Works in Progress

When Showing Up Weak Is Worse Than Not Showing Up at All: Analyzing Weak & Endogenous Instruments in the Strategy Literature through Replication (Under Review)

(Joint work with Jordan Siegel)

Instrumental variable (IV) techniques have been an important tool used by researchers in Strategic Management, particularly in the last decade. However, common practices have not been well-established for the motivation, implementation, and interpretation of IV regressions. Using a simulation, we illustrate that endogenous instrumental variables can leave the researcher worse off than with OLS, particularly in the presence of weak instruments. Motivated by this finding, we show through a meta-analysis that nearly half of strategy articles using IV techniques do not consider the issue of weak instruments. To guide researchers going forward, we propose a sequence of best practices for use with IV techniques, and replicate and discuss a series of strong IV papers to illustrate how these techniques can be used most effectively.

Strategy and management practices: revisiting the World Management Survey (R&R at Strategy Science)

(Joint work with Daniela Scur)

The academic field of Strategy has a strong history of theoretical literature, but a relatively younger empirical literature testing these theories. Partly due to the nature of questions in Strategic Management, scholars have often relied on collecting their own data or using specialized, and often expensive, proprietary data. This limits the possibility of replication exercises, which are a key step to refining and reinforcing the theories that are most supported in practice. To support this effort, we revisit the World Management Survey (WMS): a cross-country, cross-industry survey dataset with over 20,000 observations at the establishment-level that is collected through a rigorous and well-documented process and made free and accessible to researchers. While it is well-cited in the Strategy literature, we propose it is underused and better exposure to this data's offerings has the potential to add significant value to the field.

How do Firms Manage Multiple Objectives:
Employee Incentives, Mission Drift, and Competition in Hybrid Organizations (under review)

Hybrid organizations balance multiple sets of organizational goals, that are often in conflict.   Competition is thought to exacerbate the tension between these goals, and there is debate about whether or not competition leads to increasing mission drift, or abandonment of the more socially-oriented mission.  One way to address mission drift could be with employee incentives specifically targeting mission outcomes.  However, the use of performance incentives along dimensions where employees are intrinsically motivated can be challenging.  To examine this issue, this paper examines the use of financial incentives in the hybrid industry of microfinance.  First, I find that more “mission-oriented” firms pay employees less, but incentivize along a higher number of dimensions, including along mission-oriented dimensions.   Second, some incentives are associated with intended outcomes with increased competition: firms that incentivize new clients, client retention, and client interaction see lower declines in the number of borrowers per loan officer at higher levels of competition.  Importantly, firms that incentivize more mission-oriented outcomes have lower declines in profit margin and return on assets at higher levels of competition. Thus, this paper contributes to the conversation about how hybrids balance competing logics, particularly in avoiding mission drift in the face of competition, and discussion about the use of incentives for mission-based work.

Featured in the Dyson Business Feed.

Adapting Deposits to Mission: Deposits as a sign of Mission Drift or as a service to Mission?

Nonprofits are increasingly encouraged to imitate activities of for-profit organizations. However, certain for-profit activities are associated with higher financial performance but also mission drift, given different firm objectives.  Examining deposit-taking in Latin American microfinance, I find nonprofit organizations successfully adapt deposit-taking to serve their mission, although in different ways depending on their organizational form.  This result suggests that deposit-taking does not have uniform performance effects across nonprofits, as it is adapted to achieve complementarity to the existing organizational structure.  For some nonprofits, the benefit is moderated by for-profit competition, suggesting competitive concerns may constrain success of the practice.  Allowing for nonprofits to be strategic in whether and how they adopt commercial practices gives better insight into the effects of these activities.

I discuss this work in a CEMS Webinar.

Postwar Railroad Productivity Measurement: Refining the Statistical Analysis

(Joint work with Robert Reynolds)

A number of studies have found that postwar railroad productivity increased at a high rate both prior to and after deregulation. Important innovations, such as the steam locomotive, roller bearings, and loading truck trailers onto rail cars, likely resulted in productivity improvements. Simultaneously, though, railroads were under increasingly tight financial constraints with declining passenger traffic and an increase in competition from other modes of transportation, such as trucks. As a result, during this time period, railroads notably deferred investment in maintenance and in capital expenditures, to deal with these financial conditions and to paint a better picture of their financial position than reality. The end result of this period of deferred maintenance and tight financial positions was a shrinkage in the rail network. Not accounting for this deferral in maintenance overstates the short-term productivity and thus may misstate productivity improvements. In this paper, we use detailed firm-level and aggregate data to calculate the amount of deferred maintenance and update productivity estimates. We show a stairstep decline in maintenance of rail and ties that is triggered by recessions and consistent with a managerial response to financial conditions. In addition, we illustrate that accounting

In JSM Proceedings, Statistical Computing Section. Alexandria, VA: American Statistical Association (2019)