Robert H. Smith School of Business
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Item HISTORICAL EXPLANATION IN STRATEGY RESEARCH: LEARNING BY SCALING IN THE EARLY AMERICAN AUTOMOBILE INDUSTRY(2019) Devanatha Pillai, Sandeep; Goldfarb, Brent; Kirsch, David; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation uses the historical explanation to engage in an abductive study of the early American automobile industry (1895-1918). The dissertation suggests that historical explanation is a valuable complement to abductive research. Historical explanation increases the number of hypotheses considered through the temporal perspective it offers and through contextualization. Historical explanation also adjudicates between likely hypotheses to determine the loveliest explanation by evaluating explanatory coherence and consilience. Further, the practical use of the historical explanation is demonstrated by analyzing the challenges that firms faced while attempting to scale manufacturing during the early American automobile industry (1895-1918). The analysis identifies metalworking knowledge as a specific pre-entry capability that mattered and demonstrates that process innovation is critical from a very early industry stage. Thus, this dissertation enhances strategy literature's understanding of why and how scholars should engage with historical explanation.Item Essays on Business Analytics(2019) Gu, Liyi; Ryzhov, Ilya O; Business and Management: Decision & Information Technologies; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)With the rapidly increasing availability of business-related big data in recent years as well as the advancements in statistical and machine learning techniques, business analytics (BA) is becoming an essential practice to explain past events, predict future trends and optimize decision making. Using BA, the two essays in this dissertation aim to address some important questions in two emerging topics: humanitarian fleet management and social behaviors in online gaming industry. In the first essay, we analyse how vehicle management is carried out in a humanitarian setting. In humanitarian fleet management, the performance of purchase, assignment, and sales decisions is determined by dynamic interactions between the fleet composition, the time-varying and uncertain demands on the fleet, and the depreciation of the vehicles as they are exploited. We propose to evaluate purchase, assignment, and sales policies in a realistic simulation environment that directly models heterogeneous vehicle attributes and tracks their evolution over time. Using data from a large international humanitarian organization (LIHO), the simulator can identify the rationale behind seemingly ad-hoc decisions by field managers at LIHO. For instance, by selling vehicles later than LIHO recommends, managers are actually reducing their costs; similarly, managers decline to switch vehicles between mission types because the benefits to the operational cost turn out to be marginal at best. In the second essay, we conduct an empirical study of the relationship between social interaction and user engagement, retention, and purchase behavior, based on a high-resolution player-level dataset from a major international video game company for one of its premier titles. We engineer a set of features that characterize social behavior within the game, and link these behaviors to several measures of user engagement using statistical and econometric models. Our results show that user engagement is highly correlated with certain social dynamics; meanwhile, social interaction does not always translate to better retention rates or more purchases. In some cases, high dependence on a small set of friends is positively correlated with churn, indicating a tradeoff between engagement in one title and adoption of others. Early adopters are generally more responsive to the social experience than late adopters.Item VALUE IN THE EYE OF THE BEHOLDER: THE MODERATING EFFECTS OF MANAGERS’ SOCIAL NETWORKS ON THEIR IDEA VALUATION AND IMPLEMENTATION DECISION-MAKING(2019) Lu, Shuye; Bartol, Kathryn M; Venkataramani, Vijaya; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Many of employees’ novel ideas often cannot get appreciated or valued by their managers, thus precluding the opportunity for innovation. Drawing on the social-information-processing theory and the situated evaluation perspective, this paper investigates the moderating roles of managers’ social networks in the innovation process of idea evaluation and implementation decision-making. Through a field study with 85 managers in a ceramic company, I found that when managers evaluated product ideas proposed by employees, they manifested a disfavor to novelty. That is, idea novelty had a negative relationship with managers’ perceived value of the focal idea regarding the idea’s potential operational efficiency, likelihood of social support, and strategic fit. However, I also found that both managers’ advice network diversity and friendship network centrality mitigated the negative effect of idea novelty on their perceived value of the proposed product ideas. In addition, I found managers’ perceived value of the idea mediated the relationship between idea novelty and their decisions to implement the idea. Theoretical contributions and empirical strategies are discussed.Item Employee Mobility, Employee Entrepreneurship, and Employee Value Capture: Labor Market Frictions and the Impact of Social Comparison Costs on Compensation(2018) Olson, Daniel; Agarwal, Rajshree; Waguespack, David M.; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)Strategic human capital research explores heterogeneity in firm performance based on differences in firms’ abilities to leverage human capital. Much of the discussion in this literature focuses on how firms can exploit isolating mechanisms that limit the mobility of employees. This dissertation studies two important facets of strategic human capital research related to the mobility of employees. The first essay explores how a labor market frictions lens can connect the strategic human capital literature to the employee entrepreneurship literature, two complementary but largely disparate literatures. The examination of the impact of various labor market frictions on employee mobility to competitor firms and employee transitions to entrepreneurship suggests that the outcomes of some frictions are divergent across the two literatures, the outcomes of some are aligned, and the outcomes of some are ambiguous. The complex interplay of labor market frictions provides opportunities for future research specifically exploring the intersection of the strategic human capital and employee entrepreneurship literatures. The second essay of explores how multi-location firms facilitate the spread of compensation increases across labor markets. Prior research cites the threat of employee mobility as the primary mechanism for the spread of compensation increases across locations. Multi-location firms that straddle more than one labor market, however, must manage employees across labor markets. I propose that internal firm processes, including social comparison between employees of the firm in different locations, may lead firms to raise compensation for employees in other locations when addressing competitive pressure in a given location. In doing so, these multi-location firms put pressure on local labor market competitors to also raise compensation, leading to compensation increases across distinct labor markets without reference to mobility constraints that dominate the strategic human capital literature.Item ESSAYS ON AWARDS AND ACHIEVEMENT(2018) Frake, Justin; Agarwal, Rajshree; Beckman, Christine; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation comprises three essays on the intended and unintended consequences of achievement. The introductory essay discusses the growing literature on awards in organizational contexts. I summarize the theoretical and empirical work on awards and integrate across these literatures to identify unanswered questions. The next essay explores an unintended organizational consequence of patenting. Building on theories of appropriability and firm-specificity, prior studies support the notion that patents constrain inventors from leaving their employer. I argue, however, that by patenting an inventor's idea, firms unintentionally send signals about the employee inventor's quality to their labor-market competitors, thereby increasing the probability of inventor mobility and entrepreneurship. I match US patent data to linked employee-employer Census microdata at the individual level. This novel dataset allows me to observe the near-complete patent, wage, and employer history of most US inventors between 1995 and 2008. To causally identify the effect of patenting, I use the historical leniency of quasi-randomly assigned patent examiners to instrument for whether a patent is granted. I challenge prior work by finding support for the signaling, rather than constraining, effects of patents. To test whether signaling is the operant mechanism, I show that patenting also increases the inventor's wages and future productivity. My findings reveal an interesting paradox for innovative firms: by patenting an inventor's idea, firms send signals to their labor market competitors and dramatically increase the probability that the inventor will leave to join or start another firm. My final essay explores the effect of prestigious awards on artist's subsequent productivity and performance. There is a large body of literature that finds award-winners have higher status, greater access to resources, and enhanced self-confidence; all of which may lead to increased performance and productivity. However, in this essay, I argue that prestigious awards may decrease ex post productivity for three reasons: (1) winners may become complacent after winning a prestigious award, and (2) winners may be freed to explore alternative career paths, and (3) winners may be more selective in choosing new projects. I investigate these conjectures in the US film industry from 2002-2018. I use prediction market odds to estimate the probability of winning an Academy or Golden Globe Award. I then condition on the probability of winning an award using a propensity score design to estimate the causal effect winning an award on subsequent productivity and performance. My results suggest that winning does lead to a decrease in the actor's future productivity. Further analysis suggests that winning an award also leads the winner to explore other careers (e.g., actors become directors) and to take less important roles. Award winners subsequently join movies that receive higher artistic ratings, but less commercial success. I find no effect on the number of screens the movie is released on or the movie's budget size. The results suggest that the productivity-enhancing effects in the pre-award period may be reversed after an award is granted.Item Essays on macro-level structures and dynamics of inter-organizational networks(2018) Geng, Ying; Ding, Waverly; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In the strategic management literature, researchers have demonstrated that inter-organizational networks can significantly influence firm-level outcomes. However, an understanding of network outcomes is incomplete without an understanding of the underlying network structures. Firstly, the benefits provided by networks to their constituents and their role as sources of value, including competitive advantages of firms, might be dependent on macro-level network structure and its changes over time. Secondly, understanding how macro-level network structure will evolve can help us predict and understand the changes in the distribution of benefits and constraints afforded by egocentric network properties. Nevertheless, very few studies have attempted to establish a link between macro- and micro-level network effects. In two essays, I seek to further our understanding of inter-organizational network macro-structures. In essay one, I re-evaluate the classical centrality-performance relationship in an emerging market context, China, and find a differential in centrality-based benefits for foreign and domestic VC firms. Further exploration of the macro-structure of the underlying syndication networks leads to the discovery of a correlation between network changes and the changes in the centrality effect differential. These findings have the potential to inform further theorizing and testing on the interaction between macro- and micro-level network effects on firm outcomes. In essay two, I compare large-scale topological properties of the Chinese VC syndication network and the American VC syndication network to seek the differences and commonalities in their macro-structures. More importantly, I compare these results with previous studies in the strategic management field that have explicitly examined large-scale topologies of inter-organizational networks. Aggregating evidence from disparate studies could reveal emergent properties of networks and might have the potential to lead in new directions of micro-level inquires that we may previously have not considered.Item ESSAYS ON A DEMAND-SIDE DRIVER OF MARKET ENTRY(2018) Byun, Heejung; Agarwal, Rajshree; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this three-essay dissertation, I explore the role of demand-pull in new market entry given repeated transactions with embedded prior transaction partners. I investigate a demand-side driver of entrepreneurial spin-outs and diversifying entrants into a new market through recurring transactions between buyers (clients) and suppliers (firms). In the first chapter, I examine the performance of diversification driven by embedded client ties, "client-led diversifiers." I focus on diversifications intended to cater to an existing client's needs and its adverse effect on firm performance. In doing so, I explore the potential tension embedded client ties create vis-à-vis firm capabilities. I find support for the negative impact of client-led diversifications on firm performance. In the second chapter, I further explore the new market performance of client-led entrants. I focus on the role of clients’ selection in entering a new market and argue that such selection predicts firm and individual performance variations in the new market. The third essay explores how individuals become entrepreneurial entrepreneurs when they experience an increase in the value of relational capital. I examine how a discontinuous increase in the value of an employee’s relational capital influences her mobility and entrepreneurship decisions. Empirically, I exploit the reporting requirements mandated by the Lobbying Disclosure Act of 1995 to construct a unique transaction-level database between lobbyists and clients for lobbying service on lobbying issues in the United States federal lobbying industry between 1999 and 2008. In the first two chapters, I exploit the exogenous creation of the "Homeland Security" issue market after the 9/11 terrorist attack to identify the effect of client-led diversification on firm performance. In chapter three, I use a sample of revolving door lobbyists who are lobbyists-turned-ex-staffers of a politician in the U.S. federal lobbying industry between 1999 and 2008. I leverage plausibly exogenous and large shocks to the value of an employee’s relational capital in testing the hypotheses.Item Algorithms for Online Advertising Portfolio Optimization and Capacitated Mobile Facility Location(2017) Sahin, Mustafa; Raghavan, Subramanian; Business and Management: Decision & Information Technologies; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)In this dissertation, we apply large-scale optimization techniques including column generation and heuristic approaches to problems in the domains of online advertising and mobile facility location. First, we study the online advertising portfolio optimization problem (OAPOP) of an advertiser. In the OAPOP, the advertiser has a set of targeting items of interest (in the order of tens of millions for large enterprises) and a daily budget. The objective is to determine how much to bid on each targeting item to maximize the return on investment. We show the OAPOP can be represented by the Multiple Choice Knapsack Problem (MCKP). We propose an efficient column generation (CG) algorithm for the linear programming relaxation of the problem. The computations demonstrate that our CG algorithm significantly outperforms the state-of-the-art linear time algorithm used to solve the MCKP relaxation for the OAPOP. Second, we study the problem faced by the advertiser in online advertising in the presence of bid adjustments. In addition to bids, the advertisers are able to submit bid adjustments for ad query features such as geographical location, time of day, device, and audience. We introduce the Bid Adjustments Problem in Online Advertising (BAPOA) where an advertiser determines base bids and bid adjustments to maximize the return on investment. We develop an efficient algorithm to solve the BAPOA. We perform computational experiments and demonstrate, in the presence of high revenue-per-click variation across features, the revenue benefit of using bid adjustments can exceed 20%. Third, we study the capacitated mobile facility location problem (CMFLP), which is a generalization of the well-known capacitated facility location problem that has applications in supply chain and humanitarian logistics. We provide two integer programming formulations for the CMFLP. The first is on a layered graph, while the second is a set partitioning formulation. We develop a branch-and-price algorithm on the set partitioning formulation. We find that the branch-and-price procedure is particularly effective, when the ratio of the number of clients to the number of facilities is small and the facility capacities are tight. We also develop a local search heuristic and a rounding heuristic for the CMFLP.Item Essays on Dynamic Pricing and Choice in the Internet and Sharing Economy(2017) Ming, Liu; Tunca, Tunay I; Business and Management: Decision & Information Technologies; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)The widespread use of the Internet, social networking, mobile technology and big data has improved people's ability to obtain and use information to an unprecedented level. Influencing consumer behavior and changing concepts of consumption, the Internet and Sharing Economy has carved itself a significant and growing place in the daily life and the economy. The race to commercialize the value of this change has brought about numerous innovations and creative operational solutions in emerging industries worldwide. The first chapter of my dissertation theoretically and empirically studies consumer equilibrium, pricing, and efficiency of these events. Modeling a continuous time customer arrival and sign-up process, we start by deriving the stochastic dynamic consumer equilibrium. Based on this equilibrium and utilizing sign-up level data from a major Chinese retailer's group buying events, we then structurally estimate consumer arrival rates and utility distributions for 266 events, and empirically verify the fit and predictive power of the model. Utilizing the estimated arrival rates and consumer utility distributions, we then employ a doubly stochastic Generalized Linear Regression Model to provide empirical evidence for consumer network effects in group buying, and estimate 15.4% increase in consumer demand attributable to the employment of a group buying mechanism. Through counterfactual analysis, we further estimate that employing group buying increased retailer profits by 11.21% on average, corresponding to an annual monetary gain of approximately $4.32M for the 266 events in the data set. We further demonstrate that low deal discounts offered by the retailer for very low and very high consumer arrival rates boost profitability, suggesting that an inverse U-shaped deal discount pattern as a function of consumer arrival rate is recommendable when employing group buying events. Ride-sharing platforms, such as Uber and Lyft and their Chinese counterpart Didi, set prices dynamically to balance the demand and supply for their services. In the second chapter, we provide an empirical model and analysis of price formation and surplus generation of these services. We first develop a two-sided-market discrete choice model, capturing the formation of mutually dependent demand (consumer) and supply (driver) sides that jointly determine the pricing. Based on this model, we then use a comprehensive data set obtained from Didi to estimate consumer and driver price elasticities as well as other factors that affect market participation. Based on the estimation results and counterfactual analysis, we demonstrate that surge pricing has a significant role in improving the welfare of consumers and Kuaiche drivers, i.e., by 21.80% and 22.02%, respectively. In terms of government regulations, proposed regulation imposing price caps that match current Taxi rates can decrease consumer surplus by 39.84% while causing a relatively moderate 5.66% decrease in Kuaiche driver surplus. Further, we estimate that restricting driver capacity to equal local Taxi levels would have more severe consequences, resulting in 18.07% and 23.40% reductions in consumer and Kuaiche driver surpluses respectively.Item Status Motivations: Consumer and Seeker Perspectives(2017) Vesco, Robert; Waguespack, David; Agarwal, Rajshree; Business and Management: Management & Organization; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)My dissertation includes two essays which examine status motivations from different perspectives. In the first essay, I explore the motivations of actors who are seeking to increase their status. In particular, when the competitive signals become opaque, how do their behaviors change? In the second essay I look at status motivations from the perspective of the consumers. In other words, what motivates actors and audiences to reward status? Ultimately, my aim with this dissertation is to extend our understanding of status beyond whether it has an effect and into understanding what is driving those effects. I also seek to highlight the importance of heterogeneity in status motivations since populations of people are unlikely to have homogeneous reasons for pursuing status. The first essay examines how making the competitive environment opaque changes status-seekers productivity and prosocial behavior. While status competition is generally considered a positive force for increasing productivity, a growing body of research suggests it can have unintended consequences. However, the literature on status is largely divided on the motivations behind it. Management scholars tend to see status as an asset to be pursued as a means to an end while economists and psychologists focus on the ego needs associated with it. If these two groups of status-seekers react differently to changing incentives, and ex ante, we cannot identify these groups, then how can we interpret empirical results? To deal with this complexity I leverage an agent-based simulation that explores motive heterogeneity. I then exploit a natural experiment in an online community for technologists where status competition is decreased and then examine how low- versus high-status actors change their helpful behaviors and productivity. I find that productivity decreases with the less competitive (opaque) environment, but that only high-status actors decrease their helpful comments. I argue that the agent-based simulation suggests that this pattern of outcomes is likely due to the community having a heterogenous mixture of status-seekers since a homogenous community of either type of status-seeker would yield different results. The second essay turns around the motivation lens to the status-consumers rather than to the status-seekers. Why do they value status? This study examines taste-based status motives. That is, motives which are independent of quality considerations. Among this class of status audience, theory suggests that they may either be interested in status intrinsically or that they value status as a form of conspicuous consumption, but few large-scale empirical studies have addressed these different motivations. To address this challenge, I use a setting where audiences can reward high-status actors either anonymously or publicly. I find high-status actors receive a 60\% increase in deference versus their low-status counterparts. However, I find no difference between anonymous or public deference. Thus, while my findings replicate prior work on quality-based status motives, I find no evidence of taste-based status motives. One possibility for this could be that my setting does not contain sizable cohorts of people who have a taste for status. Another possibility could be that a different empirical approach is needed to tease these differing motivations apart from one another.