Context Of Investment Research Articles

Understanding evaluation practice within the context of social investment

Social impact investing is the use of private investment to fund social programs in various public welfare sectors. It is currently unclear which evaluative practices are used to determine the impact of social investment. This study describes how impact investments are evaluated and the factors that help explain variations in practice through survey ( N = 161) and interview ( N = 13) data from investors, intermediaries, entrepreneurs, and analysts. Study findings indicate that analysts typically rely on descriptive quantitative and qualitative data and analyses. Analysts’ background, training, and role; perceptions of the goals of the work; and the complexity of a program’s theory influence their evaluation approach. More nuanced or indirect impacts of investments may not be captured because evaluation activities tend to be limited in scope and scale. Future research should explore the work of those directly responsible for impact activities to better understand the conditions under which more sophisticated evaluation approaches might be employed.

The line of equilibrium: improving the legitimacy of investment treaty arbitration through the application of the WTO’s general exceptions

This article considers the application of the general exceptions of the World Trade Organization’s (WTO) General Agreement on Tariffs and Trade (GATT) and General Agreement on Trade in Services (GATS) to the context of international investment arbitration under international investment agreements (IIAs). It suggests that the designated categories and balancing contemplated by the WTO exceptions, along with its tried and sophisticated jurisprudence may offer useful guidance to arbitrators seeking to evaluate public interest exceptions implemented by host states. Improvements to the trade-inspired general exceptions for the investment context to enhance this exercise are also proposed. Taken together these initiatives may help promote the legitimacy of investment arbitration which continues to face criticism for its failure to consider non-economic matters and as an affront to national sovereignty.

Trust Me, I Have a Conflict of Interest! Testing the Efficacy of Disclosure in Retail Investment Advice

This study explores the psychology of disclosure in the context of advised financial investment decisions. It investigates how information about the financial advisor’s potential conflict of interest impacts on the participants’ judgement, whether as to attitudes or actions.Participants provided a rating of their trust in the advice out of a scale of one to seven after reading a financial advertisement that displayed a handwritten note making a recommendation to invest. The advertisement also set out the fee structure of the advisor. In half of the cases, the advertisement included an additional note, one version of which explained that the interests of the advisor were aligned with those of the participant, and the other version of which explained that their interests were not so aligned.The results suggest, first, that participants’ ratings of their willingness to invest was reliably affected by the presence of conflicts of interest only when the specific implication of the conflict was made explicit in the explanatory disclosure; and secondly, that their rating of trust in the advice was in all cases affected by the presence of a known conflict of interest, but more strongly so when accompanied by an explanatory disclosure. Even then, in ratings relating to the first-seen advertisement, the disclosure primarily affected stated trust in the advisor rather than willingness to invest, only affecting the latter when participants had the opportunity to compare offers, advice and disclosures across multiple advertisements.The implications of these findings for public policy are that, contrary to what is commonly suggested, problems of conflict of interest in the financial investment context may efficiently be treated by means of mandatory disclosures, provided that such disclosures explicit the consequences of the conflict for the decision maker. It remains to analyse how explanatory disclosures can be drafted so that their influence on the trust in the advice also translates into modified action.

European emerging real estate markets

Purpose– The purpose of this paper is to improve the transparency of European emerging real estate market dynamics and performance attributes in the wake of the 2007-2008 global financial crisis (GFC). The paper examines the extent and nature of inter-relationships between three emerging real estate markets namely, the Czech Republic, Hungary and Poland as well as determining the rationale for including emerging real estate markets within a Pan-European investment portfolio. The paper affords a timely update following the reinstatement of lending provision for European emerging real estate investment markets in 2014.Design/methodology/approach– The paper employs lead-lag correlations and Grainger causality to examine inter and intra relationships across three emerging European real estate markets, namely the Czech Republic, Hungary and Poland over the period 2006-2014. Optimal portfolio analysis is undertaken to explore the role of emerging real estate markets within the confines of a multi-asset investment portfolio as well as a Pan-European real estate investment portfolio.Findings– The findings demonstrate the opportunities afforded by the European emerging real estate markets in terms of both performance enhancement and risk diversification. Significantly, the findings highlight the lack of “uniformity” across the European emerging markets in terms of their investment potential, with Grainger causality confirming that the real estate markets in the Czech Republic, Hungary and Poland are not endogenous functions of one-another’s performance.Practical implications– This paper makes a considered contribution to the analytical interpretation of European emerging property market performance across the real estate cycle. The research demonstrates that the real estate markets in the Czech Republic, Hungary and Poland exhibit specific investment characteristics which differentiate them from the more developed real estate markets across Europe. Indeed emerging markets have the propensity to serve as both a risk diversifier as well as performance enhancer within the confines of a pan-European real estate investment portfolio. However, as the research clearly articulates, intricate understanding of the attributes afforded by the different emerging markets as well as the divergence in sectoral dynamics/performance is integral to portfolio allocation strategies.Originality/value– Robust academic research on Europe’s emerging real estate markets has been hampered by deficiencies in data provision. This study makes an innovative and timely contribution to redressing the research vacuum through delineated examination of the performance dynamics of three markets namely, the Czech Republic, Hungary and Poland, across the real estate cycle. The role and function of emerging markets is depicted within the confines of a Pan-European direct real estate investment portfolio at the all property level and in terms of sectoral specific allocations comprising retail, office and industrial. The explicit added value of the paper is the propensity to bench-mark the performance of emerging markets real estate markets on a like-for-like basis with developed real estate markets across Europe facilitating the exploration of the role and function of emerging real estate markets within a Pan-European investment context.

Multi-objective probabilistically constrained programs with variable risk: Models for multi-portfolio financial optimization

We consider a class of multi-objective probabilistically constrained programs (MOPCP) with a joint probabilistic constraint and a variable risk level. We consider two cases with only a random right-hand side vector or a multi-row random technology matrix, and propose a Boolean modeling framework to derive new mixed-integer linear programs (MILP) that are either equivalent reformulations or inner approximations of MOPCP, respectively. Via testing randomly generated MOPCP instances, we demonstrate modeling insights pertaining to the most suitable MILP, to the trade-offs between conflicting objectives of cost/revenue and reliability, and to the parameter scalarization determining relative importance of each objective. We then focus on several MOPCP variants of a multi-portfolio financial optimization problem to implement a downside risk measure, which can be used in a centralized or decentralized investment context. We study the impact of modeling parameters on the portfolios, show, via a cross-validation study, robustness of MOPCP, and perform a comparative analysis of the optimal investment decisions.

Is there a mere categorization effect in investment decisions?

This study seeks to replicate and extend the work of Mogilner, Rudnick, and Iyengar (2008) on the mere categorization effect (i.e., placing choice options into categories – even uninformative ones – can increase perceived variety and choice satisfaction among novices). This effect did not extend to the context of investments. We suggest that decision complexity and intangibility are possible boundary conditions such that consumers expend additional cognitive effort rather than rely on heuristics such as perceptual variety cues.

Private ethical fund investors across countries and time: a survey-based review

Purpose – This paper aims to provide an overview of the literature to point out similarities and differences among private ethical investors across countries and time. Over the past three decades, many surveys have been conducted to advance the understanding of the demographic characteristics, motivation and morals of private ethical investors across countries and time. To date, the survey-based evidence on private investors into ethical funds is geographically rather segmented, and the research questions are fairly diverse. This permits only very temporally or regionally selective conclusions. Thereby, the authors identify interesting topics for future research. Design/methodology/approach – To identify the relevant literature for our review, the authors carried out a structured Boolean keyword search using major library services and databases. Findings – When questions about negative screening criteria are presented in a direct investment context, the consensus of private ethical investors “worldwide” (on average) is that social screening issues are most important, followed by ecological and moral topics. The percentage of ethical funds in the fund portfolio of the average private ethical investor in Europe seems to increase when the investor exhibits high degrees of pro-social attitudes and perceived consumer effectiveness. European private ethical investors are of the opinion that ethical funds perform worse but are less risky than conventional funds. Practical implications – The authors make suggestions on how investment companies should design their funds so that they can attract more socially responsible investors. Originality/value – The paper is of particular value because it focuses on private investors in the fast growing retail market of socially responsible investment funds.

The South and Alternative Models of Trade and Investment Regulation Australia, China and the Regional Comprehensive Economic Partnership

After a relatively slow beginning, the countries of East and South-East Asia, including Australia and New Zealand, have greatly expanded their network of bilateral and pluri-lateral regional agreements dealing with investment and trade in the form both of bilateral investment agreements and free trade agreements. Currently, the ASEAN states and its six main partners, the developing countries of China, Korea and India, and the developed countries of Japan, Australia and New Zealand, are negotiating a Regional Comprehensive Economic Partnership (RCEP), which is intended to cover trade in goods and services, investment, competition, intellectual property and a range of other issues. At the same time, countries such as Australia and China are considered by the OECD to maintain highly restrictive investment regimes. Australia, which is both a capital exporting and importing state, now has FTAs with investment provisions with ASEAN, Japan and Korea and hopes to finalize its agreements with China towards the end of 2015. Although Australia cannot be placed in the category of a Southern country, its middle-level economy, and its role as a recipient of capital investment, presents some rather different issues to the developing-developed country analysis. China, although a developing country, is a world leader in both inbound and outbound investment, and the expansion of its investments in Asia and elsewhere presents a number of issues for its neighbors and for its own policies. This paper will focus on Australian and Chinese investment in the context of developments in the region and explore the legal tools that these two countries undertake, both at the international and the national levels, to implement their own development policies, particularly in the context of investment.

Economic, sociological, and neighbor dimensions of energy efficiency adoption behaviors: Evidence from the U.S residential heating and air conditioning market

This study identifies factors that affect the adoption behavior for residential Heating, Ventilating, and Air Conditioning (HVAC) systems, including a spatial and temporal contagion effect, house characteristics, and other economic and contextual factors. The study draws on a dataset of house sale records in the greater Chicago area, spanning 1992–2004. First-differenced models and restricting the sample to new construction allow separate identification of adoption determinants for homeowners and for developers, respectively. We show that attributes of the building stock and demographics influence adoption decisions of both homeowners and developers. This includes a strong influence of square footage, a modest spatial clustering effect for existing homes, a consistent deterrent effect of higher property tax rates, and a positive influence of neighborhood education levels. Adoption decisions for existing homeowners appear to be driven by different factors than sellers of newly constructed homes. Adoption coincided with multi-story homes for developers, and neighbor adoption rates predicted adoption by existing homeowners but not developers. The results highlight the need for more research into the social context of energy efficiency investment.

Managing the Unknowable

Using an inductive theory-development study, a field experiment, and a longitudinal field test, we examine early-stage entrepreneurial investment decision making under conditions of extreme uncertainty. Building on existing literature on decision making and risk in organizations, intuition, and theories of entrepreneurial financing, we test the effectiveness of angel investors’ criteria for making investment decisions. We found that angel investors’ decisions have several characteristics that have not been adequately captured in existing theory: angel investors have clear objectives—risking small stakes to find extraordinarily profitable investments, fully expecting to lose their entire investment in most cases—and they rely on a combination of expertise-based intuition and formal analysis in which intuition trumps analysis, contrary to reports in other investment contexts. We also found that their reported emphasis on assessments of the entrepreneur accurately predicts extraordinarily profitable venture success four years later. We develop this theory by examining situations in which uncertainty is so extreme that it qualifies as unknowable, using the term “gut feel” to describe their dynamic emotion-cognitions in which they blend analysis and intuition in ways that do not impair intuitive processes and that effectively predict extraordinarily profitable investments.

Security Assistance in Africa: The Case for More

Abstract: This article argues that political tampering with military recruitment and promotion practices, especially the construction and dismantling of ethnically based armies, has led African militaries to intervene in politics in order to block or reverse democratization efforts. The entrenchment of politically insulated, merit-based military institutions is thus necessary to deepen democracy in Africa. The United States can assist by offering protection, training, and financial incentives to encourage reform. ********** Promoting peace and security in Africa through the establishment of democratic institutions and good governance has been prioritized by the Obama administration as a key US foreign policy concern. (1) Weak and failed states threaten national security because they attract destabilizing forces. Unable to control their borders or police their territory internally, such states provide breeding grounds and transit routes for terrorist organizations, drug cartels, weapons traffickers, and other criminal networks. (2) For example, poor governance and rampant conflict in northern Nigeria and Somalia have given rise to two of the continent's most dangerous terrorist organizations, Boko Haram and al Shabaab, while persistent political instability and poverty in Guinea Bissau have led that country to become an international hub for drug trafficking. Democracy is seen as a long-term solution to this threat because democratic institutions remove many of the underlying causes of state weakness. Democracy creates peaceful channels for resolving social conflict, alleviating incentives for domestic strife. Democracies are more politically inclusive, remedying the systemic exclusion of ethnic groups from political power; this kind of exclusion is a known driver of insurgency, as often occurred at the hands of autocratic rulers. (3) Democracy is also associated with the rule of law, which both dampens popular grievances and provides a stable context for investment, entrepreneurship, and other determinants of economic growth, thereby raising populations out of poverty. Strengthening democratic institutions and protecting democratic gains have thus become core principles of both US policy toward Africa and the strategic approach adopted by Africa Command (AFRICOM). (4) Yet, democracy is in decline. Larry Diamond argues that since the turn of the 21st century, there has been a significant and, in fact, accelerating rate of democratic breakdown with at least 25 democracies having collapsed since 2000--a failure rate of 17.6 percent. (5) Africa, in particular, has struggled deeply with democratization. Despite the passing of over 20 years since most African countries took their indispensable first steps toward liberalization and adopting competitive elections, the latest Freedom House reports indicate that recent setbacks have left only 12 percent of the continent free today. (6) Of Diamond's collapsed democracies, 32 percent are in Africa, suggesting the continent contributes significantly to global trends of increasing authoritarianism. (7) Even Botswana, long considered a bulwark of democracy in Africa, has recently suffered government harassment of opposition candidates, interference with media reporting, and abuse of state resources during campaigning. (8) The continued absence of democracy in many African countries, and the loss of democratic institutions in others, threatens continued instability and conflict in a region already rife with the problems generated by weak states. For US policymakers and AFRICOM to reverse this trend, a deeper understanding of Africa's struggle to democratize is necessary. This article hopes to contribute to such an understanding by focusing on the role of African militaries in blocking or reversing democratization efforts. It then proposes a number of policy interventions that may help reform these institutions to be more compatible with democracy. …

Making sense in asset markets: Strategies for Implicit Organizations

AbstractWhile asset markets are traditionally left to economic inquiry, the paper shows that there is both a legal possibility and an incentive for organizing within such markets and for exercising market share-based strategic maneuvering. It proposes, based on sensemaking theory, Implicit Organizations in asset markets to exploit equivocality for momentum trading strategies. An Implicit Organization fulfills the criteria of an organization, while maintaining the image of a perfect market. Its members coordinate via market signals and fixed investment time windows to ensure positive returns to strategic maneuvering in asset markets. In support of hypotheses derived from sensemaking theory, results of empirical studies from two different investment contexts (Xetra and NYSE) provide evidence that equivocal analysts’ recommendations predict investment returns after a fixed time period.

Salivary oxytocin increases concurrently with testosterone and time away from home among returning Tsimane' hunters.

Oxytocin, testosterone and cortisol can have opposing effects on social behaviour, yet few studies have examined their interactions. We measured changes in salivary oxytocin, testosterone and cortisol among Tsimane' men returning home after hunting, an ancient context of male status competition, parental investment and cooperation. Contra normal diurnal rhythm, oxytocin increased relative to baseline and this increase was positively associated with duration of the hunt and change in testosterone, but not cortisol, social context, hunting outcome or physical activity. The concurrent increase in endogenous peripheral oxytocin and testosterone is unexpected given their opposing independent effects on social cognition and behaviour, and has not been observed before. We discuss the potential significance of these effects for the biology of pair-bonding, parenting and social foraging in humans and other species.

Challenges in donor–NPO relationships in the context of corporate social investment

ABSTRACTThe purpose of this article is to highlight challenges in the relationship between corporate donors and recipient NPOs within the context of corporate social investment (CSI) in South Africa and to link the relational challenges to problems NPOs face in general. It is theoretically argued that CSI forms an important part of sustainable development and that NPOs, in turn, form an integral part of many organisations’ social investment. The challenges faced by them need addressing for the sake of NPOs, donors and society as a whole. It was found that although the stakeholder relationship generally shows both positive and negative perceptions of the parties involved, the challenges that exist can be traced to challenges in the everyday functioning of NPOs, including resource limitations and dependence; staffing problems; and strategy, management and environmental challenges. These challenges facing NPOs manifest in their relationship with donors and can be seen in the power imbalance in the relationship that favours donors, the lack of transparency by NPOs, divergent views on commitment, the questioned competence of NPOs, time constraints in the execution of activities, a perceived incomprehension by NPOs of the realities of the business world, and an unwillingness on the part of donors to allow NPOs some decision-making power.

The Role of Market Fundamentals versus Market Sentiment in Property Investment Decision-making in South Africa

In property markets, unlike capital markets, the quantity and quality of data available is limited. To compensate for deficiencies in data on market fundamentals available for property investment decision-making, fund managers may rely on market sentiment. Such deficiencies, together with possible mispricing in property assets, may lead to inefficiencies in property markets. We investigate the use of market sentiment and personal judgement, as opposed to market fundamentals, in property investment decision-making in South Africa. The results indicate that in the South African property investment context, market sentiment plays a smaller role than market fundamentals, unlike in some developed economies.

Finance and Society: On the Foundations of Corporate Social Responsibility

This thesis consists of six chapters. The first four chapters explore different foundations of CSR. Chapter 1 studies the legal and institutional foundations of CSR around the world. Chapter 2 studies the agency foundations of CSR, with a focus on whether CSR should be regarded as an agency problem or value-enhancing tool. Chapter 3 studies the ownership foundations of CSR by investigating the role of family ownership and state ownership in driving corporate shareholder-stakeholder relationship. Chapter 4 investigates the cultural and cognitive foundations of CSR by focusing on how languages people speak around the world may explain cross-country and cross-firm variations in CSR practice. The fifth and sixth chapters look at the social influence of state-owned enterprises (SOEs) and the social context of corporate governance using Chinese data. Chapter 5 investigates how state presence in corporations through shareholdings and political connections affects managerial compensation, and how such state influence is attenuated following the removal of market friction. Chapter 6 extends the analysis of state influence to the context of international investment, and investigates how two major state control mechanisms – state ownership and managerial political connections – can influence globalization decisions and the degree of globalization of SOEs during different time and in different stages of international investment.

Irish Money on the London Market: Ireland, the Anglo-Irish, and the South Sea Bubble of 1720

London’s emergence as a significant financial center in the decades after the Glorious Revolution of 1688 created new opportunities not just for Londoners, but also for those living either in the English provinces or in the metropolitan provinces of Ireland and Scotland. This article focuses on the new opportunities available to both Irish men and women for accumulating capital and wealth in the City. It examines the growth in Anglo-Irish investment, during what historians call “the Financial Revolution,” and analyzes the development of increasingly complex financial networks, which spanned both sides of the Irish Sea. Its particular focus is on the experience of Irish investors in the South Sea Company, before, during, and after the famous stock-market bubble of 1720. Drawing on a variety of source materials, including private correspondence, exchange-rate data, and banking ledgers, this article shows how Irish investors, both those living in London, and those more normally residing in Ireland, interacted with the London markets. The importance of personal and familial links is emphasized, while the experience of Irish investors is also situated within the broader context of nonmetropolitan investment in the bubble.

The Line of Equilibrium: Improving the Legitimacy of Investment Treaty Arbitration Through the Application of the WTO's General Exceptions

This article considers the application of the general exceptions of the WTO GATT and GATS to investment arbitration under international investment treaties. It suggests that the designated categories and balancing contemplated by the WTO exceptions, along with its sophisticated and established jurisprudence may offer useful guidance to arbitrators seeking to evaluate public interest exceptions implemented by host states. Improvements to the trade-inspired general exceptions for use in the investment context in order to enhance this exercise are also proposed. Taken together these initiatives may help promote the legitimacy of investment arbitration, a procedure which continues to face criticism for its failure to consider non-economic elements raised during disputes.

Port system evolution – the case of Latin America and the Caribbean

The explosion of global container trade in the last two decades has significantly influenced the port geography of Latin America & the Caribbean (LAC), leading to a concentration of container traffic at selected ports. Theory suggests that, as port systems become mature, they tend to deconcentration, partly due to the emergence of secondary ports. Previous research has examined the region’s dominant ports, but an unanswered research question is how the evolution of this port system is influencing and being influenced by the actions of those ports currently occupying a secondary rank in the LAC port hierarchy.The methodology is based primarily on analysis of time series data on container movements between 1997 and 2012, revealing patterns of cargo flows and transhipment location choices. The institutional context of devolution processes and new investments in the region provides additional insight into the performance of selected ports. From a theoretical perspective, this analysis is situated within the context of recent institutional approaches that examine the port’s ability to act through critical moments and junctures, in order to deepen understanding of which of the various factors influencing port system deconcentration are the most sensitive to successful institutional adaptations.Results show that the manufacturing of strategic locations can be successful and may have driven the emergence of secondary ports in the LAC system. This finding demonstrates how path dependence can be challenged by new developments, the identification and success of which are nevertheless contingent on factors such as the first mover advantage, port planning regimes and diversification of port roles. The paper identifies some of the key factors influencing the transition of a port system from concentration at a few dominant ports to a deconcentrated system of primary and secondary ports, which can be applied to other port systems in future research.

Directional Goals and Perceptions of Risk in Accounting Estimates

Individuals who evaluate business-related risks often have a preference or goal for the business to perform well. In this paper, we test how such a directional goal affects risk perceptions and the relation between risk perceptions and assessments of value in an investment context. Compared to investors without directional goals — who, consistent with prior behavioral research, focus on negative aspects of risk — we find that those with directional goals assess risk as being more symmetric (i.e., they are less focused on downside risk). However, investors with directional goals are also less likely to consider risk when assessing value. Taken together, these results suggest that a directional goal reduces one behavioral effect identified in prior literature (the tendency to focus on downside risk), but creates another behavioral effect (ignoring risk in assessing value).