors, such as leadership style and organizational structure, have on the use of comprehensive PMS as it relates to employee engagement. A major premise behind the development of more comprehensive PMS is that they can help to improve productivity. Agency Theory, integrated with organizational behavior theories, suggests that a heightened level of organizational justice obtained through more comprehensive PMS, provides the mechanisms through which employees are motivated (Burney, Henle, & Widener, 2009), and the agency problem is mitigated and employee performance is improved. Data collected from a survey of 312 employees are used to test the SEM model. Results from the structural model tested indicate that transformational leadership is directly related to employee engagement. In addition more comprehensive PMS leads directly to a higher level of engagement. This study provides evidence that the employee's supervisor's leadership characteristics play an important role in cultivating the engagement of employees and also offers evidence that more comprehensive PMS result in the more heightened engagement of an employee. Alternative title: Return & report : the role of leadership and performance measurement systems in employee engagement
International diversification and professional service firms
(University of Hawaii at Manoa, 2011-05) Powell, Kristan Skylar
This research considers factors related to the propensity of professional service firms to open foreign offices, and explores relationships between patterns in international diversification and firm performance. This is one of the first studies to consider how a firm's home location relates to patterns in diversification, and also contributes by relating specific strategic motives to operational definitions, and theorized links between diversification and performance. The results suggest that firm prestige, or status, is positively related to the ratio of foreign to total offices maintained, and home location is associated with patterns in diversification. Additionally, results suggest that international diversification to exploit existing firm resources, or diversification to pursue and develop new resources, are both associated with positive performance. However, the results also suggest that the simultaneous pursuit of both types of diversification may be associated with negative performance.
Reputation incongruence and preference of stakeholders: case of MBA programs
(University of Hawaii at Manoa, 2013-05) Park, Jin Suk
I examine the effect of an organization's multi-dimensional reputation on the external stakeholders' preference for an organization in the notions of reputation incongruence. I propose that an organization's incongruent reputation, or large variations among the reputations of each dimension, can be an unfavorable signal to its stakeholders based on theoretical ideas that claim reputation incongruence induces the ambiguity and risk of an organization perceived by stakeholders. I also investigate the moderating effect of reputation incongruence by positing that this incongruence may nullify the influences of reputation dimensions on the preferences of stakeholders. These propositions about reputation incongruence is empirically examined in the context of MBA programs of the global business schools which have three dimensions of reputation--career development, globalization, and research performance.
Social dynamics within electronic networks of practice
(University of Hawaii at Manoa, 2013-05) Mattson, Thomas
Electronic networks of practice (eNoP) are special types of electronic social structures focused on discussing domain-specific problems related to a skill-based craft or profession in question and answer style forums. eNoP have implemented peer-to-peer feedback systems in order to motivate future contributions and to distinguish contribution quality. However, there is a lack of empirical data or a set of theoretical perspectives in the literature to evaluate their effectiveness against these claims. The purpose of this dissertation is to develop and empirically test two related theoretical perspectives concerning voting practices within these systems and the usefulness that these systems have in terms of promoting future contributions. I do this by performing two independent (but related) empirical studies. In the first study, I qualitatively demonstrate that the off-topic forums within eNoP have the potential to be virtual third places, special types of informal gathering places. I then quantitatively demonstrate that members who have greater affective place attachment to the third place portions of the network and members who make identity claims with the eNoP through their third place participation have a higher propensity of contributing a positively rated practice-related contribution and a lower propensity of becoming inactive on the practice side of the eNoP. I further demonstrate empirically that the usefulness of the peer-to-peer feedback system in terms of promoting future practice-related contributions is qualified by third place participation, most notably site level identity claims made by third place participants. I argue that this is the case, because status attainment and maintenance in a place of emotional and psychological significance is more important than status attainment and maintenance in 'just another' knowledge sharing eNoP. In the second study, I utilize a cultural sociology perspective drawing primarily from Bourdieu's integrated social theory (fields, forms of capital and habitus) and Eliasoph and Lichterman's concept of culture in interaction in order to explain voting practices within peer-to-peer feedback systems. In this study, I argue that a vote is a complex social and cultural phenomenon that is based on more than the quality of the post. I demonstrate empirically that the lower the social class of the giver and receiver of feedback, the greater the differences in professional habitus between the giver and the receiver of feedback, and members who violate the group style have a higher propensity of receiving negative votes (as opposed to positive votes). My results further reveal that the effect of small professional habitus differences is amplified in the presence of a group style violation, specifically group bond violations. These results hold even after controlling for the quality of the post and previous interaction histories between dyadic pairs of members. This dissertation advances the knowledge of social dynamics within eNoP by complementing existing eNoP literature, which explains interactions and knowledge contributions largely in terms of networking constructs such as network centrality and network density using market-based ties and traditional resource exchange perspectives. My research demonstrates that eNoP are much broader than resource exchange systems and may be more appropriately conceptualized as social and cultural systems. Concepts of place, social stratification, habitus, and cultural in interaction provide eNoP researchers an enhanced theoretical toolkit for explaining and predicting the social interactions within these electronic social structures. This dissertation also has practical ramifications for eNoP site designers and the designers of peer-to-peer feedback systems more generally.
Venture capital risk in transitional economies: evidence from China
(University of Hawaii at Manoa, 2010-12) Chen, Charles Xiao Liang
In China, guanxi is a particular kind of interpersonal relationship or connection that serves as a form of social currency that can secure resources and benefits in business contexts. In the venture capital market in China, some have suggested that venture capitalists (VCs) use guanxi as a mechanism for addressing institutional risks. This study examines how VCs respond to institutional risks in China using appropriate guanxi networks, which in turn have a direct and indirect influence on VC investment performance. I propose an integrative framework that both delineates the direct effects of guanxi networks on firm performance and indicates how they are moderated by environmental turbulence and mediated by response capabilities, interlocking directorates varying in density and multiplicity, and syndications such as affiliated projects and affiliated funds. A group of 222 venture capital firms in China were surveyed. This study identifies a significant link between guanxi and VC firm performance but also demonstrates that this link is reduced by environmental turbulence. The mediators identified here also have a significant influence on the relationship between guanxi and VC performance.
Privatization and insider incentives: an international test of earnings management in public offerings of state-owned enterprises
(University of Hawaii at Manoa, 2011-08) Nguyen, Anh Thuc
Massive privatization programs over the last two decades have created an unprecedented surge in share issues on stock markets worldwide. Privatization is applauded for enhancing efficiency of state-owned firms, as evidenced by financial and operational improvements of these firms after being sold to the private sector. The current study looks into the possibility that such improvements are confounded by managerial opportunistic behaviors during the privatization process. Discretionary accruals over a three year period around share issue of 63 privatized public offerings during the 1990s and 2000s have been examined against those of non-privatized firms and in relation to offering prices as well as post-privatization performance. Results show that discretionary accruals of privatized firms are negative during the year prior to privatization. Offering prices are influenced by pre-issue earnings management, upholding the suspicion of possible managerial manipulation to opportunistically lower prices. Interestingly, preprivatization discretionary accruals are found to be negatively related to postprivatization performance, suggesting that the reversal impact of pre-privatization accounting choices contribute to recorded financial improvements after state assets are sold. In addition, pre-issue accounting choices introduce noise to earnings and impair the value relevance of reported incomes on stock return in the aftermarket. In conclusion, the study provides evidence of management's opportunistic behavior during state ownership transfer and that the documented success of privatization is inflated by such behavior.
Hand versus mouse: role identity formation of competing institutional logics in the U.S. animation film industry, 1991-2008
(University of Hawaii at Manoa, 2011-08) Kim, Euisin
In this dissertation, I investigate how competing logics are shaping role identity formation and behavior of actors as to explore how competing logics are managed and maintain their co-existence for a lengthy period of time when new technology emerges in an organizational field. I show how 2D animators and 3D animators form their role identities in response to competing institutional logics. Based on content analysis, I address salient competing institutional logics at the societal level. At the micro level, I explore how 2D animators and 3D animators adjust their role identity in response to competing situations. Previous literatures on competing institutional logics explore rivalry relations at the societal level and the tendency to form defensive role identities toward each other. However drawing on this analysis, I develop a theoretical model of symbiotic identity formation at the micro level although hostile competing logics co-exist at the societal level. Overall, I present the role identity formation change process with competing logics and their co-existence within the animation film industry, with the concept of symbiotic identity as its unique centerpiece. The second part of this study attempts to identify likely participants in this symbiotic identity formation: actors of a certain social network position are more likely to show goal-oriented identity spreading behavior. This part of the study contributes to previous literature on how logics influence the behavior of actors. In this study, I argue that 2D animators in powerful network positions and structural hole positions are more likely to work for 3D films as 2D animators which influence 3D animators to form a symbiotic identity.
Competitive dynamics and firm resources in the internationalization of Korean manufacturing firms 1981-2002
(University of Hawaii at Manoa, 2011-05) Cho, Eun Bum
This study proposes internationalization as a strategic process for firms to adapt to competitive environments, compete with rivals, and grow. Drawing on the industrial organization economics perspective, and the resource-based view, this study investigated how relative market positions and resource positions of Korean manufacturing firms are related to their international involvement. Export intensity and foreign subsidiary numbers are used as measures of international involvement. An empirical examination of international strategies from 1981 through 2002 of publicly traded Korean manufacturing firms revealed that competitive market positions and firm resources have different implications for exports and foreign direct investments (FDIs). Specifically, dominant domestic market position, domestic market share growth, and marketing resources appear to be positively related to the growth of FDIs but negatively associated with export performance. Cost leadership was positively associated with export performance. However, it was not related to FDIs. Consequently, this research found that cost leadership is an efficient strategy for export-led growth, while differentiation strategy, especially based on marketing activities, is effective for FDI-led growth. Some structural differences were observed among chaebol and non-chaebol group affiliations related to international strategies. Chaebol affiliations seem to be positively associated with FDIs but not related to exports. Non-chaebol business group membership was found to be negatively related to both exports and FDIs. Although some scholars speculated that going abroad is a sign of domestic weakness, this research shows that the speculation is only accurate in terms of exports. Non-dominant firms tend to seek alternative growth via exports. Conversely, domestically dominant firms tend to have more foreign subsidiaries than non-dominant firms. Therefore, FDIs seem to reflect domestic strength. Finally, it seems that for Korean firms, exporting is simultaneously weighed with domestic expansion, but FDIs come after domestic expansion alternatives.
Economic determinants and consequences of direct method cash flow disclosure
(University of Hawaii at Manoa, 2012-05) Zhao, Lijuan
The statement of cash flows of a business can be presented by using either the direct method (DM) or the indirect method (IM). In United States, only a small portion of businesses use the DM. Compared to the IM, the DM has been shown to provide incremental information in predicting future cash flows. Furthermore, the DM can also improve the ability to compare the individual component of cash receipts and cash payments among similar companies over a period of time. However, the direct method is more costly to implement. Given the high costs associated with the DM, why do some firms continue to use the DM? What are the benefits in choosing the DM? This study investigates how firms choose between the DM and the IM. In order to answer this question, this study explores the economic determinants and consequences if firms adopt the DM instead of the IM. This study finds that firms choosing the DM tend to (1) be in high tech industries, (2) be in relatively less competitive industries, (3) have higher leverage ratio and (4) have higher earnings quality. This study further explores the possible consequences if firms select the DM. The results indicate that analysts' cash flow forecasts are more accurate for firms employing DM than those using IM to present the statement of cash flows. Finally, this study shows that firms with the DM cash flow disclosure will have lower cost of debt in comparison to those choosing the IM. This study provides comprehensive empirical evidence about the determinants and consequences of firms' decisions of using DM. This study contributes to the current literature in identifying the underlying reasons behind in the selection process among the two methods.
Analyses of the shareholder benefit program in Japan
(University of Hawaii at Manoa, 2012-12) Yasutake, Taeko
The shareholder benefit is noncash gifts and services Japanese companies provide to their shareholders. We find that firms that initiate the shareholder benefit program experience a significant increase in the number of individual investors but the average number of shares held by individual investors become smaller, indicating a more diffused ownership by individual investors. Our analyses on the price movement and trade volume around the ex-benefit day show that the shareholder benefit is reflected in the stock price around the ex-benefit day, providing evidence of an existence of shareholder benefit clientele in Japan. We also find a positive relation between firm value and the number of individual investors, our proxy for the investor recognition, consistent with Merton's (1987) investor recognition hypothesis. The positive relationship, however, does not hold when firm age is 10 years or older, asset size is larger than the median value, and the percentage ownership structure by individuals exceeds 51%. Our analyses suggest a possible trade-off between the improvement in investor recognition and the deterioration in effective monitoring due to more diffused ownership by individual investors.
Learning by doing in social networks: North American automotive engine plants, 1995-2006
(University of Hawaii at Manoa, 2012-05) Yang, Dae Gyu
This dissertation is an academic attempt to make answers to a couple of research questions: What are the potential factors to internally affect the effectiveness of organizations' learning by doing activities and how do the network characteristics of organizations influence the effects of those internal factors on the effectiveness of learning by doing? By using the automobile engine manufacturing plants in North America 1995-2006 as the research context, this study suggests three factors to influence the effectiveness of learning by doing: (1) the change of part-time worker ratio, (2) the in-house manufacturing ratio, and (3) the failure of quality control. To measure the effectiveness of learning by doing, this study uses the extent to which productivity is enhanced by following the convention of organizational learning perspectives. In addition to the direct effects of the internal factors, this study pays attention to the interaction effects of the network properties of engine plants and each internal factor on the effectiveness of learning by doing in order to examine the influence of the networks in which engine plants are embedded. The network properties of engine plants used in this study are degree centrality and closeness centrality, which are obtained from the engine plants' production-based networks. The findings show that both the increase of the part-time worker ratio and the high in-house manufacturing ratio negatively affect the productivity enhancement and that those negative effects are mitigated when plants have high centralities in networks. Intriguingly, this study reports that plants with unsuccessful quality control tend to focus more on productivity enhancement, but such tendency is likely to be distracted by the high extent of centrality due to the contingency of knowledge irrelevance. This study makes at least two contributions to the extant literature of learning by doing: It first empirically examines the effects of three internal factors on the effectiveness of learning by doing based on in-depth literature review, while there are few empirical studies that did so. It also expands the research areas of learning by doing by investigating the effects of the network features of organizations on the effectiveness of learning by doing.
The value relevance of the fair value hierarchy of FAS 157
(University of Hawaii at Manoa, 2012-05) Wen, Eric Chih-ming
Financial Accounting Standard (FAS) 157 requires disclosures of the fair value hierarchy (FVH) of assets and liabilities for financial reports issued after November 15, 2007. This dissertation examines the value relevance of the FVH across a set of industry sectors. The results suggest that the FVH is value relevant for all industry sectors. However, although the degree of value relevance varies across industry sectors, the relative amount of assets and liabilities measured at fair value, as a ratio to total assets and liabilities, does not influence the value relevance of the FVH. This study also examines the influence of several other characteristics of firms on the value relevance of the FVH across industry sectors. Its main findings suggest that book-to-market equity and a firm's status (as entering or incumbent) influence the value relevance of the FVH. The dissertation also finds some evidence that a firm's size and firm's status are related and that the firm's size may also influence the value relevance of the FVH. This dissertation is unable to find a clear pattern of the influence of liquidity (as measured by both the quick ratio and cash flow from operations) on the value relevance of the Level 3 fair value of assets across industry sectors.
Essays on target date funds as a retirement portfolio choice
(University of Hawaii at Manoa, 2012-12) Saar, Helen
This two part dissertation evaluates target date funds (TDFs) as a portfolio choice for retirement savings. In the first part we analyze the fit of TDFs as the main retirement savings instrument for the utility maximizing investor who becomes more risk averse as he/she gets older. Using bootstrapping simulations, we show that TDFs lead to higher expected utility than the strategies that keep stock allocation fixed in the portfolio over the whole investment horizon. Incorporating the concept of loss aversion into the expected utility model, we find further proof that decreasing the weight of risky assets in the portfolio as the target retirement date nears will lead to higher expected utility and is therefore preferable to the utility maximizing investor. In the second part of the dissertation we analyze the actual return dispersion of 2010 TDFs to indentify the sources of this performance. In the fall of 2008, the investors in these TDFs were about 2 years away from their planned retirement when some of those investors lost up to 40% of their accumulated wealth in the 2010 TDFs. According to the central tenet of TDFs, the funds that are close to target retirement year should have decreased their allocation to risky assets in their portfolios in order to protect the retirement savings. Instead, those underperforming TDFs fell short of providing a safe harbor for the retiring investors' funds. Though all 2010 TDFs were affected by the bear market, not all of them experienced extreme losses and the savings of some investors were affected minimally. We find that the worst returns were limited to only few renegade funds and that in general the asset allocation of 2010 TDFs protected investors as it was designed to do. The main source of underperformance of some of the 2010 TDFs was the poor security selection skills of the managers.
How does power corrupt?: the way individual and institutional support of social hierarchies influences unethical behavior
(University of Hawaii at Manoa, 2012-08) Rosenblatt, Valerie
A universal aspect of human behavior is the tendency to establish and negotiate social hierarchies supporting power and status inequalities. Previous research linked the support of social hierarchies to unethical behavior at the individual and societal levels of analysis. However, factors and processes supporting these associations have not been well understood. In a series of three studies, this dissertation investigates factors and processes supporting the relationship between the individual and institutional support of social hierarchies and unethical behavior. The first study presents a conceptual multilevel process framework grounded in social dominance theory. The framework suggests that the individual support of social hierarchies (i.e., social dominance orientation) is associated with unethical behavior directly, supported by restricted perception and cognition, and mediationally by means of legitimizing rationalizations, ideologies, and logics. The institutional support of social hierarchies is linked to unethical behavior directly, since hierarchies sustain the decoupling of processes and fragmentation of responsibilities, and interactively through person-environment fit processes (e.g., socialization). The second study empirically demonstrates that the individual support of social hierarchies is indirectly related to unethical decision making by means of legitimizing rationalizations that help reduce accountability, responsibility, and self-sanctions. However, the positive relationships between the individual support of social hierarchies, propensity to use legitimizing rationalizations, and unethical decision making are attenuated among individuals with a greater ability to self-regulate. The third study presents and empirically investigates a culture-based model of the relationship between the support of social hierarchies and unethical decision making. The results of a cross-cultural study involving participants from Australia and the U.S. reveal that individual cultural orientations in the form of social beliefs (e.g., social cynicism) are related to the individual support of social hierarchies and the propensity to use morally disengaging rationalizations. The individual support of social hierarchies and propensity to use morally disengaging rationalizations, in turn, link the individual endorsement of social beliefs to the propensity to make unethical decisions. Societal differences in the support of social hierarchies only partially influence these relationships.
On the value creation process via management buyouts in Japan
(University of Hawaii at Manoa, 2012-08) Ito, Haruyoshi
We examine a sample of 54 management buyouts (MBO) in Japan from January 2001 to March 2009 and document an average buyout premium of 49.0% and a post-MBO investor average return of 54.6%. We find no evidence of operating performance improvements; rather, operating cash flow is worse after MBOs in Japan. However, MBO firms do sell off significant amounts of assets post-MBO. The median equity ownership of pre-buyout managers is 29.36% increasing to 59.82% post buyout. Our MBO sample firms have high equity book to market ratios compared to industry and size-matched control firms indicating that MBO firms are undervalued relative to their peers. MBO firms have higher levels of stock repurchase activity in the years prior to the buyout compared to control firms. MBO firms have less financial visibility relative to the control firms. The evidence suggests undervaluation and not the reduction of agency problems as the motivation for MBOs in Japan.
Charitable giving after indulgence: forgiveness for past sins
(University of Hawaii at Manoa, 2012-05) Hwang, Hyekyung
Previous studies have shown that consumers are more likely to make indulgent choices after making charitable contributions. Indulgent purchases become easier to justify and rationalize when they are linked to charitable contributions, and thus are more likely to occur. This paper further investigates how the virtues of charitable contributions offset the sins of making indulgent choices. The main findings are fourfold. First, people are willing to make greater charitable contributions in money and in time after making more indulgent choices, as compared to non-indulgent choices. I call this the "forgiveness" effect. Giving to charities, in part, offers forgiveness for the sins of a prior indulgence. Furthermore, I demonstrate that people in fact make even greater proportional charitable contributions relative to indulgent spending, when charitable giving follows rather than precedes indulgent choices. That is, the relative magnitude of the forgiveness effect is greater than the previously documented licensing effect. Third, the magnitude of the forgiveness effect is greater to the extent that people use more abstract mental models. And finally, I demonstrate that the forgiveness effect is based on choosing indulgences, not necessarily on spending money or time on indulgences.

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