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The role of corporate lean programmes in crisis response: a multi-case study of hospitals during the COVID-19 pandemic
No full textPurpose This research aims to examine the role of established Corporate Lean Programmes (CLPs) in responding to extreme disruptions. While CLPs are often considered dynamic capabilities, their effectiveness during crises remains unclear. Given substantial investment in CLPs and increasing global uncertainty, evaluating their crisis management potential is crucial. Design/methodology/approach We build on a longitudinal non-participant field study conducted in five English hospitals, which implemented the Virginia Mason Production System, which is a CLP. This research was expanded in March 2020 to examine its application during the COVID-19 pandemic. We investigated how CLPs were utilised and adapted to manage the crisis. Data collection (May–December 2020) included 20 h of non-participant observation at leadership meetings, 39 semi-structured interviews, and extensive document review. Findings To respond to the crisis, activities related to strategy and long-term planning were paused, and the CLP was adapted in three main ways: increased daily management practices for coordination, communication and teamwork; flexible deployment of specialist knowledge resources and simplified CLP routines for widespread, structured problem-solving. We develop a process model of adapting a CLP to respond to a crisis. The increased use and visibility of these practices enhanced the CLP’s perceived legitimacy, overcoming initial resistance to adoption. Originality/value This study offered a unique opportunity to deepen our understanding of how a CLP responded to extreme disruption. It also provides evidence that, despite arguments that lean approaches are only effective in stable environments, they can be adapted to work effectively in dynamic ones. This offers significant insights into the CLP’s sustained utility during extreme disruption
Firms’ Real and Reporting Responses to Taxation: A Review
No full textTaxation is a central economic policy tool, with governments increasingly using tax policy to stimulate local economic growth and also regulate multinational firms. We review the empirical literature that studies the effect of tax policies on firms’ investment, employment, and other real outcomes. Building on the neoclassical theory of corporate taxes and tangible investment, we propose an organizing framework for our review that captures the wide set of tax policies and firm responses examined in accounting research. This framework highlights four dimensions along which accounting scholars contribute to the literature: (i) documenting the role of financial reporting incentives as a moderating factor in firms’ real responses, (ii) studying firms’ reporting versus real responses, (iii) quantifying real effects of tax disclosure regulations, and (iv) improving measurement of firms’ tax status and proxies for investment and employment. We identify open questions for future research and suggest new international, federal, and local settings that may help uncover underlying mechanisms driving observed economic phenomena. Specifically, we encourage scholars to further distinguish firms’ reported and real responses to tax changes and improve measurement of these outcomes, especially in settings related to environmental taxation or settings in which tax avoidance and real outcomes are closely linked
Mortgage Pricing and Monetary Policy
No full textThis paper examines how central bank policies influence mortgage pricing in the United Kingdom. It shows that lenders price discriminate by offering two-part tariffs of interest rates and origination fees, and during unconventional monetary policies like the Funding for Lending Scheme, lenders reduced interest rates while increasing fees. Using a model of mortgage demand and lender competition, we find that central bank policies increased mortgage lending. Additionally, banning origination fees would reduce lending, as fees help lenders capture surplus while allowing them to price discriminate across borrowers with different sensitivities to rates and fees
Standing on the Shoulders of (Male) Giants: Gender Inequality and the Technological Impact of Scientific Ideas
Full text linkScience is fundamental to the innovation process; however, not all scientific ideas significantly contribute to shaping technological developments. In this paper, we argue that, despite having strong incentives to build on the most promising ideas, inventors rely more on research conducted by men than by women. We analyze the citations that scientific papers receive in patented inventions and find that the papers authored by female scientists receive fewer citations, both in a large sample of over 10 million papers and in a smaller sample of simultaneous discoveries. We systematically explore the mechanisms underlying this finding, including an online experiment conducted with 400 individuals holding science doctoral degrees. Our results suggest that the gender disparity in patent-to-paper citations is unlikely to stem entirely from supply-side mechanisms such as access to resources, networks, and scientific style. Instead, they align with demand-side explanations, in particular the notion that inventors pay more attention to and place higher value on scientific publications authored by men. These findings have implications for our understanding of frictions in science-based technology development, as well as for broader theories of how gender inequality shapes cumulative innovation
The Long-Run Effects of Government Spending
Full text linkMilitary spending has large and persistent effects on output because it shifts the composition of public spending toward R&D. This boosts innovation and private investment in the medium term and increases productivity and GDP at longer horizons. Public R&D expenditure stimulates economic activities beyond the business cycle even when it is not associated with war spending. In contrast, the effects of public investment are shorter-lived, while public consumption has a modest impact at most horizons. We reach these conclusions using BVAR with long lags and 125 years of US data, including newly reconstructed series of government spending by main categories since 1890. (JEL E21, E22, E23, E62, H50, H56, O30
When Discounted Rates End: The Costs of Taking Action in the Mortgage Market
No full textWe combine administrative data with a life-cycle structural model that exploits the unique features of the UK mortgage market to analyze the sources of inaction and to estimate borrowers’ non-pecuniary remortgaging costs. The utility costs needed to generate a given level of inaction depend on monetary gains from remortgaging and on the importance of those monetary gains for agents, which in turn depend on the (endogenously determined) marginal utility of consumption. The model results reveal significant non-pecuniary costs of action that, when measured as a proportion of borrower income, are larger for the young and for lower income households
Political Information and Network Effects
No full textWhy do political campaigns so often yield unexpected results? We address this question by separately estimating the direct effect of a campaign on targeted voters and the indirect effect on others in the same social environment. Partnering with a local NGO during Argentina’s 2023 presidential election, we randomized the distribution of leaflets providing an expert assessment of the likely consequences of certain proposals by the outsider candidate Javier Milei. Exploiting Argentina’s unique sub-precinct election reporting system, we show that the campaign reduced Milei’s support among directly treated voters, as expected, but increased his support among untreated voters in treated precincts, producing a backfiring, net-positive effect for Milei. A pre-registered replication confirmed these opposite-signed effects. Using theory and a survey experiment, we show that the minority of voters who disbelieved the campaign were more motivated to discuss it with peers, convincing them to support Milei. This mobilization effect appears especially likely when campaigns criticize outsider candidates. Our results highlight how campaigns aimed at anti-elite candidates can unintentionally mobilize support for them
The Misfit Bias
Full text linkConsumers and other audiences often penalize products that combine unrelated elements. In this paper, we document the consequences of that penalty for the evaluation of the elements being combined. Building on the idea that audiences cannot fully disentangle the quality of “fit” between elements from the quality of the elements individually, we argue that audiences are likely to direct their dislike of a misfit product to the individual elements being combined. Using an archival study of the music industry and an online experiment with photographic galleries, we find that evaluations of individual elements (songs, photographs) are influenced by product-level fit (albums, galleries). Elements of misfit products are evaluated less favorably than they would have been otherwise. Moreover, this bias is exacerbated when the evaluation of the whole product is emphasized. We discuss the implications of this “misfit bias” for the innovation, entrepreneurship, and categories literatures
The Value of Software
Full text linkSoftware is one of the most important assets that needs to be priced in the digital economy. It has emerged as a disruptive technology, with companies primarily valued for their software offerings growing from 2% to 13% of market share between 1996 and 2023. We document persistent anomalies in growth forecasts and stock returns for software companies, indicating significant deviations from rational expectations over multiple decades. Our findings are consistent with Bayesian investors gradually learning about software’s growing importance, highlighting how markets can be very slow to discern fundamental shifts from transient shocks in noisy data
Breaking With Tradition: Insights From the Literature on Disruptive Innovation
No full textHow can established organizations (as opposed to new entrants or start-up firms) break with tradition successfully? The literature on disruptive innovation is a good lens to examine this topic because a break with tradition is disruptive to established organizations, and the conflicts and challenges it creates have already been explored in the context of disruptive business models. The author uses this literature to identify several ways in which firms can break with tradition successfully by limiting the costs associated with such an innovation