First Look

Abstract—In the published proceedings of the first Journal of Accounting Research Conference, Vatter (1966) lamented that “Gathering direct and original facts is a tedious and difficult task, and it is not surprising that such work is avoided.” For the 50th JAR Conference, we introduce a framework to help researchers understand the complementary value of seven empirical methods that gather data in different ways: pre-structured archives, unstructured (“hand-collected”) archives, field studies, field experiments, surveys, laboratory studies, and laboratory experiments. The framework spells out five goals of an empirical literature and defines the seven methods according to researchers’ choices with respect to five data gathering tasks. We use the framework and examples of successful research studies in the financial reporting literature to clarify how data-gathering choices affect a study’s ability to achieve its goals and conclude by showing how the complementary nature of different methods allows researchers to build a literature more effectively than they could with less diverse approaches to gathering data.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51015

Abstract—The last decade has seen a sharp rise in patent litigation in the U.S., with 2015 having one of the highest patent lawsuit counts on record. In theory, this could be a consequence of growth in the commercialization of technology and innovation—patent lawsuits increase as more firms turn to intellectual property (IP) protection to safeguard their competitive advantages. However, the majority of recent patent litigation is driven by nonpracticing entities (NPEs), firms that generate no products but instead amass patent portfolios for the sake of enforcing IP rights afforded therein. We discuss new, large-sample evidence adding to a growing literature suggesting that NPEs—in particular, large patent aggregators—on average act as "patent trolls," suing cash-rich firms seemingly irrespective of actual patent infringement. This has a negative impact on future innovation activity at targeted firms. These results suggest a need to check the power of NPEs through changes in U.S. IP policy, in particular to screen out trolling early in the litigation process.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51034

Abstract—New, "big" data sources allow measurement of city characteristics and outcome variables at higher frequencies and finer geographic scales than ever before. However, big data will not solve large urban social science questions on its own. Big data has the most value for the study of cities when it allows measurement of the previously opaque, or when it can be coupled with exogenous shocks to people or place. We describe a number of new urban data sources and illustrate how they can be used to improve the study and function of cities. We first show how Google Street View images can be used to predict income in New York City, suggesting that similar image data can be used to map wealth and poverty in previously unmeasured areas of the developing world. We then discuss how survey techniques can be improved to better measure willingness to pay for urban amenities. Finally, we explain how Internet data is being used to improve the quality of city services.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51012

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51052

Abstract—The experience of Encyclopædia Britannica provides the canonical example of the decline of an established firm at the outset of the digital age. Competition from Microsoft’s Encarta in 1993 led to sharp declines in the sales of books, which led to the distressed sale of the firm in 1996. This essay offers new source material about the actions at both Encarta and Britannica, and it offers a novel interpretation of events. Britannica’s management did not misperceive the opportunities and threats, and Britannica did not lack technical prowess. This narrative stresses that Britannica’s management faced organizational diseconomies of scope between supporting lines of business in the old and new markets, which generated internal conflicts. These conflicts hindered the commercialization of new technology and hastened its decline.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51040

Abstract—Purpose: We tested the effects of employer subsidies on employee enrollment, attendance, and weight loss in a nationally available weight management program. Design: A randomized trial tested the impact of employer subsidy: 100%, 80%, 50%, and a hybrid 50% subsidy that could become a 100% subsidy by attaining attendance targets. Setting and Subjects: 23,023 employees of two U.S. companies. Measures: The primary outcome was the percentage of employees who enrolled in the weight management program. We also tested whether the subsidies were associated with differential attendance and weight loss over 12 months, as might be predicted by the expectation that they attract employees with differing degrees of motivation. Analysis and Results: Enrollment differed significantly by subsidy level (p<.0001). The 100% subsidy produced the highest enrollment (7.7%), significantly higher than each of the lower subsidies (vs. 80% subsidy: 6.2%, p=.002; vs. 50% subsidy: 3.9%, p<.0001; vs. hybrid: 3.7%, p<.0001). Enrollment in the 80% subsidy group was significantly higher than both lower subsidy groups (vs. 50% subsidy: 3.9%, p<.0001; vs. hybrid: 3.7%, p<.0001). Among enrollees, there were no differences among the four groups in attendance or weight loss. Conclusion: This pragmatic trial, conducted in a real-world workplace setting, suggests that higher rates of employer subsidization help individuals to enroll in weight loss programs, without a decrement in program effectiveness. Future research could explore the cost effectiveness of such subsidies or alternative designs.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51020

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51036

Abstract—No abstract available.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51051

Abstract—The purpose of this article is to explore corporate brand identity and reputation, with the aim of integrating them into a single managerial framework. The Nobel Prize serves as an in-depth field-based case study and is analysed using the Corporate Brand Identity and Reputation Matrix (CBIRM), introduced here for the first time. Eight key reputation elements adapted from the literature and enriched by the case study are incorporated within an existing corporate brand identity framework. Among the key findings are structural links outlining essential connections among elements of corporate brand identity and reputation. The new framework provides a structure for managing a corporate/organisational brand. It is a potential tool in the definition, alignment, and development of such brands. A limitation is that the communication dimension—the journey from identity to reputation and vice versa—is included but not explored in detail. The originality of the article is two-fold: first, developing a new integrated framework and second, refining and applying the framework to a distinctive research study of a specific organisational case, in this instance, the Nobel Prize. Specific quotes from extensive field interviews support the development of the new CBIRM and its broader managerial relevance and applicability.

Publisher's link: http://www.hbs.edu/faculty/Pages/item.aspx?num=51014

Abstract—We develop a theoretical model of, and provide the first large-sample evidence on, the behavior and impact of non-practicing entities (NPEs) in the intellectual property space. Our model shows that NPE litigation can reduce infringement and support small inventors. However, the model also shows that as NPEs become effective at bringing frivolous lawsuits, the resulting defense costs inefficiently crowd out some firms that, absent NPEs, would produce welfare-enhancing innovations without engaging in infringement. Our empirical analysis shows that on average, NPEs appear to behave as opportunistic patent trolls. NPEs sue cash-rich firms—a one standard deviation increase in cash holdings roughly doubles a firm's chance of being targeted by NPE litigation. We find moreover that NPEs target cash unrelated to the alleged infringement at essentially the same frequency as they target cash related to the alleged infringement. By contrast, cash is neither a key driver of intellectual property lawsuits by practicing entities (e.g., IBM and Intel), nor of any other type of litigation against firms. We find further suggestive evidence of NPE opportunism, such as forum shopping and targeting of firms that may have reduced ability to defend themselves against litigation. We find that NPE litigation has a real negative impact on innovation at targeted firms: firms substantially reduce their innovative activity after settling with NPEs (or losing to them in court). Moreover, we neither find any markers of significant NPE pass-through to end innovators, nor of a positive impact of NPEs on innovation in the industries in which they are most prevalent.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=47648

Abstract—We examine the role of management in agricultural productivity by evaluating a mobile-phone based agricultural advice service provided to farmers in India. Demand for advice is high, and advice changes practices, increasing yields in cumin (28%) and cotton (8.6% for a subgroup receiving reminders). Information spreads, as non-treated farmers with more treated peers change practices and lose less to pest attacks. Though willingness to pay for the service is low, the value of the information externality exceeds the subsidy that would be necessary to operate the service. We estimate each dollar spent on the service yields a $10 private return.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=43681

Abstract—The mirroring hypothesis predicts that organizational ties within a project, firm, or group of firms (e.g., communication, collocation, employment) will correspond to the technical patterns of dependency in the work being performed. A thorough understanding of the phenomenon is difficult to achieve because relevant work is scattered across multiple fields. This paper presents a unified picture of mirroring in terms of theory, evidence, and exceptions. First, we formally define mirroring and argue that it is an approach to technical problem-solving that conserves scarce cognitive resources. We then review 142 empirical studies, divided by organizational form into (1) industry studies, (2) firm studies, and (3) studies of open collaborative projects. The industry and firm studies indicate that mirroring is a prevalent pattern but not universal. However, there is evidence of a mirroring “trap”: firms focused on the current technical architecture may fall victim to architectural innovations arising outside their boundaries. Thus in technologically dynamic industries, partial mirroring, where knowledge boundaries are drawn more broadly than operational boundaries, is likely to be a superior strategy. Firms can also strategically “break the mirror” in two ways: by implementing modular partitions within their own boundaries or by building relational contracts that support technical interdependency across their boundaries. Finally, in contrast to industry and firm studies, studies of open collaborative projects, most of which focused on software, were not supportive of the hypothesis. We argue that these seemingly contradictory results arise because digital technologies make possible new modes of coordination that enable groups to deviate from classical mirroring as seen within firms.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51030

Abstract—We develop real-time proxies of retail corporate sales from multiple sources, including approximately 50 million mobile devices. These measures contain information from both the earnings quarter (within quarter) and the period between that quarter's end and the earnings announcement date (post quarter). Our within-quarter measure is powerful in explaining quarterly sales growth, revenue surprises, and earnings surprises, generating average excess returns at announcement of 3.4%. However, surprisingly, our post-quarter measure is related negatively to announcement returns and positively to post-announcement returns. When post-quarter private information is directionally strong, managers, at announcement, provide guidance and use language that points statistically in the opposite direction. This effect is more pronounced when, post-announcement, management insiders trade. We conclude managers do not fully disclose their private information and instead message to shareholders and analysts something of opposite sign. The data suggest they may be motivated in part by subsequent personal stock-trading opportunities.

Download working paper: http://www.hbs.edu/faculty/Pages/item.aspx?num=51028

N12 Technologies was a startup founded in 2010 that employed nanotechnology to manufacture a patented material to improve the performance of carbon fiber composites, which were used in a wide variety of products, ranging from bicycles to automobiles to aircraft parts. By 2016, the company had grown to 27 employees and was able to produce its product in small volumes. While much had been achieved, the company's success hinged on its leadership's ability to scale both the organization and production capabilities exponentially. The case describes the company's evolution from a newly created startup to a young "loosely structured" company as well as the challenges ahead.

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No abstract available.

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Because of the deepening Greek crisis, in October 2015, National Bank of Greece (NBG) was required to sell one of its most valuable assets, Finansbank, the eighth largest Turkish bank. There were three potential buyers: Garanti Bank, Turkey's second largest private bank, which was owned by the Spanish bank BBVA; Qatar National Bank, with a strong footprint in the Middle East; and a private equity consortium led by Finansbank's previous owner and founder Husnu Ozyegin. Each of these potential buyers had different motivations for the purchase. NBG's motivations were to obtain the highest price and to close the deal as quickly as possible. The identity of the winning bidder would be critically important to the future of Finansbank and its employees. Who is likely to win the bidding, and will the winner be best for Finansbank's future?

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American Electric Power, like most utilities in the U.S. is currently exposed to distributed generation and the problem of net-metering. Solar installations in particular have been heavily subsidized, by the state and by regulation, which does not allow grid operators to recover their fixed costs. This results in stranded assets and cross-subsidies from poor to rich.

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