Long-run restrictions and survey forecasts of output, consumption and investment

We consider the extent to which long-horizon survey forecasts of consumption, investment and output growth are consistent with theory-based steady-state values, and whether imposing these restrictions on long-horizon forecasts will enhance their accuracy. The restrictions we impose are consistent with a two-sector model in which the variables grow at different rates in steady state. The restrictions are imposed by exponential-tilting of simple auxiliary forecast densities. We show that imposing the consumption-output restriction yields modest improvements in the long-horizon output growth forecasts, and larger improvements in the forecasts of the cointegrating combination of consumption and output: the transformation of the data on which accuracy is assessed plays an important role.

Investigation of institutional investors’ responsible investment practices in UK

The focus of Corporate Governance is shifting from the role of directors to active ownership. Based on their fiduciary duty to other shareholders, it is believed that institutional investors have an important role to play in this regard. However, the Pension Funds and the Sovereign Wealth Organisations are not driven by the same set of objectives. In addition, Environmental Social and Governance (ESG) issues in investment decision-making are now becoming more important and they are capable of becoming the mainstream in the future. However, there are widespread variations in perception of fiduciary responsibilities, ESG issues appraisal, as well as the strategies adopted by institutional investors on shareholder engagement as responsible investors. Responsible Investment market is largely driven by institutional investors and they are expected to continue to lead the way. This research work investigates the role of the main asset owners and their advisors in responsible investment practices in the UK. It adopts a qualitative approach using semi-structured interviews, questionnaire and meetings observations. Gathered data is analysed using grounded theory and the findings highlight the perception of the various investor groups to corporate governance. The research work contributes to the body of knowledge by assessing the corporate governance perspectives of the various classes of institutional investors which may have practical implications for other countries.

Using proxies to calculate the carbon impact of investment into electricity network assets

Replacement and upgrading of assets in the electricity network requires financial investment for the distribution and transmission utilities. The replacement and upgrading of network assets also represents an emissions impact due to the carbon embodied in the materials used to manufacture network assets. This paper uses investment and asset data for the GB system for 2015-2023 to assess the suitability of using a proxy with peak demand data and network investment data to calculate the carbon impacts of network investments. The proxies are calculated on a regional basis and applied to calculate the embodied carbon associated with current network assets by DNO region. The proxies are also applied to peak demand data across the 2015-2023 period to estimate the expected levels of embodied carbon that will be associated with network investment during this period. The suitability of these proxies in different contexts are then discussed, along with initial scenario analysis to calculate the impact of avoiding or deferring network investments through distributed generation projects. The proxies were found to be effective in estimating the total embodied carbon of electricity system investment in order to compare investment strategies in different regions of the GB network.

Exploring methods to evaluate the carbon impact of network investment deferral

Replacement, expansion and upgrading of assets in the electricity network represents financial investment for the distribution utilities. Network Investment Deferral (NID) is a well discussed benefit of wider adoption of Distributed Generation (DG). There have been many attempts to quantify and evaluate the financial benefit for the distribution utilities. While the carbon benefits of NID are commonly mentioned, there is little attempt to quantify these impacts. This paper explores the quantitative methods previously used to evaluate financial benefits in order to discuss the carbon impacts. These carbon impacts are important for companies owning DG equipment for internal reporting and emissions reductions ambitions. Currently, a GB wide approach is taken as a means for discussing more regional and local methods to be used in future work. By investigating these principles, the paper offers a novel approach to quantifying carbon emissions from various DG technologies.

The evolution and heterogeneity of outward foreign direct investment from Latin America

The PhD dissertation investigates the rise of emerging country multinationals (EMNEs), a phenomenon that has opened up a series of research themes and debates. The main debate in this field is the extent to which the theories/frameworks on foreign direct investment (FDI), which have been developed from investigations on multinationals from developed countries, is relevant in explaining outward FDI from EMNEs. This debate is sparked by research suggesting that EMNEs supposedly do not hold the characteristics that are seen as a prerequisite to engaging in FDI. The underlying theme in this PhD is that the field should move away from a one size fit all categorisation of EMNEs, and explore the heterogeneity within EMNEs. Collecting data through various databases, archival articles and annual reports, there was an examination of the internationalisation process of 136 Latin American Multinationals (LAMNEs). The research explores the differences in internationalisation trajectories and global strategies and classifies firms into one of four categories. The four categories that LAMNEs fall into are: Natural-Resource Vertical Integrator, which are firms that are in resource seeking sectors; Accelerated Global, which depict firms that have become global over a very short period of time; Traditional Global, which are EMNEs that have internationalised at the same pace as developed country MNEs and Local Optimisers that only acquire or internationalise to developing countries. The analysis also looks at which decade LAMNEs engaged in FDI, to see if LAMNEs that internationalised during the 1970s and 1980s, during a time when Latin America had a closed economy, was different to LAMNEs that internationalised during the Washington consensus era of the 1990s or to firms that have only just internationalised within the last decade. The findings show that LAMNEs that internationalised before 1990 were more likely to adopt Local Optimiser strategies. However, more LAMNEs that started to internationalise during the 1990s started to adopt Traditional Global strategies, although Local Optimisers were the most prominent strategy. From 2002, there was more prominence of Accelerated Global strategies and a lot more heterogeneity among LAMNEs. Natural-Resource Vertical Integrator LAMNEs, tended to start to internationalisation process during the 1970s/1980s. Despite the rise of EMNEs, and by extension LAMNEs opting to use cross border merger and acquisitions (M&A), there is little research on whether this entry mode has been successful. Contrary to the argument that EMNEs are “internationalising successfully” through this strategy, the findings show that these firms are highly geared and are running less efficiently against their Western competitors. In comparison, LAMNEs internationalising through a more gradual approach, are outperforming their Western competitors on efficiency and are not highly geared- i.e. do not hold a lot of debt. The conclusion of the thesis is the emphasis of moving away from evaluating firms from their country or region of origin, but rather through the global strategy they are using. This will give a more a robust firm level of analysis, and help develop the understanding of EMNEs and international business theory.

Sources of stakeholder salience in the responsible investment movement: why do investors sign the Principles for Responsible Investment?

Since its inception in 2006, the United Nations-backed Principles for Responsible Investment (PRI) have grown to over 1300 signatories representing over $45 trillion. This growth is not slowing down. In this paper, we argue that there is a set of attributes which make the PRI salient as a stakeholder and its claim to sign the six PRI important to institutional investors. We use Mitchell et al.’s (Acad Manag Rev 22:853–886, 1997) theoretical framework of stakeholder salience, as extended by Gifford (J Bus Eth 92:79–97, 2010). We use as evidence confidential data from the annual survey of signatories carried out by the PRI in a 5-year period between 2007 and 2011. The findings highlight pragmatic and organizational legitimacy, normative and utilitarian power, and management values as the attributes that contribute most to the salience of the PRI as a stakeholder.

State ownership, bank loans, and corporate investment

We study the effect of bank loans on Chinese publicly listed firms' investment decisions based on the underinvestment and overinvestment theories of leverage. Evidence from China is of particular importance because China is the world's largest emerging and transitional economy. At first we show that there is a negative relationship between bank loan ratios and investment for Chinese publicly listed firms. And this negative relationship is much stronger for firms with low growth than firms with high growth. Secondly, we find that both short-term and long-term loan ratios are negatively correlated with investment. However, the higher the long-term loan ratios are, the weaker the negative relationship between long-term loan ratios and investment is. Thirdly, firm ownership only matters to the effect of short-term bank loans on investment in our sample. That is, the negative relationship between short-term loan ratios and investment is weaker for SOEs than for non-SOEs. Lastly, we show that the reform of China's banking system in 2003 has not strengthened the negative relationship between bank loans and investment. Our findings suggest that although Chinese state-owned banks are severely intervened by government policies, they still have a disciplining role on firms' investment, especially in firms with low growth.

Exploiting satellite-based rainfall for weather index insurance: the challenges of spatial and temporal aggregation

Lack of access to insurance exacerbates the impact of climate variability on smallholder famers in Africa. Unlike traditional insurance, which compensates proven agricultural losses, weather index insurance (WII) pays out in the event that a weather index is breached. In principle, WII could be provided to farmers throughout Africa. There are two data-related hurdles to this. First, most farmers do not live close enough to a rain gauge with sufficiently long record of observations. Second, mismatches between weather indices and yield may expose farmers to uncompensated losses, and insurers to unfair payouts – a phenomenon known as basis risk. In essence, basis risk results from complexities in the progression from meteorological drought (rainfall deficit) to agricultural drought (low soil moisture). In this study, we use a land-surface model to describe the transition from meteorological to agricultural drought. We demonstrate that spatial and temporal aggregation of rainfall results in a clearer link with soil moisture, and hence a reduction in basis risk. We then use an advanced statistical method to show how optimal aggregation of satellite-based rainfall estimates can reduce basis risk, enabling remotely sensed data to be utilized robustly for WII.

The use of remotely sensed rainfall for managing drought risk: a case study of weather index insurance in Zambia

Remotely sensed rainfall is increasingly being used to manage climate-related risk in gauge sparse regions. Applications based on such data must make maximal use of the skill of the methodology in order to avoid doing harm by providing misleading information. This is especially challenging in regions, such as Africa, which lack gauge data for validation. In this study, we show how calibrated ensembles of equally likely rainfall can be used to infer uncertainty in remotely sensed rainfall estimates, and subsequently in assessment of drought. We illustrate the methodology through a case study of weather index insurance (WII) in Zambia. Unlike traditional insurance, which compensates proven agricultural losses, WII pays out in the event that a weather index is breached. As remotely sensed rainfall is used to extend WII schemes to large numbers of farmers, it is crucial to ensure that the indices being insured are skillful representations of local environmental conditions. In our study we drive a land surface model with rainfall ensembles, in order to demonstrate how aggregation of rainfall estimates in space and time results in a clearer link with soil moisture, and hence a truer representation of agricultural drought. Although our study focuses on agricultural insurance, the methodological principles for application design are widely applicable in Africa and elsewhere.

Tenacity and silk investment of two orb weavers: considerations about diversification of the Araneoidea

Orbiculariae consists of two major clades: the cribellate Deinopidea and the much more diverse ecribellate Araneoidea. It has been hypothesized that the higher diversity of Araneoidea is a consequence of the superiority of the viscid orb web. However, this explanation seems incomplete: for example, cribellate silk may perform better than viscid silk in some contexts. Here, we consider the hypothesis that the diversification of Araneoidea was facilitated by changes in microhabitat occupation behavior due to the cheaper viscid orb web. In the present work we investigate the idea that the reduction in site tenacity caused by the emergence of the viscid orb web has led to an increase in the exploration of different resources and to a greater diversification of the Arancoidea through the evolutionary time. To test this idea, we evaluated the response of one cribellate orb web spider (Zosis geniculata Olivier 1789, Uloboridae) and one ecribellate orb web spider (Metazygia rogenhoferi Keyserling 1878, Arancidae) to abrupt prey absence. The changes in site tenacity and the day-to-day investment in web silk were evaluated. Spiders with three-dimensional webs tend to exhibit greater site tenacity than spiders making orb webs. Zosis geniculata and M. rogenhoferi show similar site tenacity when prey is ample. When prey is unavailable, the tenacity of the cribellate species increases while the tenacity of the ecribellate remains unchanged, and the silk investment of both species decreases. However, this decrease in silk investment is more extensive in Z. geniculata. These results coincide with the idea that a less costly ecribellate orb web leads to a lower tenacity and suggest that more frequent microhabitat abandonment in a context of insect radiation (Neiptera) leads to more diverse and opportunistic exploration of microhabitats that, in the long term, may be one explanation for the greater Araneoidea diversification.