Diane Coyle: Cogs and Monsters: what economics is,and what it should be Princeton University Press, 2021

Business Economics -     

Reading Pro-Am theatre through a serious leisure lens: organisational and policy-making implications

Amateur theatre has often suffered from a stigma of incompetence, and the view that while participants enjoy their involvement, they are unable to impact on the professional realm. Recent policy from Arts Council England and major projects from the Royal Shakespeare Company and National Theatre Wales suggest the amateur contribution is increasingly being recognised and celebrated. This article explores the emerging role of the non-professional in contemporary British theatre through the ‘Pro-Am’ initiative – whereby amateurs and professionals work collaboratively. It initially considers how serious leisure theories such as collective amateurism, flow, subjective well-being, social identity and culture of commitment can be applied to the Pro-Am theatre context and explore the challenge of negotiating the commitments of a serious leisure pursuit with participants’ ‘real lives’. Methods employed include case study, semi-structured interviews, observation and a focus group. Data are presented from the perspective of professional practitioners who facilitate Pro-Am work in regional, producing theatres and other industry experts, supported by some additional participant comments. Implications for arts organisations delivering this kind of work are then addressed. Findings reflect many of the outcomes outlined in the theory, and we conclude that the broadening of categories and the increasing popularity of Pro-Am initiatives are breaking boundaries, changing the very nature of amateurism.     

Do the Right Thing! Developing Ethical Behavior in Financial Institutions

Organizational culture and employee conduct in financial institutions are coming under increasing scrutiny by regulators who seek to identify the underlying sources of unethical behavior. The literature on ethics in the workplace has often emphasized the importance of the alignment of systems and processes with organizational values and the role of the leader in creating an ethical culture. Less is known about how individual employees experience the ethical decision-making process, especially in complex and high-risk business environments where there are discrepancies between an organization’s formal ethical standards and its informal practices. This article combines ethical decision-making models with key concepts from organization and adult learning theories to develop a deeper and more nuanced view of how individuals in financial institutions deal with ethical issues that arise in their daily work. Eight practical ideas are formulated to help financial institutions narrow the gap between formal ethical standards and actual practices and develop a culture that promotes ethical behavior: challenging authority, creating opportunities for discourse, valuing positive emotion, making time for reflection, rewarding ethical behavior, strengthening escalation processes, eliciting feedback, and establishing a learning culture.     

Capturing downside risk in financial markets: the case of the Asian Crisis

Using data on Asian equity markets, we observe that during periods of financial turmoil, deviations from the mean-variance framework become more severe, resulting in periods with additional downside risk to investors. Current risk management techniques failing to take this additional downside risk into account will underestimate the true Value-at-Risk with greater severity during periods of financial turnoil. We provide a conditional approach to the Value-at-Risk methodology, known as conditional VaR-x, which to capture the time variation of non-normalities allows for additional tail fatness in the distribution of expected returns. These conditional VaR-x estimates are then compared to those based on the RiskMetrics™ methodology from J.P. Morgan, where we find that the model provides improved forecasts of the Value-at-Risk. We are therefore able to show that our conditional VaR-x estimates are better able to capture the nature of downside risk, particularly crucial in times of financial crises.     

A vehicle routing cost evaluation algorithm for the strategic analysis of radial distribution networks

This article presents a new algorithm, based on bin packing algorithms, that determines vehicle routing costs on networks with certain geographic characteristics. Requiring very little data and computation time, the algorithm is used to test the impact of adding flexibility to a retailer’s Canadian distribution operations. It is shown that it is possible to save 5–10% of vehicle routing costs by modifying shipping schedules.     

E-commerce developments and strategies for value creation: The case of Russia

This inductive interview-based study aims to develop a model which describes the kinds of e-commerce business models that create value in Russia. We suggest that prior e-commerce research has not paid enough attention to the environment's role in determining how value is created by different e-commerce business models and thus explore how key factors in the environment impact the development and effectiveness of e-commerce. The study also identifies eight key drivers of e-commerce value creation in Russia (accessibility, ease of search, ease of use, trust, complementarities, novelty, lock-in, and efficiency). The interaction between these value drivers and characteristics of the external environment affect how value is created by e-commerce business models in Russia.     

The Roles of Performance Measures and Monitoring in Annual Governance Decisions in Entrepreneurial Firms

This paper analyzes annual corporate governance decisions at firms making initial public offerings (IPOs) of common stock between 1996 and 1999. Our objective is to examine relations between firms' corporate governance decisions and the informativeness of available measures of managerial performance. We consider financial measures such as earnings and stock return, as well as direct monitoring. We collect a sample of IPO firms from the manufacturing, Internet, and technology (non-Internet) industries, and examine how the use of various performance measures in annual compensation grants and turnover decisions varies with the information environment of the firm and with the extent of venture capital influence. Consistent with prior research that finds earnings are of limited usefulness in firm valuation for Internet firms, we find Internet firms place less importance on earnings and greater importance on stock returns in determining compensation grants than do non-Internet firms. We also find that compensation grants of firms with little or no venture capital influence display significantly stronger association with accounting and stock performance measures than those of firms with more intense monitoring by venture capitalists. This result is consistent with direct monitoring and the use of explicit performance measures acting as substitute governance mechanisms.     

Due Process Failure in Sector-neutral Accounting Standard-setting

This study of due process in New Zealand draws upon information concerning events from 1993 to 1996 that resulted in the revision of a newly approved financial reporting standard and the withdrawal of requirements for the disclosure of director remuneration. Traditional consultation processes preceding approval of the standard failed to provide the FRSB with an adequate signal of the opposition to come, indicating a failure of due process. Analysis of this case study suggests adoption of a single and sector-neutral Board in New Zealand was undertaken with a poor appreciation of how to manage effective due process in a 'sector-neutral' world.     

Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab

This paper examines the relationship between foreign ownershipand productivity, paying particular attention to two issuesneglected in the existing literature—the role of multinationalsin service sectors and the importance of R&D activity conductedby foreign multinationals. We review existing theoretical andempirical work, which largely focuses on manufacturing, beforepresenting new evidence using establishment-level data on production,service, and R&D activity for Great Britain. We find thatmultinationals play an important role in service sectors andthat entry of foreign multinationals by takeover is more prevalentthan greenfield investment. We find that British multinationalshave lower levels of labour productivity than foreign multinationals,but the difference is less stark in the service sector thanin the production sector, and that British multinationals havelower levels of investment and intermediate use per employee.We also find that foreign-owned multinationals conduct a substantialamount of British R&D. We discuss the implications of theseand other findings for the policy debate on incentives to influencemultinational firms' location choices.