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Institutional Disruptions and the Philanthropy of Multinational Firms
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2022 | Organization Science | Citations: 0
Authors: Ballesteros, Luis; Magelssen, Catherine

Abstract: This paper studies philanthropy by multinational enterprises (MNEs) during insti ... Expand

Abstract: This paper studies philanthropy by multinational enterprises (MNEs) during institutional disruptions—the sudden and unexpected, temporary, and systemic breakdowns in market-oriented institutions. The central argument is that, under institutional disruptions, MNEs aim to restore factors that are essential for the market to function, such as infrastructure and labor markets, and the strength of the market restoration motive is positively associated with the economic importance of the affected country to the MNE. Analyses of donations from 2,000 MNEs headquartered in 63 countries in the aftermath of 265 major epidemics, natural disasters, and terrorist attacks affecting 129 countries suggest that the economic importance of the country to the firm strongly explains donations. Country market concentration, public aid, and the country’s regulatory quality moderate this effect. These associations are robust to a matching method; a vector of firm-, country-, and event-specific time-varying and -constant variables; and alternative motives, such as reputation, altruism, media salience, market standing, and poverty-gap avoidance. They offer evidence that company philanthropy in the aftermath of institutional disruptions may deviate from predicted behavior under stable conditions. Particularly, the findings contest the expectation that philanthropy rises in market competition. Monopolistic firms are comparatively large donors and may act as an economic stop-loss mechanism during large disruptions. Collapse

Semantic filters: theory of economic fluctuations

Topics: database system terrorist incident pandemic missing data earthquake

Methods: qualitative interview descriptive statistic natural language processing theory development robustness check

Theories: theory of economic fluctuations
Lowering the Bar? External Conditions, Opportunity Costs, and High-Tech Start-Up Outcomes
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2021 | Organization Science | Citations: 0
Authors: Conti, Annamaria; Roche, Maria P.

Abstract: We assess the heterogeneous impact of economic downturns on individuals’ decisio ... Expand

Abstract: We assess the heterogeneous impact of economic downturns on individuals’ decisions to bring high-technology ideas to the market in the form of new ventures. We thereby examine how worsening labor market conditions influence individuals’ opportunity costs of starting new ventures, the resulting composition of the entrepreneurial pool, and start-up performance outcomes. Using a rich data set of start-up founders in the biotechnology and medical device sectors, we find that an increase in the unemployment rate is associated with a substantial rise in the share of entrepreneurs who are most sensitive to worsening labor market conditions. Additionally, we find that start-ups founded by these entrepreneurs display lower financial and innovative performance than start-ups founded by entrepreneurs who are relatively insensitive to business cycles. Finally, we provide suggestive evidence that individuals’ heterogeneous response to worsening labor market conditions is a relevant factor in explaining the negative relationship between unemployment and start-up performance outcomes. Collapse

Semantic filters: theory of economic fluctuations

Topics: entrepreneurship productivity LinkedIn innovation management human resource management

Methods: robustness check descriptive statistic regression analysis method survey design linear regression analysis

Theories: theory of economic growth theory of economic fluctuations
Technology executives in the changing accounting information environment: Impact of IFRS adoption on CIO compensation
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2018 | Information & Management | Citations: 8
Authors: Liu, Fang-Chun; Hsu, Hsiao-Tang; Yen, David C.

Abstract: Accounting regulatory changes that affect the information technology (IT) infras ... Expand

Abstract: Accounting regulatory changes that affect the information technology (IT) infrastructure of firms have prompted Chief Information Officers (CIOs) to take the lead in aligning IT changes with new reporting requirements. This study investigates the associations between the mandatory adoption of International Financial Reporting Standards (IFRS) and CIO compensation. We find a significant increase in CIO compensation in the post-IFRS period, which is higher in non-IT firms than in IT firms. Moreover, pay is at a premium for CIOs equipped with more educational background in business. We discuss the implications of our study and offer suggestions for future research. Collapse

Semantic filters: theory of economic fluctuations

Topics: Chief Information Officer accounting database system accounting standard research and development

Methods: propensity score method Capital IQ financial report regression analysis method mixed method

Theories: theory of economic fluctuations
Invention or incremental improvement? Simulation modeling and empirical testing of firm patenting behavior under performance aspiration
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2017 | Decision Support Systems | Citations: 0
Authors: Guo, Bin; Ding, Peng

Abstract: This paper explores how firms determine their patenting strategy when faced with ... Expand

Abstract: This paper explores how firms determine their patenting strategy when faced with different performance situations. Patenting strategy in this study is defined in terms of either engaging more in inventions with more risk and higher profit or in more incremental improvements with less risk and lower profit. We develop two game-theoretical models to analyze how different kinds of performance discrepancies encountered by a firm influence the evolution of the firm's propensity toward a patenting strategy. Then, an empirical analysis of 1921 listed companies in China is conducted to test the propositions derived from the two game-theoretical models. The results reveal the decision-making pattern of a firm's patenting strategy. Specifically, a firm with performance higher than its aspiration will prefer to engage more in invention-type patents, while a firm with lower performance than its aspiration will invest more in incremental improvement patents. Additionally, all else being equal, the patenting strategy more likely to succeed will be more appealing to firms, no matter what kinds of performance gaps they have. Collapse

Semantic filters: theory of economic fluctuations

Topics: research and development database system decision making organizational productivity innovation management

Methods: longitudinal research regression analysis method simulation autocorrelation analysis ordinary least square

Theories: prospect theory behavioral theory of the firm game theory theory of economic fluctuations
The Impact of Information Technology Investments on Downside Risk of the Firm: Alternative Measurement of the Business Value of IT

2012 | Journal of Management Information Systems | Citations: 30
Authors: Otim, Samual; Dow, Kevin E.; Grover, Varun; Wong, Jeffrey A.

Abstract: We examine the effect that investments in information technology (IT) have on do ... Expand

Abstract: We examine the effect that investments in information technology (IT) have on downside risk profiles of companies that made public announcements of their investments in technology. Given the limitations of financial and decision theory perspectives on risk, we adopt the strategic management perspective that stresses downside risk as an important alternative measure of firm performance. We examine whether different types of IT investments have a differential impact on firm downside risk. Drawing on the resource-based view of the firm and the real options perspective, we find evidence that IT investments and their timing influence organizational downside risk. Transformational and informational IT investments lead to a reduction in downside risk only if they lead to strategic IT investments in the industry. For competitive necessities such as IT investments that automate business functions, a reduction in downside risk is realized by investing in parity with industry participants. Our study contributes to the literature by offering an alternative perspective on the benefits of IT investments, particularly where no apparent incremental financial results may be evident. It also generates insights on IT investment strategies that may help firms keep up with or stay ahead of the competition. Collapse

Semantic filters: theory of economic fluctuations

Topics: organizational productivity IT investment real option accounting competitive advantage

Methods: event study longitudinal research theory development Compustat parametric test

Theories: theory of economic cycles decision theory prospect theory resource based view of the firm theory of economic fluctuations
The Influence of Industry Growth and Firm Market Share on Firm-Level IT Value

2009 | Americas Conference on Information Systems | Citations: 0
Authors: Singh, Harminder; Wimble, Matt; Sabamurthy, V

Abstract: Market-dominant firms traditionally have an advantage in growing markets because ... Expand

Abstract: Market-dominant firms traditionally have an advantage in growing markets because they operate with larger average plant sizes and are better able to reap the rewards of economies of scale. We present evidence that with information technology (IT), the effect is precisely the opposite: firms with less market power enjoy the benefits in a growing market. The influence of firm-level attributes on the economic value of information technology (IT) to firms has been the predominant focus of much prior research in this field. While some studies have examined how IT value differs across industries, there has been little research on how industry and firm attributes jointly affect firms’ returns on their IT investments. To that end, we develop cross-level hypotheses to examine how the latter is influenced by industry growth and firm size. By using a hierarchical linear model to test the industry-to-firm interactions, we are able to control for violations of statistical assumptions that are likely to bias cross-level estimates obtained using conventional statistical methods. Results of the analysis reveal that 93.25% of the variance in firm-level IT value lies within firms, while 6.75% is attributable to industrylevel factors. The implications of these findings for research and practice are examined. Collapse

Semantic filters: theory of economic fluctuations

Topics: IT investment organizational productivity IS value information system use accounting

Methods: hierarchical linear modeling statistical hypothesis test

Theories: theory of economic fluctuations
An Empirical Investigation of Information Technology Returns: The Role of IT and Market Structure as Determinants of Efficiency

2004 | International Conference on Information Systems | Citations: 1
Authors: Chang, Young; Gurbaxani, Vijay

Abstract: The impact of information technology on productivity has been debated for two de ... Expand

Abstract: The impact of information technology on productivity has been debated for two decades. While some studies in the1980s found no contribution of IT to output, more recent studies have found a positive return to IT investment in several industries. However, we have a limited understanding of industry differences in these returns, in particular as to why productivity enhancements in the trade and service sectors, which are ITintensive, have been low. A few previous studies have reported the different impacts of IT on productivity across industries. This paper aims at developing an in-depth understanding of why we witness different IT returns across industries. In our analysis, we find that while the trade sector is more efficient than other industries, the direct impact of IT is masked by the impact of competition on efficiency. This finding provides us with insight not just into why we did not observe productivity gains in the service and trade sectors, but also provides justification for the large IT investment in this sector. Collapse

Semantic filters: theory of economic fluctuations

Topics: productivity IT investment IS impact information system use system efficiency

Methods: longitudinal research Compustat econometric modeling literature study

Theories: economic theory theory of economic fluctuations theory of economic growth

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Found 7 articles

Institutional Disruptions and the Philanthropy of Multinational Firms

Lowering the Bar? External Conditions, Opportunity Costs, and High-Tech Start-Up Outcomes

Technology executives in the changing accounting information environment: Impact of IFRS adoption on CIO compensation

Invention or incremental improvement? Simulation modeling and empirical testing of firm patenting behavior under performance aspiration

The Impact of Information Technology Investments on Downside Risk of the Firm: Alternative Measurement of the Business Value of IT

The Influence of Industry Growth and Firm Market Share on Firm-Level IT Value

An Empirical Investigation of Information Technology Returns: The Role of IT and Market Structure as Determinants of Efficiency