Experiments on risk attitude: The case of Chinese students

This paper examines Chinese students' risk attitudes using selling and buying experiments with lotteries. We found that subjects were more risk averse during the buying experiment than during the selling experiment, suggesting an endowment effect. In the selling experiment, subjects were risk loving when there was a low win probability and risk averse with a high win probability, whereas they were risk averse in the buying experiment. Using the prize money won during the experiment as a measure of wealth, we found decreasing absolute risk aversion. Subjects' risk attitudes as revealed in the experiments explain their risky asset holding behavior.     

鱼和熊掌不可兼得？角色冲突-增益视角下女性创业者的机会识别过程研究

随着全球女性创业者数量增多，女性创业者成为了创业领域研究的热点。不少研究指出女性创业具有鲜明的行业特征，但性别与机会识别之间的关系尚未深入探究。女性的创业行为是嵌入到家庭关系之中的。因此，文章尝试探讨在角色冲突的情境下角色增益对女性创业者机会识别过程的作用机理。通过长期跟踪一家女性创业企业，发现工作与家庭角色增益有利于女性创业者识别机会。在创业过程中，角色内容共情有助于女性创业者发现机会，角色期待满足则有利于构建机会。本文结论对机会理论、角色理论和女性创业者研究与实践都有一定的启发。     

模仿还是创新：创业机会开发与创业绩效的实证研究

创业者是选择模仿还是创新关乎企业绩效及创业成败。传统理论认为创新道路更容易成功,原因是创新能够帮助企业构筑竞争优势。但国内外实践均表明,大量中小型企业恰恰是凭借模仿实现成功创业,中国情境下新创企业模仿型高于创新型的现象则更加明显。本文将创业者的创新选择与机会开发联系起来,认为创业者选择的原则是在约束条件下权衡何种机会开放方式能够增进创业绩效,通过194份新创企业样本分别考察模仿型机会开发和创新型机会开发对创业绩效的影响,以及内外部情境因素对二者关系的调节作用。研究发现,模仿型机会开发与创新型机会开发均能促进创业绩效,但在不同情境下作用效果有别：模仿型机会开发与创业绩效间关系对情境依赖不明显;创新型机会开发对情境依赖明显,越发激烈的外部环境会削弱创新型机会开发对创业绩效的促进作用,创业者自身行业经验的增加又会增强这一关系。可见模仿型还是创新型机会开发不应是简单的孰优孰劣,而是创业者在约束条件下理性战略选择的结果。     

Does religion enhance firm performance? Evidence from private firms in China

We study the impact of religiosity on firm performance in China. We find that entrepreneurs with religious beliefs have higher accounting performance. Firms are more likely to obtain bank credit if entrepreneurs have religious beliefs as religiosity stimulate them to invest more in networking, which further enhance the access to bank credit. Religious entrepreneurs have more trust towards external people, which incentivizes them to adopt a shareholding reform and employ external professional CEOs instead of family members, and thus enhances the corporate governance of these firms. In contrast, religious entrepreneurs also prefer family members as shareholders and inheritance of the firm by family members. The preference of inheritance of the firm by family members undermines the enhancing effect of external CEOs on firm performance. Religious entrepreneurs are more likely to spend more on safety insurance for employees, which is driven by the altruism originated from religious doctrines and also the risk aversion channel. The impact of religiosity complements market institutions, and political and social status of the entrepreneurs, which shows the interaction between religion and formal market institutions. We find that it's mainly Buddhism that drives our results, while other religions have limited impact on business activities in the country.     

社会网络与机会识别:海归企业家与本土企业家的比较研究

为检验网络关系强弱与机会识别关系具有跨文化差异的观点,通过对长三角和珠三角142位企业家的问卷调查和分析,结果发现：海归企业家社会网络中弱关系对机会识别有显著正向影响;而对本土企业家而言,无论是强关系还是弱关系,对其机会识别均没有显著影响,可能的原因是,在转型时期的本土企业家受多元文化影响,文化的差异可能导致本土企业家内部之间在网络关系利用上的差异。     

Risk Management in Small- and Medium-Sized Businesses and How Accountants Contribute*

We investigate how owners of small- and medium-sized enterprises (SMEs) perceive, make sense of, and practice risk management. Drawing on Schatzki's practice theory, we theorize on how and why risk management happens in SMEs. Thus, we fill a gap in the extant literature, which focuses almost exclusively on risk management within large organizations. We interview entrepreneurs and conduct site observations to gain insight into their risk management activities, the drivers that lead to the adoption of said activities, their attitudes toward risk management, and how their accountants may shape and contribute to risk management in SMEs. We find that rather than a specific set of formal processes, entrepreneurs view risk management as a mindset that emphasizes the preservation of key assets, creation of competitive advantages, and development of local talent and expertise. We observe practices that are mainly informal yet planned, deliberate, and fully integrated within the fabric of organizations that align with ideal forms of risk management. We also find that full-time, in-house accountants do help entrepreneurs with risk management, while external accountants, whose main activities relate to financial statement preparation and tax filings, do not systematically help entrepreneurs manage risk. We contribute to both the theory and practice of risk management by sharing empirical insights into how SME owners perceive, make sense of, and manage risk.     

Does winning a venture competition encourage entrepreneurial exploration? Evidence from China

This paper examines whether winning venture competition spurs entrepreneurs to carry out entrepreneurial exploration. We use data from new venture competitions organized by Shanghai municipal government that are open to innovative small ventures. Using a regression discontinuity design, we show that winning leads to a higher level of entrepreneurial explorations in the year following the competition. However, this effect is reduced for female entrepreneurs, and entrepreneurs whose affiliated ventures have a shorter time of operation. Our findings are consistent with existing theories about entrepreneurship and behavioral economics, including entrepreneurial experimentation and “house money” effect.     

Early-life experience of land reform and entrepreneurship

We examine the long-run impact of land reform experience in childhood and adolescence on entrepreneurship later in life. To do so, we take advantage of village-level variation in the Household Responsibility System (HRS) reform in China that transformed land property rights from a communal system into an individualized tenure system. We find that early-life exposure to land reform increases the probability of becoming an entrepreneur in adulthood. This positive association is mainly driven by exposure to the HRS increasing the propensity for solo and necessity entrepreneurship. We also find considerable heterogeneity in the long-run impact of early-life HRS reform exposure across subsamples. Females, individuals from low-income families, individuals with less-educated parents and individuals in the central region are more likely to become entreprenuers following early-life exposure to land reform. Overall, while previous research has found that land titling reform in China significantly increased business creation in rural areas, our findings imply that the positive impact of land reform on entrepreneurial ventures is likely to be understated if its long-run impact on those exposed to land reform early in life on the likelihood of their becoming entrepreneurs later in life is not considered.     

An experimental study of intra- and international cooperation: Chinese and American play in the Prisoner’s Dilemma Game

We study whether intra- and international groups have different cooperation rates in the Prisoner's Dilemma Game. We report on an experiment in which university students in China and America engage in a single iteration of the game, complete belief elicitation tasks regarding their counterparts' play, and complete a survey including attitudinal measurements regarding their in- and out-group attitudes. We find that Chinese overall cooperation rates are less than American ones. Further, female participants are more cooperative than males. With respect to international cooperation, Chinese participants accurately estimate the likelihood of cooperative behavior of their American counterparts, while Americans overestimate the same likelihood of their Chinese counterparts. Our results further show that Chinese participants cooperate more conditionally than American ones. Finally, we find a more positive attitude towards one's living country is related to less international cooperative behavior, and a more positive attitude towards the other country is related to more international cooperation.     

Discretionary Disclosures to Risk‐Averse Traders: A Research Note

Verrecchia (1983) investigates a manager's incentives for costly, discretionary disclosure of his information to risk‐averse traders when the functional form of prices is exogenously specified. We extend Verrecchia (1983) by deriving the endogenously determined functional form of prices that would arise when all traders have constant risk tolerance. We show that these endogenously determined prices are inconsistent with the assumed prices in Verrecchia (1983) when the manager elects to not disclose. We derive the manager's disclosure strategy for our setting and extend the comparative static results in Verrecchia (1990) for risk‐neutral traders to a setting where traders have constant risk tolerance and prices are endogenously derived. Further, in our setting, discretionary disclosure does not affect how traders price risk of different outcomes. Also, we offer a representation of risk‐averse traders' prices using risk‐adjusted distributions. Finally, these results provide implications for empirical‐archival discretionary disclosure studies.     

在希望的田野上：企业家农村经历与创业行业选择

究竟具备什么样特征的私营企业家更意愿于涉入农业领域创业？基于中国私营企业调查数据,本文研究私营企业家的农村经历特征及其异质性如何影响其创业行业选择的作用机制。结果发现,有农村经历的私营企业家通过发挥其心理偏好认知机制和专业能力认知机制的作用,更倾向于选择进入农业行业创业。为解决内生性问题,基于企业家“是否有过上山下乡经历”构造工具变量,并发现了一致的结果;农村经历的异质性结果显示,相较于农民经历,有村干部经历的私营企业家的这一倾向更为强烈。进一步的分析表明,在农业发展水平较高、政府治理水平较高的地区,上述倾向均具有放大效应;在有农村经历的私营企业家进入农业行业创业后的经济后果方面,其创新投入和融资负债均显著低于无农村经历的样本组。该研究不仅从企业家农村经历视角对高管早期经历文献进行了丰富和拓展,还进一步深化了高管早期经历如何影响企业战略决策的相关文献,亦为企业创业决策领域补充了独特的中国农业农村情境特征。     

Individual characteristics,behavioral biases,and attitudes toward foreign workers: Evidence from a survey in Japan

This study examines individual attitudes toward foreign workers jointly with their trade policy preferences based on a survey of more than 10,000 respondents in Japan. Our bivariate probit estimation results show that people influenced by status-quo bias or risk aversion tend to have significantly lower probability of supporting both foreign workers and imports. Individuals opposing foreign workers tend to have pessimistic views of the national economy's prospects and no personal acquaintance with foreigners. We also confirm the effects of standard variables, such as education and occupation. These findings suggest that wide-ranging measures are required for expanding support for foreign workers.     

The rise of red private entrepreneurs in China: Policy shift,institutional settings and political connection

This article examines the relationship between the Chinese Communist Party (CCP) membership and private entrepreneurship in China since 2002, the year when the party revised its constitution and officially removed ideological discrimination against private entrepreneurs in member recruitment. Drawing on the data from the six waves of a nationwide survey on privately owned enterprises in China from 1997 to 2008, we find that, while very few private entrepreneurs were recruited into the CCP during the decade we examine, the constitutional change had encouraged many party members to enter the private sector. We also show that party members who became entrepreneurs after the 2002 policy shift tended to be more senior than those who had started their business before the constitutional change. Furthermore, our difference-in-difference estimation demonstrates that the phenomenon of party members turning entrepreneurs was more prominent in regions where the level of marketization was lower, legal protection was less available, and local governments were prone to more corruption, since political rents were generally larger in environments with weaker market-supporting institutions. This study suggests that party members in general and especially the elite among them were quick to sense the opportunity and knew how to translate their political influence into economic power.     

For Economic Advantage or Something Else? A Case for Racial Identification Switching

The identity choices people take on serve as a filter for viewing the world. It is believed that race identity formation is in part a response to economic and social incentives. Using NELS 1988 dataset we evaluate at the individual level factors that affect changes in self-reported racial identity. We find that being multiracial, living in a non-affirmative action ban state, and relative income/education measures within race groups have an effect on racial identity switching. We find strong evidence that the social-political environments surrounding an affirmative action ban alters the likelihood that an individual will change race. Our results suggest that social factors when present dominate economic incentives to take on a different racial identity.     

Capitalization of Flood Insurance and Risk Perceptions in Housing Prices: An Empirical Agent‐Based Model Approach

Federally regulated or insured lenders in the United States are mandated to require flood insurance on properties that are located in areas at high risk of flooding. Despite the existence of this mandatory flood insurance requirement, take‐up rates for flood insurance have been low, and the federal government's exposure to uninsured property losses from flooding remains substantial. Meanwhile, the value of capital at risk varies significantly with flood events and changing risk perceptions, which necessitates mechanisms that stabilize these dynamics. In this article we discuss how a scenario of complete insurance uptake, under various risk attitudes, affects the value of properties in the 100‐year and 500‐year flood zones. Our results indicate that an increase in flood insurance uptake may provide such a mechanism by lowering the value of capital at risk in the flood zone consistently, independent of homeowners' risk attitudes. We apply an empirical adaptive agent‐based model to examine the capitalization of insurance costs, risk premiums, and their interaction in housing prices. Our approach combines widely‐used empirical hedonic analysis with the computational economic framework. We highlight the usefulness of our method in capturing the marginal implicit price of homeowners' preferences that may change over time and separately assess the effect of various factors and policies on property values, illustrating the agent‐based modeling as a valuable complement to traditional hedonic analysis.     

Returns to education among entrepreneurs in Bangladesh

This article estimates returns to education among entrepreneurs in Bangladesh, using unique survey data from 2012. Our main instrument for education is the education of the father of the entrepreneur, and we control for sibling education in order to take out the potential effect of father education on productivity and profitability. The results suggest a return to education in the order of 11 per cent per year of education. Using the education of the mother as an alternative instrument, we find evidence of heterogeneous returns to education among entrepreneurs. Compared to our main instrument, the education of mothers appears to affect education choices among individuals with relatively higher participation probabilities in education, where returns to education are lower.     

Does crop insurance reduce pesticide usage? Evidence from China

We test how crop insurance participation affects the intensity of pesticide use in China using data on staple crop production from eight provinces. Our preferred specification instruments farmers' decisions of participation in insurance by village-level intensities of promotional activities and controls for province fixed effects. We find crop insurance participation significantly reduces pesticide use intensity. The reduction effect is greater for smaller plots, older farmers, and farmers who are more risk averse.     

Managers' Discretionary Adjustments: The Influence of Uncontrollable Events and Compensation Interdependence

Discretionary bonus adjustments allow managers to restore the alignment of employee effort and compensation when bonus amounts are based on noisy objective performance measures. The implications of discretionary adjustments for employees' future efforts and fairness perceptions present important trade‐offs for managers to consider. Adjustments may be used to motivate different types of effort in future periods, but may also create perceptions of unfairness among employees who are not affected by negative events. This study examines the joint influence of the likelihood of future negative uncontrollable events and compensation interdependence (i.e., the extent to which one employee's compensation influences others' compensation) on managers' willingness to make adjustments for the effect of a negative uncontrollable event on a single employee. In our experiment, we manipulate the likelihood of future uncontrollable events and whether bonuses are determined individually or are drawn from a shared bonus pool. Results show that managers are less willing to adjust when the likelihood of future events is high to avoid setting a precedent, thereby motivating employees to adapt to changing conditions. We also find that managers are less willing to adjust, regardless of event likelihood, when compensation interdependence is high, to avoid demotivating unaffected employees. Finally, we find that participants' general attitudes toward compensation significantly influence their adjustment decisions beyond the effects of our independent variables. Our results highlight the unique nature of discretionary adjustments, help explain findings from previous research, and demonstrate important considerations managers must make when using the flexibility provided to them in pay‐for‐performance contracts.     

企业家口碑语言与企业家形象的关系

语言对传递信念和态度起着重要的决定性作用。文章基于语言类别模型理论(LCM),将企业家口碑的语言传播类型区分为具体传播和抽象传播两种类型,探讨和检验了它们如何影响消费者对企业家形象的评价和消费者对传播者态度的感知。研究结果表明,这两种语言传播类型对企业家形象和消费者的感知态度均发挥不同的影响,并且随着企业家口碑效价的不同而存在显著差异。这些发现对于指导企业家后台和前台化行为与营销沟通都有积极意义。