Prithwiraj (Raj) Choudhury is an assistant professor of business administration in the Technology and Operations Management Unit. He joined the HBS faculty after three years as an assistant professor at The Wharton School of the University of Pennsylvania. In his research, Professor Choudhury studies global innovation with a focus on emerging markets. His two major areas of inquiry concern the management of human capital within multinational firms and local entities in emerging markets. He was awarded the Haynes Prize by the Academy of International Business and recognized as the most promising scholar under the age of 40 in the field of international business. Professor Choudhury earned his DBA at HBS, receiving the Wyss Doctoral Research Award. He also holds degrees from the Indian Institute of Management and the Indian Institute of Technology. Before pursuing his doctorate, he worked at McKinsey & Company, IBM, and Microsoft Corporation.
How Return Migrants are helping Multinational Firms innovate in Emerging Markets
I study how return migrants are helping a Fortune 50 multinational firm innovate in an emerging market R&D center. Return migrants file higher number of patents compared to local employees, however this might be endogenous to their underlying ability. More interestingly, I study the effect of returnees on their direct reports. I exploit a natural experiment where undergraduates joining the firm are randomly assigned a returnee or local manager and find that direct reports of returnees are more likely to file a U.S. patent compared to direct reports of local managers. I also study longitudinal trends of human capital over the first 10 years of this R&D center and find that direct reports of returnees emerge as the most important group of innovators within the center.
Hiring Stars from Remote Towns
High ability individuals can be constrained from commensurate employment opportunities due to their geographic location. Firms with nationwide hiring practices can benefit from facilitating the migration of high ability individuals from low employment districts to regions with better employment opportunities. Exploiting a natural experiment within one of India’s largest technology firms, this paper establishes that individuals hired from low employment districts outperform their mainstream counterparts. The paper also finds evidence of selection – individuals hired from low employment districts outperform their mainstream counterparts in standardized tests of logical and verbal ability at the time of recruitment.
Bio-Piracy or Prospering Together?
In a series of studies we analyze the phenomenon of patenting Chinese and Indian herbal formulations by western entities. We analyze the institutional pushback to such patenting from India and China that leads to codified prior art being available to patent examiners in the U.S. and Europe. We study the effect of this codification of prior art on the trend and nature of future patenting. We also examine the ethnicities of inventors on herbal patents and find evidence of cross-border migration and knowledge transfer – most western patents are filed by scientists of Chinese or Indian ethnicities. Finally, we also examine 17 detailed case studies from 10 emerging markets and explore conditions under which rents from filing herbal patents are shared by the western firm and the indigenous community.
Return Migration and Geography of Innovation in MNEs: A Natural Experiment of On-the-job Learning of Knowledge Production by Local Workers Reporting to Return Migrants
I study whether return migrants facilitate knowledge production by local employees working for them at geographically distant R&D locations. Using unique personnel and patenting data for 1,315 employees at the Indian R&D center of a Fortune 500 technology firm, I exploit a natural experiment where the assignment of managers for newly hired college graduates is mandated by rigid HR rules and is uncorrelated to observable characteristics of the graduates. Given this assignment protocol, I find that local employees with returnee managers file disproportionately more US patents. I also find some evidence that return migrants act as a 'bridge' to transfer knowledge from the MNE headquarters to the local employees working for them.
Innovation and Invention;
Toward Resource Independence—Why State-Owned Entities Become Multinationals: An Empirical Study of India's Public R&D Laboratories
In this paper, we build on the standard resource dependence theory and its departure suggested by Vernon to offer a novel explanation for why state-owned entities (SOEs) might seek a global footprint and global cash flows: to achieve resource independence from other state actors. In the context of state-owned entities, the power-use hypothesis of standard resource dependence theory can be used to analyze the dependence of SOEs on other state actors, such as government ministries and government agencies that have ownership and control rights in the SOE. Building on Vernon, we argue that the SOE can break free from this power imbalance and establish resource independence from other state actors by becoming a multinational firm and/or by generating global cash flows. We leverage a natural experiment in India and outline both quantitative and qualitative evidence from 42 Indian state-owned laboratories to support this argument.
Charting Dynamic Trajectories: Multinational Firms in India
In this article, we provide a synthesizing framework that we call the "dynamic trajectories" framework to study the evolution of multinational enterprises (MNEs) in host countries over time. We argue that a change in the policy environment in a host country presents an MNE with two sets of interrelated decisions. First, the MNE has to decide whether to enter, exit, or stay in the host country at the onset of each policy epoch; second, conditional on the first choice, it has to decide on its local responsiveness strategy at the onset of each policy epoch. India, which experienced two policy shocks—shutting down to MNEs in 1970 and then opening up again in 1991—offers an interesting laboratory to explore the "dynamic trajectories" perspective. We collect and analyze a unique dataset of all entry and exit events for Fortune 50 and FTSE 50 firms (as of 1991) in India in the period from 1858 to 2013 and, additionally, we document detailed case studies of four MNEs (that arguably represent outliers in our sample).
Keywords: Multinational Firms and Management;
A 'Core Periphery' Framework to Navigate Emerging Market Governments—Qualitative Evidence from a Biotechnology Multinational
We build on the emerging literature of influence-based models to study how multinational firms can navigate host governments. Our "core-periphery" framework posits that the actions that an MNC takes with actors in what we call the "periphery"—comprised of state, quasi-state, and civil society actors—can lead to positive or negative influence with interconnected state actors in a "core." There are two mechanisms by which this can happen: engaging the periphery may either change the information set of the core or help align incentives of multiple core actors. Engaging the periphery might be particularly relevant in settings where the institutional framework is still emerging. We build a case study of a multinational firm in the biotechnology sector to illustrate how the core-periphery framework works in multiple emerging markets across institutional differences. The analysis is based on 32 interviews conducted with the CEO and other executives of Genzyme at the corporate headquarters in Cambridge, Massachusetts, and in subsidiaries in Brazil, China, Costa Rica, France, India, and the United States.
Keywords: Emerging Markets;
Multinational Firms and Management;
Business and Government Relations;
Power and Influence;
A Reexamination of Tunneling and Business Groups: New Data and New Methods
One of the most rigorous methodologies in the corporate governance literature uses firms' reactions to industry shocks to characterize the quality of governance. This methodology can produce the wrong answer unless one considers the ways firms compete. Because macro-level shocks reverberate differently at the firm level depending on whether a firm has a cost structure that requires significant adjustment, the quality of governance can only be elucidated accurately analyzing a firm's business strategy and their corporate governance. These differences can help one determine whether the fruits of a positive macro-level shock have been expropriated by insiders. Using the example of Indian firms, we show that an influential finding is reversed when these differences are considered. We further argue that the conventional wisdom about tunneling and business groups will need to be reformulated in light of the data, methodology, and findings presented here.
The Role of Firms in Fostering Within Country Migration: Evidence from a Natural Experiment in India
High ability individuals can be constrained from commensurate employment opportunities due to their geographic location. In the face of physical, informational and social barriers to migration, firms with nation-wide hiring practices can benefit from facilitating the migration of high ability individuals from low employment districts to regions with better employment opportunities. We exploit a natural experiment within an Indian technology firm where the pre-existence of a computer-generated talent allocation protocol allows us to isolate the relation between an employee's prior home town/village and subsequent performance within the firm. Using unique personnel data for entry level undergraduates and leveraging the fact that the assignment of an employee to one of many technology centers within the firm is uncorrelated to observable characteristics of the employee, we find that employees hired from low employment districts (remote employees) outperform their non-remote counterparts in the short term. They continue to outperform their non-remote counterparts in the long term once we control for the distance of migration. As a possible explanation of our result, we test for selection and find that employees hired from low employment districts outperform their non-remote counterparts in standardized verbal and logical tests at the recruitment stage. To explain why the firm might be more likely to select high ability individuals from remote districts, we additionally conduct a survey of randomly selected urban and rural colleges and document statistically significant differences in employment opportunities for rural and urban graduates. Our survey results also indicate that not every firm follows the policy of hiring from low-employment districts.
Keywords: Geographic Location;
Selection and Staffing;
Ex-ante Information Provision and Innovation: Natural Experiment of Herbal Patent Prior Art Adoption at the EPO and USPTO
We study how ex-ante information provision, in the form of codified prior art, affects innovation outcomes. Using a unique dataset of herbal patents filed on the United States Patent Office (USPTO) and European Patent Office (EPO) from 1977 to 2013, we exploit a natural experiment where the USPTO and EPO adopted a codified database of traditional herbal medicine prior art at different points in time. This database (the 'Traditional Knowledge Depository Library' or TKDL) was created by Indian state-owned R&D labs and provided the USPTO and EPO patent examiners with codified, searchable prior art on herbal formulations based on a translation of ancient Indian medicinal texts. We establish that the time lag of the USPTO adopting TKDL compared to the EPO was related to idiosyncratic differences in how the agreements were structured and negotiated, not differences in policy toward herbal patents at the USPTO and EPO. We find that the adoption of TKDL affects the level of herbal patent filing and grants. It also shifts the composition of patenting away from pure herbal formulations that are similar to prior art available in the ancient texts towards applications involving both herbs and synthetic compounds, which are more distant from the prior art and arguably less contestable. We also use unique data coded from patent image wrappers at the USPTO and validate the 'smoking gun' that prior art codification affects the search strategies of patent examiners.
Health Care and Treatment;
Agriculture and Agribusiness Industry;
Do Leaders Matter? Natural Experiment and Quantitative Case Study of Indian State Owned Laboratories
Our study is one of the first natural experiments around the role of leaders in the context of firms. Also while most prior natural experiments around leadership in the policy world have exploited the death of the leader, we exploit an alternate exogenous shock—rigid bureaucratic rules that constrain the appointment of leaders to 42 Indian public R&D labs with 12,500 employees. The bureaucratic rules ensure that the timing of leadership change is uncorrelated with observable or unobservable firm level characteristics. This enables us to circumvent the issues related to the use of manager fixed effects in the prior empirical literature. Efforts to incentivize individual employees to file and license patents did not meet with immediate success. However, patenting and licensing both increased once leaders at individual labs were replaced.
Bio-Piracy or Prospering Together? Fuzzy Set and Qualitative Analysis of Herbal Patenting by Firms
Since the 1990s, several Western firms have filed patents based on medicinal herbs from emerging markets, evoking protests from local stakeholders against 'bio-piracy'. We explore conditions under which firms and local stakeholders share rents from such patents. Our theoretical model builds on two distinct strategy literatures: firms appropriating rents from new technologies and firms managing stakeholders. We predict that a win-win outcome emerges when the patent strength is moderate and when local stakeholders form a coalition with larger national stakeholders to initiate litigation against the focal firm. We test our predictions using a two-pronged empirical strategy. Our empirical context relates to herbal patents from emerging markets and given that we have a small sample (N=17), we employ a fuzzy set QCA methodology. In addition, we develop four in-depth qualitative case studies to support our predictions.
Keywords: Rents from New Technology;
Fuzzy Set Analysis;
Qualitative Case Studies;
Health Care and Treatment;
Business and Stakeholder Relations;
Cross-Cultural and Cross-Border Issues;
Agriculture and Agribusiness Industry;
Microsoft in China and India, 1993-2007
Relates to Microsoft's expansion in China and India in the period 1993-2007 and the strategic issues faced by multinationals in emerging markets.
Multinational Firms and Management;
Information Technology Industry;
Microsoft in China and India, 1993-2007 (TN)
Teaching Note for .
Khanna, Tarun, and Prithwiraj Choudhury. "Microsoft in China and India, 1993-2007 (TN)." Harvard Business School Teaching Note 708-471, January 2008. View Details
Genzyme's CSR Dilemma: How to Play its HAND
Genzyme, a global biotechnology company, launches a program to develop therapies for neglected diseases (e.g., malaria, TB), giving away the intellectual property. This case focuses on the decision of which diseases, which partnerships, and which markets should management decide to fund. But the bigger issue is how this program, developed under the umbrella role Genzyme's corporate social responsibility, fits into its global competitive strategy.
Keywords: Global Strategy;
Health Care and Treatment;
Corporate Social Responsibility and Impact;
Partners and Partnerships;
Research and Development;
Professor Choudhury’s research is focused on innovation in the context of emerging markets and has two broad themes. The first, managing human capital within innovative firms, examines individual engineers, scientists, and R&D employees working in various emerging market R&D organizations (multinational R&D centers, domestic firms, and state-owned R&D labs). Using personnel data from global entities and natural experiments within firms, Professor Choudhury studies how return migration, within-country migration, intrafirm mobility, and leadership change affect innovation outcomes and the productivity of individuals. The second theme, interactions between multinational firms and local entities in emerging markets, offers a view of how the relationship between multinational firms and their host countries in emerging markets can evolve dynamically over time when the host country changes its policies to be either more or less welcoming. Different corporate strategies, particularly regarding local responsiveness, lead to different “dynamic trajectories.” Professor Choudhury has also developed a “core-periphery” perspective on the way multinational firms interact with state and civil society actors in these markets. Engaging peripheral actors can lead to positive or negative influence with the state actors at the core, and may be particularly relevant in settings where institutional frameworks are still emerging.
Return Migration and Replicating Innovation Capabilities in Multinationals: Results from an Intrafirm Quasi-Natural Experiment
Using theoretical arguments on grafting capabilities and mentoring, I argue that the transfer of personnel across locations helps multinational firms replicate sticky capabilities related to patenting. I test this using unique personnel data for 1,315 inventors at a Fortune 50 multinational R&D center in India. I find that return migrants have both a direct effect on subsidiary patenting and an indirect effect through their direct reports. I exploit a preexisting natural experiment based on rigid HR rules where the assignment of managers for fresh college graduates is uncorrelated to observable characteristics of the direct reports.
Do Leaders Matter? Evidence from Natural Experiment at Indian State Owned Laboratories
Our study is one of the first natural experiments around the role of leaders in the context of firms. Also while prior natural experiments around leadership in the policy world have exploited the death of the leader, we exploit an alternate exogenous shock – rigid bureaucratic rules that constraint the appointment of leaders to 42 Indian public R&D labs with 12,500 employees. The bureaucratic rules ensure that the timing of leadership change is uncorrelated with observable or unobservable firm level characteristics. This enables us to circumvent the issues related to the use of manager fixed effects in the prior empirical literature. Efforts to incentivize individual employees to file and license patents did not meet with immediate success. However patenting and licensing both increased once leaders at individual labs were replaced.
Multinational Firms and Innovation in India, 1970-2013
Over the past several decades, a rich literature has emerged on multinational (MNC) firms and their relationship with host countries. On one hand, there are models such as the sovereignty at bay model (Vernon, 1971) and the neoclassical welfare economics based bargaining model (Caves, 1996) that describe a conflictual relationship between the host country and the MNC firm. On the other hand, there are models that outline cooperation and dependency between the host country and the multinational firm (Bamet and Muller, 1974). Missing from this literature is a historical analysis of how this relationship between multinational firms and the host country can evolve when the host country moves from a policy regime that is unwelcoming to MNCs to a policy regime that is more welcoming of MNCs. For instance, it is not clear ex ante, whether such a policy switch would lead to MNCs across the board to invest in host country initiatives such as investing in R&D. India, which experienced two exogenous policy shocks, shutting down to MNCs in 1977 prior to opening up in 1991 offers the perfect laboratory to conduct such historical analysis.
Firms as Catalyst of Within Country Migration: Evidence from a Randomized Intra-firm Experiment in India
In the face of rapid growth in many emerging markets, technology firms face severe labor shortages. Yet there is often simultaneously a large under-utilized base of talent, disenfranchised from the mainstream for physical, social or informational reasons. We study the effort of one major information technology multinational, “INDTECH”, with its production centers in India, to bridge the barriers that normally prevent hiring from remote areas and from disadvantaged social groups. We also exploit the pre-existence of a talent allocation protocol at INDTECH. The firm randomizes entering talent across the available projects in the 10 development centers it runs across India, so as to ensure that none of its typically large global clients complains about not having access to INDTECHs best software engineers. This randomization helps us evade econometric problems that plague studies that measure employee productivity within firms and helps us control for endogeneity concerns. Using hand collected data on personnel records and migration patterns for entry level employees recruited by INDTECH in 2007 from over 250 educational institutions all across India, we find that employees from remote locations outperform talent sourced from mainstream locations provided the distance of migration is less than 500 miles. Further, the non-mainstream talent appears disproportionately to use the firm as a platform for further advanced education. Also, talent from underrepresented social strata outperforms that hired from mainstream social communities. However INDTECH does not help bridge the gender barrier, that is, women hires are not likely to perform better than their male counterparts.
Codifying Prior Art for Patent System Reform: The Case of Chinese and Indian Herbal Patents
In this paper we use novel data of Chinese and Indian herbal patents and exploit the staggered introduction on the U.S. patent office (USPTO) and the European patent office (EPO) of a new CD codifying prior art, to study how ex ante information provision affects patent filing behavior. Herbal patent filing by western entities peaked in the 1990s. Several of these herbal patents were later invalidated in courts based on evidence of prior-art existing in Chinese and Indian traditional medicinal texts. We study the effect of codifying and digitizing thousands of years of traditional medicine text and making patent examiners in the USPTO and EPO systematically aware of such prior art. We find that this has an effect on both the trend of herbal patent filing and the type of herbal patents being filed. In other words, codifying prior art affects patent filing behavior and has a social welfare implication by avoiding costly litigation.
A ‘Core-periphery’ Framework to Navigate Emerging Market Governments – Qualitative Evidence from a Biotechnology Multinational
We build on the emerging literature of influence based models to study how multinational firms can navigate host governments. Our ‘core-periphery’ framework posits that the actions that an MNC takes with actors in what we call the ‘periphery’ – comprised of state, quasi-state and civil society actors, can lead to positive or negative influence with interconnected state actors in a ‘core’. There are two mechanisms by which this can happen - engaging the periphery may either change the information set of the core or help align incentives of multiple core actors. Engaging the periphery might be particularly relevant in settings where the institutional framework is still emerging. We build a case study of a multinational firm in the biotechnology sector to illustrate how the core-periphery framework works in multiple emerging markets across institutional differences. The analysis is based on 32 interviews conducted with the CEO and other executives of Genzyme at the corporate headquarters in Cambridge MA and in the following subsidiaries – Brazil, China, Costa Rica, France, India and the United States.
Awards & Honors
Winner of the 2011 Richard N. Farmer Award for Best Dissertation from the Academy of International Business for his dissertation, “Innovation in Emerging Markets.”
Awarded the 2010 Haynes Prize for the Most Promising International Business Scholar, Academy of International Business, for his paper “Knowledge Creation in Multinationals” (Academy of Management Best Papers Proceedings, 2010). This paper was also a finalist for the 2010 Douglas Nigh Memorial Best Paper Award and the 2010 IMD Skolkovo Best Paper on Emerging Markets Award, both from the Academy of Management, International Management Division.
Winner of the 2010 Wyss Award for Excellence in Doctoral Research from Harvard Business School.
Winner of the 2009 Best Doctoral Dissertation Proposal Award at the Academy of Management Doctoral Consortium, International Management Division.
Winner of the 2009 AIB/Sheth Dissertation Proposal Award at the Academy of International Business Doctoral Consortium.