This thesis contains three studies. They are connected by the idea that "no man is an island": each individual contributes to shaping, and is constrained by, the social and economic structures of the organization or the society that the individual is embedded in. The first study, Chapter 2, examines optimal networks with weighted and directed links under complementarities. A group of agents take actions that are endogenously determined by which network the planner implements. Complementarities mean that the best-response action of each agent is increasing in the actions of those who have a link with positive weight pointing to the agent (representing the direction and intensity of influence). Optimal networks are those maximizing the planner's objective function which is an increasing function in the effort of each agent, subject to the constraint that the total weight of the links of the network does not exceed a certain level. The agents' best-response function and the planner's objective function can be convex or concave. We show that every optimal network exhibits dramatic concentration of influence so that a very small number of agents impose significant impact on the productivity of the whole organization. The second study, Chapter 3, investigates how cooperative norms emerge and evolve over time. I construct a stochastic dynamic model based on the idea that cooperation in one-shot interactions is sustained by endogenous social norms. The model shows how cooperation and punishment of defectors co-evolve. It reveals the conditions under which cooperation emerges and persists in the long run. In particular, recent empirical studies find that cooperation in one-shot interactions is positively correlated with law enforcement across societies, and that cooperation is higher in large, modern societies with higher degrees of market integration compared to small-scale societies. I extend the model to explain these regularities. I show that the ability to “vote with feet” is the key to understanding the difference in cooperation between small-scale societies and large, modern societies. The third study, Chapter 4, is an experimental project, a joint work with Lucas Molleman and Dennie van Dolder. Previous studies suggest that whether individuals perceive a behavior as fair depends on its frequency in the population. Using a prisoner's dilemma game, we test experimentally whether informing individuals of a higher proportion of cooperators in the population affects the fairness perception about free riding and changes individuals' punishment of free riders. Different from previous studies, we use the strategy method to obtain each participant's complete punishment strategy. We find a remarkable heterogeneity among participants: some participants increase punishment of free riders as the proportion of cooperators increases, suggesting that they consider free riding to be more unfair when more cooperators are around; yet, many others punish independently of the proportion of cooperators. We show that the heterogeneity cannot be captured by any single existing theory.

Organisations today are investing significant amounts of time, money, and resources on workplace self-paced e-learning, yet employees seem to be having problems even getting these e-learning courses completed, bringing into question the true value of workplace self-paced e-learning. In an attempt to improve understanding of factors contributing to success in workplace self-paced e-learning, this study investigated how employee learners’ motivation, self-regulated learning, and organisational contextual factors affected outcomes in workplace self-paced e-learning. A quantitative study was conducted to investigate the research questions. Participants of the study were 119 employees enrolled in workplace self-paced e-learning courses provided by Hong Kong organisations. Data were collected using online questionnaires and analysed using the partial least squares structural equation modelling technique. Findings revealed significant relationships between learners’ motivation, self-regulated learning, organisational contextual factors, and training outcomes in workplace self-paced e-learning. Motivation to learn, time management, metacognitive self-regulation, perceived choice, workload, and organisational support were found to positively correlate with training outcomes as expressed in terms of course completion rate, learner satisfaction, and perceived learning performance in workplace self-paced e-learning. Findings also revealed learners’ autonomy in learning participation, level of workload (negative), and supervisor support (negative) moderate the relationship between learners’ time management strategy use and completion rate of workplace self-paced e-learning courses. Unfortunately, the results failed to support the expected relationship between supervisor support and training outcomes. The significance of the findings is discussed, along with implications for researchers and practitioners, limitations of the current study, and opportunities for future research.

In today’s highly competitive global manufacturing industries, the reality facing most prime or focal manufacturing organisations around the world is one where resources have been reduced, inventory has been drained, technology spending curtailed, and processes that are not core to an organisation’s business have been scaled back and / or outsourced. In competitive global marketplaces prime manufacturers simply cannot afford to have any area of their operations compromised. Supply chain operations need to be robust and resilient in order to retain and increase market share. Supply chain failure is a phenomenon that can potentially cause major issues for many organisations, especially when failure becomes persistent. Supply chains may under-perform or fail in different ways. Here we are concerned with a particular kind of supply chain failure, persistent failure over time, which occurs when a supplier fails persistently to provide the level of quality and delivery performance originally expected or specified in an agreed contract. The phenomenon is observed in industries where there is a lack of substitute suppliers with adequate design and production capability and / or capacity, potentially high switching costs, and regulatory and accreditation issues. The goal of this research is to provide managers at prime manufacturing organisations with an effective way to understand their supply environment and provide insights to help identify and resolve supply problems that might otherwise become persistent failures. In this research project, we seek to understand and rationalize what persistent supply chain failure is, identify why it happens and what influences it. This is achieved by conducting new primary empirical research to examine the ‘mechanisms’ and ‘dynamics’ of persistent failure and how organisations react to persistent adversity in supply chains. Multiple case studies have been conducted in the Aerospace Industry to understand and explain the nature of the phenomenon of persistent failure. An analysis of the extensive empirical evidence collected has enabled a new model of persistent supply chain failure be developed using causal loop diagrams. The ‘Persistent Failure’ model helps to understand the causes of the phenomenon and helps to identify mitigating strategies that can limit its emergence in supply chain relationships. The empirical study, the qualitative and quantitative analyses, and the causal loop model of persistent failure provide a significant contribution to the body of knowledge in purchasing, supply chain and operations management.

This thesis consists of three closely related studies investigating individual decision-making under risk and uncertainty, with a focus on decision weighting. Chapter 1 provides an overview of the common themes and theoretical framework for this research. Chapter 2 reports the development of a simple method to measure the probability weighting function of Prospect Theory (Kahneman & Tversky, 1979) and rank-dependent utility theories. Our method, called the Neo-Lite method, is based on Abdellaoui et al. (2011)’s source method and the Neo-additive weighting function (Chateauneuf et al., 2007). It can be used for both risk (known probabilities) and for ambiguity (unknown probabilities). The novelty of our method lies in how data of decision weights are used to obtain the measurement of the whole function. Compared to the more widely used parametric fitting, our method is simpler, as it minimizes the number of decision weights required and does not rely on the elicitation of subjective probabilities (for ambiguity). An experiment of choice under risk demonstrates the simplicity and tractability of our method. The predictive performance of probability weighting functions measured using our method is shown to be almost equally good to that measured using the standard parametric fitting method. Chapter 3 presents a theory of choice under risk primarily to explain why individual probability weighting functions are often found to be non-linear and inverse-S shaped. Our rationale for non-linear probability weighting is based on a psychologically grounded feature of choice making, a feature we call attention-based state weighting. We show that, under well-defined circumstances, our theory can be equivalent to Cumulative Prospect Theory (Tversky & Kahneman, 1992) with a probability weighting function depending on not only ranks but also sizes of outcomes of risky prospects. This allows our theory to accommodate evidence about probability weighting that cannot be explained by Prospect Theory or Cumulative Prospect Theory. The evidence just mentioned refers to recent findings that people have stake-sensitive probability weighting functions. Chapter 4 reports an experiment that further explores the idea of stake-sensitive decision weighting. In addition, the experiment also tests hypotheses derived from the theory presented Chapter 3. In this chapter, we use a more general concept, decision weights, to refer to probability weights that can be stake-sensitive. Particularly we investigate whether and how decision weights are affected by two main properties of a lottery: outcome level (or expected payoff level) and outcome spacing (or the ratio of the best outcome of the lottery to its worst outcome). We elicit subjects’ Certainty-Equivalents for carefully-designed sets of lotteries and estimate their decision weights and utility curvatures using a model slightly more general than Cumulative Prospect Theory. Our main finding is that only outcome spacing has significant and systematic influence on decision weighting at the aggregate level, and that both outcome level and outcome spacing have systematic and significant effects at individual levels. This finding, together with the theory of Chapter 3, challenges the common understanding of probability weighting. Chapter 5 concludes the thesis by summarizing all findings in previous chapters, discussing the implications, and pointing to directions for future research.

This thesis contains three studies that provide theoretical and empirical evidence on household decisions in housing and investment portfolios in China, using 2010-2014 data from the China Family Panel Studies (CFPS). The first study investigates regional disparities in homeownership and value of owner-occupied housing in Chinese cities by using panel data from 2010-2014 CFPS. The results show that demographic characteristics actively shape the housing outcomes of urban households in different regions. The results also reveal development trajectories of regional economies. The findings indicate that while urban households benefit from an emerging population and an enormous growth in the private sector in the Eastern and Central regions, in the Northeastern region households are hindered in homeownership by an ageing population and an economy dominated by oversized but inefficient state-owned enterprises (SoEs). The second study adopts a nested logit approach, applying three data sets from the 2010-2014 CFPS. This approach explores how household investment choice differs with personal and household characteristics (e.g., such as health, demographic features, and institutional factors) across the broad investment categories of financial assets, private businesses, and real estate. I also employ a sub-sample from the 2012 CFPS that is restricted to parental households to examine how parenthood alters household investment decisions by building a binomial logistic model. The empirical results show that migration and income have a positive effect on investment decisions in the nested logit models. The evidence from the subsample finds that there are significant differences in the impact of demographic composition between investment categories. Using the 2010-2014 CFPS panel data, the third study investigates how household investment holdings vary according to demographic composition and intra-household bargaining strength in urban China. In addition, to explore the allocation of household investment, a further examination is carried out in the fixed-effect model with the specification of the Working-Leser function and in a Tobit model with two limits. Empirical evidence supports the following hypotheses: (a) changes in demographic composition considerably alter household investment holdings; and (b) the existence of a higher proportion of female children is strongly associated with an increase in household investments in financial assets.

The goal of this thesis is to study and understand the informal employment in China. With the rapid growth of informal employment, this thesis challenged the conventional view of informal sector that it is a hub for the poor who need work but cannot find employment in the formal sector. It analysed informal sector employment in China. It focused on three aspects: (1) the pattern and determinants of what constitutes employees, casual workers and employers, (2) the reasons for employment change between the formal and informal sectors, and (3) remuneration differences between formal sector employees and informal sector self-employed workers/employers. This analysis used CHIPs data from 2008, 2009, and 2014. The findings suggest that informal employment is a hub for the more vulnerable who are less able to compete, such as women, less educated, not healthy and disabled. However, it not necessarily applied to self-employed and small business owners. They are competitive with longer working experience and financial capital to start up own businesses. Running one’s own business can provide benefits in terms of job flexibility to accommodate the need to take care of children or elderly relatives. The findings also suggested that labour force engaged in the informal sector are more likely to be induced by personal career pursuing, rather than enforced unemployment. Finally, we have find that changing jobs from formal employment to either self-employment or entrepreneurship can increase monthly disposable income. The results found in this study contribute to the existing literature on China’s labour markets. We comprehensively dissected employment status by recognizing casual workers who either have no contract or a temporary contract under one year in length, which was neglected by the authorities and researchers. It has contributed to a richer understanding of employment status, where informal sector self-employed workers and employers are better off compared to formal employees. Indeed, casual workers have the worst working conditions when considering the number of hours worked and social protections received. These findings contribute to the existing literature on the informal sector as well as provide a comprehensive understanding of China’s labour market that the government can use when considering the establishment of new policies.

Strong empirical evidence points towards an extremely skewed distribution of exporters, corresponding to a few “superstar” firms operating alongside a fringe of small competitors. Superstars are characterised by superior efficiency, increased access to financial capital and, unlike fringe firms, by the ability to internalise the impact of their behaviour on the market. We develop a model in order to examine how productivity differences result in different abilities to invest in cost-reducing innovation which, in turn, allows firms to expand to the extent that they can exploit their market power. We then introduce international trade into this model and calculate the impact of increasing trade openness on aggregate welfare. We show that incorporating productivity heterogeneity jointly with differences in strategic behaviour generates a composition effect that dampens the pro-competitive effect of trade liberalisation. This effect materialises through a market share reallocation from smaller towards larger rivals. We find that, although trade always increases welfare by reducing the average markup and markup heterogeneity, gains from trade are lower when market power distortions are more severe. Consequently, in the presence of such distortions, size-dependent policies could have a welfare-enhancing role to play. We then use an appropriately augmented version of our model to account for the role of credit constraints differences between superstars and smaller enterprises. We examine how an economy’s financial development affects the welfare gains from trade and explore the role of large firms. We show that trade benefits less financially developed countries more and that the oligopolistic inefficiency resulting from the presence of large firms crucially alters theoretical predictions of the gains from trade. We go on to investigate the effect of trade with a more financially developed partner and find that it could act as a substitute for financial development by diminishing the impact of domestic credit market and oligopolistic inefficiencies.

This thesis considers play in bargaining games subject to Endogenous Commitment and in contribution games with a sunk cost. In bargaining games, Endogenous Commitment (EC) describes a common feature in negotiation: once an offer is made, neither would the proposer offer nor would the respondent accept anything worse. Similarly, in contribution games, the notion of sunk cost implies an irrevocability similar to EC: it is impossible for either contributor to reduce his or her contribution, so far as the cost is sunk. Another similarity between the bargaining and contribution games in our thesis is that we assume (most of) them to be finite, meaning that there is a deadline effect: when approaching the deadline, the final negotiator/contributor has a stronger incentive to reach an agreement/complete the project. The deadline effect puts the final negotiator/contributor in a relatively weaker position. With these two similarities, the bargaining and contribution games in our thesis share some similar features. In the first chapter, we conduct a literature review. In the second chapter, we study two player alternating finite/infinite bargaining games with Endogenous Commitment. In both cases, the outcomes are affected by the assumption of EC. In the third chapter, we apply Endogenous Commitment in bargaining games with protocols involving uncertainty. The settlement timings then exhibit a U-shaped pattern: players reach an agreement at the first or the last stage of the game. In the fourth chapter, we turn to contribution games with sunk cost and heterogeneous valuations. We show that a minor difference in valuation could affect the total welfare significantly. In our thesis, we adopt several settings in all chapters. As all models include two players, we refer to player 1 as male and to player 2 as female for convenience. When no specific player is referred to, we use i and j to indicate the two players, assuming i to be male and j to be female. When player 1 makes an offer (in bargaining games) or makes a contribution (in contribution games) in stage t (t\in[1,2,...T], T is the length of the game), we denote it as x_{t}; and when player 2 does so, we denote it as y_{t}. Similarly, we denote player i's and player j's choice as m_{t} and n_{t}.

This thesis comprises three essays in corporate finance, with a focus on corporate risk management and debt diversity. The first chapter examines the impact of derivatives use on the cost of equity for German non-financial firms. Using hand-collected data on derivatives use for a sample of German non-financial firms, I find that user firms have a 306 basis point lower cost of equity than non-users. This reduction in the cost of equity of users is attributable to their lower market, size, and value risk factor exposures. The observed negative relation between derivatives use and the cost of equity remains robust to specifications that account for potential endogeneity arising from a firm's derivatives hedging and capital structure decisions. I find that the reduction in the cost of equity is largest for smaller firms and for firms making use of foreign currency and interest rate derivatives. Moreover, new derivatives users experience a significant reduction in the cost of equity capital in the first year of adoption. In the second chapter, I empirically examine the impact of derivatives use on firms' distress risk using hand-collected data from the annual reports of German non-financial firms. The time period of this empirical analysis spans from 1999 to 2010. I find that derivatives using firms have lower distress risk. I use Heckman's two-stage treatment effect model to account for the unobservable factors that could affect the decision of the firm to use derivatives. Even after accounting for the unobservable factor bias, the results confirm that hedging reduces financial distress risk significantly. Moreover, I find that firms using foreign currency and interest rate derivatives can benefit via the reduction in financial distress risk. Using a comprehensive data for 46 countries firm's choice of the debt instrument, I find that firms use debt from many sources. Firms those sources debt from only one source or more specifically from the Bank, significantly lower their investment during the financial crisis. However, the firms those source debt from public market shows insignificant negative impact during the financial crisis. Later, I find that during the financial crisis time firms with higher financial distress exhibit negative impact on the bank debt. Whereas, firms with higher financial distress during the financial crisis shows a positive association with public debt. Findings of this study suggest that during the crisis period firms with access to the bond market issue bonds to substitute bank debt. However, this substitution is not one-for-one, so the firms experience deleveraging and consequently underinvestment.

This doctoral thesis aims to explore the innovation adoption process in project-based organizations. In particular, I developed a theoretical framework that explains how intra- and inter- project learning influenced by different management practices. I further generated various hypotheses based on the conceptual framework by conducting qualitative interviews. Empirically, I used survey data to test those hypotheses. I collected data from 147-construction industry, most of the companies were contractors and real estate companies. The results strongly support our hypotheses and suggest that different management practices facilitate different types, i.e. tacit and explicit, knowledge transfer among projects and it further influences speed of innovation adoption and speed of innovation routinization. This dissertation contributes to management theory and practice by establishing a comprehensive framework which explains how different types of knowledge flows among different types of projects, i.e. innovative and routine projects, finally influence innovation adoption behavior of project-based organizations. Overall, this research has important implications for how project-based organizations can enhance innovation adoption and routinization to realize the economies of repetition.