Why Wine is not Glue? The Unresolved Problem of Negative Screening in Socially Responsible Investing

The purpose of socially responsible investing (SRI) is to: (1) allow investors to reflect their personal values and ethics in their choices, and (2) encourage companies to improve their ethical, social, and environmental performance. In order to achieve these ends, the means SRI fund managers employ include the use of negative screening, or the exclusion of companies involved in “sinful” industries. We argue that there are problems with this methodology, both at a theoretical and at a practical level. As a consequence, current SRI offerings cannot accurately reflect the values and ethical beliefs they propose to represent. Moreover, the use of a␣priori criteria is potentially misleading, as we show by discussing examples of glue and wine making. Applying this flawed approach SRI funds fail to influence the direction of the firms they deem most in need of re-directing. Rather than engaging in the simple a␣priori assumption that some industries are “saints” while others are “sinners” (Freeman, 2007) we suggest a new framework upon which the SRI screening methodology could be grounded. Embracing the philosophical tradition of American pragmatism, we suggest that SRI methodology could be improved by engaging in an analysis based on (1) the actual impacts of the company’s products and services, (2) the company’s relationships with its specific, real stakeholders, and (3) the contingent environment (social, economic, political, legal, and cultural) in which the business operates.     

Querschnittstechnologie Internet – Universallösung für den Arbeitsmarkt der Zukunft?

The ongoing processes of digitalisation in economy and society have certainly important implications, not only for economic growth but also for the future labour market. But, what are the actual effects of this ?Digital Revolution“? Who will be the winners and who will be the losers? This article reviews the current empirical literature and draws relevant policy conclusions. While the growth effects will be substantial, the labour market effects of ICT and broadband technologies and their linkage with industrial production via the “internet of things” are likely to be ambivalent. The authors point to the need for political action with respect to labour market institutions that support workers in adjusting to the rapidly changing work environment in a digital world, and measures designed to reduce the skill gap between “digital natives” and “digital illiterates”. They also identify the need to help increase adoption and use intensity of the new technologies, rather than solely investing in broadband infrastructure.     

Correction to: Mis-measurement of inequality: a critical reflection and new insights

Journal of Economic Interaction and Coordination - In the original publication of the article, caption of Figure 3 on the third page of Sect. 4.1 was incorrectly published as.     

Are regional systems greening the economy? Local spillovers,green innovations and firms’ economic performances

The adoption and diffusion of environmental innovations (EIs) is crucial to greening the economy and achieving win–win environmental/economic gains. A large and increasing literature has focused on the levers underlying EIs that are external to the firm, such as stakeholder and policy pressures. Little attention, however, has been devoted to the possible role of local spillovers of a sector/geographical nature as a factor that correlates with EIs and economic performances. A rich data set that covers the innovative activities and economic performances of firms in the Emilia-Romagna region in Italy, an area dense in manufacturing districts, is analysed. EIs’ drivers and effects on firms’ performance are investigated through a two-step procedure. First, we examine the relevance of spatial levers, namely, whether high rates of eco-innovators in a given local area induce the adoption of EIs in firms located in the same local area. The role of the ‘agglomeration lever’ turns out to be fairly local in nature: we find that spillovers are significantly inducing innovation within municipal boundaries. Second, we test whether EIs adoptions have significantly increased firms’ economic performances and find that some firms’ productivity performances are positively related to EI adoption.     

Exchange Rate Determination: An Application of a Monetary Model for Brazil

The goal of this paper is to test a variant of the monetary exchange rate determination model, described by Obstfeld and Rogoff (1996), for the Brazilian economy in the recent period. The model starts with the Cagan (The Journal of Political Economy, 66(4):303–328, 1958) money demand, which is complemented by the hypotheses of purchase power parity (PPP) and uncovered interest parity (UIP). We used monthly data of exchange rate, GDP, interest rate for Brazil, and U.S. interest rate and inflation as proxies for international variables. We applied cointegration tests to identify a long run relationship among the variables. The estimated error correction model offers an exchange rate determination model in the short run. Due to potential endogeneity of some variables, GMM was applied to estimate a long-run model of exchange rate determination. The forecasting results of both estimatives were compared with a random walk approach. The results point to the existence of a long and short run equilibrium Real/dollar exchange rate using the structural model, which may be the achievement of this paper.     

The term structure of cross-sectional dispersion of expectations in a Learning-to-Forecast Experiment

In this paper, we present the results of a Learning-to-Forecast Experiment (LtFE) where we eliciting short- as well as long-run expectations regarding the future price dynamics in markets with positive and negative expectations feedback. Comparing our results on short-run expectations with the LtFE literature, we prove that eliciting long-run expectations has no impact on the price dynamics nor on short-run expectations formation. In particular, we confirm that the Rational Expectation Equilibrium (REE) is a good benchmark only for the markets with negative feedback. Interestingly, our data show that while the term structure of the cross-sectional dispersion of expectations is convex in positive feedback markets, it is concave in negative feedback markets. Differences in the slope of the term structure stem from diverse degrees of uncertainty regarding the evolution of prices in the two feedback systems: (1) in the negative feedback system, the convergence of the price to the REE reflects a tendency for coordination of long-run expectations around the fundamental value; (2) conversely, oscillatory price dynamics observed in the positive feedback system is responsible for the diverging pattern of long-run expectations. Finally, we propose a new measure of heterogeneity of expectations based on the scaling of the dispersion of expectations over the forecasting horizon.