Qiang Ye

Understanding the antecedents and consequences of electronic word-of-mouth (eWOM) is of significant theoretical value and great interest to both consumers and firms. To reconcile the disagreement in the relationship between eWOM and product sales, we investigate the joint effect of different dimensions of eWOM on the sales of durable goods (i.e., cars). Our study is based on eWOM collected from Autohome, a leading online review platform of automobiles in China. Our empirical results show that the volume and valence of eWOM positively affect car sales, and variance negatively affects car sales when the volume of eWOM is low. Further analyses of the joint effect show that the positive impact of eWOM volume on sales is stronger when the valence is lower and the variance is higher. This research contributes to the literature on eWOM and provides helpful suggestions for firms by shedding light on the joint effect of different dimensions of eWOM in the context of the Chinese automobile industry.

Understanding factors associated with the performance of the sell-side analyst is of great value in both theory and practice. We profile the crucial influence of professional connections among security analysts on generating earnings forecast in this study based on a dataset of analysts' employment history obtained from the Securities Association of China and analysts' history forecasts obtained from CSMAR. By estimating a multivariate linear regression model, we find that professional connections within analyst teams are positively associated with earnings forecast accuracy. The results of Fisher's Permutation test further confirm that the effect of professional connections on analyst forecast quality is stronger when firms covered are facing decreasing EPS. Our results still hold for additional analyses with an alternative measure for professional connections. In conclusion, this work confirms the significant role of professional connections in information sharing and mutual understanding among analysts.

One fundamental economic challenge in social gaming is how to monetize players. We address this problem from the lens of social influence. Specifically, we examine how players’ paying behaviors in a social game are associated with their pure friends and Simmelian-tie friends. Analyzing a comprehensive social game dataset provided by Tencent.com, we find that the cohesion effect emanating from players’ direct connections in the social gaming network exhibits positive impacts on players’ willingness to pay. Surprisingly, the cohesion effect of pure friends is found to be significantly stronger than that of Simmelian-tie friends, contrary to the common findings in the literature. These new findings have direct implications for companies tasked with designing social games or gamification systems and, more broadly, to help better understand the mechanism behind the microscopic economic behavior of individuals in a virtual economy.

We use the search volume index in Baidu to reveal investor sentiment in the Chinese stock index futures market. We find that the abnormal search volume index predicts return reversal in the short term where the effect is mainly caused by the searches of investors who use personal computers rather than mobile devices. We also find that restriction on futures trading changes the relation between the abnormal search volume index and returns significantly. Overall, we provide a new set of results on the effects of investor sentiment on Chinese index futures markets.

With the growing influence of online social media, firms increasingly take an active role in interacting with consumers in social media. For many firms, their first step in online social media is management responses, where the management responds to customers' comments about the firm or its products and services. In this article, we measure the impact of management responses on customer satisfaction using data retrieved from a major online travel agency in China. Applying a panel data model that controls for regression toward the mean and heterogeneity in individual preference for hotels, we find that online management responses are highly effective among low satisfaction customers but have limited influence on other customers. Moreover, we show that the public nature of online management responses introduces a new dynamic among customers. Although online management responses increase future satisfaction of the complaining customers who receive the responses, they decrease future satisfaction of complaining customers who observe but do not receive management responses. The result is consistent with the peer‐induced fairness theory.