“Entering Markets While Standing in Place: The Impact of Redeployment Costs on Entry Mode and Organizational Structure” (Job Market Paper)
This paper examines the impact of reduced resource redeployment costs on market entry, entry mode, and organizational structure, using changes in state-level occupational licensing rules for lawyers. The findings suggest that firms are more likely to enter a market when redeployment costs drop, yet less likely to enter using a new physical establishment (greenfield investment). Moreover, the study indicates that firms increase their managerial span of control in response to lower redeployment costs. Relatedly, firms increase the level of worker specialization since expanded market access enables workers to concentrate on a greater depth of specialized knowledge. With these new opportunities for flexible firm expansion, firm performance improves as redeployment costs decrease. Overall, these results imply that firms adopt new entry modes and organizational structures when facing lower redeployment costs to effectively reallocate resources as market conditions evolve.
“Learning to Use: Stack Overflow and Technology Adoption” (With Maria Roche)
In this paper, we examine the potential impact of Q&A websites on the adoption of technologies. Using data from Stack Overflow – one of the most popular Q&A websites worldwide – and implementing an instrumental-variable approach, we find that users whose questions are answered within 24 hours are significantly more likely to adopt the technologies that they ask about in their next job than users whose questions are answered later or not at all. In analyzing heterogeneous effects, we detect that this relationship is driven entirely by users located in or in close proximity to technological hubs, is stronger for more established technologies, and for users who have already asked more questions about a focal technology. Our findings suggest that the feedback provided by virtual communities can assist with the adoption of new technologies by supporting individuals that are learning to use a technology rather than in the discovery of new ones. Critically, our results suggest that such online activity functions as a complement to physical proximity, rather than as a substitute.
“The Ties That No Longer Bind: Inventor Mobility and Patent Litigation” (With Maria Roche)
The retention of inventor-employees represents a core strategic concern for firms in innovative industries. In this paper, we examine the impact of reduced patent enforceability on the mobility of inventor-employees and explore the related influence on firms’ innovative activities. To analyze this potential relationship, we use the US Supreme Court ruling eBay Inc. v. MercExchange, L.L.C., which decreased the use of injunctions in patent infringement cases and, consequently, the risk firms and individuals faced from being sued for patent infringement. Our analyses rely on difference-in-differences specifications that include state-year, firm, and technological fixed effects, and a host of other controls. Using patent application data to track the movements of 50,283 early career patent inventors before and after the ruling, we find that in the post period, inventor-employees at firms with a greater reliance on intellectual property are relatively more likely to leave their employer. Moreover, we find that employees most affected by the change are those involved in basic research and those with generalizable skills, suggesting that the change in patent enforceability may have improved the outside employment options for certain inventors. We further detect important implications for firm performance and the direction of firm innovation resulting from these patterns.
“Leaders Running from Laggards: The Impact of Patent Strength on Competitor Knowledge Flows and Colocation” (With Maria Roche)
Formal intellectual property and location choice are both tools that firms can use to protect their innovations from appropriation. In this paper, we investigate the effect of patent enforceability on knowledge flows and spatial proximity between competitors. We find that a drop in patent strength encourages the movement of inventors to competitors, especially to geographically proximate competitors who are relative technological laggards. Moreover, we detect that, as a result, more knowledge flows from technological leade rs to technological laggards. Following these changes, technological leaders become significantly less likely to geographically collocate with laggards, likely in an effort to reduce knowledge spillovers. Our results suggest that the patent system can significantly impact the spatial organization of the firm, with effects differing based on competitive conditions.