Bilateral R&D Productivity and Supply Chain NetworksWe study research and development productivity (RDP) transmission between 4,123 global firms across three supply chain tiers. Collecting 153,090 yearly supply chain dyad partnerships from Bloomberg, we construct a two-sided econometric model of supply chain R&D. In our empirical specification, the dependent variable measures return on R&D, and the independent variables measure supply chain partner and network effects. In our sample data, we find that a 1% R&D productivity improvement of (i) an upstream partner can increase a downstream agent’s R&D productivity by 0.14%, and (ii) a downstream partner can increase an upstream agent’s R&D productivity by 0.28%. Our findings show that having R&D-productive partners plays a significant role in transforming an agent’s R&D into revenues. Similarly, we estimate a network’s average R&D productivity elasticity on an agent as 0.23%. We further find that R&D productivity spreads more within smaller, integrated, domestic, and intra-industry networks. In our two-stage estimation, we address supply chain network endogeneity resulting from entanglement, simultaneity, and partner selection. Our findings provide operational and financial insights for R&D practitioners.
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Does Extended Producer Responsibility Improve Eco-Innovation:
An Empirical Study of Product Take-Back Programs
Extended producer responsibility (EPR) is an important policy instrument to address environmental risks in solid waste disposal. Whether EPR incentivizes a producer’s eco-innovation is an ongoing debate among operations researchers and policymakers. Using firm-level take-back program as an important initiative of EPR and eco-patent as a proxy of eco-innovation, we leverage a difference-in-differences approach with propensity score matching and staggered treatment adjustment to identify the causal relationship between EPR and eco-innovation. We find that adopting take- back programs significantly motivates producers to develop eco-innovation. We also find that producers’ program scales and industries play significant roles in the take-back effect. Our research provides implications for both producers and policymakers. A growing number of states in the United States have set a goal to eliminate landfill/incineration for product end-of-life treatment, and eco- innovation is essential to achieve this goal. Our findings suggest that policymakers may promote individual take-back programs to incentivize eco-innovation. While taking on a new role in a take-back initiative is challenging, producers that eco-innovate may enhance their competitive advantage in the long run by reducing environmental risks, optimizing production and recycling processes, and satisfying the increasing customer demand in green products and services.
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Social Responsibility and Operational Risks in Merger and Acquisition Decisions
In this research, we study how corporate social responsibility (CSR) impacts a firm’s decisions on mergers and acquisitions (M&As). M&As are accompanied by significant organizational and operational changes, and the decision of M&A may be affected by expected challenges in post-M&A integration and risks. CSR brings a broad set of corporate values that could address these challenges. Our research aims to develop theoretical and managerial insights into the relationship between CSR and M&As. Using secondary data from 2005-2016, we estimate bootstrap-based conditional logit models to empirically investigate the role of CSR in M&A decisions. We find that a firm’s CSR score is positively associated with its M&A decision, and this effect remains positive and significant for M&As targeting firms for innovation or in emerging markets. We argue that, with regard to M&As, CSR can promote a long-term perspective on value-creation, facilitate integration across organizations, and buffer against risks of failures. Our extended analyses further show that such a positive impact is primarily driven by the corporate governance dimension of CSR, instead of social and environmental dimensions.
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Airline Revenue Management around Sporting Mega-Events:
An Application Using Data from the Super Bowl XLIX
Using air travel ticketing data for the travel dates around the 2015 Super Bowl in Phoenix, AZ, we exploit the exogenous shock created by the conference championship results and design a quasi-natural experiment to identify market-specific airfare and booking patterns. Our findings help quantify the impact on the resolution in uncertainty by measuring the changes in airfare and bookings, before and after the conference championship games, in the airline markets of finalist teams and teams that lost in the conference championship round. This empirical evidence provides important insights to airlines.
(Forthcoming: Journal of Revenue and Pricing Management) |