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Article
Publication date: 5 March 2018

En Te Chen and Yunieta Anny Nainggolan

Despite the benefits of international diversification, the home equity bias phenomenon is well documented in the portfolio choice literature. The purpose of this paper is…

Abstract

Purpose

Despite the benefits of international diversification, the home equity bias phenomenon is well documented in the portfolio choice literature. The purpose of this paper is to investigate whether the same investment behavior applies to domestic socially responsible investments (SRIs) where ethical screenings should be the selection criteria.

Design/methodology/approach

The authors apply the model by Coval and Moskowitz (1999), Grinblatt and Keloharju (2001) and Agarwal and Hauswald (2010) to uncover the effect of distance relative to screenings on SRI domestic portfolio choice. For the first time, the authors test the robustness of distance effect by using time bias, which is the travel time between the fund manager and the company’s headquarter.

Findings

The authors find that SRIs exhibit a strong preference for locally headquartered firms. After controlling for screening activity and other fund characteristics, the authors still find a strong distance bias in SRI fund portfolio decision-making. The authors find that this bias is mostly observed in SRI fund with social screening and that fund holding characteristics determine the propensity of fund managers to invest locally. The results suggest that the local bias puzzle exists in SRI.

Research limitations/implications

This study provides avenue for future research to examine whether the same local bias is found in SRI investment in other countries where they have different characteristics and behavior. Also, the evidence that local bias exists in SRI investment may need further analysis as to whether this is conflicting with the objectives of SRI, which focus more on ethical beliefs.

Practical implications

The results suggest that many local firms in the same city currently held by an SRI fund will not be held by this fund if it is in another city. The implications of the findings are that geographic proximity, along with ethical screenings, is an important dimension to how SRI fund invests.

Originality/value

This study is the first that examines local bias in SRI funds by using portfolio holding data.

Details

Social Responsibility Journal, vol. 14 no. 1
Type: Research Article
ISSN: 1747-1117

Keywords

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Article
Publication date: 7 November 2018

Wagner Junior Ladeira, Fernando Oliveira Santini, Diego Costa Pinto, Clécio Falcao Araujo and Fernando A. Fleury

This paper aims to analyze how judgment bias (optimism vs pessimism) and temporal distance influence self-control decisions. This research also analyzes the mediating role…

Abstract

Purpose

This paper aims to analyze how judgment bias (optimism vs pessimism) and temporal distance influence self-control decisions. This research also analyzes the mediating role of perceived control on judgment bias and temporal distance.

Design/methodology/approach

Three studies (one laboratory and two online experiments) analyze how judgment bias and temporal distance influence self-control decisions on consumers’ willingness to pay.

Findings

The findings uncover an important boundary condition of temporal distance on self-control decisions. In contrast to previous research, the findings indicate that individuals exposed to optimism (vs pessimism) bias display more self-control in the future and make choices that are more indulgent in the present. The findings also reveal that perceived control mediates the effects of judgment bias and temporal distance.

Practical implications

The findings help managers to adapt short- and long-term marketing efforts, based on consumers’ momentary judgment biases and on their chronic judgment bias orientation.

Originality/value

This research contributes to the literature on self-control and temporal distance, showing that judgment bias reverses previous research findings on self-control decisions.

Details

Journal of Consumer Marketing, vol. 35 no. 5
Type: Research Article
ISSN: 0736-3761

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Article
Publication date: 17 August 2020

Yawei Fu and Sin Huei Ng

The purpose of this paper is twofold to examine the factors that contribute to local bias of venture capital in China and to explore the relationship between local bias

Abstract

Purpose

The purpose of this paper is twofold to examine the factors that contribute to local bias of venture capital in China and to explore the relationship between local bias and performance of venture capital institutions.

Design/methodology/approach

Local bias was measured in line with the model developed by Cumming and Dai (2010). Regression techniques were performed for our long-term cross-sectional data to analyse the potential determinants of local bias. This is followed by the Probit model to test the relationship between local preference and successful exit.

Findings

The overall finding indicated that local bias in China increased over time. The stiff competition among venture capital institutions reduced local bias, but the enhanced innovation capabilities of a particular geographical area amplified local bias because of the knowledge spillover effect. Finally, the results suggested that venture capital institutions with less local bias enjoy a greater likelihood of making successful exits.

Research limitations/implications

This study used successful venture capital exit as a proxy for venture capital institution’s performance because of the unavailability of information such as internal rate of return. Future research should try to adopt other way of measuring venture capital institution’s performance.

Practical implications

This study sheds light on the various possible causes of local bias that the policymakers need to be aware of. Despite the rapid rise of China’s venture capital market in recent years, venture capital institutions have yet to make inroads into the local high-tech industry. This study implies to the policymakers that to reverse this trend, they should formulate policies that foster the long-term performance of venture capital institutions, mitigate the severity of local bias and raise the competitiveness of the Chinese venture capital market.

Originality/value

Because of data limitations, there is currently lack of prior empirical research on local bias of Chinese venture capital institutions based on large-scale data. This study intends to fill the gap.

Details

Journal of Asia Business Studies, vol. 15 no. 1
Type: Research Article
ISSN: 1558-7894

Keywords

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Article
Publication date: 28 May 2021

K. Skylar Powell and Eunah Lim

Top-management-teams (TMTs) and chief executive officers (CEOs) dealing with internationalization are naturally predisposed to deal with space, so they will consult…

Abstract

Purpose

Top-management-teams (TMTs) and chief executive officers (CEOs) dealing with internationalization are naturally predisposed to deal with space, so they will consult “spatial knowledge.” The purpose of this paper is to offer a conceptual description of spatial knowledge used by TMTs/CEOs and to describe how the use of spatial knowledge can be triggered and the resulting biases that arise from it. The description of spatial knowledge is also discussed in relation to core international business (IB) theories/models.

Design/methodology/approach

This is a conceptual study.

Findings

TMTs/CEOs use spatial knowledge for internationalization decisions. This spatial knowledge is “declarative” because it involves knowledge of places and associated characteristics or attributes, “configurational” because it involves knowledge of various types of relative positions and proximities between places and “procedural” because it involves knowledge of how to structure transactions, operate or organize interdependencies between locations. Additionally, TMTs/CEOs individually have spatial knowledge that is uniquely distorted. Then, finally, when TMTs/CEOs consult spatial knowledge to identify international opportunities or solutions, their search process may entail distance and directional biases as a result of their spatial knowledge.

Originality/value

This is the first paper to introduce the notion of “spatial knowledge” to the research on TMT/CEO experiences and internationalization and IB research in general.

Details

Multinational Business Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1525-383X

Keywords

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Abstract

Details

Threats from Car Traffic to the Quality of Urban Life
Type: Book
ISBN: 978-0-08-048144-9

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Article
Publication date: 1 August 1999

William McCluskey and Sarabjot Anand

Hybrid systems as the next generation of intelligent applications within the field of mass appraisal and valuation are investigated. Motivated by the obvious limitations…

Abstract

Hybrid systems as the next generation of intelligent applications within the field of mass appraisal and valuation are investigated. Motivated by the obvious limitations of paradigms that are being used in isolation or as stand‐alone techniques such as multiple regression analysis, artificial neural networks and expert systems. Clearly, there are distinct advantages in integrating two or more information processing systems that would address some of the discrete problems of individual techniques. Examines first, the strategic development of mass appraisal approaches which have traditionally been based on “stand‐alone” techniques; second, the potential application of an intelligent hybrid system. Highlights possible solutions by investigating various hybrid systems that may be developed incorporating a nearest neighbour algorithm (k‐NN). The enhancements are aimed at two major deficiencies in traditional distance metrics; user dependence for attribute weights and biases in the distance metric towards matching categorical variables in the retrieval of neighbours. Solutions include statistical techniques: mean, coefficient of variation and significant mean. Data mining paradigms based on a loosely coupled neural network or alternatively a tight coupling with genetic algorithms are used to discover attribute weights. The hybrid architectures developed are applied to a property data set and their performance measured based on their predictive value as well as perspicuity. Concludes by considering the application and the relevance of these techniques within the field of computer assisted mass appraisal.

Details

Journal of Property Investment & Finance, vol. 17 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 13 April 2020

Haili Zhang, Hans van der Bij and Michael Song

While some studies have found that cognitive biases are detrimental to entrepreneurial performance, others have conjectured that cognitive biases may stimulate…

Abstract

Purpose

While some studies have found that cognitive biases are detrimental to entrepreneurial performance, others have conjectured that cognitive biases may stimulate entrepreneurial action. This study uses a typology of availability and representative heuristics to examine how two patterns of biases affect entrepreneurial performance. Drawing on ideas from cognitive science, this study predicts that various levels of biases in each pattern stimulate entrepreneurial behavior and performance.

Design/methodology/approach

A profile-deviation approach was employed to analyze data from 253 entrepreneurs and zero-truncated Poisson regression and the zero-truncated negative binomial regression to test hypotheses.

Findings

This study finds some positive associations between a particular level of cognitive biases in each of the two patterns and entrepreneurial behavior and performance. Results show that the patterns of biases often stimulate and never hurt entrepreneurial behavior and performance. The opposite holds for a lack of cognitive biases, which hurts and never stimulates entrepreneurial behavior and performance.

Originality/value

This study examines patterns of cognitive biases of entrepreneurs instead of single biases. The study broadens the perspective on the heuristics and cognitive biases of entrepreneurs by examining patterns of biases emanating from the availability and the representativeness heuristic that make a difference for entrepreneurial behavior and performance. The study also brings the “great rationality debate” closer to the entrepreneurship field by showing that a normative rule based on statistics and probability theory does not benefit entrepreneurial behavior and performance.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 26 no. 4
Type: Research Article
ISSN: 1355-2554

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Abstract

Details

Topics in Analytical Political Economy
Type: Book
ISBN: 978-1-84950-809-4

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Article
Publication date: 7 January 2019

Thomas E. Dearden

This paper aims to add to the theoretical discussion of white-collar crime by introducing modern psychological decision-making literature and the potential effect on…

Abstract

Purpose

This paper aims to add to the theoretical discussion of white-collar crime by introducing modern psychological decision-making literature and the potential effect on white-collar offending.

Design/methodology/approach

Using a theoretical approach, literature on heuristics, innovation and stress, insight into why white-collar offenders decide to commit crime is posited.

Findings

The heuristics and strategies that people use to assist in decision-making process may inadvertently promote white-collar crime. For example, stress may inhibit white-collar offenders’ thinking, causing them to discount the risk of committing said offense; individuals may not challenge the success of carrying out a white-collar offense once it is considered; and generally, people will be more optimistic in considering their success of not getting caught.

Originality/value

Currently, the study of white-collar crime is discussed largely in the context of sociological factors. Current psychological theories have considerable explanatory power in understanding why white-collar offenders commit their crimes.

Details

Journal of Financial Crime, vol. 26 no. 1
Type: Research Article
ISSN: 1359-0790

Keywords

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Book part
Publication date: 20 October 2017

Eleftherios Aggelopoulos

Purpose: The present study investigates how the performance of Greek bank branching varies when the external environment causes dramatic changes that are reflected in…

Abstract

Purpose: The present study investigates how the performance of Greek bank branching varies when the external environment causes dramatic changes that are reflected in recession and capital control effects.

Design/Methodology: A unique dataset of accounting Profit and Loss statements of retail branches of a systemic Greek commercial bank, closely supervised by the European Central Bank (ECB), is utilized. A profit bootstrap Data Envelopment Analysis (DEA) model is selected to measure the bank branch efficiency. The derived efficiency estimates are analyzed through a second-stage panel data regression analysis against a set of efficiency drivers related to branch profitability, diversification of income, branch size, and branch activity.

Findings: The results indicate that recession negatively affects branch efficiency in the short and long run. The occurrence of recession significantly intensifies the efficiency premium of branch profitability, reduces the efficiency premium of diversification of income (i.e., a negative efficiency effect is recorded during the early recession period), while mitigating the generally negative efficiency effect of branch size. The analysis of efficiency effects from the deep recession period that encompasses capital controls reveals the importance of diversification of income for the improvement of profit efficiency at bank branch level.

Originality/Value: This is the first branch banking study that explores branch efficiency alteration and the dynamic of branch efficiency drivers when the economy suddenly enters recession and afterwards when conditions are becoming extremely difficult and consequently capital controls are imposed on the economy.

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