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Accounting for Product Impact in the Water Utilities Industry

by George Serafeim and Katie Trinh

Using a framework for measuring and monitoring product impact in a systematic way, this paper compares two competitor companies in the water utilities industry. Results demonstrate the potential for product impact measurement to inform strategic decision-making.

Time Dependency, Data Flow, and Competitive Advantage

by Ehsan Valavi, Joel Hestness, Marco Iansiti, Newsha Ardalani, Feng Zhu, and Karim R. Lakhani

The perishability of data has strategic implications for businesses that provide data-driven products and services. This paper illustrates how different business areas might differ with respect to the rate of decay in data value and the importance of data flow in their operations.

Accounting for Product Impact in the Telecommunications Industry

by George Serafeim and Katie Trinh

A product impact framework is a systematic methodology applicable to different companies across a wide range of industries. This study examines the telecommunications industry, estimating the value of a product’s reach, accessibility, quality, optionality, environmental use emissions, and end-of-life recyclability.

The Emergence of Mafia-like Business Systems in China

by Meg Rithmire and Hao Chen

This study sheds light on the political pathology of fraudulent, illegal, and corrupt business practices. Features of the Chinese system—including regulatory gaps, a lack of formal means of property protection, and pervasive uncertainty—seem to facilitate the rise of mafia systems.

Cognitive Biases: Mistakes or Missing Stakes?

by Benjamin Enke, Uri Gneezy, Brian Hall, David Martin, Vadim Nelidov, Theo Offerman, and Jeroen van de Ven

This study of field and lab data strongly suggests that people do not necessarily make better decisions when the stakes are very high. Results highlight the potential economic consequences of cognitive biases.

Deregulation, Market Power, and Prices: Evidence from the Electricity Sector

by Alexander MacKay and Ignacia Mercadal

Efforts to deregulate the US electricity sector beginning in the 1990s included market-based prices and restructuring measures to introduce competition. This paper argues that electricity prices increased after deregulation because of the presence of market power.

Population Interference in Panel Experiments

by Iavor I. Bojinov, Kevin Wu Han, and Guillaume Basse

In panel experiments, units are exposed to different interventions over time. This article introduces a unifying framework for studying panel experiments with population interference, in which a treatment assigned to one experimental unit affects another experimental unit's outcome. Findings have implications for fields as diverse as education, economics, and public health.

The World Management Survey at 18: Lessons and the Way Forward

by Daniela Scur, Raffaella Sadun, John Van Reenen, Renata Lemos, and Nicholas Bloom

With a dataset of 13,000 firms and 4,000 schools and hospitals spanning more than 35 countries, the World Management Survey provides a systematic measure of management practices used in organizations. This paper gives an overview of lessons learned and a management policy toolkit for policymakers.

Currency Hedging in Emerging Markets: Managing Cash Flow Exposure

by Laura Alfaro, Mauricio Calani, and Liliana Varela

Economies with less liquid foreign exchange derivative markets offer firms fewer options to hedge their currency risk. Given the limitations of natural hedging, these firms are more exposed to systemic risk.

Kidney Exchange: An Operations Perspective

by Itai Ashlagi and Alvin E. Roth

Kidney exchange has become a standard form of transplantation in the United States and a few other countries in part because of exchange process improvements. However, much more needs to be done: There are still many more patients in need of transplants than can be saved.

Whose Job Is It Anyway? Co-Ethnic Hiring in New US Ventures

by Sari Pekkala Kerr and William R. Kerr

The impact of immigration has been particularly sharp in entrepreneurship, yet there is remarkably little evidence about how immigration in the workplace connects to the creation and scaling of new firms. The economic consequences of greater workplace and entrepreneurial diversity deserve closer attention.

Assessing the Strength of Network Effects in Social Network Platforms

by Marco Iansiti

Network-specific traits, such as the degree of clustering and the prevalence of multihoming, influence the strength and competitive impact of network effects. However, network size alone is often misleading, and network effects should be examined on a case-by-case basis.

Consuming Contests: Outcome Uncertainty and Spectator Demand for Contest-based Entertainment

by Patrick J. Ferguson and Karim R. Lakhani

Analysis of Australian Football League data shows that the uncertainty of game outcomes has a large, positive causal effect on stadium attendance. These findings show how competitive balance is important for contest designers in general and sports leagues in particular.

Fairness or Control: What Determines Elected Local Leaders’ Support for Hosting Refugees in Their Community?

by Kristin Fabbe, Eleni Kyrkopoulou, Konstantinos Matakos, and Asli Unan

Local politicians are not adamantly opposed to setting up host sites for refugees in their municipalities. However, they want a fair process to ensure that interaction between refugees and residents is limited, gradual, and mediated. Most importantly, local politicians want to control those interactions.

The Health Costs of Cost-Sharing

by Amitabh Chandra, Evan Flack, and Ziad Obermeyer

Small increases in cost cause patients to reduce their use of drugs with major benefits, ultimately causing their death. Since patient cost-sharing introduces large and deadly distortions into the cost-benefit calculus, payers should evaluate the merits of policies in light of their impact on health, not just on health care costs.

Real Credit Cycles

by Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer, and Stephen J. Terry

The financial crisis of 2008 renewed economists’ interest in financial fragility, specifically understanding its origins. This paper shows how market participants’ expectations can be part of standard macroeconomic models and significantly improve their explanatory power.

Stock Price Reactions to ESG News: The Role of ESG Ratings and Disagreement

by George Serafeim and Aaron Yoon

Company performance evaluations have included sell-side analyst forecasts, recommendations, and credit ratings, but a newer set has emerged: environmental, social, and governance (ESG) ratings. This study finds that ESG ratings are useful for predicting future ESG news, but their predictive ability diminishes for firms with large disagreement between raters.

Connecting Expected Stock Returns to Accounting Valuation Multiples: A Primer

by Akash Chattopadhyay, Matthew R. Lyle, and Charles C.Y. Wang

This paper introduces a framework to investors and researchers interested in accounting-based valuation. The framework connects expected stock returns to accounting valuation anchors. It can be generalized to evaluate an enterprise's expected returns, and can be adapted to correct for the use of stale accounting data.

Measuring Employment Impact: Applications and Cases

by Katie Panella and George Serafeim

Employment impact-weighted accounting statements quantify the positive and negative effects of firm practices for employees and the broader labor community. This analysis of companies in different sectors shows how these statements are beneficial both at an aggregate and more specific level.

Private and Social Returns to R&D: Drug Development and Demographics

by Efraim Benmelech, Janice Eberly, Dimitris Papanikolaou, and Joshua Krieger

Research and development (R&D) by pharmaceutical firms focuses disproportionately on medical conditions afflicting the elderly. The proportion of R&D spending targeting older age groups is increasing over time. Even though these investments in R&D prolong life expectancy and improve quality of life, they have little effect on measured productivity and output growth.