First Look

Abstract—The global food system is the largest segment of the world's economy. As agribusiness-studies pioneer Ray Goldberg suggests, it is also the largest health system on the planet. And it is changing fast. Its size and importance to human, environmental, and economic health means that no system is viewed with as much suspicion by so many people around the globe. Changing societal expectations and scientific and medical advances have made the drivers of the food system—the world's food citizens—realize they must take more responsibility for society's nutritional needs, economic development, and the health of the environment. Goldberg argues that the traditionally commodity-oriented, bargaining relationship between segments of the food system has become win-win, collaborative, and characterized by public and private partnerships. Those who are responding to society's needs are succeeding; those who are not are losing out. The food system's greatest growth area is the developing world, where millions of small-scale producers, workers, and impoverished consumers need help to become part of the commercial food system. In this book, Ray Goldberg interviews the change makers of today's food system: leaders and constructive critics in government, private industry, nonprofits, and academia who provide a panoramic and in-depth look at a revolution in progress.

Publisher's link: https://www.hbs.edu/faculty/Pages/item.aspx?num=55344

Abstract—In this paper, we study the effects of immigration on natives’ marriage, fertility, and family formation across U.S. cities between 1910 and 1930. Instrumenting immigrants’ location decision by interacting national changes in migration flows across ethnic groups with pre-existing immigrants’ enclaves across U.S. cities, we find that immigration raised marriage rates and the probability of having children for young native men and women. We show that these effects were driven by the large and positive impact of immigration on native men’s employment and occupational standing, which increased the supply of "marriageable men." We also explore alternative mechanisms—changes in sex ratios, natives’ cultural responses, and displacement effects of immigrants on female employment—and provide evidence that none of them can account for a quantitatively relevant fraction of our results.

Download working paper: https://www.hbs.edu/faculty/Pages/item.aspx?num=54796

Abstract—We examine two episodes of strategic interaction in the U.K. betting industry: (i) Betfair (an entrant multi-sided platform or MSP) vs. Flutter (also an MSP), and (ii) Betfair vs. traditional bookmakers. We find that although Betfair was an underfunded second mover in the betting exchange space, it was able to attract punters at a much faster rate than the better-funded first mover, Flutter. Moreover, while Betfair and traditional bookmakers competed aggressively for market share, they also developed a highly complementary relationship that favored all parties. We discuss implications for research in the economics and management of MSPs. Specifically, we argue that the literature would benefit from work that endogenizes platform design and that considers the possible competitive and cooperative interactions between the business models of traditional incumbents and those of potential innovative MSP entrants.

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Abstract—This working paper highlights the benefits that rigorous use of oral history can offer to research on the contemporary business history of emerging markets. Oral history can help fill some of the major information voids arising from the absence of a strong tradition of corporate archives in most countries in Africa, Asia, and Latin America. Oral history also permits a level of nuance that is hard to obtain even if written documents exist and are accessible in corporate and governmental archives. Oral histories can provide insights into why events did not occur as well as why companies chose certain industries over others, including wishing to avoid sectors where there was extensive government interference. Oral history can shed light on hypersensitive topics, such as corruption, which are rarely formally documented. While the methodological challenges of oral history are considerable and fully acknowledged, oral history can still be seen as a critical source of data on opinions, voices, and judgements on events in which there was often silence in written records.

Download working paper: https://www.hbs.edu/faculty/Pages/item.aspx?num=55332

Abstract—We propose a new measure of the economy’s risk appetite based on the valuation of volatile stocks. Unlike proxies for risk appetite derived from aggregates, our measure is strongly correlated with safe asset prices and future economic activity. When our measure is high, safe bonds fall in value and risky assets rally, forecasting a boom in investment. Risk appetite is closely linked to investors’ expectations of future risk and rises following positive macroeconomic outcomes. Periods of elevated risk appetite are predictably followed by upward revisions in expectations of risk, suggesting that these expectations may not be rational.

In summer 2017, Victor Santos, CEO of AirFox, considered whether to pivot his startup towards a new product built with blockchain—a quickly growing technology at the time. AirFox was an early stage startup that sold Software-as-a-Service (SaaS) to small telecom companies. AirFox was generating revenue and had a pipeline of interested customers, but it was running low on cash. In addition, Santos was finding it difficult to secure further venture capital investment. In the meantime, blockchain protocols were growing in popularity in technology circles and many blockchain projects were securing investment via Initial Coin Offerings (ICOs). Santos and his team brainstormed a new business, which would launch a new blockchain currency to facilitate financial services for unbanked and underbanked customers in emerging markets via their smartphone. Santos had to decide whether to go forward with the new plan despite regulatory risk, execution risk, and vocal opposition from some employees and investors.

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In recent years, the twin software development methodologies of continuous delivery and continuous deployment have risen to prominence in the start-up world and beyond. These methods have enabled technology companies large and small to accelerate their product development pipelines and reshape their relationships with customers. Drawing on academic research and interviews with practitioners, this note explores the evolution of iterative approaches to software development, describes the mechanics of continuous development, and assesses the business benefits and challenges of rapid software testing and release.

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This case describes the career of the iconic French fashion designer Coco Chanel who created a transformational business during the first half of the 20th century. Beginning in her early adulthood, Chanel leveraged relationships with acquaintances, friends, and romantic partners to build her fashion business and legendary luxury brand based on understated elegance. Chanel’s famous “little black dress” was accompanied by many other innovations including the use of jersey as material for daytime clothing and her development of the Chanel No. 5 perfume. The case pays close attention to the importance of Chanel’s networks among the cultural elite and European high society. It explores how she embraced the rise of Anti-Semitism among many members of the upper class at that time. During World War II, Chanel lived in the Ritz Hotel in Paris in occupied France, where she entered into a romantic relationship with a high-ranking German intelligence officer. Subsequently, Chanel herself became an intelligence operative for the Nazis. The case ends with Chanel in Switzerland in 1945 after she departed France following the Liberation of Paris by Allied forces. This case can be used to explore multiple issues including creating and building an iconic fashion brand, entrepreneurship, and ethical responsibility of business.

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In 2016, Bruce Wayne, Managing Director of Energy Finance Corporation (EFC), was refining the Investment/Credit Committee materials for the development of up to 10 power generating plants in Argentina. As a subsidiary of the much larger International Conglomerate Corporation (ICC), EFC had to convince ICC’s Investment/Credit Committee to provide capital despite the many risks associated with investing in Argentina. Due to Argentina’s vast energy resources, its modern political history has been deeply intertwined with its “energy” history. In its many military coups and political uprisings, typically each government used artificially low energy prices to keep the population subdued and the revenues from Yacimientos Petroliferos Fiscales (YPF) to finance these subsidies or worse to line their pockets. Many of the interventionist measures that Argentina's governments imposed on the energy sector, such as price controls and at the most extreme nationalization, made it nearly impossible for private sector energy players to succeed or for the public sector to invest in its development. After severe blackouts in the summer of 2014, many Argentines in the country's most populous cities were outraged and went to the streets in protest. These blackouts were specifically due to the increased power usage for air conditioning in the summer months but were more generally caused by the removal of subsidies for power companies and a dearth of public and private infrastructure investment. Into this environment, President Macri was elected and he made energy reform one of the key pillars of his administration. Furthermore, he invited the private sector back into Argentina to immediately alleviate its power generation deficiencies. In this case, the students will examine the ways in which Bruce Wayne and his team may structure and diligence this electric power infrastructure deal. Particularly, the students should come to understand how the deal structure could allow EFC to both gain the most benefit but also shift the risks away from their company. Key questions that will be explored include the following: What makes investing in infrastructure particularly risky? Can private investment close the world’s infrastructure gap? Can political risk be mitigated?

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