Harvard Business School Working Knowledge

Trade Creditors' Information Advantage

Fri, 02/23/2018 - 00:00
Trade credit represents about a quarter of the liabilities of U.S. firms. There are several theories explaining this fact. This study by Victoria Ivashina and Benjamin Iverson reexamines whether suppliers hold private information about their trade partners, by analyzing their behavior in bankruptcy.by Victoria Ivashina and Benjamin Iverson8884Victoria Ivashina378483Working Paper Summaries

The New History of American Capitalism

Thu, 02/22/2018 - 00:00
Historians are taking a new look at capitalism in light of its adoption in most of the developed world. From the edited volume "American Capitalism: New Histories," by Sven Beckert and Christine Desan.Re: Sven Beckert8878Sven Beckert12329Book

Debt Traps? Market Vendors and Moneylender Debt in India and the Philippines

Thu, 02/22/2018 - 00:00
Small-scale entrepreneurs throughout the developing world often rely on moneylenders for working capital but at exorbitant interest rates. Results of three experiments involving market vendors in India and the Philippines show the difficulty that small-scale entrepreneurs face in escaping usage of moneylender debt. Research by Benjamin N. Roth and colleagues.by Dean Karlan, Sendhil Mullainathan, and Benjamin N. Roth8883Benjamin N. Roth1028680Working Paper Summaries

When a Competitor Abandons the Market, Should You Advance or Retreat?

Wed, 02/21/2018 - 00:00
Companies pay close attention when a competitor drops out of the market, according to new research by Joshua Lev Krieger. Too often, though, they come to the wrong conclusion.by Rachel Layne8787Joshua Lev Krieger951435Research & Ideas

Stock Market Returns and Consumption

Tue, 02/20/2018 - 00:00
Using a unique dataset for the entire Swedish population, this study of household consumption in response to changes in capital gains and dividends shows that the marginal propensity to consume (MPC) out of capital gains for households in the top 50 percent of financial wealth distribution is relatively uniform and around 5 percent but is more than 10 percent for the bottom 50 percent. These results explain why the recent stock market rally ignited a spending splurge that is cutting into how much households save for rainy days. Research by Marco Di Maggio and colleagues.by Marco Di Maggio, Amir Kermani, and Kaveh Majlesi8880Marco Di Maggio697248Working Paper Summaries

First Look at New Research and Ideas, February 20, 2018

Tue, 02/20/2018 - 00:00
Why Chinese students flood American universities ... Studying how people make decisions ... Out of debt--then right back in.Sean Silverthorne8881First Look

The Supply Chain Economy: A New Framework for Understanding Innovation and Services

Mon, 02/19/2018 - 00:00
This study shows that a large and dynamic supply chain economy plays a crucial role in innovation and in the creation of well-paid jobs. Traded service suppliers are particularly important. Policies that help suppliers access skilled labor, buyers, and capital could be beneficial for fostering innovation and economic growth.by Mercedes Delgado and Karen G. Mills8871Karen Mills123725Working Paper Summaries

Amazoned: Is Any Industry Safe?

Mon, 02/19/2018 - 00:00
Like the Amazon River itself, Jeff Bezos's company cuts a powerful, meandering channel through the business landscape, changing every industry it touches.by Sean Silverthorne8850Sharpening Your Skills

A New Categorization of the US Economy: The Role of Supply Chain Industries in Innovation and Economic Performance

Fri, 02/16/2018 - 00:00
Mercedes Delgado and Karen G. Mills provide a novel industry categorization that quantifies the supply chain economy in the United States. Suppliers of goods, and particularly services, to business and government are a distinct and large sector, and play an important role in national innovation and economic performance.by Mercedes Delgado and Karen G. Mills8870Karen Mills123725Working Paper Summaries

Black Business Leaders Series: John Rogers and the Importance of Hiring Minority-Owned Services Firms

Thu, 02/15/2018 - 00:00
Re: Steven S. Rogers8808Steven S. Rogers98896Cold Call Podcast

Can Financial Innovation Solve Household Reluctance to Take Risk?

Thu, 02/15/2018 - 00:00
Structured products are an innovative class of retail financial products with option-like features. This paper by Boris Vallée and colleagues provides empirical evidence suggesting that innovative financial products like these can help alleviate loss aversion and thus the low participation of households in risky asset markets.by Laurent Calvet, Claire Celerier, Paolo Sodini, and Boris Vallée8875Boris Vallee738417Working Paper Summaries

In Search of Organizational Alignment Using a 360° Assessment System: Evidence from a Retail Chain

Tue, 02/13/2018 - 00:00
This study assesses an implementation of a values-based 360° performancre measurement system in a retail chain that already incentivized employees on financial performance. Paradoxically, the 360° system led to improvements on financial performance, but not on desired non-financial dimensions. Research by Carolyn Deller, Susanna Gallani, and Tatiana Sandino.by Carolyn Deller, Susanna Gallani, and Tatiana Sandino8874Susanna Gallani774593Tatiana Sandino10699Working Paper Summaries

New Research and Ideas, February 13, 2018

Tue, 02/13/2018 - 00:00
The embarrassment of paid volunterers ... The next wave of virtual reality ... Duke University's "outrageous ambition."Sean Silverthorne8872First Look

Private Equity, Jobs, and Productivity: Reply to Ayash and Rastad

Mon, 02/12/2018 - 00:00
In 2014, the authors published an influential analysis of private equity buyouts in the "American Economic Review." Recently, economists Brian Ayash and Mahdi Rastad have challenged the accuracy of those findings. This new paper responds point by point to their critique, contending that it reflects a misunderstanding of the data and methodology behind the original study.by Steven J. Davis, John Haltiwanger, Kyle Handley, Ron S. Jarmin, Josh Lerner, and Javier Miranda8873Josh Lerner9961Working Paper Summaries

Customers at the Back of the Line Are Anxious—Can You Keep Them from Leaving?

Mon, 02/12/2018 - 00:00
The irrational anxiety associated with being last in line can lead to unhappy customers, according to new research by Ryan Buell. But there are ways to make people happier while they wait--and keep them from abandoning the queue.by Michael Blanding8825Ryan W. Buell320524Research & Ideas

Big Hits: The Best of the 2018 Super Bowl Ads

Fri, 02/09/2018 - 00:00
Harvard Business School marketing experts Jill Avery, Stephen Greyser, and Thales Teixeira discuss the best ads and how they reflect American society.by Christian Camerota8868Jill J. Avery176164Stephen A. Greyser6467Thales S. Teixeira522373Research & Ideas

Developing Novel Drugs

Fri, 02/09/2018 - 00:00
Joshua Krieger, Danielle Li, and Dimitris Papanikolaou develop a new measure of drug novelty based on molecular characteristics, and explore the tradeoffs involved in decisions to develop more novel therapies.by Joshua Krieger, Danielle Li, and Dimitris Papanikolaou8869Joshua Lev Krieger951435Working Paper Summaries

Two Things to Know Before Deciding on Trump's Tax Plan

Fri, 02/09/2018 - 00:00
At the end of the day, tax policy is more about values than dollars. And it's still not too late to have a real discussion over the Trump tax plan, says Matthew Weinzerl.by Matthew Weinzerl8862Matthew C. Weinzierl496493Op-Ed

First Look at New Research and Ideas: February 6, 2018

Tue, 02/06/2018 - 00:00
Starting a business in North Korea...The unrecognized role of services in driving innovation...How to tell when the CEO is tipping good news.8867First Look

Subjectivity in Tournaments: Implicit Rewards and Penalties and Subsequent Performance

Tue, 02/06/2018 - 00:00
Analyzing data from a Chinese manufacturing company, Wei Cai and Susanna Gallani explore side effects of subjective performance evaluations in a setting where workers are rewarded based on performance rankings and subject to both rewards and penalties.by Wei Cai and Susanna Gallani8866Wei Cai776075Susanna Gallani774593Working Paper Summaries