This dissertation focuses on testing and identifying individual ambiguity preference under the framework of "smooth ambiguity preference" developed by Klibanoff, Marinacci, and Mukerji (2005). Following the seminal contributions of Allais (1953) and Ellsberg (1961), experimental data have consistently demonstrated that individuals do not behave in accordance with predictions of the expected utility model when they face uncertainty. As one important class of ambiguity utility, the smooth ambiguity model distinguishes ambiguity aversion from risk aversion, which makes the comparative statics possible. However, currently there is little work on testing and recovering such preferences based on observable choices. The dissertation contains four parts. Chapter 2 uses two approaches to derive the necessary and sufficient conditions for observed individual portfolio choice to be compatible with the smooth ambiguity preference. The first approach is the revealed preference method, and is based on finite observations. The second approach is demand function testing, and is based on infinite observations. Chapter 3 establishes the conditions under which the smooth ambiguity preference can be uniquely identified from individual demand functions. In Chapter 4, I extend the argument of Varian (1988) to multiple observations and incomplete market case to non-parametrically test different shapes of risk aversion, and then to test hypotheses on shapes of ambiguity aversion. In Chapter 5, to use household survey data to identify household risk and ambiguity aversion, I build a simple parametric model to identify household risk and ambiguity aversion from their saving and portfolio choice. The data from the Bank of Italy Survey on Household Income and Wealth 2008 and 2010 support the constant relative risk aversion and constant relative ambiguity aversion hypothesis, and give evidence of the magnitude of household risk and ambiguity aversion.

The aim of the study was to determine the extent to which the narrative or storytelling approach shapes a brand with a focus on Oldham. The objectives of the study were to ascertain the nature of stories; understand the way stories are told; identify ways places shape their identity; determine the extent to which stories are mirrored in the unfolding re-branding or re-storying of Oldham; compare Oldham’s experience to Bradford; profile perceptions of the Oldham stakeholders; develop an identity matrix for Oldham; formulate a framework for conceptualising the Oldham brand; make recommendations on the way forward; and suggest an approach to story based branding (story-branding). The conceptual framework states that, This study is a research of the storytelling approach or the narrative in the development of a place brand focusing on Oldham. The four core elements of the theoretical framework of the study include branding, place branding, the case study approach, Oldham and the storytelling or narrative approach. The researcher’s epistemological perspective is that of a phenomenological interpretivist engaged ethnographically in the study, i.e., grounded in the dynamics of Oldham as a social constructioninst. The methodology employed storytelling, using the narrative by thirty people familiar with Oldham, the Oldham historian’s perspective, eighty questionnaires and a focus group discussion rendering the methodology to a mixed method (triangulation). The literature review showed that the storytelling approach is central to human understanding. The Oldham brand is diverse given its heritage and its multiple stakeholders. The Oldham story projects hard work leading to global industrial excellence “king cotton”, peaking in 1866 and then deteriorating into dilapidation in the 1970’s and chaos, culminating in the race riots of 2001. Rebranding Oldham is complex as various elements are considered. The researcher recommends consolidation of the story and the utilisation of the great sub-stories of Oldham. The study proposes the Adaptive Story branding Conceptual Framework where the main story is adapted for different stakeholder groups.

This study investigates the sensitivity of the relationship between oil industrial inventories and oil supply at national, international and global levels to developments in monetary policy in the UK. More specifically, it provides evidence for the UK about the two-way relationship between monetary policy and commodity markets in an environment of inflation targeting. The importance of this research can be found in the provision of information which may be beneficial when projecting the economic outlook in general and inflation forecasts in particular. Although the UK operates under an inflation targeting framework, where supply shocks are considered as short-term, but recent movements in commodity markets are found to be more persistent, this study also investigates whether the sensitivity of the UK economy and policy makers to unanticipated movements in commodity prices has changed since the peak in commodity prices in 2008 which is coincident with the start of the financial crisis. The estimation of VEC models adjusted for the UK, and plotting impulse response functions is used to investigate the dynamic reaction of oil inventories and oil supply at national, international and global levels to the shock in monetary policy. Estimated SVAR models investigate the size of the persistent and transitory effects of different types of oil and food commodity shocks on the UK economy and the reaction of policy makers. Afterwards, the Chow test is used for the identification of potential structural breaks and the investigation of whether the sensitivity of the UK economy to shocks in commodity prices has changed. The results reveal that an expansionary UK monetary policy leads to a statistically significant decline in the OPEC oil supply while there is a less statistically significant effect on EU oil supply movements. Tight monetary policy is found to have the most significant effect on the UK’s industrial oil stocks and EU industrial oil stocks. The results also reveal that the world oil supply, as well as the OPEC oil supply, became less responsive to money supply and more responsive to interest rates after the Bank of England was given an operational independency. The responsiveness of the OECD oil stocks has also become slightly more responsive since the financial crisis. Following an investigation of the transitory and persistent effect of oil and food commodities shocks in relation to the nature of the shocks, the results reveal that shocks in oil prices pass through into the UK’s core inflation. It is also found that policy decisions in the UK are more sensitive to the actual shock in food prices than to the primary shock in food demand. The response of headline inflation to oil price shocks is found to be stronger before the oil price peak in 2008 and becomes less responsive afterwards while the response of core inflation to the shock in food prices is stronger after the price peak in 2008.

Disequilibrium analysis, particularly in the context of explicit dynamic economic models, is an area of considerable interest. Disequilibrium is important when markets fail to clear and dynamic adjustments are required. Three essential strands of the literature seem the most important: non market-clearing temporary equilibria; long term growth theory which allows for the possibility of unemployment of labour and underutilisation of capital stock; medium term dynamics where aggregate demand fails to match up to potential output. This thesis presents a number of theoretical and analytical models which analyse various aspects of the last two issues. Even though we use some concepts from short-run rationing models of temporary equilibria, the central focus is exclusively on long run growth and more shorter-term dynamic systems, where capital stock is exogenous. The work is also emphatically macroeconomic in nature, emphasising aggregative structures which conform to stylised facts and have interesting policy conclusions. The first part of the thesis discusses growth models. Given the lack of a unified theoretical structure in the area itself, we concentrate on specific issues: income-expenditure models with independent investment functions leading on to capital formation and (possible) movement towards steady states; unemployment of labour, and capital; monetary growth and asset structure; open economy considerations when markets may fail to clear. The second part analyses macrodynamics, assuming fixed capital, and is concerned with medium term adjustments of variables such as output, price and exchange rate under disequilibrium and rigidities. The purpose of the research is to present a diversity of concepts and conclusions. The objective is not to present a comprehensive 'general' or 'meta' theory; it is not clear whether encompassing concepts will necessarily be more insightful; in any case the current state of the arts preclude such a schema. The chapters that follow deal with a wide range of possible topics; model specifications are adapted to tackle the specific problem at hand. The conclusions clearly demonstrate that specification of regime, Keynesian or Classical, is vital to the understanding of how the economy will behave under disequilibrium. Even if the steady state depends on exogenous parameters (such as the natural rate or potential output) the paths that approach it are essentially different in characteristics, depending on what sort of disequilibrium regime the economy is in. This, of course, has important policy relevance. Discretionary policies, as well as policy rules, must carefully study the underlying structural features of the economy if they are to have significance.

This thesis contains 5 independent chapters together with an Introduction and a General Conclusion. All five chapters consider the problem of wage determination in an economy characterized by asymmetric information. The solution which is implemented, for example a pair consisting of the wage and the level of employment, is restricted to elicit all possible relevant information. This forces some additional constraints upon the optimization problem of the agents. Chapters 2 and 3 demonstrate that since the firm does not voluntarily share its information with other agents, the level of employment is not efficient. In both a separating and a pooling equilibrium, underemployment is the case. Note here that the equilibrium obtained changes qualitatively from Chapter 2 to Chapter 3. We return to this in the General Conclusion. Chapter 4 elaborates upon Chapter 2. It is shown that in an otherwise competitive economy, employment and investment are lowered since they are used as signalling devices, compared to the case of symmetric and perfect information. In a model characterized by monopoly, this conclusion is no longer true. The effect upon investment is no longer unambiguous. We also return to this in the General Conclusion. Chapters 5 and 6 consider economic policy in the case of a separating, respectively, pooling equilibrium. It is shown that in the case of a separating equilibrium, taxation can improve upon the situation. For a pooling equilibrium we show the existence of multipliers. General for these models is that the introduction of asymmetric information certainly does have an effect, but also that the results are possibly non-robust to assumptions with respect to the market form.

In entrepreneurship, the fear of failure has been identified as a significant barrier to entrepreneurial activity. The Global Entrepreneurship Monitor (GEM), the world's largest study of entrepreneurial activity, defines the fear of failure as a strong inhibitor for seizing opportunities and transforming entrepreneurial intentions into entrepreneurial actions. Contrary to entrepreneurship research, psychological theory offers a counterintuitive prediction of the outcomes of fear of failure. While early achievement theories argued that fear of failure inhibits behavior, later psychological research has found fear of failure to be dualistic in nature, sometimes motivating individuals to act while at other times inhibiting such action. Although there is no unified theory on fear of failure within the psychology literature, the theoretical background of this construct in entrepreneurship appears even more fragmented. An examination of the existing entrepreneurship literature on fear of failure reveals that scholars have used different definitions and measures to explain this phenomenon and investigate its effects on entrepreneurial behavior. Because these measures refer to a different nature of the fear of failure construct, it is very unlikely that they converge to capture the same phenomenon. Therefore, a clear understanding of the nature and effects of fear of failure in entrepreneurship is needed. In this respect, this thesis addresses the research question of how fear of failure can be defined and measured within the entrepreneurial process. Three articles have been developed to answer this research question. In Article 1, the conceptual issues associated with the current status of the literature on fear of failure in entrepreneurship and the characteristics of the entrepreneurial setting that shape the fear of failure experience are discussed. Building on these conceptual observations, Article 2 adopts a qualitative approach to investigate the experience of fear of failure antecedent and concurrent to the entrepreneurial process. Sixty-five entrepreneurs and potential entrepreneurs have been interviewed to show that fear of failure can be defined as a complex combination of cognition, affect, and behavior. Finally, in Article 3 four studies are conducted to develop and validate a new measure of entrepreneurial fear of failure. Findings from these three articles shed light on the fear of failure construct in entrepreneurship, which emerged as a context-sensitive phenomenon.

Insurance market failures are common in developing countries and one commonly proposed explanation for this is the presence of asymmetric information. In this paper I test for the relative importance of adverse selection and moral hazard for car insurance using a randomised experiment at the largest insurance company in Mongolia, randomly upgrading low coverage buyers to a higher coverage. With this experiment, I find significant ex-ante adverse selection for third party and theft risks, while there is no evidence of ex-post moral hazard for either risk. Moreover, I find no evidence of adverse selection or moral hazard for coverages differing in co-payment rates. I also discuss how certain market features, likely to be perceived as specific to this context, are common in other insurance markets in developing countries, and whether these factors are likely to be driving the results in this paper.

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Financial constraints influence corporate policies of firms, including both investment decisions and external financing policies. The relevance of this phenomenon has become more pronounced during and after the recent financial crisis in 2007/2008. In addition to raising costs of external financing, the effects of financial crisis limited the availability of external financing which had implications for employment, investment, sale of assets, and tech spending. This thesis provides a comprehensive analysis of the effects of financial constraints on share issuance and repurchases decisions. Financial constraints comprise both internal constraints reflecting the demand for external financing and external financial constraints that relate to the supply of external financing. The study also examines both operating performance and stock market reactions associated with equity issuance methods. The first empirical chapter explores the simultaneous effects of financial constraints and market timing on share issuance decisions. Internal financing constraints limit firms’ ability to issue overvalued equity. On the other hand, financial crisis and low market liquidity (external financial constraints) restrict availability of equity financing and consequently increase the costs of external financing. Therefore, the study explores the extent to which internal and external financing constraints limit market timing of equity issues. This study finds that financial constraints play a significant role in whether firms time their equity issues when the shares are overvalued. The conclusion is that financially constrained firms issue overvalued equity when the external equity market or the general economic conditions are favourable. During recessionary periods, costs of external finance increase such that financially constrained firms are less likely to issue overvalued equity. Only unconstrained firms are more likely to issue overvalued equity even during crisis. Similarly, small firms that need cash flows to finance growth projects are less likely to access external equity financing during period of significant economic recessions. Moreover, constrained firms have low average stock returns compared to unconstrained firms, especially when they issue overvalued equity. The second chapter examines the operating performance and stock returns associated with equity issuance methods. Firms in the UK can issue equity through rights issues, open offers, and private placement. This study argues that alternative equity issuance methods are associated with a different level of operating performance and long-term stock returns. Firms using private placement are associated with poor operating performance. However, rights issues are found empirically to be associated with higher operating performance and less negative long-term stock returns after issuance in comparison to counterpart firms that issue private placements and open offers. Thus, rights issuing firms perform better than open offers and private placement because the favourable operating performance at the time of issuance generates subsequent positive long-run stock price response. Right issuing firms are of better quality and outperform firms that adopt open offers and private placement. In the third empirical chapter, the study explores the levered share repurchase of internally financially unconstrained firms. Unconstrained firms are expected to repurchase their shares using internal funds rather than through external borrowings. However, evidence shows that levered share repurchases are common among unconstrained firms. These firms display this repurchase behaviour when they have bond ratings or investment grade ratings that allow them to obtain cheap external debt financing. It is found that internally financially unconstrained firms borrow to finance their share repurchase when they invest more. Levered repurchase firms are associated with less positive abnormal returns than unlevered repurchase firms. For the levered repurchase sample, high investing firms are associated with more positive long-run abnormal stock returns than low investing firms. It appears the market underreact to the levered repurchase in the short-run regardless of the level of investments. These findings indicate that market reactions reflect both undervaluation and signaling hypotheses of positive information associated with share repurchase. As the firms undertake capital investments, they generate future cash flows, limit the effects of leverage on financial distress and ultimately reduce the risk of the equity capital.

This thesis contains four chapters that participate to the literature between development economics, banking and organisational economics. The first chapter shows that deposit volatility and costly bank liquidity increase the long ­term lending rates offered by banks, which reduce loan maturities,long-term investment and output. Together with my co-author(Ali Chaudhary from the State Bank of Pakistan), we formalise this mechanism in a banking model and analyse exogenous variation in deposit volatility induced by a Sharia levy in Pakistan. Data from the credit registry and a firm-level survey show that deposit volatility and liquidity cost: 1) reduce loan maturities and lending rates; 2) leave loan amounts and total investment unchanged;3) redirect investment from fixed assets towards working capital. A targeted liquidity program is quantified to generate yearly output gains between 0.042% and 0.205%. The second chapter,with my co-author(Francesco Strobbe from the World Bank), focuses on the importance of liquidity regulation in absence of deposit insurance and credible safe-asset commitment by banks. We show that bank liquidity regulation creates a commitment device on repaying depositors in bad states,which can: 1) stimulate a deposit inflow, moderating the limited liability inefficiency; 2) promote bank profits and branching, if deposit growth exceeds the inter mediation margin decline. Our empirical test exploits an unexpected policy change, which fostered the liquid assets of Ethiopian banks by 25% in 2011. Exploiting the cross sectional heterogeneity in bank size and bank-level databases,we find an increase in deposits, loans and branches, with no decline in profits. The third chapter focuses on the role of financial regulation, starting from the observation that it can create a demand for government bonds, generating government revenue gains. Together with my co-author (Francesco Strobbe from the World Bank),we study an Ethiopian banking regulation introduced in 2011, forcing banks to purchase a negative-yield government bond. High-frequency bank data and public finances documentation allow tracking the subsequent government revenue gain. This policy is compared to three alternatives: raising funds competitively on international markets;distorting the state-owned bank lending; and raising deposits through state-owned bank branches. Our results suggest that the revenue gain is moderate(1.5--2.6% of tax revenue); banks amass more bonds; their profitability slows without turning negative (from 10% to 2%). In the fourth chapter I study the impact of World Bank managers on project success through the value-added method. Manager effects are interpretable as performance indices and are more volatile than country effects. Both correlate positively with determinants of productivity (i.e., schooling and institutions respectively) and provide evidence of a negative assortative matching,with high-performing managers assigned to low-performing countries. Exploiting a novel variation for World Bank board access, I find a significant manager premium for countries in the board. All of these results are consistent with the World Bank behaving as a planner which assigns its managers as project inputs to client countries.