Management and Strategy - HKU Business School

14 June

Gatekeeping in research: Evidence from economics journals

SPEAKER

Prof. Ivan Png
Distinguished Professor in Strategy & Policy, Economics
National University of Singapore

ABSTRACT

How does research in economics progress? Is the agenda directed by senior scholars at top universities or does it emerge organically from competition in the marketplace of ideas? Previous research showed that top-five journals were more likely to publish work of scholars connected with journal editors. Here, we examine one potential explanation – that editors were more likely to publish papers that were related to their own research. Using the Pachinko Allocation Method, we classify over 54,600 abstracts of articles published in the top-five journals, next-five (EER, EJ, IER, JEEA and REStat), or AEA and Econometric Society journals and all other articles published by their editors between 1986-2019 into 35 topics. The top-five published 62% more articles in editors’ own topics. The empirical relation might be due to editors attracting more submissions on their own topics (“editorial activism”) or editors favouring submissions on their own topics (“editorial favouritism”). Estimates so far rule out editorial activism.

13 May

Market Size and Trade in Medical Services

SPEAKER

Dr. Joshua D. Gottlieb
Associate Professor
Harris School of Public Policy
University of Chicago

ABSTRACT

We quantify the roles of increasing returns and trade costs in medical services. Using data on millions of Medicare claims, we document that “imported” medical procedures—defined as a patient’s consumption of a service produced by a medical provider in a different region—constitute about one-fifth of US healthcare consumption. Larger markets specialize in the production of less common procedures, and these procedures are more traded between regions. These patterns reflect economies of scale: larger regions produce higher-quality care because they serve more patients. The revealed-preference estimates of quality have a scale elasticity of 0.77 and are positively related to external measures of quality of care. We use our estimates to evaluate the proximity-concentration tradeoff associated with various policy options for improving access to care.

29 April

Explaining the Rise of Women Managers: Changing Managerial Roles

SPEAKER

Dr. Letian Zhang
Assistant Professor of Business Administration
Harvard Business School

ABSTRACT

This paper argues that the changing role expectation of managers could help explain the rise of women managers in the United States. Traditionally, a major impediment for women’s advancement into management has been role incongruity: the communal stereotype ascribed to women is inconsistent with the agentic expectation for ideal managers. To explain women’s recent progress into middle management, this paper underscores the changing expectations for middle managers. Instead of commanding and controlling their employees, today’s middle managers are increasingly expected to be collaborative and empathetic, qualities that align more closely with the communal stereotype about women. Through analyzing millions of managerial job ads and detailed firm demographic data, we find that managerial expectations have become increasingly collaborative and that firms expecting more collaborative managers have a much higher proportion of women in management. We conducted several placebo tests to account for endogeneity concerns, replicated the key conclusions using a separate individual-level dataset, and conducted additional survey and experiment to identify mechanisms. Together, these findings suggest that the changing expectations for managers contributed to women’s rise into middle management, indicating that women’s advancement into traditionally authoritative positions remains a challenge.

21 April

Riding the J-Curve: Loss Tolerance and US Venture Capital

SPEAKER

Prof. Thomas Hellmann
DP World Professor of Entrepreneurship and Innovation
Saïd Business School
Oxford University

ABSTRACT

Policymakers across the world like to encourage innovation and high impact start-ups to spur growth. Initiatives include tempting established US venture capital firms to invest locally, betting on them to bring in capital and expertise. We document another benefit: US venture capitalists have a distinct investment style that is more tolerant of financial losses when investing abroad compared to non-US venture capital firms. We find that companies funded by US venture capitalists already have higher cumulative losses at the time of funding, and then incur further cumulative losses. They are more likely to receive subsequent funding, which is necessary to sustain their higher financial losses. Ultimately, they have a higher likelihood of a successful exit, suggesting that incurring financial losses was worthwhile. We also find that companies backed by US venture capitalists rely more on equity financing rather than debt financing, consistent with equity financing being better suited for loss making firms.

06 April

Stigmatization in The Technology Market: The Impact of Patent Invalidation on Subsequent Patent Sales

SPEAKER

Prof. Yan Anthea Zhang
Fayez Sarofim Vanguard Professor of Management
Jesse H. Jones Graduate School of Business
Rice University

ABSTRACT

Granted patents do not necessarily warrant that the property rights granted are correct, and some patents did get invalidated later. However, the impact of such rare yet negative events is overlooked in the existing innovation literature. We propose that patent invalidation may serve as a negative signal of the quality of the patent owner’s other still-valid patents and reduce the patent owner’s opportunities to monetize these patents. In support to this argument, we find that patent invalidation reduces the likelihood of selling valid patents in the patent owner’s portfolio. Moreover, we find that the harm caused by patent invalidation is stronger if the patent is in the same tech class as the invalid patent and the negative impact of patent invalidation on patent sales will be weaker if the firm has more experience in patent sales and the firm is a foreign firm as opposed to a domestic one.

31 March

The Organizational Structure of Development and Firm Innovation

SPEAKER

Prof. Paola Criscuolo
Professor of Innovation Management
Business School
Imperial College London

Abstract

This paper explores the impact of centralization or decentralization of development activities on a firm’s development and commercialization outcomes. We hypothesize that although the centralization/decentralization of development and of research are afflicted by the same underlying trade-offs, these trade-offs are manifested in qualitatively distinct ways in development vs. research. Specifically, whereas centralization of research offers a primary benefit of enhancing the breadth of knowledge recombination (with a concomitant reduction in BU-specific knowledge creation), centralization of development offers a primary benefit of reducing duplication of development effort. The concomitant cost is that this satisficing version will not be ideal for any given business unit; on the margin, this leads to lower rates of commercialization of development’s outputs. To test these hypotheses, we exploit a unique dataset that is composed of all invention disclosures, including those for which it chose not to seek patent protection, submitted by R&D personnel at a global ICT company where the organization structure governing development activities shifted from a decentralized structure to a centralized one. Exploiting this shift in the organization of development activities, we examine subsequent changes in development outcomes. We find support for our hypotheses: The shift from decentralized to centralized development is associated with 1) reduced duplication across inventions by development personnel, and 2) reduced likelihood that an invention is commercialized.

09 March

Climbing the ranks: Knowledge diversification, promotions and managerial skills

SPEAKER

Dr. Shinjae Won
Assistant Professor
School of Labor and Employment Relations
University of Illinois at Urbana-Champaign

ABSTRACT

This paper examines the invention histories and careers of 1319 inventors from the twenty most inventive firms in the pharmaceutical industry in the United States to study which scientists firms promote through the ranks. We propose that the association of diversification in past knowledge with promotions varies non-uniformly with rank. Scientists acquire managerial skills in the process of acquiring diversified knowledge through building superior coordination skills, having better ability to leverage relational capital, and an ability to relate to a wider scope of projects. Diversification is positively associated with promotion to the first managerial position, and thereafter with promotions within subsequent managerial roles. We further show that the association of diversification with promotions is positively moderated by rank, and that business education substitutes for diversified knowledge.

01 March

Quality Uncertainty and the Performance Benefits of Social Ties in Financial Markets

SPEAKER

Dr. Pavel I. Zhelyazkov
Assistant Professor of Management
Hong Kong University of Science and Technology

ABSTRACT

Extensive research has demonstrated that organizational actors draw on their social ties in identifying future investment opportunities but has paid less attention to when and how such ties enable superior investment selection. Proceeding from the assumption that any such selection benefits derive from privileged access to private information, we hypothesize that interorganizational ties have their greater effects when the investor faces the highest level of quality uncertainty vis-à-vis the prospective target. We propose three sources of such quality uncertainty: i) lack of investment experience of the evaluator required to accurately assess targets; ii) geographic distance to prospective opportunities, which hinders due diligence processes; and iii) limited activity of the target, which makes it harder to evaluate its track record. We find support for our predictions in a longitudinal study of institutional investors (limited partners) investing in private equity funds. Our study demonstrates the presence of selection benefits of interorganizational ties in a novel empirical context, as well as previously unexplored boundary conditions to their effectiveness.

16 February

Singing Your Own Praises: Digital Cultural Production and Gender Inequality

SPEAKER

Dr. Abhishek Nagaraj
Assistant Professor in the Management and Organizations
Haas School of Business
University of California Berkeley

ABSTRACT

New technologies are constantly transforming how culture is produced. Production-of-culture scholars have long posited that technological change influences the diversity of content in cultural fields. But how does such change affect demographic diversity among producers of culture? We study the advent of digital recording technologies in the production of music, and ask whether their adoption has shifted the allocation of artistic gigs between male and female artists. If so, how? Specifically, we argue that digital cultural production has the potential to increase gender inequality. Digitization reduces barriers to entry, but also necessitates greater self-promotion on the part of artists to stand out in a crowded labor market. Insofar as male artists can promote themselves more readily than can female artists, digital cultural production inadvertently increases the allocation of artistic gigs to male artists, though this self-promotion deficit can be mitigated when women benefit from audience endorsements. We develop and test this theory using in-depth interviews and a novel quantitative dataset relating to the labor market for studio singers in the Indian Hindi film industry (“Bollywood”). This paper contributes to the study of culture, technology, labor markets and gender, and explores the implications of technological change for women in the arts.

10 February

The Value of Information in Competitive Markets: The Impact of Big Data on Small and Medium Enterprises

SPEAKER

Dr. Ricard Gil
Associate Professor
The Stephen J.R. Smith School of Business
Queen’s University

ABSTRACT

In this paper, we empirically investigate how the performance and decision-making of small and medium-size enterprises (SMEs) change when gaining access to strategically valuable market information. To do so, we evaluate the impact of an unprecedented Big Data information-sharing service diffused at zero cost by a large European bank among its SMEs customers. Adopting firms had monthly access to reports elaborated by the bank with rich information about each firm’s clientele portfolio and that of its competitors. Using first-differences, we find adoption is associated with a 4.5% increase in establishment revenue, whereas IV estimation results show that adoption causally increases revenue by 9% for those establishments whose adoption decision is most strongly affected by the instrument. The main mechanism driving our result is that the new information prompted adopting establishments to target existing, yet unexploited, business opportunities. More specifically, we find adopting establishments increase their sales to underrepresented gender-age customer groups in their customer portfolio prior to adoption. Our evidence also suggests that adopting establishments shift sales between weekly peak and off-peak times. Because SMEs obtain substantial returns from information access, our findings suggest managerial inattention and high adoption costs are key factors deterring small firms from investing in resources to acquire and analyze market information.