Monthly Archives: March 2017

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    Fintechs have advantages over established banks, but regulation is a major challenge

Fintechs have advantages over established banks, but regulation is a major challenge

Fintech firms may have many advantages over established banks in entering the new market of digital banking. For example many well-known banks have outdated and cumbersome computer systems while new start-ups can start from scratch and develop new and fast systems in only months. The question for large financial institutions is whether to buy firms or build the new […]

Gender quotas and the crisis of the mediocre man

A common criticism against gender quotas is that they are anathema to meritocratic principles. This research on Sweden shows that the opposite can be true: Quotas actually increased the competence of politicians by leading to the displacement of mediocre men whether as candidates or leaders. The results may also be relevant for judging gender quotas in business.

More than 100 countries […]

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    The Complacent Class: The Self-Defeating Quest for the American Dream – Book Review

The Complacent Class: The Self-Defeating Quest for the American Dream – Book Review

The Complacent Class: The Self-Defeating Quest for the American Dream. Tyler Cowen. St. Martin’s Press. 2017.

The end of America’s complacency 

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Politically speaking, 2016 was dramatic – and 2017 promises to be even more so. Yet, Americans are living in a world of historically unprecedented stability and calm. Fewer people move for jobs, and those who have jobs tend […]

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    Rupert Murdoch’s Sky bid: why Ofcom should review the deal

Rupert Murdoch’s Sky bid: why Ofcom should review the deal

In December 2016, Rupert Murdoch’s 21st Century Fox reached an agreement in principle to buy satellite broadcaster Sky. After Fox formally notified the European Commission of its bid on 3 March, Culture, Media and Sport Secretary Karen Bradley has said that she is ‘minded to’ refer the deal to Ofcom on the grounds of media plurality and commitment to broadcasting standards.

Karen Bradley will […]

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    The crucial role of apprentice­ships for the rise of Europe

The crucial role of apprentice­ships for the rise of Europe

The role of specific institutions was important in giving Europe a technological advantage well before the Industrial Revolution. This column argues that apprenticeships were crucial to Europe’s rise. Unlike in the extended families or clans in other parts of the world, apprentices in Europe’s guild systems could learn from any master. New techniques and innovations could thus spread rapidly […]

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    How to ensure future brain technologies will help and not harm society

How to ensure future brain technologies will help and not harm society

Thomas Edison, one of the great minds of the second industrial revolution, once said that “the chief function of the body is to carry the brain around.” Understanding the human brain – how it works, and how it is afflicted by diseases and disorders – is an important frontier in science and society today.

Advances in neuroscience and technology increasingly […]

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    The side effect of scrutinising traders in social trading platforms

The side effect of scrutinising traders in social trading platforms

The rationality of human investors has long been questioned. Behavioural biases have been broadly investigated and are known to impair human decision-making in capital markets. Our empirical study draws on these findings regarding behavioural biases and analyses the behaviour of traders on a social trading platform to expand insights on behavioural biases and human decision-making. In particular, we have […]

Technology may not be responsible for jobless recoveries

Since the early 1990s, the US has been plagued by weak employment growth when emerging from recessions – so called ‘jobless recoveries’. Georg Graetz and Guy Michaels look at multiple recoveries elsewhere in the world over a 40-year period to see if the same applies – and whether modern technology is responsible.

Recoveries from recessions in the United States used […]

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    Employees v. entrepreneurs: Have the two categories become irrelevant?

Employees v. entrepreneurs: Have the two categories become irrelevant?

Most debates about work today focus on the joint evolution of entrepreneurs versus employees. Some academics believe we are moving towards an entrepreneurial society. Others focus on the increasing precariousness of work, but clearly qualify the thesis of a move towards an entrepreneurial society. In the context of this short reflexion, we simply want to question the categories themselves.

Entrepreneurs […]

Diversity is a fact; inclusion, a choice

An organisation’s competitiveness may depend on its ability to create an inclusive workplace that uses the talents of a diverse workforce. Yet many organisations struggle with this, despite research linking an ‘inclusive’ culture, where all talent feels valued regardless of gender, ethnic background or sexuality, to higher reported innovation and teamwork.

People who feel different from the dominant majority can […]

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    Firms in less competitive industries are riskier investments

Firms in less competitive industries are riskier investments

The financial economics literature regularly assumes that the markets in which firms sell their products are perfectly competitive, i.e., that firms take product prices as given while making corporate decisions. Alternatively, many models in the literature assume that firms operate in isolation, and hence their decisions do not affect other firms. Reality lies in between. The most prominent firms […]

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    Why e-readers succeeded as a disruptive innovation in the US, but not in Japan

Why e-readers succeeded as a disruptive innovation in the US, but not in Japan

The concept of disruptive innovation has captured the attention of executives around the world. As explained by Clayton Christensen, a disruptive innovation is initially seen as unattractive by mainstream customers and by the leading firms who serve those customers. Eventually, however, those firms lose their leadership positions to new entrants who are willing to develop and improve the innovation […]

The roles of nature and history in world development

Why do people live where they do, whether in the world as a whole or within a given country?  Why are some places so densely populated and some so empty? In daily life, we take this variation in density as a matter of course, but in many ways it can be quite puzzling.

Key drivers of the distribution of population […]

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    Strengthening private capital markets: less of the same is more

Strengthening private capital markets: less of the same is more

The financial market landscape has changed dramatically since the global financial crisis nine years ago. A key feature of today is the dominance of central banks in financial markets, especially in Europe. However, central bank activism has crowded out long-term investors (insurance companies, pension funds and sovereign wealth funds).

Not only do long-term investors hold assets worth about USD 70 trillion […]

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    The Conversational Firm: Rethinking Bureaucracy in the Age of Social Media – Book Review

The Conversational Firm: Rethinking Bureaucracy in the Age of Social Media – Book Review

The Conversational Firm: Rethinking Bureaucracy in the Age of Social Media. Catherine J. Turco. Columbia University Press. 2016.

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‘Empowered workforce’, ‘flat organisation structures’: we’ve all heard the empty buzzwords and latest fads to improve office productivity. When new initiatives are implemented there is often little change at the coalface for employees and minimal rewards to a company’s bottom […]

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    LSE Growth Commission: invest more in people, not only buildings and machines

LSE Growth Commission: invest more in people, not only buildings and machines

The LSE Growth Commission sets out a new blueprint for inclusive and sustainable growth that deals with the challenges facing the UK, old and new.

Based on the latest research, analysis and evidence from leading practitioners and scholars, the Commission – drawn from leading business, policy-making and academic figures – outlines the top priorities in four key areas.

Jobs and skills

In […]

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    How boards perform their dual role as supervisors and advisors of management

How boards perform their dual role as supervisors and advisors of management

The board of directors forms an integral part of a firm’s governance mechanisms. Yet, how boards perform their dual role of supervisor and advisor of corporate management is difficult to observe from outside of the company. To open this black box, we survey 130 non-executive directors in various emerging markets to obtain detailed information about the inner workings of […]

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    The challenge for impact investing is management, not measurement

The challenge for impact investing is management, not measurement

It feels like we’re at an important point in the evolution of impact investing.  While the field has shown tremendous growth over the past few years, there are far more asset owners still sitting on the sidelines – interested in impact, but not yet investing. So why is it that – to quote the famous impact investor Bono – […]

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    What the South African anti-foreign riots say about the country’s economy

What the South African anti-foreign riots say about the country’s economy

As anti-immigration protesters take the streets of South Africa’s capital, Pretoria, it is instructive to look at the nation’s economy.

South Africa’s economic performance since the 2008/09 global recession is disturbing. The economy’s growth seems stunted, posting 1.3 per cent year-on-year change in 2015[1] and a more measly average of 0.8 per cent in the first three quarters of 2016[2]. Per capita income […]

Think locally, act globally

Why do we observe climate-friendly behaviour?

From an economic perspective, it is particularly hard to explain why people, and countries, engage in pro-environmental behaviour. Even more so when it comes to climate-friendly behaviour. Since its benefits are enjoyed worldwide, regardless of who shoulders its burden, why not simply free riding on the efforts of others?

Yet, people purchase hybrid cars, solar […]