Publications
- January 2015
- Handbook of Regional and Urban Economics
Agglomeration and Innovation
Abstract—This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).
Publisher's link: http://www.hbs.edu/faculty/Publication%20Files/15-007_e181fd00-4426-4db8-8f70-89b1b5054a8f.pdf
- January 2015
- Routledge Handbook of Immigration and Refugee Studies
International Migration and Innovation: Insights from the U.S. Experience
Abstract—No abstract available.
Publisher's link: http://www.routledge.com/books/details/9781138794313/
- January 2015
- Journal of Economic Behavior & Organization
Strategic Disclosure: The Case of Business School Rankings
Abstract—We empirically analyze disclosure decisions made by 240 MBA programs about which rankings to display on their websites. We present three main findings. First, consistent with theories of countersignaling, top schools are least likely to disclose their rankings, whereas mid-ranked schools are most likely to disclose. Second, schools that do poorly in the U.S. News rankings are more likely to disclose their Princeton Review certification, suggesting that schools treat different certifications as substitutes. Third, conditional on displaying a ranking, the majority of schools coarsen information to make it seem more favorable. The stark patterns in the data help to provide empirical evidence on the strategic elements of voluntary disclosure and marketing decisions.
Publisher's link: http://people.hbs.edu/mluca/StrategicDisclosure.pdf
- January 2015
- Innovation Policy and the Economy
Firms and the Economics of Skilled Immigration
Abstract—Firms play a central role in the selection, sponsorship, and employment of skilled immigrants entering the United States for work through programs like the H-1B visa. This role has not been widely recognized in the literature, and the data to better understand it have only recently become available. This paper discusses the evidence that has been assembled to date in understanding the impact of high-skilled immigration from the perspective of the firm and the open areas that call for more research. Since much of the U.S. immigration process for skilled workers rests in the hands of employer firms, a stronger understanding of these implications is essential for future policy analysis, particularly for issues relating to fostering innovation.
Publisher's link: http://www.people.hbs.edu/wkerr/Kerr_Kerr_Lincoln_WP14_IPEFirms.pdf
- January 2015
- IESE Insight
From TV to Web: Content Strategies for Ads That Drive Online Sales
Abstract—Consumers have become avid media multitaskers, moving seamlessly between their TVs and digital devices. Shorter TV commercials have reduced both the quantity and quality of consumer attention during prime-time viewing hours. In this new media environment, can TV advertising remain an effective means of promoting and selling products and services? In this article, the author draws upon his research to argue that TV advertising remains a powerful vehicle for capturing people's attention, persuading them to purchase products and services, and building brands. He describes four different ad types and explains how each can influence multitasking consumers. To create an effective media mix, he recommends that companies take advantage of lean advertising principles and adopt a sequential approach to capture customer attention, which he calls the "ladder of engagement."
Publisher's link: http://www.ieseinsight.com/review/articulo.aspx?doc=119397&seccion=6&idioma=2
Working Papers
College Admissions as Non-Price Competition: The Case of South Korea
Abstract—This paper examines non-price competition among colleges to attract highly qualified students, exploiting the South Korean setting where the national government sets rules governing applications. We identify some basic facts about the behavior of colleges before and after a 1994 policy change that changed the timing of the national college entrance exam and introduced early admissions, and we propose a game-theoretic model that matches those facts. When applications reveal information about students that is of common interest to all colleges, lower-ranked colleges can gain in competition with higher-ranked colleges by limiting the number of possible applications.
Download working paper: http://www.nber.org/papers/w20774
Does Front-Loading Taxation Increase Savings? Evidence from Roth 401(k) Introductions
Abstract—Can governments increase private savings by taxing savings up front instead of in retirement? Roth 401(k) contributions are not tax-deductible in the contribution year, but withdrawals in retirement are untaxed. The more common before-tax 401(k) contribution is tax-deductible in the contribution year, but both principal and investment earnings are taxed upon withdrawal. Using administrative data from 11 companies that added a Roth contribution option to their existing 401(k) plan between 2006 and 2010, we find no evidence that total 401(k) contribution rates differ between employees hired before versus after the Roth introduction, which means that the amount of retirement consumption being purchased by 401(k) contributions increases after the Roth introduction. A survey experiment suggests two behavioral factors play a role in the unresponsiveness of contribution rates to their tax treatment: (1) employee confusion about or neglect of the tax properties of Roth balances and (2) partition dependence.
Download working paper: http://www.nber.org/papers/w20738
The Rise and Fall of Demand for Securitizations
Abstract—Collateralized debt obligations (CDOs) and private-label mortgage-backed securities (MBS) backed by nonprime loans played a central role in the recent financial crisis. Little is known, however, about the underlying forces that drove investor demand for these securitizations. Using micro-data on insurers' and mutual funds' bond holdings, we find considerable heterogeneity in investor demand for securitizations in the pre-crisis period. We argue that both investor beliefs and incentives help to explain this variation in demand. By contrast, our data paints a more uniform picture of investor behavior in the crisis. Consistent with theories of optimal liquidation, investors largely traded in more liquid securities, such as government-guaranteed MBS, to meet their liquidity needs during the crisis.
Download working paper: http://www.people.hbs.edu/shanson/ABS_2014-12-8_FINAL.pdf
Tommy Koh and the U.S.-Singapore Free Trade Agreement: A Multi-Front 'Negotiation Campaign'
Abstract—Complex, multiparty negotiations are often analyzed as principals negotiating through agents, as two-level games (Putnam 1988), or in coalitional terms. The relatively new concept of a "multi-front negotiation campaign" (Sebenius 2010, Lax and Sebenius 2012) offers an analytic approach that may enjoy descriptive and prescriptive advantages over more traditional approaches that focus on a specific negotiation as the unit of analysis. The efforts of Singapore Ambassador-At-Large Tommy Koh to negotiate the U.S.-Singapore Free Trade agreement serve as an extended case study of a complex, multiparty negotiation that illustrates and further elaborates the concept of a negotiation campaign.
Download working paper: http://ssrn.com/abstract=2539774
Government Preferences and SEC Enforcement
Abstract—I examine whether political pressure by the government as a response to voters' general interest in protecting employment is reflected in the enforcement actions by the Securities and Exchange Commission (SEC). Using labor intensity as a measure of a firm's contribution to employment, I find that labor-intensive firms are less likely to be subject to an SEC enforcement action. Next, I show that labor-intensive firms are less likely to face an SEC enforcement action in presidential election years if they are located in politically important states. I also find evidence of a lower likelihood of SEC enforcement for labor-intensive firms that are headquartered in districts of senior congressmen that serve on committees that oversee the SEC. All of these results hold after controlling for firms' accounting quality and two alternative explanations for firms' favorable treatment by the SEC, i.e., firms' location and political contributions. These findings suggest that voters' interests drive political pressure on SEC enforcement-independent of firms' lobbying for their special interests.
Download working paper: http://ssrn.com/abstract=2542242
Higher-Ambition CEOs Need Higher-Ambition Boards
Abstract—Over the past years, forward-looking CEOs have adopted a higher-ambition approach to strategy and leadership. These higher-ambition CEOs are driven by a sense of purpose that goes beyond achieving financial success. They aspire to build organizations that succeed in the marketplace by earning the respect, trust, and, commitment of their people, customers, communities, and investors. Higher-ambition leaders commit to simultaneously meeting financial targets and fulfilling broader needs in society. They are also realistic about the challenges.
Download working paper: http://ssrn.com/abstract=2539073
Cases & Course Materials
- Harvard Business School Case 915-016
Market Design in Online Businesses (Abridged)
The purpose of this note is to characterize the challenges entrepreneurs may face in creating a well-functioning ecosystem of users and to equip entrepreneurs with tools to overcome these obstacles. This note is meant to accompany the final module of the "The Online Economy: Strategy and Entrepreneurship," an elective course taught at Harvard Business School. This is an abridgment of HBS No. 911-066.
Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/915016-PDF-ENG
- Harvard Business School Case 515-039
NBCUniversal
In September 2014, Stephen Burke, chief executive officer at media and entertainment company NBCUniversal, has to decide between possible priorities for the company's "Project Symphony," guaranteeing the winners a high level of visibility and support across the media conglomerate's broadcast and cable television, film, and theme park divisions. Past "Gold" priorities for Symphony, an initiative introduced shortly after Comcast made steps to acquire NBCUniversal in 2010, saw subsequent success in the marketplace. Symphony is so powerful, in fact, that competing conglomerates are keen to buy some of NBCUniversal's cross-promotional strength, as Disney did with its megahit Frozen in 2014. For 2015, the choice is between five films-Fast & Furious 7, Fifty Shades of Grey, Jurassic World, Minions, and Pitch Perfect 2-as well as two choices in television. Which are most deserving of Gold status?
Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/515039-PDF-ENG
- Harvard Business School Case 115-013
Valuation Ratios in the Airline Industry, 2013
Examines factors underlying differences in valuation multiples (price-to-earnings and price-to-book) across four firms in the airline industry.
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https://cb.hbsp.harvard.edu/cbmp/product/115013-PDF-ENG
- Harvard Business School Case 715-002
Indonesia: Growth and Stability in a Global Economy
No abstract available.
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https://cb.hbsp.harvard.edu/cbmp/product/715002-PDF-ENG
- Harvard Business School Case 715-004
NuScale Power-the Future of Small Modular Reactors
NuScale Power, an entrepreneurial venture in Portland, Oregon, has designed the leading modular nuclear reactor in the United States. This reactor will be the safest and simplest ever built. Started in 2007 as an entrepreneurial venture, the company is now two years away from applying to the Nuclear Regulatory Commission (NRC) for a license certification. While the NRC considers the application, the company will finish designing a nuclear plant to use 12 of its modular reactors. The company will see its first of several hundred planned sales by 2021, if it can mitigate the substantial risks involved.
Purchase this case:
https://cb.hbsp.harvard.edu/cbmp/product/715004-PDF-ENG