Cognitive interviewing as tool for enhancing the accuracy of the interpretation of quantitative findings

This paper contrasts findings from a quantitative survey with those from a cognitive interviewing follow-up investigation on a subset of the same respondents. The data were gathered as part of a larger study to explore measurement error across three modes of data collection, but this paper focuses on the question format experiments rather than the mode effects part of the larger study. Three examples are presented which demonstrate how cognitive interviewing can cast new light on quantitative results by increasing the accuracy of the inferences made. These include instances where: (1) quantitative indicators of poor respondent behaviour (e.g., acquiescence bias on agree/disagree questions) are over-estimates, (2) similar quantitative response distributions across satisfaction and behavioural questions (from a fully-labelled versus end-labelled experiment) imply similar respondent satisficing behaviour, but cognitive interviews show that different response processes are at work and (3) unlikely quantitative findings (from an experiment comparing 3 vs. 7 or 8 response options) could easily be dismissed as due to chance but were instead the result of unforeseen respondent difficulties. The paper concludes with a discussion of the value of using a cognitive interviewing follow-up study as a tool in the interpretation of ambiguous quantitative findings.     

Policy risk,strategic decisions and contagion effects: Firm‐specific considerations

Research summary : In this article, we investigate the firm‐specific environment and its impact on firm strategy focusing on adverse changes in the policy environment and their effect on divestitures. We argue that experiencing a negative change in the firm‐specific policy environment causes firms to reassess their exposure to policy risk and their ability to manage their policy environment, making them more likely to divest. Operationalizing negative shifts in the firm‐specific policy environment through formal policy disputes between firms and governments, we find that following a dispute, firms are more likely to divest both in the country where the dispute occurs and in other countries in the same region. However, the impact of disputes on divestitures is firm specific, applying only to firms directly involved in a dispute . Managerial summary : What is the impact of change in the firm‐specific environment on firm strategy? We argue that when firms directly experience a negative change in their policy environment that is specific to them, they negatively reassess their exposure to policy risk and their ability to manage their policy environment, which makes them more likely to undertake a divestiture. We analyze formal disputes between firms and governments that arise from adverse changes in policy and find that, following a dispute, firms are more likely to divest in the country where the dispute occurs and in other countries in the same region. However, the impact of disputes on divestitures is firm specific as it applies only to firms directly involved in a dispute . Copyright © 2016 John Wiley & Sons, Ltd.     

Entrepreneurial inception: The role of imprinting in entrepreneurial action

Recent research highlights that founders' early decisions and the environmental conditions at founding each imprint upon a new venture in ways that affect growth and survival. However, we know much less about how the entrepreneur is imprinted and how the outcome of this imprinting process influences the entrepreneur and the venture. Through semi-structured interviews and content analysis, our study examines entrepreneurs' formative experiences during sensitive periods of transition, which we refer to as sources of imprint. We illustrate how these sources of imprint impact entrepreneurial decision making and explain how they guide entrepreneurs' decisions as they progress through their entrepreneurial careers. In doing so, we improve our understanding of how entrepreneurs navigate the entrepreneurial process.     

Mutual Fund Performance: Evidence from the UK

This paper uses a large sample containing the complete returnhistories of 2300UK openended mutual funds over a 23-year periodto measure fund performance. We find some evidence of underperformanceon a risk-adjusted basis by the average fund manager, persistenceofperformance and the existence of a substantial survivor bias.Similar findings have been reported for US equity mutual funds.New findings not previously documented for other markets includeevidence that mutual fund performance varies substantially acrossdifferent asset categories, especially foreign asset categories.We also identify some new patterns in performance related tothe funds' distance from their inception and termination dates:underperformance intensifies as the fund termination date approaches,while, in contrast, there is some evidence that funds (weakly)outperform during their first year of existence.     

Survivor Swaps

A survivor swap (SS) is an agreement to exchange cash flows in the future based on the outcome of at least one survivor index. This article discusses the possible uses of SSs as instruments for managing, hedging, and trading mortality‐dependent risks. SSs are especially useful for insurance companies, but also offer other interested parties low beta avenues into the acquisition of mortality risk exposure. The article also investigates vanilla SSs in some detail, and suggests how their premiums and values might be determined in an incomplete market setting.     

Modelling and management of mortality risk: a review

In the first part of the paper, we consider the wide range of extrapolative stochastic mortality models that have been proposed over the last 15–20 years. A number of models that we consider are framed in discrete time and place emphasis on the statistical aspects of modelling and forecasting. We discuss how these models can be evaluated, compared and contrasted. We also discuss a discrete-time market model that facilitates valuation of mortality-linked contracts with embedded options. We then review several approaches to modelling mortality in continuous time. These models tend to be simpler in nature, but make it possible to examine the potential for dynamic hedging of mortality risk. Finally, we review a range of financial instruments (traded and over-the-counter) that could be used to hedge mortality risk. Some of these, such as mortality swaps, already exist, while others anticipate future developments in the market.     

Keeping Some Skin in the Game: How to Start a Capital Market in Longevity Risk Transfers

The recent activity in pension buyouts and bespoke longevity swaps suggests that a significant process of aggregation of longevity exposures is under way, led by major insurers, investment banks, and buyout firms with the support of leading reinsurers. As regulatory capital charges and limited reinsurance capacity constrain the scope for market growth, there is now an opportunity for institutions that are pooling longevity exposures to issue securities that appeal to capital market investors, thereby broadening the sharing of longevity risk and increasing market capacity. For this to happen, longevity exposures need to be suitably pooled and tranched to maximize diversification benefits offered to investors and to address asymmetric information issues. We argue that a natural way for longevity risk to be transferred is through suitably designed principal-at-risk bonds.