Publications

Abstract: 

Smartphones regularly track the precise locations of millions of people worldwide. These data are increasingly used in industry and academic settings to measure firm performance, workplace behavior, social interactions, and other metrics. We demystify this rich data source and explain how these data are constructed, how researchers can obtain access, and best practices when making inferences. Furthermore, we examine mobility data’s coverage of business locations against a popular business listing data source (Data Axle) and provide guidelines on matching mobility data to firm financials (Compustat). Finally, we provide sample data, code for illustration, a website for data exploration (mobilitydataresearch.com), and highlight opportunities and limitations of using these data for management and strategy research.

Managerial summary:

In corporate acquisitions, the competitive threat posed by potential alternative acquirers of the target generally forces the focal acquirer to offer high returns to the target to gain its control. Indeed, these transactions are often not profitable for acquirers. Yet, we know little about what determines the competitive threat faced by acquirers in the market for corporate control. This study shows that the presence of airline routes that reduce the travel time between the target and its latent acquirers increases the target's returns from the deal and the number of competing bids. The study also tests whether lower travel time between the acquirer and its latent targets gives the acquirer more bargaining power vis-à-vis the focal target. However, there is no evidence of this effect.

Abstract: 

This paper studies the impact of geographic isolation on innovation. Geographically isolated regions have lower access to distant knowledge and, thus, may be less effective in producing innovation. In addition, this effect may be moderated by frictions in the labor market, such as trade secrecy protection, that hinder access to local knowledge. To explore this argument, we build a comprehensive dataset of US CBSAs for the period 1971–2014, combining data on travel time, trade secrecy protection, and patenting activity. We find that geographic isolation has a substantial negative impact on innovation quantity and quality. This relationship is at least partially explained by lower access to existing knowledge, as geographic isolation hinders collaboration and, to some extent, mobility. The negative effect is especially pronounced in regions characterized by strong trade secrecy protection. Overall, the evidence suggests that the combination of geographic isolation and trade secrecy protection is detrimental to the innovation performance of regions.

Managerial summary: 

Previous research shows that while acquisitions can create synergistic gains, the presence of potentially competing bidders forces acquirers to pay a high price for their targets, which makes acquisitions generally unprofitable for acquirers. We provide evidence suggesting that frequent social interactions between the acquirer's and the target's management in the pre-acquisition phase increase the target management's trust in the acquirer, making it more willing to cede control to the acquirer and less eager to seek alternative bidders. By mitigating competition in the bidding process, social interactions make acquisitions more profitable for acquirers vis-à-vis targets. Social interactions are less effective when the target's management owns a larger share of the target or is better monitored by shareholders (e.g., in companies with concentrated ownership or private companies).

Managerial summary: 

Technological resources are key strategic resources that significantly contribute to firms' valuations. These resources are often acquired through corporate acquisitions. This study explores whether acquisitions affect the valuation of technological resources of other companies not involved in the transaction. The results show that a firm that owns patents similar to the company being acquired experience positive stock market returns at the acquisition announcement, which suggests that the deal signals to investors that the acquired resources are more valuable than initially expected. This effect holds regardless of whether the firm belongs to the same industry as the target or the acquirer. These spillovers change the market value of technological resources and are likely to affect the gains from later acquisitions or divestures of similar resources.

Highlights:

• Crowdfunding is a growing phenomenon that encompasses several different models of financing for business or other ventures. Despite the hype, equity crowdfunding is still the smallest part of the crowdfunding market. Because of its legal framework, Europe has been at the forefront of equity crowdfunding market development.

• Equity crowdfunding is more complex than other forms of crowdfunding and requires proper checks and balances if it is to provide a viable channel for financial intermediation in the seed and early-stage market in Europe. It is important to explore this new channel of funding for young and innovative firms given the critical role these start-ups can play job creation and economic growth in Europe.

• We assess the potential role of equity crowdfunding in the overall seed and early-stage financing market and highlight the potential risks of equity crowdfunding. We describe the current state of play in this nascent industry, considering both the innovations introduced by market operators and existing regulation. Currently in Europe there is a patchwork of national legal frameworks related to equity crowdfunding and this should be addressed in a harmonised way.

Abstract:

In this study, we investigate how the performance of an acquisition is influenced by the acquisitions and divestitures previously conducted by the target firm. By combining insights from the corporate strategy literature and organizational structure research, we propose that the efficiency of an acquisition’s post-merger integration phase is negatively affected by the target’s levels of structural fragmentation, which, in turn, are increased by acquisitions and reduced by divestitures. Based on this perspective, we hypothesize that the performance of an acquisition worsens as the size of assets acquired by the target prior to the acquisition increases, particularly if those assets are unrelated to the target’s core business. Conversely, we suggest that the performance of an acquisition improves when the target has divested assets, especially if they are unrelated to its core business. To support our viewpoint, we analyzed data from a sample of acquisitions announced between 1985 and 2019 among U.S. public firms. The results strongly support our claims, making a significant contribution to the corporate strategy literature, expanding research on organizational structure, and providing valuable managerial insights about how to maximize acquisition performance.