Management & Organization
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Item THE ROLE OF SCIENTISTS AND ENGINEERS IN INVENTIONS AND THEIR ALLOCATION: EVIDENCE FROM JAPAN’S INDUSTRIALIZATION(2024) Yamaguchi, Shotaro; Braguinsky, Serguey; Agarwal, Rajshree; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)My dissertation seeks to address the role of university-educated scientists and engineers (S&Es) during industrialization, with a particular focus on the sorting of S&Es into invention activities and their allocation process both within and across firms. To achieve this, I delve deeply into the historical context of Japan's industrialization from the late 19th to the early 20th century, a period marked by the simultaneous emergence of multiple heavy manufacturing industries, a higher education system in science and engineering, and the rise of extensively diversified conglomerates known as zaibatsu. Using a manually constructed individual career database encompassing nearly all Japanese university graduates in science and engineering from the cohorts of 1877 to 1920 as an empirical basis, I conduct three independent yet interconnected studies in this dissertation. In Chapter 1, I investigate the factors influencing the sorting of university-educated scientists and engineers (S&Es) into inventors by matching them with archival patent records. I find a strong positive correlation between academic excellence and the likelihood of becoming an inventor as well as invention productivity. These highly skilled individuals significantly contributed to inventions in fields associated with emerging heavy manufacturing industries. I also underscore a strong complementarity between their academic skills and post-graduation job experience, which synergistically facilitated the generation of inventions. In Chapter 2, I delve deeply into the (re-)allocation process of educated plant managers and engineers across establishments within a leading cotton-spinning firm, in conjunction with investment in physical capital. Through detailed analysis of plant-level data on human capital appointments, transfers, and capital investments, I illuminate the endogenous process of internal human capital (re-)allocations in alignment with evolving strategic priorities. Notably, the shift from cost leadership to product differentiation, driven by high-end spinning machines, engendered a three-way complementarity between managerial human capital, engineering human capital, and advanced technologies. In Chapter 3, I examine how S&E university graduates are allocated both externally (moves across different independent firms) and internally (moves across affiliated firms within diversified firms or conglomerates) and their implication for innovation. I demonstrate that internal mobility enhances individual invention performance, whereas external mobility diminishes it. However, these performance differences are primarily attributed to the selection of different quality of human capital. Additional analysis suggests that high-quality human capital tends to enter growing industries through internal mobility and be often placed in managerial positions that grant them to access complementary resources. Overall, my dissertation studies contribute to the literature on strategic human capital, corporate strategy, and economic emergence. I assert that the insights derived from the unique historical context of Japan’s industrialization can not only be applied to current emerging economies but also to new industries in developed countries wherein the supply of specialized talent is scarce and mega firms play a pivotal role in driving innovation.Item Essays on Entrepreneurship: The Role of Complexity of Innovation and Efficient Hierarchies(2023) Ding, Yuheng; Braguinsky, Serguey; Agarwal, Rajshree; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Entrepreneurial activities have been on the decline across a broad range of sectors in the U.S. during the past few decades. This decline (sometimes also called “declining business dynamism”) is reflected in the decreasing rate of new firm entry, the share of young firms (usually defined as those five years of age or less) in the total number of firms and/or the share of employment at young firms in total employment, and so on (e.g., Decker et al. 2014; Akcigit and Ates, 2021). All of the above have exhibited a secular decline, not just in the U.S. but in other advanced economies as well. The underlying causes of these trends, however, are not yet clear with a broad array of explanations suggested in the literature (Akcigit and Ates, 2019; 2021; Decker et al., 2016; Hopenhayn et al., 2018; Karahan et al., 2019; Andrews et al., 2016). There also appears to be a lot of heterogeneity in how strongly the decline in entrepreneurial activities (business dynamism) is pronounced in various industries and sectors of the economy. In particular, the evidence in Haltiwanger et al. (2014) suggests that high-tech industries could be affected more than other sectors of the economy. High-tech sectors have been the driving force of growth in recent decades, so uncovering the reasons for declining business dynamism in those sectors is a task of first-order importance. In the first chapter, I employ the restricted-use data on the science and engineering workforce in the U.S. to investigate whether the increasing burden of knowledge is a growing concern for science-based entrepreneurship. Results show that since 1997, the rate of startup formation has precipitously declined for firms operated by U.S. Ph.D. recipients in science and engineering. The decline in startup formation is accompanied by an earnings decline, increasing work complexity in R&D, and more administrative work for science-based founders. With limited access to efficient knowledge hierarchies, founders of science-based startups must shoulder the burden of knowledge by doing more tasks by themselves. Workers at established firms, on the other hand, could better mitigate the burden of knowledge by narrowing the span of control and increasing the depth of hierarchy. Moreover, less experienced founders were hit harder than more experienced founders as the increasing burden of knowledge led to increasing returns to labor experience. While in the first chapter I use individual-level work data, in the second chapter I utilize firm-level data from the U.S. Census Bureau to develop the analysis further. I adopt the abductive approach and leverage matched employee-employer Census data between 2000-2014 to investigate how a growing burden of knowledge (measured as knowledge interdependence) in the most innovative firms affects potential entrepreneurs’ decisions to start their own business ventures. I show that higher knowledge interdependence in incumbent firms is negatively associated with employee entrepreneurship, and the negative effect is pronounced even stronger among the highest-performing employees. Moreover, higher knowledge interdependence has a positive selection effect on the quality of “spinouts”, and this effect is significantly stronger if the startup is formed by individuals ranked highest in the human capital distribution. These results suggest that knowledge interdependence does not merely raise the barrier for entry into entrepreneurship by imposing higher costs of knowledge transfer. It also changes the functioning of the internal labor market inside the firms. In the third chapter, I further investigate the mechanism underlying the relationship between knowledge interdependence and employee entrepreneurship. I propose a formal theoretical framework that reconciles all empirical findings. The theory suggests firms that rely on higher knowledge interdependence should share “rent” with their employees by paying wage premia if the profit from higher knowledge interdependence is high enough. As a result, within-firm earning dispersion would always be larger in firms relying on higher knowledge interdependence. I find supporting evidence in the data for this alternative explanation. Overall, these findings have important implications for declining entrepreneurial activity, rising income inequality, and technological change in the U.S. economy. While the conventional wisdom might view the declining entrepreneurial activity in the U.S. as the demise of economic growth, it is possible that as innovation becomes more complex, large established firms start to substitute the role of start-ups in pushing forward the technological frontier and driving economic growth as the efficient knowledge hierarchy could better deal with complex knowledge needed in the production process (Garicano, 2000; Garicano and Rossi-Hansberg, 2004). If this is the case, the declining business dynamism might just be a reflection of technological change and efficient (re)allocation of resources but not necessarily detrimental to technological advancement and economic growth. Whether this is true remains an avenue for future research.Item Innovation Strategies for Digital Assets & Wealth Management(2021-12) Shorter, Charles; Taylor, James; Jones, Jessica; Sanford, Kevin; Kobloth, Nicholas; Dastidar, ProtitiThe University of Maryland ALP team serves as an independent research body to the Wealth ecosystem to explore Innovation Strategies for Digital Assets & Wealth Management. During the consult the team conducted a comprehensive case study to identify key data points for solution development which would support the incorporation of Cryptocurrencies into ‘traditional' financial advisory segments. The research is built in conjunction with industry leader Envestnet which specializes in the B2B FinTech, Wealth & Financial Advisory segments for independent advisors and high net worth individuals. The authors presents the essentials of the Wealth Management industry from the perspective of Registered Independent Advisor (RIA) firms that provide financial advice and planning for clients.Item THE EFFECTS OF INFOMEDIARIES, NONMARKET STRATEGIES AND CORPORATE POLITICAL ACTION ON INNOVATION ADOPTION(2012) Benjamin, Scott; Reger, Rhonda K; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Strategic management research has recently become interested in the role of strategies that effect social stakeholders, such as the media, and how they affect the adoption of technological innovation. This dissertation consists of two essays that investigate how these stakeholders affect technological innovation adoption and how firms can increase the likelihood of having their products adopted by influencing these stakeholders. The first essay takes a fine-grained approach at investigating how the content of media coverage influences the adoption of wind projects in the United States wind energy industry. By focusing on certain characteristics of media coverage, I develop a theoretical framework that examines how coverage facilitates perception formation of an innovation in the market. Using content analysis, I examine certain characteristics of media coverage including media attention, positivity of tenor, issue diversity, economic & aesthetic issues and complexity of messaging, and hypothesize about the impact these characteristics have on how quickly stakeholders coalesce around a unified vision of a new technology. The second essay builds on the first essay by exploring how firms employ strategies in both social and political markets in an attempt to influence different segments of the general environment. I argue theoretically that general environmental segments, such as sociocultural and political markets, that were typically thought of as exogenous to the firm may be impacted by the firm. By introducing media specific concepts from the organizational literature and political strategies from the public policy domain to strategic management, this study investigates how firms can achieve more rapid technological innovation adoption by strategically using 1) social exchange mechanisms with the media for the facilitation of perception formation in the market and 2) corporate political activity to influence policy makers for the creation of beneficial legislation. I study both of these phenomena using a comprehensive sample of U.S. based wind projects that have either been proposed or are commercially operational between 2000 and 2009. The findings from both of these essays advance strategic management research by connecting themes from organizational research, mass communications and public policy research to help explain perception formation and technological innovation adoption in the market.