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Gender Differences in Preferences for Meaning at Work
No full textScholars have examined whether preferences for job characteristics help explain why men and women sort into different occupations but have overlooked preferences for meaning at work. We first document gender differences in preferences for meaning in a large-scale survey covering individuals in 47 countries. We then conduct a choice-based conjoint analysis of a cohort of MBA students at a leading business school to study gender differences in preferences for meaning compared to other job attributes. We show that gender differences in preferences for meaning at work are widespread and partly explain gender differences in behavioral outcomes, including industry of work
Rational sustainability
Full text linkThis article proposes the term and practice of “Rational Sustainability” as an alternative to ESG. “Sustainability” refers to the goal: creating sustainable, long-term value, which is relevant to all job functions and political beliefs. It considers all factors that create value, regardless of whether they fall under an ESG label, and deprioritizes immaterial factors even if they can be called ESG. “Rational” refers to the approach: it recognizes diminishing returns and trade-offs; it is based on evidence and analysis; it questions many widespread sustainability conventions and practices rather than following the herd; and it guards against being caught up in irrational sustainability bubble
A bias correction approach for interference in ranking experiments
Full text linkOnline marketplaces use ranking algorithms to determine the rank-ordering of items sold on their websites. The standard practice is to determine the optimal algorithm using A/B tests. We present a theoretical framework to characterize the Total Average Treatment Effect (TATE) of a ranking algorithm in an A/B test and show that naive TATE estimates can be biased due to interference. We propose a bias-correction approach that can recover the TATE of a ranking algorithm based on past A/B tests, even if those tests suffer from a combination of interference issues. Our solution leverages data across multiple experiments and identifies observations in partial equilibrium in each experiment, i.e., items close to their positions under the true counterfactual equilibrium of interest. We apply our framework to data from a travel website and present comprehensive evidence for interference bias in this setting. Next, we use our solution concept to build a customized deep learning model to predict the true TATE of the main algorithm of interest in our data. Counterfactual estimates from our model show that naive TATE estimates of click and booking rates can be biased by as much as 15% and 29%, respectively
The inside track: entrepreneurs’ corporate experience and startups' access to incumbent partners’ resources
Full text linkStartups are increasingly turning to incumbent firms for venture capital, anticipating access to the investor’s knowledge and complementary assets. However, startups' eventual access to these resources varies widely. This paper highlights one important driver of such variance, whether startups' managers were previously employed by an incumbent in the same industry. Using data from the life-sciences, I find that such corporate experience can precipitate technical knowledge flows to startups by enabling the generation of relational capital with incumbent firm managers. It also helps startups navigate incumbents’ decision-processes to formalize access to downstream complementary assets via alliances. The former effect is stronger when corporate experience is technology-focused, the latter when it is commercialization-focused. Corporate experience at the investing incumbent firm amplifies informal knowledge-flows but not formal alliances
Globalization, Government Popularity, and the Great Skill Divide
No full textWe provide the first large-scale, global evidence on the impact of the skill composition of trade on political approval. We show that political implications of trade shocks depend on the relationship between workers’ skills and the characteristics of goods traded. Using Gallup World Poll surveys of a million respondents from 121 countries over 2005–18, we show that growth in high-skill intensive exports increases confidence in government among skilled individuals relative to unskilled ones. Growth in high-skill intensive imports has the opposite effect. Growth in low-skill intensive exports (imports) increases (decreases) confidence in government among unskilled individuals relative to skilled ones. To identify causal relationships, we construct instruments based on time-varying effects of air and sea distances on bilateral trade in goods of different skill intensity
Pathways to Foreign Venture Capital Investments
No full textForeign venture capital (VC) investments are minority equity investments in entrepreneurial ventures located in a country different to the investor’s home country. The volume of such investments has grown rapidly in recent times, but with considerable heterogeneity between otherwise similar firms in the level, type, and location of the foreign investments they make. This chapter summarizes some of the existing research on the antecedents of such investments
Capital riesgo y ‘startups’: estrategias para implementar criterios ESG y crear valor
No full text¿Las startups pueden ignorar los criterios ESG si aspiran a financiarse a través de fondos de venture capital? En Europa, estos fondos cada vez tienen más en cuenta los aspectos ambientales, sociales y de gobernanza, y no solo para decidir a qué empresas facilitan capital, sino también para orientar su propia operativa y, en algunos casos, incluso para establecer de quién aceptan dinero. En un contexto donde los inversores son muy selectivos, los emprendedores no pueden obviar este aspecto de sus proyectos
The Motherhood Wage Penalty and Female Entrepreneurship
No full textThe need to resolve work–family conflict has long been considered a central motive for women’s pursuit of entrepreneurship. In this paper, we propose and empirically uncover a novel mechanism driving female entrepreneurship: reduced earnings opportunities in wage employment due to motherhood status. Combining insights from career mobility research and the motherhood penalty literature, we propose that women who become mothers will disproportionately launch a new business to reduce the motherhood penalty they would otherwise incur in wage work due to employer discrimination. We further predict that this tendency to launch a new venture will be more pronounced for women who occupy high-paying or managerial positions, given the higher opportunity cost of staying in wage work and the higher potential payoffs from entrepreneurship that accrue mothers occupying such positions. Using matched employer–employee data from Sweden that distinguish new-venture founding from self-employment, we find support for our arguments. Overall, this study sheds light on the two antecedents of female entrepreneurship and contributes to a more thorough understanding of what motivates women to pursue irregular and atypical careers, such as entrepreneurship. Funding: This work was supported by the Ewing Marion Kauffman Foundation (Ewing Marion Kauffman Junior Faculty Fellowship) and the Wharton Dean’s Research Fund. Supplemental Material: The e-companion is available at https://doi.org/10.1287/orsc.2023.1657
Computing corporate bond returns: a word (or two) of caution
Full text linkWe offer several suggestions for researchers using corporate bond return data. First, despite clear instructions from older papers (e.g., Bessembinder et al., The Review of Financial Studies 22:4219–4258, 2009) about ways to compute credit excess returns, a lot of recent research simply subtracts a Treasury Bill return. We show that this imprecision is likely to contaminate inferences, as the rate component of returns is negatively correlated to the spread component. This is a problem for all research looking at corporate bond returns, especially time series analysis and safer corporate bonds (e.g., investment grade). We provide a simple approach using Wharton Research Data Services (WRDS) data to remove the interest rate component of corporate bond returns. Second, we note significant differences in the coverage of corporate bonds across the Trade Reporting and Compliance Engine (TRACE) platform and typical corporate bond indices. We provide some simple rules for researchers who are using TRACE to select a subset of bonds closest to those contained inside corporate bond indices used by institutional investors. Third, we note differential quality in the prices and hence returns between TRACE and typical corporate bond indices. Corporate bond returns provided by corporate bond indices (i) correctly estimate credit excess returns, (ii) are synchronous for the entire set of bonds, allowing for consistent cross-sectional comparability, and (iii) suffer less from stale pricing issues. Due to these coverage and data quality issues, researchers should try, where possible, to source return data from multiple sources to ensure the robustness of their results
Can executives predict how firm news maps to stock price? A field study at the onset of COVID-19
Full text linkExecutives have incentives to predict the price impact of disclosures to inform their insider trades, reporting discretion, and operating decision-making. Yet the extent to which they can do so accurately is unknown. We conduct a field study to provide direct evidence on executives’ accuracy, recruiting over 650 U.S. public company executives to share their predictions of the stock price response to their companies’ second quarter 2020 quarterly reports. Despite the market volatility and uncertainty at the onset of COVID-19, executives’ predictions of the one-day price reaction are directionally correct in two-thirds of cases. Further, executives’ short-window expectation errors predict returns. Following their companies’ reports, executives trade against the market in line with their initial error, and stock prices largely converge to their expectations over the subsequent 100 trading days. Collectively, our results provide novel evidence of executives’ superior ability to anticipate how the market prices information in quarterly financial reports, even in periods of extraordinary change