Do we understand each other? Toward a simulated empathy theory for entrepreneurship

Entrepreneurs often face the daunting task of predicting consumer demand before it exists—what consumers will want if and when the entrepreneur might make it available to them. Such alertness and judgment require an entrepreneur's vicarious imagination—the supposition of what a value experience would be like for another—such as empathy. Prevailing theories of empathy, however, are ill-suited for entrepreneurship theory as they are defined as and focused on an emotion-matching process. We propose that empathy be understood instead as a vicarious mental simulation of another's experience that, when accurate, produces similar emotions but also similar experiential knowledge. According to our ‘simulated empathy theory,’ empathy is a rational imagination process, intentional and knowledge-based. We connect this empathy process to contemporary entrepreneurship theory, namely opportunity recognition and evaluation processes. We also revise the concept of empathic accuracy accordingly, and derive therefrom some practical implications regarding how entrepreneurs can increase their empathic accuracy and, thereby, their chances of success.     

Climate change adaptation actions by fish farmers: evidence from the Niger Delta Region of Nigeria

This paper examined climate change adaptation strategies in fish farming and the effect of such methods on the profit of fish farmers in the Niger Delta region of Nigeria, Africa’s most populous country. Using cross‐sectional data obtained from 420 fish farmers from the region and applying multivariate probit and instrumental variable regressions, the study found that fish farmers have adopted a broad range of strategies to address climate risk and that these have significantly increased farmers’ profit. Our findings indicated important relationships between certain farm, socio‐economic and institutional characteristics and the adaptation actions. The study provides useful insight into factors that potentially encourage the adoption of livelihood‐enhancing climate risk adaptation strategies by fish farmers in the Niger Delta region and similar contexts.     

An anatomy of zero‐hour contracts in the UK

We present the first attempt to locate zero‐hour contract (ZHC) jobs—jobs that lack a guaranteed minimum number of hours—within theoretical frameworks of the employment relationship and occupational class and empirically explore their characteristics using successive UK Labour Force Survey. In line with these theories, we find this contentious form of employment to be strongly differentiated by the nature of occupational tasks and to overlap with nonstandard employment features (e.g. part‐time and temporary). They are also highly concentrated in a small number of occupations and sectors, with over half of ZHC jobs found in just 10 occupations. We further show that ZHCs are associated with indicators of inferior job quality such as low pay and underemployment. Although we find no evidence that ZHCs are a particularly pervasive feature of the UK labour market, further growth cannot be ruled out in certain occupations.     

Earning the “Write to Speak”: Sell‐Side Analysts and Their Struggle to Be Heard

This paper explores the ways in which sell‐side (SS) financial analysts seek to position themselves advantageously within the wider field of investment advice in spite of widespread skepticism over the value that their forecasts and recommendations add to investment decisions. The field of investment advice has been characterized in recent years by a number of regulatory and technological changes that have forced SS analysts to reconstitute the ways in which they influence the investment decisions of buy‐side (BS) actors. Faced with existential threats, SS analysts have responded to the disruptive impact of technology and regulation by struggling hard to ensure that their services are still valued by fund managers. Key to this ongoing process is the recalibration of professional expertise, which previous research has alluded to but not explored in detail. Central to the persistence of SS analysts in processes of investment decision making are activities revolving around the production and use of analyst reports which, our findings indicate, are less valuable for their informational content than their role as “relational devices,” ascribing legitimacy to SS analysts and earning them an entry ticket to more substantive, value‐adding interactions with companies and BS actors. We also show that economic considerations in the area of investment advice are influenced by social ties, the motivations of various actors in the field, and their relative position vis‐à‐vis other actors. More generally, we contribute to the literature on professional projects by showing how professional groups are constantly engaged in attempts to reposition themselves in the social space, but that field‐level changes can restrict the outcomes of these strategies to mitigation rather than advancement for the professionals concerned.     

The response of asset prices to monetary policy shocks: Stronger than thought

Standard macroeconomic theory predicts rapid responses of asset prices to monetary policy shocks. Small‐scale vector autoregressions (VARs), however, often find sluggish and insignificant impact effects. Using the same high‐frequency instrument to identify monetary policy shocks, we show that a large‐scale dynamic factor model finds overall stronger and quicker asset price reactions compared to a benchmark VAR, both on euro area and US data. Our results suggest that incorporating a sufficiently large information set is crucial to estimate monetary policy effects.     

On Education and Democratic Preferences

We make the point that preferences for democracy are positively correlated with level of education. This correlation is robust even after controlling for a range of personal characteristics, including country of residence, income, age, or using different definitions of preferences for democracy or using instrumental variables. Interestingly, the results hold across countries with different level of democracy. We use data from World Values Surveys and show that our results are consistent with a simple theoretical model in which education makes political accountability easier.     

Opportunities to reduce road traffic injury: new insights from the study of urban areas

Abstract

Over the past four decades considerable efforts have been taken to mitigate the growing burden of road injury. With increasing urbanisation along with global mobility that demands not only safe but equitable, efficient and clean (reduced carbon footprint) transport, the responses to dealing with the burgeoning road traffic injury in low- and middle-income countries has become increasingly complex. In this paper, we apply unique methods to identify important strategies that could be implemented to reduce road traffic injury in the Asia-Pacific region; a region comprising large middle-income countries (China and India) that are currently in the throes of rapid motorisation. Using a convolutional neural network approach, we clustered countries containing a total of 1632 cities from around the world into groups based on urban characteristics related to road and public transport infrastructure. We then analysed 20 countries (containing 689 cities) from the Asia-Pacific region and assessed the global burden of disease attributed to road traffic injury and these various urban characteristics. This study demonstrates the utility of employing image recognition methods to discover new insights that afford urban and transport planning opportunities to mitigate road traffic injury at a regional and global scale.     

Does foreign investment benefit the exporting activities of Vietnamese firms?

Using firm-level data, this paper examines the effects of foreign investment on the exporting behaviour of domestic firms in the Vietnamese manufacturing and service sectors. Applying the Heckman selection model on panel data and following the Wooldridge approach, we find that investment by foreign firms has a significant positive effect on the decision of domestic firms in the same and upstream sectors to export. The proportion of exports of domestic firms declines through horizontal and forward linkages, but increases through backward linkages in the manufacturing sector. However, there is only weak evidence in support of export spillovers on domestic firms in the service sector. We also find that the presence of foreign firms has differing effects on the exporting activities of low- versus high-tech firms in the manufacturing sector.     

Oil shocks and volatility jumps

Review of Quantitative Finance and Accounting - In this paper, we analyse the role of oil price shocks, derived from expectations of consumers, economists, financial market, and policymakers, in...