First Look

Abstract—At the time of the American Revolution, China was the strongest, richest, and most powerful civilization in the world. The Great Qing Empire ruled China and dominated East Asia by a combination of power and cultural prestige. China's economy was the world's largest. China seemed without peer. Decline came fast. By 1900, China had been invaded, defeated, and degraded, first by Western nations, and then by Japan. An entire system of governance was blown away. In 1911, an imperial tradition of more than 2,000 years ended. After the subsequent disasters of world war and Maoist utopianism, China was an impoverished third world economy holding 20% of the world's population and barely 5% of its economic activity. Today China has again emerged as a great power. Beijing is once more the capital of a multi-ethnic empire that dominates East Asia. Foreign students flock to China to live, study, and work. New infrastructure of airports, highways, railways, electricity, and telecommunications dominate the landscape. It has a powerful government, appears respected in the world, and for the first extended time in modern history, it faces no real external threats to its security. China's resurgence has been driven by a combination of private entrepreneurship and top-down bureaucratic capitalism, by an unmatched and unchecked culture of engineering ambition, of rote learning and educational experimentation, of sophisticated tastes along with basic concerns with food safety. It is a country that is at once cosmopolitan and confused about what its new global roles should be. How will those conflicting strategies, shortcomings, and achievements play out in the future? How do we imagine this great and resurgent nation with its embedded conflicts and challenges will look in 2034? We examine successively the forces that have made China as we know it today, the history and role of the Party, its success in engineering and infrastructure construction, its challenges in planning and innovation, and the special things that a firm must do to compete successfully in the Chinese market. We conclude with China's approach to the global economy and our prognostication for 2034.

Publisher's link: http://www.amazon.com/Can-China-Lead-Reaching-Limits/dp/1422144151

Abstract—Throughout the twentieth century, the U.S. government willingly deployed power, hard and soft, to protect American investments all around the globe. Why did the United States get into the business of defending its citizens' property rights abroad? The Empire Trap looks at how modern U.S. involvement in the empire business began, how American foreign policy became increasingly tied to the sway of private financial interests, and how postwar administrations finally extricated the U.S. from economic interventionism, even though the government had the will and power to continue. Maurer examines the ways that American investors initially influenced their government to intercede to protect investments in locations such as Central America and the Caribbean. Costs were small-at least at the outset-but with each incremental step, American policy became increasingly entangled with the goals of those they were backing, making disengagement more difficult. Maurer discusses how, all the way through the 1970s, the U.S. not only failed to resist pressure to defend American investments, but also remained unsuccessful at altering internal institutions of other countries in order to make property rights secure in the absence of active American involvement. Foreign nations expropriated American investments, but in almost every case the U.S. government's employment of economic sanctions or covert action obtained market value or more in compensation-despite the growing strategic risks. The advent of institutions focusing on international arbitration finally gave the executive branch a credible political excuse not to act. Maurer cautions that these institutions are now under strain and that a collapse might open the empire trap once more. With shrewd and timely analysis, this book considers American patterns of foreign intervention and the nation's changing role as an imperial power.

Publisher's link: http://press.princeton.edu/titles/9952.html

Abstract—We posit that household decision making over fertility is characterized by moral hazard due to the fact that most contraception can only be perfectly observed by the woman. Using an experiment in Zambia that varied whether women were given access to contraceptives alone or with their husbands, we find that women given access with their husbands were 19% less likely to seek family planning services, 25% less likely to use concealable contraception, and 27% percent more likely to give birth. However, women given access to contraception alone report a lower subjective well-being, suggesting a psychosocial cost of making contraceptives more concealable.

Publisher's link: http://www.people.hbs.edu/nashraf/AshrafFieldLee_Sept2013.pdf

Abstract—Business cycle fluctuations in developed economies (N) tend to have large and persistent effects on developing countries (S). We study the transmission of business cycle fluctuations for developed to developing economies with a two-country asymmetric DSGE model with two features: (i) endogenous and slow diffusion of technologies from the developed to the developing country and (ii) adjustment costs to investment flows. Consistent with the model, we observe that the flow of technologies from N to S co-moves positively with output in both N and S. After calibrating the model to Mexico and the U.S., it can explain the following stylized facts: (i) shocks to N have a large effect on S, (ii) business cycles in N lead over medium-term fluctuations in S, (iii) the outputs in S and N co-move more than their consumption, and (iv) interest rates in S are counter-cyclical.

Abstract—Our study of the London Olympics 2012 construction programme showed that systems integration is one of the major challenges involved in delivery of a complex "system of systems"-or array-project. Organizations cope with complexity by decomposing a project into different levels of systems integration with clearly defined interfaces and buffers between levels and individual component subsystems. At the "meta systems integration" level, an organization has to be established with the capabilities to understand the total system of systems, manage external interfaces with the multiple stakeholders, and coordinate the integration of its component parts. At the "systems integration" level, efforts are made to manage each individual system as a loosely coupled, relatively self-contained subsystem with defined interfaces to coordinate interdependencies with other parts of the overall array. Establishing processes to maintain stability whilst responding dynamically to uncertain and changing conditions is one of the most challenging aspects of systems integration.

Abstract—Human faces are used as cues to the presence of social agents, and the ability to detect minds and mental states in others occupies a central role in social interaction. In the current research, we present evidence that the human propensity for mind perception is bound by social group membership. Specifically, we show how identification with different social groups influences the threshold for mind perception. In three experiments, participants assessed a continuum of face morphs that ranged from human to doll faces. These faces were described as in-group or out-group members. Participants had higher (i.e., more stringent) thresholds for perceiving minds behind out-group faces, both in minimal (Experiment 1) and real-world groups (Experiment 2). In other words, out-group members required more humanness than in-group members to be perceived as having minds. This intergroup bias in mind perception was moderated by collective identification, such that highly identified group members had the highest threshold for perceiving minds behind out-group relative to in-group faces. In contrast, Democrats and Republicans who perceived the other party as threatening had lower thresholds for perceiving minds behind out-group faces (Experiment 3). These experiments suggest that mind perception is a dynamic process in which relevant contextual information such as social identity and out-group threat change the interpretation of physical features that signal the presence of another mind. Implications for mind perception, dehumanization, and intergroup relations are discussed.

Abstract—People believe that weather conditions influence their everyday work life, but to date, little is known about how weather affects individual productivity. Contrary to conventional wisdom, we predict and find that bad weather increases individual productivity and that it does so by eliminating potential cognitive distractions resulting from good weather. When the weather is bad, individuals appear to focus more on their work than on alternate outdoor activities. We investigate the proposed relationship between worse weather and higher productivity through four studies: (1) field data on employees' productivity from a bank in Japan, (2) two studies from an online labor market in the United States, and (3) a laboratory experiment. Our findings suggest that worker productivity is higher on bad rather than good weather days and that cognitive distractions associated with good weather may explain the relationship. We discuss the theoretical and practical implications of our research.

Publisher's link: http://francescagino.com/#/motivation_research

Abstract—This paper examines the investments and performance of community development venture capital (CDVC). We find substantial differences between CDVC and traditional venture capital (VC) investments: CDVC investments are far more likely to be in nonmetropolitan regions and in regions with little prior venture capital activity. Moreover, CDVC is likely to be in earlier-stage investments and in industries outside the venture capital mainstream that have lower probabilities of successful exit. Even after we control for this unattractive transaction mix, the probability of a CDVC investment being successfully exited is lower. One benefit of CDVCs may be their effect in bringing traditional VC investment to underserved regions: when we control for the presence of traditional VC investments, each additional CDVC investment results in an additional 0.06 new traditional VC firm in a region.

Abstract—If the differences in accounting standards across countries reflect relatively stable institutional differences (e.g., auditing technology, the rule of law, etc.), why did several countries rapidly, albeit in a staggered manner, adopt IFRS over local standards in the 2003-2008 period? We test the hypothesis that perceived network benefits from the extant worldwide adoption of IFRS can explain part of countries' shift away from local accounting standards. That is, as more jurisdictions with economic ties to a given country adopt IFRS, perceived benefits from lowering transactions costs to foreign financial-statement users increase and contribute significantly towards the country's decision to adopt IFRS. We find that perceived network benefits increase the degree of IFRS harmonization among countries, and that smaller countries have a differentially higher response to these benefits. Further, economic ties with the European Union are a particularly important source of network effects. The results, robust to numerous alternative hypotheses and specifications, suggest IFRS adoption was self-reinforcing during the sample period, which, in turn, has implications for the consequences of IFRS adoption.

Publisher's link: http://ssrn.com/abstract=1590245

Abstract—Humor and other entertaining content, as opposed to demonstrations of product features and "selling," are increasingly used in advertising, such as TV commercials, to attract and keep consumers' attention. This study uses facial tracking to explore how marketers can best use entertainment in ads to increase their effectiveness in increasing intent to purchase. The findings suggest that the optimal amount of entertainment differs by type of entertainment and target group, but not by product category, and confirms that the funniest ads are not necessarily the most effective.

Publisher's link: http://www.warc.com/Pages/Taxonomy/Results.aspx?SubjectRef=1198&Filter=All&Area=AcademicPapers&Tab