From Russia with Love: The Impact of Relocated Firms on Incumbent Survival
We identify the impact of local firm concentration on incumbent performance with a quasi-natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources.
Keeping Up with the Quants: Your Guide to Understanding and Using Analytics
Managers today need to be able to analyze and make sense of data. They need to be conversant with analytical technology and methods and to make decisions on quantitative analysis. This book offers a variety of practical tools and examples to improve a manager's understanding of business analytics, and to enhance their thinking and decision processes.
Davenport, Thomas H., and Jinho Kim. Keeping Up with the Quants: Your Guide to Understanding and Using Analytics
. Harvard Business Review Press, 2013.
Hybrid Innovation in Meiji Japan
Japan's hybrid innovation system during the Meiji era of technological modernization provides a useful laboratory for examining the effectiveness of complementary mechanisms to patents. Patents were introduced in 1885, and by 1911, 1.2 million mostly non-pecuniary prizes were awarded at 8,503 competitions. Prizes provided a strong boost to patent outcomes, especially in less developed prefectures, and they also induced large spillovers of technical knowledge in prefectures adjacent to those with prizes, relative to distant control prefectures without prizes. Linking competition expenditures with the expected market value of patents induced by the prizes permits a cost-benefit assessment of the prize competitions to be made.
Cost vs Benefits;
Factories, Labs, and Plants;
An fMRI Investigation of Racial Paralysis
We explore the existence and underlying neural mechanism of a new norm endorsed by both black and white Americans for managing interracial interactions: "racial paralysis," the tendency to opt out of decisions involving members of different races. We show that people are more willing to make choices—Who is more intelligent? Who is more polite?—between two white individuals (same-race decisions) than between a white and a black individual (cross-race decisions), a tendency that was enhanced when judgments involved traits related to black stereotypes. We use fMRI to examine the mechanisms underlying racial paralysis, revealing greater recruitment of brain regions implicated in socially appropriate behavior (VMPFC), conflict detection (ACC), deliberative processing (DLPFC), and inhibition (VLPFC). We discuss the impact of racial paralysis on the quality of interracial relations.
Keywords: Decision Choices and Conditions;
Conflict and Resolution;
Norton, Michael I., Malia F. Mason, Joseph A. Vandello, Andrew Biga, and Rebecca Dyer. "An fMRI Investigation of Racial Paralysis
." Social Cognitive and Affective Neuroscience
8, no. 4 (April 2013): 387–393.
Language Matters: Status Loss & Achieved Status Distinctions in Global Organizations
How workers experience and express status loss in organizations has received little scholarly attention. I conducted a qualitative study of a French high-tech company that had instituted English as a lingua franca, or common language, as a context for examining this question. Results indicate that nonnative English-speaking employees experienced status loss regardless of their English fluency level. Yet variability in their self-assessed fluency—an achieved status marker—was associated with differences in language performance anxiety and job insecurity in a non-linear fashion: those who believed they had medium level fluency were the most anxious compared to their low and high fluency co-workers. In almost all cases where they differed, self-assessed rather than objective fluency determined how speakers explained their feelings and actions. Although nonnative speakers shared a common attitude of resentment and distrust toward their native English-speaking co-workers, their behavioral responses—assertion, inhibition, or learning—to encounters with native speakers differed based on their self-perceived fluencies. No status differences materialized among nonnative speakers as a function of diverse linguistic and national backgrounds. I discuss the theoretical and practical implications of these findings for status, achieved characteristics, and language in organizations.
Status and Position;
Gendered Races: Implications for Interracial Marriage, Leadership Selection, and Athletic Participation
Six studies explored the overlap between racial and gender stereotypes and the consequences of this overlap for interracial dating, leadership selection, and athletic participation. Two initial studies, utilizing explicit and implicit measures, captured the stereotype content of different racial groups: the Asian stereotype was seen as more feminine whereas the Black stereotype more masculine compared to the White stereotype. Study 3 found that preferences for masculinity versus femininity mediated White participants' attraction to Blacks relative to Asians. Analysis of the 2000 United States Census replicated this pattern with interracial marriages. In Study 5, Blacks were more likely and Asians less likely to be selected for a masculine leadership position compared to Whites. Study 6 analyzed the NCAA Student-Athlete Ethnicity Report and found Blacks were more heavily represented in masculine versus feminine sports relative to Asians. These studies demonstrate that the association between racial and gender stereotypes has important real-world consequences.
Salience in Quality Disclosure: Evidence from the U.S. News College Rankings
How do rankings affect demand? This paper investigates the impact of college rankings, and the visibility of those rankings, on students' application decisions. Using natural experiments from U.S. News and World Report College Rankings, we present two main findings. First, we identify a causal impact of rankings on application decisions. When explicit rankings of colleges are published in U.S. News, a one-rank improvement leads to a 1-percentage-point increase in the number of applications to that college. Second, we show that the response to the information represented in rankings depends on the way in which that information is presented. Rankings have no effect on application decisions when colleges are listed alphabetically, even when readers are provided data on college quality and the methodology used to calculate rankings. This finding provides evidence that the salience of information is a central determinant of a firm's demand function, even for purchases as large as college attendance.
Keywords: Rank and Position;
Demand and Consumers;
Business and the Public Good: Ethics in Action
Paine, Lynn S. "Business and the Public Good: Ethics in Action." University of Arizona, Tucson, AZ, March 18, 2013.
Monitoring and the Portability of Soft Information
We study the portability of soft information in a decentralized financial institution. Theories from a variety of literatures suggest that difficulties in capturing, storing, and communicating soft information can inhibit its portability over time and across individuals within the organization. Using unique data on lending decisions made by employees in a highly decentralized financial services organization, we show that a monitoring system which captures soft information for vertical communication (to superiors) purposes also facilitates the horizontal communication of soft information (across employees) for decision-making purposes. Contrary to prevailing views on the limited portability of soft information, our results provide evidence that the "stock" of soft information accumulated in this system has persistent effects on the lending decisions of employees. We show that employees rely on this information to increase access to credit for borrowers, provide more favorable pricing terms, and reduce the ex post risk of their lending decisions. These effects remain even when this information was acquired by employees other than the decision-maker, and they are not diminished by the physical separation of employees working in different business units.
Institutional Access and Failure: Colonial Legal Systems and Persistent Institutional Inadequacy in Tropical Africa
Duggan, Catherine S. M. "Institutional Access and Failure: Colonial Legal Systems and Persistent Institutional Inadequacy in Tropical Africa." Working Paper.