The impact of corporate social performance on financial risk and utility: a longitudinal analysis

This study focuses on the wealth-protective effects of socially responsible firm behavior by examining the association between corporate social performance (CSP) and financial risk for an extensive panel data sample of S&P 500 companies between the years 1992 and 2009. In addition, the link between CSP and investor utility is investigated. The main findings are that corporate social responsibility is negatively but weakly related to systematic firm risk and that corporate social irresponsibility is positively and strongly related to financial risk. The fact that both conventional and downside risk measures lead to the same conclusions adds convergent validity to the analysis. However, the risk-return trade-off appears to be such that no clear utility gain or loss can be realized by investing in firms characterized by different levels of social and environmental performance. Overall volatility conditions of the financial markets are shown to play a moderating role in the nature and strength of the CSP-risk relationship.

Formal theory building for the avalanche game: explaining counter-intuitive behaviour of a complex system using geometrical and human behavioural/physiological effects

In 'Avalanche', an object is lowered, players staying in contact throughout. Normally the task is easily accomplished. However, with larger groups counter-intuitive behaviours appear. The paper proposes a formal theory for the underlying causal mechanisms. The aim is to not only provide an explicit, testable hypothesis for the source of the observed modes of behaviour-but also to exemplify the contribution that formal theory building can make to understanding complex social phenomena. Mapping reveals the importance of geometry to the Avalanche game; each player has a pair of balancing loops, one involved in lowering the object, the other ensuring contact. For more players, sets of balancing loops interact and these can allow dominance by reinforcing loops, causing the system to chase upwards towards an ever-increasing goal. However, a series of other effects concerning human physiology and behaviour (HPB) is posited as playing a role. The hypothesis is therefore rigorously tested using simulation. For simplicity a 'One Degree of Freedom' case is examined, allowing all of the effects to be included whilst rendering the analysis more transparent. Formulation and experimentation with the model gives insight into the behaviours. Multi-dimensional rate/level analysis indicates that there is only a narrow region in which the system is able to move downwards. Model runs reproduce the single 'desired' mode of behaviour and all three of the observed 'problematic' ones. Sensitivity analysis gives further insight into the system's modes and their causes. Behaviour is seen to arise only when the geometric effects apply (number of players greater than degrees of freedom of object) in combination with a range of HPB effects. An analogy exists between the co-operative behaviour required here and various examples: conflicting strategic objectives in organizations; Prisoners' Dilemma and integrated bargaining situations. Additionally, the game may be relatable in more direct algebraic terms to situations involving companies in which the resulting behaviours are mediated by market regulations. Finally, comment is offered on the inadequacy of some forms of theory building and the case is made for formal theory building involving the use of models, analysis and plausible explanations to create deep understanding of social phenomena.

Partially identified treatment effects under imperfect compliance: the case of domestic violence

The Minneapolis Domestic Violence Experiment (MDVE) is a randomized social experiment with imperfect compliance which has been extremely influential in how police officers respond to misdemeanor domestic violence. This paper re-examines data from the MDVE, using recent literature on partial identification to find recidivism associated with a policy that arrests misdemeanor domestic violence suspects rather than not arresting them. Using partially identified bounds on the average treatment effect I find that arresting rather than not arresting suspects can potentially reduce recidivism by more than two-and-a-half times the corresponding intent-to-treat estimate and more than two times the corresponding local average treatment effect, even when making minimal assumptions on counterfactuals.

Autistic traits modulate mimicry of social but not nonsocial rewards

Autism Spectrum Conditions (ASC) are associated with diminished responsiveness to social stimuli, and especially to social rewards such as smiles. Atypical responsiveness to social rewards, which reinforce socially appropriate behavior in children, can potentially lead to a cascade of deficits in social behavior. Individuals with ASC often show diminished spontaneous mimicry of social stimuli in a natural setting. In the general population, mimicry is modulated both by the reward value and the sociality of the stimulus (i.e., whether the stimulus is perceived to belong to a conspecific or an inanimate object). Since empathy and autistic traits are distributed continuously in the general population, this study aimed to test if and how these traits modulated automatic mimicry of rewarded social and nonsocial stimuli. High and low rewards were associated with human and robot hands using a conditioned learning paradigm. Thirty-six participants from the general population then completed a mimicry task involving performing a prespecified hand movement which was either compatible or incompatible with a hand movement presented to the participant. High autistic traits (measured using the Autism Spectrum Quotient, AQ) predicted lesser mimicry of high-reward than low-reward conditioned human hands, whereas trait empathy showed an opposite pattern of correlations. No such relations were observed for high-reward vs. low-reward conditioned robot hands. These results demonstrate how autistic traits and empathy modulate the effects of reward on mimicry of social compared to nonsocial stimuli. This evidence suggests a potential role for the reward system in underlying the atypical social behavior in individuals with ASC, who constitute the extreme end of the spectrum of autistic traits.

Emotional arousal amplifies the effects of biased competition in the brain

The arousal-biased competition model predicts that arousal increases the gain on neural competition between stimuli representations. Thus, the model predicts that arousal simultaneously enhances processing of salient stimuli and impairs processing of relatively less-salient stimuli. We tested this model with a simple dot-probe task. On each trial, participants were simultaneously exposed to one face image as a salient cue stimulus and one place image as a non-salient stimulus. A border around the face cue location further increased its bottom-up saliency. Before these visual stimuli were shown, one of two tones played: one that predicted a shock (increasing arousal) or one that did not. An arousal-by-saliency interaction in category-specific brain regions (fusiform face area for salient faces and parahippocampal place area for non-salient places) indicated that brain activation associated with processing the salient stimulus was enhanced under arousal whereas activation associated with processing the non-salient stimulus was suppressed under arousal. This is the first functional magnetic resonance imaging study to demonstrate that arousal can enhance information processing for prioritized stimuli while simultaneously impairing processing of non-prioritized stimuli. Thus, it goes beyond previous research to show that arousal does not uniformly enhance perceptual processing, but instead does so selectively in ways that optimizes attention to highly salient stimuli.

Developing social skills in autistic children through ‘Relaxed Performances’

Families living with autism often feel unable to attend social and cultural events largely due to the fear of their child attracting negative or even aggressive reactions from others. The ‘joint attention’ that is part of the theatre experience however may be a powerful factor in the development of social and communication skills for such children. ‘Relaxed performances’ offer an opportunity for them to access and engage with theatre by making special arrangements designed to reduce tensions associated with visits to public places. Aspects of the production such as the use of lighting and sound effects which may trigger adverse reactions are also adjusted. This paper reports on how one local theatre drew on the findings of a national project to mount a ‘relaxed performance’ of their annual pantomime. It discusses the theatre’s preparations and presents evidence of the impact the event had on local children with autism and their families. The success of both the national and this local project marks a new beginning for improved access to the theatre for an audience that has hitherto felt largely excluded.

The dynamic effects of age-related stereotype threat on explicit and implicit memory performance in older adults

While an awareness of age-related changes in memory may help older adults gain insight into their own cognitive abilities, it may also have a negative impact on memory performance through a mechanism of stereotype threat (ST). The consequence of ST is under-performance in abilities related to the stereotype. Here, we examined the degree to which explicit and implicit memory were affected by ST across a wide age-range. We found that explicit memory was affected by ST, but only in an Early-Aging group (mean age 67.83), and not in a Later-Aging group (mean age 84.59). Implicit memory was not affected in either the Early or Later Aging group. These results demonstrate that ST for age-related memory decline affects memory processes requiring controlled retrieval while sparing item encoding. Furthermore, this form of ST appears to dissipate as aging progresses. These results have implications for understanding psychological development across the span of aging.

Interventions in social networks: impact on mood and network dynamics

Results from two studies on longitudinal friendship networks are presented, exploring the impact of a gratitude intervention on positive and negative affect dynamics in a social network. The gratitude intervention had been previously shown to increase positive affect and decrease negative affect in an individual but dynamic group effects have not been considered. In the first study the intervention was administered to the whole network. In the second study two social networks are considered and in each only a subset of individuals, initially low/high in negative affect respectively received the intervention as `agents of change'. Data was analyzed using stochastic actor based modelling techniques to identify resulting network changes, impact on positive and negative affect and potential contagion of mood within the group. The first study found a group level increase in positive and a decrease in negative affect. Homophily was detected with regard to positive and negative affect but no evidence of contagion was found. The network itself became more volatile along with a fall in rate of change of negative affect. Centrality measures indicated that the best broadcasters were the individuals with the least negative affect levels at the beginning of the study. In the second study, the positive and negative affect levels for the whole group depended on the initial levels of negative affect of the intervention recipients. There was evidence of positive affect contagion in the group where intervention recipients had low initial level of negative affect and contagion in negative affect for the group where recipients had initially high level of negative affect.

Local and landscape effects on bee functional guilds in pigeon pea crops in Kenya

Pollinators face many challenges within agricultural systems due to landscape changes and intensification which can affect resource availability that can impact pollination services. This paper examines pigeon pea pollination and considers how landscape context and agricultural intensification in terms of pesticide use affects the abundance of bees characterized by species guilds on crops. The study was conducted on six paired farms across a gradient of habitat complexity based on the distance of each farm from adjacent semi-natural vegetation in Kibwezi Sub-county, Kenya. The study found that farms which do not use insecticides in farm management, but are in close proximity to natural habitat have greater bee guild abundance, but at further distances, overall abundance is reduced with or without insecticide use. At 1 km landscape radius, the complexity of habitats but not patch size had a positive impact on the abundance of cavity nesting bees and mason bees, which can be attributed to the interspersion of the small-holder farms with semi-natural habitats across the landscapes producing mosaics of heterogeneous habitats. The study revealed the strongest relationships between fruit set and bee abundance to be with the carpenter bee, social bee and solitary bee guilds, which are among the most abundant bees visiting pigeon pea flowers in this system. Our findings provide the foundation for conservation efforts by identifying which bee guilds pollinated pigeon peas. From this study, we suggest managing the floral and nesting resources that would best support the most abundant crop pollinators, and also reducing insecticide application to the crop.

Social and ecological drivers of success in agri-environment schemes: the roles of farmers and environmental context

1. Agri-environment schemes remain a controversial approach to reversing biodiversity losses, partly because the drivers of variation in outcomes are poorly understood. In particular, there is a lack of studies that consider both social and ecological factors. 2. We analysed variation across 48 farms in the quality and biodiversity outcomes of agri-environmental habitats designed to provide pollen and nectar for bumblebees and butterflies or winter seed for birds. We used interviews and ecological surveys to gather data on farmer experience and understanding of agri-environment schemes, and local and landscape environmental factors. 3. Multimodel inference indicated social factors had a strong impact on outcomes and that farmer experiential learning was a key process. The quality of the created habitat was affected positively by the farmer’s previous experience in environmental management. The farmer’s confidence in their ability to carry out the required management was negatively related to the provision of floral resources. Farmers with more wildlife-friendly motivations tended to produce more floral resources, but fewer seed resources. 4. Bird, bumblebee and butterfly biodiversity responses were strongly affected by the quantity of seed or floral resources. Shelter enhanced biodiversity directly, increased floral resources and decreased seed yield. Seasonal weather patterns had large effects on both measures. Surprisingly, larger species pools and amounts of semi-natural habitat in the surrounding landscape had negative effects on biodiversity, which may indicate use by fauna of alternative foraging resources. 5. Synthesis and application. This is the first study to show a direct role of farmer social variables on the success of agri-environment schemes in supporting farmland biodiversity. It suggests that farmers are not simply implementing agri-environment options, but are learning and improving outcomes by doing so. Better engagement with farmers and working with farmers who have a history of environmental management may therefore enhance success. The importance of a number of environmental factors may explain why agri-environment outcomes are variable, and suggests some – such as the weather – cannot be controlled. Others, such as shelter, could be incorporated into agri-environment prescriptions. The role of landscape factors remains complex and currently eludes simple conclusions about large-scale targeting of schemes.

Evidence for interplay between genes and maternal stress in utero: monoamine oxidase A polymorphism moderates effects of life events during pregnancy on infant negative emotionality at 5 weeks

The low activity variant of the monoamine oxidase A (MAOA) functional promoter polymorphism, MAOA-LPR, in interaction with adverse environments (G × E) is associated with child and adult antisocial behaviour disorders. MAOA is expressed during foetal development so in utero G × E may influence early neurodevelopment. We tested the hypothesis that MAOA G × E during pregnancy predicts infant negative emotionality soon after birth. In an epidemiological longitudinal study starting in pregnancy, using a two stage stratified design, we ascertained MAOA-LPR status (low vs. high activity variants) from the saliva of 209 infants (104 boys and 105 girls), and examined predictions to observed infant negative emotionality at 5 weeks post-partum from life events during pregnancy. In analyses weighted to provide estimates for the general population, and including possible confounders for life events, there was an MAOA status by life events interaction (P = 0.017). There was also an interaction between MAOA status and neighbourhood deprivation (P = 0.028). Both interactions arose from a greater effect of increasing life events on negative emotionality in the MAOA-LPR low activity, compared with MAOA-LPR high activity infants. The study provides the first evidence of moderation by MAOA-LPR of the effect of the social environment in pregnancy on negative emotionality in infancy, an early risk for the development of child and adult antisocial behaviour disorders.

Responsibility effects in decision making under risk

We systematically explore decision situations in which a decision maker bears responsibility for somebody else's outcomes as well as for her own in situations of payoff equality. In the gain domain we confirm the intuition that being responsible for somebody else's payoffs increases risk aversion. This is however not attributable to a 'cautious shift' as often thought. Indeed, looking at risk attitudes in the loss domain, we find an increase in risk seeking under responsibility. This raises issues about the nature of various decision biases under risk, and to what extent changed behavior under responsibility may depend on a social norm of caution in situations of responsibility versus naive corrections from perceived biases. To further explore this issue, we designed a second experiment to explore risk-taking behavior for gain prospects offering very small or very large probabilities of winning. For large probabilities, we find increased risk aversion, thus confirming our earlier finding. For small probabilities however, we find an increase of risk seeking under conditions of responsibility. The latter finding thus discredits hypotheses of a social rule dictating caution under responsibility, and can be explained through flexible self-correction models predicting an accentuation of the fourfold pattern of risk attitudes predicted by prospect theory. An additional accountability mechanism does not change risk behavior, except for mixed prospects, in which it reduces loss aversion. This indicates that loss aversion is of a fundamentally different nature than probability weighting or utility curvature. Implications for debiasing are discussed.

The effects of corporate and country sustainability characteristics on the cost of debt: an international investigation

We investigate the relationship between corporate and country sustainability on the cost of bank loans. We look into 470 loan agreements signed between 2005 and 2012 with borrowers based in 28 different countries across the world and operating in all major industries. Our principal findings reveal that country sustainability, relating to both social and environmental frameworks, has a statistically and economically impactful effect on direct financing of economic activity. An increase of one unit in a country's sustainability score is associated with an average decrease in the cost of debt by 64 basis points. Our international analysis shows that the environmental dimension of a country's institutional framework is approximately twice as impactful as the social dimension, when it comes to determining the cost of corporate loans. On the other hand, we find no conclusive evidence that firm-level sustainability influences the interest rates charged to borrowing firms by banks. Our main findings survive a battery of robustness tests and additional analyses concerning subsamples, alternative sustainability metrics and the effects of financial crisis.

An assessment of the effects of climate change on horticulture

Horticulture may be defined as the intensive cultivation and harvesting of plants for financial, environmental and social profit. Evidence for the occurrence of climate change more generally and reasons why this process is happening with such rapidity are discussed. These changes are then considered in terms of the effects which might alter the options for worldwide intensive horticultural cultivation of plants and its interactions with other organisms. Potentially changing climates will have considerable impact upon horticultural processes and productivity across the globe . Climate change will alter the growth patterns and capabilities for flowering and fruiting of many perennial and annual horticultural plants. In some regions perennial fruit crops are likely to experience substantial difficulties because of altered seasonal conditions affecting dormancy, acclimation and subsequent flowering and fruiting. Elsewhere these crops may benefit from the effects of climate change as a result of reduced cold damage and increased length of the growing season. There will be considerable effects for aerial and edaphic microbes invertebrate and vertebrate animals which have benign and pathogenic interactions with horticultural plants. Microbial activity and as a consequence soil fertility may alter. New pests and pathogens may become prevalent and damaging in areas where the climate previously excluded their activity. Vital resources such as water and nutrients may become scarce in some regions reducing opportunities for growing horticultural crops. Wind and windiness are significant factors governing the success of horticultural plants and the scale of their impacts may change as climate alters. Damaging winds could limit crop growing in areas where previously it flourished. Forms of macro- and micro-landscaping will change as the spectrum of plants which can be cultivated alters and the availability of resources and their cost changes driven by scarcities brought about by climate change. The horticultural economy of India as it may be affected by climate change is described as an individual example in a detailed study.

Effects of infant cleft lip on adult gaze and perceptions of ‘cuteness'

Objective: Early mother-infant interactions are impaired in the context of infant cleft lip, and are associated with adverse child psychological outcomes, but the nature of these interaction difficulties is not yet fully understood. The aim of this study was to explore adult gaze behaviour and cuteness perception, which are particularly important during early social exchanges, in response to infants with cleft lip, in order to investigate potential foundations for the interaction difficulties seen in this population. Methods: Using an eye-tracker, eye movements were recorded as adult participants viewed images of infant faces with and without cleft lip. Participants also rated each infant on a scale of cuteness. Results: Participants fixated significantly longer on the mouths of infants with cleft lip, which occurred at the expense of fixation on eyes. Severity of cleft lip was associated with the strength of fixation bias, with participants looking even longer at the mouths of infants with the most severe clefts. Infants with cleft lip were rated as significantly less cute than unaffected infants. Men rated infants as less cute than women overall, but gave particularly low ratings to infants with cleft lip Conclusions: Results demonstrate that the limited disturbance in infant facial configuration of cleft lip can significantly alter adult gaze patterns and cuteness perception. Our findings could have important implications for early interactions, and may help in the development of interventions to foster healthy development in infants with cleft lip.