inverted-U Relationship Research Articles

Striking a Balance: The Effect of Capability and Character Reputation Claims on Crowdfunding Performance

Drawing from expectancy violations theory, we examine the effect of entrepreneurs’ claims about their ventures’ capability reputation and character reputation on crowdfunding performance. We propose that capability reputation and character reputation claims benefit crowdfunding performance—but only up to a point—until crowdfunding backers begin to perceive it as over-claiming (inverted-U relationship). We also suggest the effect of entrepreneurs’ capability and character reputation claims are highly contingent upon whether the entrepreneur has launched a commercial or social campaign. Our analysis of 68,899 crowdfunding campaigns strongly supports our theoretical predictions.

Association between Mild Overweight and Survival: A Study of an Exceptionally Long-Lived Population in the Sardinian Blue Zone.

Background/Objectives: Overweight and obesity are generally considered risk factors for premature mortality. However, scientific evidence suggests that among older populations, mild conditions of overweight might be associated with reduced comorbidity and longer survival. This study investigates the potential association between anthropometric parameters and survival among a cohort of nonagenarians in Sardinia, Italy. Methods: This study included 200 subjects (50% females) aged 89 and older, enrolled in 2018 in the Sardinian Blue Zone-a population known for longevity-and followed for up to six years. Anthropometric variables such as body height, weight, age, sex, comorbidity, disability, and food group intake were collected using validated questionnaires and analyzed through multivariable analysis. Results: Out of 200 participants at baseline, 28 (14%) were still alive after six years of follow-up (females 10%, males 18%). Mean survival was 3.36 years (range 0.1-6.9 years) for males and 3.03 years (range 0.2-6.6 years) for females. Participants with a Body Mass Index (BMI) in the range of 25.0-27.0 kg/m2 among males and 25.0-27.2 kg/m2 among females had longer survival compared to those who were underweight (p = 0.002) or obese (p < 0.0001). The Cox proportional hazards regression model, adjusted for age, sex, and comorbidity, revealed a statistically significant association between the BMI and survival, demonstrating an inverted-U relationship. This indicates that mild overweight was associated with a survival advantage compared to both normal weight and obesity. Conclusions: Our study indicates that mild, but not severe, overweight in nonagenarians is associated with extended lifespan. Therefore, primary care physicians and geriatricians should exercise caution before recommending calorie-restricted diets for mildly overweight elderly patients.

Moderate cardiac vagal tone predicts more cooperation in highly sensitive individuals.

Cooperation, as a mutual collaboration, is a defining feature of human social life. Individual characteristics can influence cooperation. Recent studies have shown a quadratic relationship between cardiac vagal tone (CVT), an index of self-regulation, and prosocial behaviors. Individual differences in cooperation might also vary as a function of people's environmental sensitivity (ES), i.e., may be influenced by individual differences in the perception and processing of inner and external stimuli. We tested the direct and interactive effect of CVT and ES on cooperative behaviors in two independent samples. We measured heart rate and engagement in cooperative acts in 80 young adults (M = 23.61; SD = 1.60) who were also asked to self-report on ES. We found an inverted-U relationship between CVT and cooperative behaviors. ES, on the other hand, did not predict differences in cooperative behaviors but moderated the relationships between CVT and cooperation, although the magnitude of this result was small. Specifically, only among individuals with higher ES cooperative behaviors change as a function of CVT. Highly sensitive individuals with lower or higher CVT, were less cooperative than low sensitive ones. Subsequently, we replicated the same study design in a second sample of 88 undergraduate students (M = 23.69; SD = 4.91). Once again, we found evidence supporting the presence of an inverted-U relationship between CVT and cooperative behaviors, and we also found that ES moderated the relationships between the quadratic CVT term and cooperation.

Environmental Nonprofit Organizations and Public Opinion on Global Warming

Abstract Environmental nonprofit organizations (ENPOs) play a critical role in climate governance. Though ENPOs dedicate significant efforts to advocacy and providing public services, their interaction with public opinion on global warming has not been fully explored. Through multilevel regression analysis on county-level data in the U.S., this article examines the relationship between the presence of ENPOs and public perceptions of global warming, taking into account variations among ENPOs. The findings indicate that: (1) the overall presence of ENPOs is slightly, but not significantly, positively correlated with public perceptions of global warming, with advocacy-oriented ENPOs showing a more robust and statistically significant correlation; (2) there is an inverted-U relationship between the presence of ENPOs and public opinion on global warming, with advocacy-oriented ENPOs reaching tipping points earlier than service-oriented ENPOs; and (3) the partisanship of liberal counties influences this association. This study suggests a potential role for nonprofits in policymaking by interacting with public opinion.

The U-shaped relationship between corruption and international tourism demand: A gravity model approach

The tourism industry significantly contributes to a country’s economic growth and creates a positive image of the destination. This study assesses the impact of corruption on international tourism demand. It employs two-dimensional analyses using the gravity model and a pooled ordinary least square estimator to provide a unique recognition of international tourism demand. The study utilized a conditional quantile regression technique to analyze a dataset of 200 destination countries from 1995 to 2022. The empirical results demonstrate a mixed effect of corruption on international tourism demand. The analysis reveals a non-linear relationship between corruption and international tourism demand, with the inverted-U relationship being statistically significant only at the 50th–75th quantiles and not holding at the upper and lower quantiles. The research confirms that income has a positive impact on tourism across quantiles, but the impact is disproportionate. The sub-period of 2006–2022 experienced a significant decline in gross domestic product (GDP) due to the global financial crisis and its aftershocks, which severely impacted the attractiveness of destination countries for tourists. These valuable insights can inform national tourism policies and businesses.

Predictive coding in musical anhedonia: A study of groove.

Groove, or the pleasurable urge to move to music, offers unique insight into the relationship between emotion and action. The predictive coding of music model posits that groove is linked to predictions of music formed over time, with stimuli of moderate complexity rated as most pleasurable and likely to engender movement. At the same time, listeners vary in the pleasure they derive from music listening: individuals with musical anhedonia report reduced pleasure during music listening despite no impairments in music perception and no general anhedonia. Little is known about musical anhedonics' subjective experience of groove. Here we examined the relationship between groove and music reward sensitivity. Participants (n = 287) heard drum-breaks that varied in perceived complexity, and rated each for pleasure and wanting to move. Musical anhedonics (n = 13) had significantly lower ratings compared to controls (n = 13) matched on music perception abilities and general anhedonia. However, both groups demonstrated the classic inverted-U relationship between ratings of pleasure & move and stimulus complexity, with ratings peaking for intermediately complex stimuli. Across our entire sample, pleasure ratings were most strongly related with music reward sensitivity for highly complex stimuli (i.e., there was an interaction between music reward sensitivity and stimulus complexity). Finally, the sensorimotor subscale of music reward was uniquely associated with move, but not pleasure, ratings above and beyond the five other dimensions of musical reward. Results highlight the multidimensional nature of reward sensitivity and suggest that pleasure and wanting to move are driven by overlapping but separable mechanisms.

Anatomy of a Song

Anatomy of a Song

Environmental Kuznets curve of carbon emissions from China’s forest products industry and decomposition of factors influencing carbon emissions

Carbon emissions from China’s forest products industry were considered based on the data of 2001-2020. Then a carbon emissions Kuznets curve was constructed to judge the relationship between the economic development level and carbon emissions. The logarithmic mean Divisia index (LMDI) was used to analyze the influencing factors of carbon emissions. The carbon emissions from China’s forest products industry showed a trend of rapid growth in the early stage and slow decline in the later stage, increasing from 19.46 million tonnes in 2001 to 54.18 million tonnes in 2020. Consumption of raw coal was the main reason for the increase in carbon emissions. There was an inverted-U relationship between the economic development level and carbon emissions, and the industry output value of CNY 3306.56 billion was the theoretical inflection point. The current economic development level of the industry was in the left-half part of the inverted “U” shape, indicating that carbon emissions from this industry will continue to increase with the increase of industrial output. Economic development was the key factor driving the increase of carbon emissions in the forest products industry, while the energy intensity was the key factor inhibiting the growth of carbon emissions.

Influence of Underperformance Duration on Firms’ Responses to Performance Feedback: Evidence from the Chinese Manufacturing Industry

AbstractThe management literature has extensively explored how firms respond to underperformance through innovation, with prior studies based on the behavioral theory of the firm and the threat-rigidity thesis producing inconsistent results. The shifting focus of attention model provides crucial insights to reconcile this contradiction. We extend this model by highlighting the temporal dimension of performance shortfall. Specifically, we argue that underperformance duration flattens the inverted U-shaped relationship by attenuating both the problemistic search and threat rigidity mechanisms. The empirical results from a sample of Chinese listed manufacturing firms between 2010 and 2019 support our predicted inverted U-relationship between underperformance intensity and research and development (R&amp;D) investment, and the moderating effect of underperformance duration. Interestingly, the inverted U-shape flips to a U-shape if underperformance extends into the long term. We contribute to the literature on performance feedback by considering both underperformance intensity and duration, which conceptualizes their interaction and reconciles extant contradictory findings from a new perspective. We also add new insights into innovation research by theorizing and examining the overlooked boundary condition for the curvilinear relationship between performance shortfalls and R&amp;D investments, which calls for future research to explore the dynamics of the relationship and account for temporal effects.

Competition, Research and Development Expenditure and Innovation in Sub-Saharan Africa. Is there an inverted-U Relationship?

Competition, Research and Development Expenditure and Innovation in Sub-Saharan Africa. Is there an inverted-U Relationship?

Organizational Culture, Adaptation, and Performance

Prior research emphasizes how organizational culture can hinder organizational adaptation. In this study, we investigate how organizational culture can help promote organizational adaptation to environmental changes, using a formal model from cultural evolution theory. In the model, organizational members face a trade-off between innovating versus following tradition (because environmental changes are uncertain). Members can also decide to help others who are following the tradition, thereby improving its diffusion. Organizational leaders shape the culture of their organization, which influences members’ decisions to choose innovation or tradition or to help others following tradition. Culture comprises two dimensions: beliefs and prosocial values. We find that increasing the accuracy of beliefs leads to improvements in both innovation and following tradition, thereby mitigating the trade-off between them and boosting adaptation and performance. On prosocial values, we find that increasing their intensity reduces the cost of following tradition but at the expense of reduced adaptation, resulting in an inverted-U relationship between intensity of prosocial values and performance. Overall, we show how leaders can fine-tune the dimensions of organizational culture to foster improvements in adaptation and performance. The formal model we introduce is novel to the literature and offers a way of studying adaptation to a changing environment and to incorporate social learning into models of adaptation under bounded rationality. Funding: J. Poblete was supported by Instituto Sistemas Complejos de Ingenieria [Grant ANID PIA/PUENTE AFB230002]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.16791 .

Wealth or health? Haze pollution, intergenerational migration experience and settlement intentions of rural migrant workers

This study employs the haze data and micro-level data from China Migrant Data Survey to examine the relations of haze pollution, intergenerational migration experience and settlement intentions of rural migrant workers. We identify that there is an inverted-U relationship between haze pollution on rural migrant workers' settlement intention; the threshold for this inverted U-shaped relationship is 31; migrants are more likely to settle while haze pollution grows below the threshold; but they are more likely to leave while haze pollution increases above the threshold. Further, this study finds that intergenerational migration experience increases individual's perception of haze pollution. The results show that the impact of haze pollution on settlement intention of first-time rural migrant workers and those whose parents do not have migration experience is not significant. But the inverted U-shape effect remains significant for individuals with multiple migration experience and those whose parents have migration experience. Finally, compared to migration experience of father, that of mother exerts a more significant impact on individual's perception of haze.

The effects of informal competition on firms’ innovation in Greece

PurposeSeveral empirical studies indicate that the existence of a large informal sector is a major obstacle to firms’ choices of innovation strategies. This paper aims to address this issue and investigates the effect of the informal sector on the innovation of formal firms in Greece.Design/methodology/approachUsing the World Bank’s Enterprise Survey data, the impact of informal competition on formal firms’ innovation in Greece is investigated by testing whether formal firms use innovation as a tool to protect and sustain their competitive advantage vis-à-vis informal firms and whether overall and informal competition has an inverted-U relationship with the innovation of formal firms. The effects of bribing and other variables drawn from the empirical literature are also controlled for.FindingsThe findings fill a gap in the literature regarding the effects of the informal sector on formal economic activity in Greece, by indicating that the informal sector puts pressure on formal firms to innovate, in order to differentiate their product or service and enhance their productivity and by offering learnings to help policymakers to promote innovation in Greece.Originality/valueThe originality of this study is that it investigates the impact of informal competition on formal firms’ innovation in Greece, a developed economy with a large informal sector. It does so by focusing on the effects that formal firms’ informal practices have on their competitors’ innovation activities, and the role of informal competition in creating and sustaining a competitive advantage in Greece.

The bright side of being uncertain: the impact of economic policy uncertainty on corporate innovation

PurposeThis study aims to theoretically hypothesize and empirically examine the impact of economic policy uncertainty (EPU) on firms' innovation performance as well as the contingency conditions of this relationship.Design/methodology/approachThis study collects and combines secondary longitudinal data from multiple sources to test for a direct impact of EPU on firms' innovation performance. It further examines the moderating effects of firms' operational and marketing capabilities. A series of robustness checks are performed to ensure the consistency of the findings.FindingsIn contrast to the common belief that EPU reduces the innovativeness of firms, the authors find an inverted-U relationship between EPU and innovation performance, indicating that a moderate level of EPU actually promotes innovation. Further analysis suggests that firms' operational and marketing capabilities make the inverted-U relationship steeper, further enhancing firms' innovation performance at a moderate level of EPU.Originality/valueThis study adds to the emerging literature that investigates the operational implications of EPU, which enhances our understanding of the potential bright side of EPU and broadens the scope of operational risk management.

Horizontal mergers and heterogeneous firm investments: evidence from the United States

I find on average firms respond to a horizontal merger by investing less in PP&E, labor, and R&D. There is notable heterogeneity among the non-merging rivals. The laggard rivals reduce investments in PP&E, labor, and R&D while the neck-and-neck rivals do the opposite. There is an insignificant change for the leader rivals. These results support Aghion et al. (2005) on the inverted-U relationship between competition and innovation. Also, I show evidence that financial constraints and innovativeness are two factors that drive rivals’ heterogeneous responses. This empirical study sheds light upon the pattern in which horizontal mergers shape industry evolvement.

Research on sustainable development of marine ranching based on blue carbon trading

Promoting the trading of blue carbon generated by marine ranching (MR) is essential for China to achieve its carbon peaking and carbon neutrality goals. As blue carbon trading develops, it remains uncertain whether it can promote the transformation of marine ranching firm (MRF) from traditional fishery aquaculture-type MR (FAMR) to more eco-friendly conservation-type MR (CMR). This paper constructs a game model involving MRF and the government to explore the impact of blue carbon trading on the transformation of MRF' production modes by considering carbon asset renting, carbon cap-and-trade, government subsidies, and green investment, which is of great significance in managing coastal marine and aquatic organisms, as well as promoting sustainable development of the marine economy. Research shows that the price and demand of FAMR products are solely influenced by carbon cap-and-trade. The introduction of carbon rents will increase the incentive for MRF to choose CMR, and this incentive is further enhanced when government subsidies are provided. Concurrently, green investment and MRF's profit have an inverted-U relationship. Both government subsidies and blue carbon trading will increase blue carbon. Although this policy will also increase MRF's carbon emissions, the carbon surplus generated by MRF will be higher than without subsidies.

Does the inverted U-shape between corporate indebtedness and investment hold up for emerging markets? Evidence from Türkiye

While corporate indebtedness has increased substantially in emerging countries over the last decade, the literature on the negative consequences of this large build-up of debt on real consequences is very limited. In addition, they provide mixed results and suffer from the lack of representativeness of their samples, which can be attributed to data availability. Unlike the previous studies, this study investigates the link between corporate indebtedness and investment by utilizing a novel firm-level data covering the universe of all incorporated manufacturing firms in Türkiye over the last decade. The results of the panel regression model with multi-dimensional fixed effects provide significant evidence of an inverted-U relationship between indebtedness and investment, indicating that leverage increases investment up to a certain level, and after that, further increase in leverage has an adverse impact on investment. This non-monotonic relationship is evident for all firm size groups. Conspicuously, the indebtedness level that impedes investment is significantly lower for Small- and Medium-Sized Enterprises (SMEs) than large firms, which supports the arguments that small firms are more likely to be affected by debt overhang. Results also reveal that firms holding more cash can sustain higher levels of debt without hurting investment activity. This is also the case for high capital-intensive firms and exporters. Findings of this paper highlight the importance of policies to make equity financing more attractive, incentivize the uptake and provision of equity capital from private investors, and deepen the capital markets.

Environmental regulation stringency and allocation between R&D and physical capital: A two-engine growth model

Many studies have identified the negative effect of environmental regulation on capital accumulation and the positive effect on innovation, but this observed capital-innovation tradeoff due to environmental regulation lacks theoretical underpinning. We fill this gap by developing a unified two-engine endogenous growth model with environmental regulation, and show that a stringent environmental policy (in terms of pollution tax) leads to a sectoral reallocation from dirty inputs to clean final-good sectors, which increases the demand for R&D and activates the innovation engine. The capital engine depends on the elasticity of substitution between polluting and capital inputs. If both are sufficiently complementary, capital accumulation slows down. Another novelty of our model is that the contrasting responses of the two growth engines can lead to an inverted-U relation between overall GDP growth and environmental taxation. Our calibration shows that a well-designed environmental regulation can achieve a “double dividend”: both improving the environment and enhancing economic growth and social welfare. Our empirical analysis provides macro-level evidence to justify our model prediction by using cross-country panel data.

Just a number? Using artificial intelligence to explore perceived founder age in entrepreneurial fundraising

Leveraging work on role theory and age stereotypes, we deploy a randomized experiment that uses AI to manipulate founder age in fundraising appeals. Broadly, we find that age perceptions matter to investors. Using 949 equity crowdfunding observations, we show that entrepreneurs benefit from appearing older when seeking funding. However, these benefits wane as age perceptions increase, and age perceptions eventually become detrimental to funding efforts, resulting in an inverted-U relationship between age perceptions and funding evaluations. Perceptions of founder intelligence, creativity, energy, and experience mediate this relationship. This study opens new frontiers by introducing founder age perceptions as an important, yet overlooked factor in entrepreneurial fundraising.

American Corporate Sustainability and Extra-Financial Performance: Is There an Inverted-U Relationship

In this paper, we explore the nexus between extra-financial performance (sustainable ESG) and firm performance within a sample of American firms from different vital sectors. In particular, we examine whether extra-financial performance has an effect on company performance. To this end, we have used a non-linear model. The study is based on a sample of 93 American companies over the period 2010–2019. We find that the association between extra-financial performance and firms’ financial performance is nonlinear, exhibiting an inverted U-shaped pattern. In particular, the results emphasize the importance of caution when pursuing ESG initiatives. Enterprise managers should monitor the effect of ESG activities on extra-financial performance and confirm the ESG threshold of their organization.