Investors systematically deviate from rationality when making financial decisions, yet the mechanisms responsible for these deviations have not been identified. Using event-related fMRI, we examined whether anticipatory neural activity would predict optimal and suboptimal choices in a financial decision-making task. We characterized two types of deviations from the optimal investment strategy of a rational risk- neutral agent as risk-seeking mistakes and risk-aversion mistakes. Nucleus accumbens activation preceded risky choices as well as risk- seeking mistakes, while anterior insula activation preceded riskless choices as well as risk-aversion mistakes. These findings suggest that distinct neural circuits linked to anticipatory affect promote different types of financial choices, and indicate that excessive activation of these circuits may lead to investing mistakes. Thus, consideration of anticipatory neural mechanisms may add predictive power to the rational actor model of economic decision-making.

The Neural Basis of Financial Risk Taking

Why do growth rates differ? This paper surveys the recent empirical literature on economic growth, starting with a discussion of stylized facts, data problems, and statistical methods. Six research questions are emphasized, drawing on growth and convergence research. In answering these questions, the paper argues that efficiency has grown at different rates across countries, casting doubt on neoclassical models in which technology is a public good. The latter half of the paper rounds up a variety of findings before providing answers to all six questions, including a short summary of how differences in growth rates arise.

The New Growth Evidence

Do cultural values enhance financial and subjective well-being (SWB)? Taking a multidisciplinary approach, we meta-analytically reviewed the field, found it thinly covered, and focused on individualism. In counter, we collected a broad array of individual-level data, specifically an Internet sample of 8,438 adult respondents. Individual SWB was most strongly associated with cultural values that foster relationships and social capital, which typically accounted for more unique variance in life satisfaction than an individual's salary. At a national level, we used mean-based meta-analysis to construct a comprehensive cultural and SWB database. Results show some reversals from the individual level, particularly masculinity's facet of achievement orientation. In all, the happy nation has low power distance and low uncertainty avoidance, but is high in femininity and individualism, and these effects are interrelated but still partially independent from political and economic institutions. In short, culture matters for individual and national well-being.

https://journals.sagepub.com/doi/pdf/10.1177/1088868317721372

The Happy Culture: A Theoretical, Meta-Analytic, and Empirical Review of the Relationship Between Culture and Wealth and Subjective Well-Being:

Using surveys data from controllers of 79 larger companies, this study examines the extent to which firms integrate sustainability measures into their strategic performance measurement systems (SPMS) and align these measures with strategy. The authors explain why practices vary across companies.

Integrating sustainability measures into strategic performance measurement systems: An empirical study

Prioritizing critical success factors for sustainable energy sector in China: A DEMATEL approach

Religion can influence economic growth and economic growth can influence religiosity (Barro & Mitchell, 2004; Barro & McCleary, 2003; McCleary, 2007). Earlier, Weber (1904, 1930, 1958) had suggested that the protestant work ethic gave rise to capitalism and that other major world religions including Catholicism, Judaism, Islam, Hinduism, Buddhism, Confucianism, and Daoism were not conducive to capitalism. However, the data on predicted growth rates and the current majority religion for the 24 emerging economies (Yeyati & Williams, 2012; IMF WEO, 2010) suggest these emerging economies with high growth rates include a variety of geo-political regions representing many different religions, national cultures, and even “no-religion” affiliation. For the same majority religion, the economic growth rates and Hofstede’s (1980) national culture dimensions vary among nations. Thus, religion alone is not sufficient to explain the higher economic growth of the emerging economies. The economic growth is influenced by additional social, political, and macroeconomic variables including human capital, infrastructure, technological progress, political stability, capital formation, domestic credit to private sector, foreign domestic investment, inflation rate, exchange rate, and international trade. In a secular sense, the religious beliefs and cultural values related to work and social ethic are conducive to economic growth through entrepreneurship and organizational effectiveness. Harish C. Chandan Argosy University, USA DOI: 10.4018/978-1-4666-4745-9.ch014

The Role of Religion and National Culture in Economic Growth of Emerging Markets

In this paper, using the governance, resources and processes model for an organization, we examine the organizational challenges for innovation in information systems in each of the three areas of this model. Information systems are a great tool to support innovation to improve the processes and activities in an organization to achieve a competitive edge. We review the role of leadership (governance), intellectual capital (resources) and organizational culture (processes) on incremental and radical innovation in information systems. The existing research suggests that a democratic organizational culture fosters organizational learning and innovation whereas a hierarchical culture acts as a barrier. In information systems, the three phases of innovation include the concept, development and commercialization. The organizational challenges associated with the concept phase of the innovation in the information systems are reviewed. To explore the organizational challenges in the development and commercialization phases in terms of governance, resources and processes, a qualitative research proposal is presented.

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Organizational Challenges for Innovation in Information Systems

This research discusses information systems (IS) maintainability in terms of control, reliability, user participation, and training (CRUT). Dependable IS have the potential to protect organizational information as well as data in cases of emergencies. This paper reviews the application of the total quality management (TQM) construct to suit organizational IS. The TQM elements that are mentioned in this research are integrity, training, employee involvement, and customer focus (ITEC). The research objective is to discover how organizational management may better preserve the quality of the IS they adopt and how their participation in IS development could impact quality maintenance. A qualitative research approach is proposed to explore the CRUT model in terms of IS maintenance.

Information Systems Maintenance: The Application of Total Quality Management Construct

Classical economics assumes human economic decision making is completely rational and dominated by self-interest. Behavior economics emerged to account for the fact that human economic preferences are often influenced by emotional and psychological factors leading to inconsistent, intransitive, and irrational decisions that fail to maximize utility and minimize cost and transcend only self-interest. Both rationality and emotions are seated in the human brain in the prefrontal cortex and limbic system, respectively. The brain imaging methods of neuroscience help in understanding the interplay between economic behavior and neural mechanisms. The human economic decision making behavior involves computational and neurobiological processes and is related to the psychological processes. Classical Economics, Psychology, and Neuroscience converge in Neuroeconomics to better understand and predict human economic decision-making. Neuromarketing is an emerging field that uses neuroscience techniques to understand economic preferences of consumers.

Rational, Emotional, and Neural Foundations of Economic Preferences

Some of the major emerging economies in Latin America (LA) include Argentina, Brazil, Chile, Peru, and Mexico. The discussion themes during the 2013 World Economic Forum on Latin America included understanding the private sector’s role in safeguarding business ethics, corporate social responsibility, sustainability, and concern for the environment. Inputs into business ethics include individual values, organizational culture, national culture, and local business climate, including level of corruption, ethics legislation, and governmental bureaucracy (Stajkovic & Luthans, 1997). A conceptual model of business ethics in terms of governance, processes, and stakeholders is presented. Various models of ethical decision-making processes, including the social-cognitive theory (Bandura, 1986), are reviewed. Models of ethical behavior and the influence of Hofstede cultural dimensions, religion, Internet, and social media are also reviewed. Various measures of business ethics, including the Business Ethics Index (Tsalikis, et al., 2013), the Corruption Perception Index (Transparency International, 2012), the Freedom from Corruption Index, and the Economic Freedom Index (Heritage Foundation, 2013) for LA countries are reviewed. The Business Ethics Index can be a leading indicator of economic growth (Tsalikis, et al., 2011). Good business ethics generate trust and lead to sustained economic growth (Hunt, 2012).

Harish C. Chandan

Papers

The Role of Religion and National Culture in Economic Growth of Emerging Markets

Organizational Challenges for Innovation in Information Systems

Information Systems Maintenance: The Application of Total Quality Management Construct

Rational, Emotional, and Neural Foundations of Economic Preferences

Business Ethics in Latin America and Its Impact on Sustained Economic Growth