Q: Risk, rents, or growth?

We document that the increasing polarization in Tobin’s Q within industries is closely connected to the growing divergence in rents and the emergence of superstar firms over the past four decades, while discount rates and growth rates did not exhibit the same increasing dispersion. We explain these industry polarization trends in an estimated general equilibrium model where each industry consists of large superstar oligopolists and small monopolistically competitive firms with endogenous transitions between them. Small firms make investments in speculative innovation to increase their probability of becoming superstars. Our model estimation finds that rising entry barriers in both small and superstar firms contribute to rising polarization in markups, but the rising barriers to creating small firms and increasing tastes for goods produced by superstars account for most of the divergence in Q. Stunting the creation of small firms generates greater incentives for speculative innovation, magnifying the impact of market power dispersion on industry polarization in Q

State ownership and corporate leverage around the world

Does state ownership hinder or help firms access credit? We use data on almost 4 million firms in 89 countries to study the relationship between state ownership and corporate leverage. Controlling for country-sector-year fixed effects and conventional firm-level determinants of leverage, we show that state ownership is robustly and negatively related to corporate leverage. This relationship holds across most of the firm-size distribution – with the important exception of the largest companies – and is stronger in countries with weak political and legal institutions. A panel data analysis of privatized firms and a comparison of privatized with matched control firms yield similar qualitative and quantitative effects of state ownership on leverage

The role of corporate lean programmes in crisis response: a multi-case study of hospitals during the COVID-19 pandemic

Purpose 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

Designing Layouts for Sequential Experiences: Application to Cultural Institutions

A fundamental issue faced by experience providers—ranging from retail to culture—is displaying a collection of items for physical and digital interactions. The arrangement of the exhibits in different locations, which we call the layout, affects the visitors’ choices over time and space, thereby driving their engagement with the offered experience. In a collaboration with the Van Gogh Museum (Netherlands), we develop a predict-then-optimize framework to inform such operational decisions. First, we propose a sequential choice model, called pathway multinomial logit, that represents visitor activity as a sequence of conditional logit outcomes influenced by the layout. Estimation on large-scale visitor activity logs recorded on multimedia guides reveals that increase in spatial distances and search distances on the multimedia guide interface are strongly correlated with a reduction of transition propensity between artworks, while also uncovering relationships with artwork characteristics and contextual features. Counterintuitively, in response to more congestion, visitors may interact with more exhibits, including less prominent artworks. Our model predicts the next visitor transition with an out-of-sample accuracy of 63%. We test the predictive accuracy of our model against several benchmarks and modified layouts. Finally, we formulate the layout optimization problem, where the goal is to assign artworks to different locations to maximize the expected length of visitors’ paths. We establish a strong inapproximability result for this new optimization setting. Our simulations suggest that optimized layouts might lift visitor engagement by improving proximity and retention exerted by the layout

Incentives, Burnout, and Turnover: Dynamic Compensation Design with Effort Cost Spillover

Employee burnout has long plagued firms. The prevalence of burnout shows that work-related effort is not only costly in the present but has carryover effects into the future. We incorporate this ‘effort cost spillover’ into a dynamic, two-period principal-agent model, where the worker’s effort cost in the second period increases in both their second-period and first-period efforts. We use this model to explore optimal compensation design and the connection between incentives, burnout, and turnover. Naturally, turnover may occur if it is easy to replace workers, or if firms fail to account for burnout when designing contracts. However, we show that even when turnover is very costly, and firms and workers properly understand effort cost spillover, the firm’s equilibrium strategy may be to offer high-powered incentives that induce workers to work so hard that they exit (i.e. reject any contract that the firm would offer) in the next period. Workplace measures that reduce spillover, such as flexible work arrangements, can limit turnover and improve profits dramatically. Committing to contracts for both periods in advance can also limit turnover (at the cost of reduced flexibility)

Inequality in startup hiring

Startups are increasingly central to job creation, innovation, and economic mobility, yet research on hiring inequality focuses predominantly on established firms and founders, overlooking the non-founder workforce. We develop a comprehensive framework for understanding how startup hiring practices affect labor market inequality. We propose that startups differ from mature firms in ways that make their hiring dynamics uniquely consequential for inclusion and exclusion. Integrating demand-side perspectives, we advance a four-part analytical framework organized around why, when, how, and who startups hire. We discuss how hiring motivations, timing, and methods interact to determine workforce composition, producing recursive effects that affect long-term diversity trajectories. Finally, we outline a research agenda highlighting the temporal, organizational, and contextual contingencies of startup hiring. By shifting attention from founders to employees and from supply-side to demand-side processes, this framework reconceptualizes startups as pivotal institutions in the reproduction and potential mitigation of inequality. It reveals how the architecture of opportunity in emerging ventures impacts the broader distribution of work and wealth

Historizing the present: Research agenda and implications for consumer behavior

This paper conceptualizes the phenomenon of historizing the present, defined as emphasizing the historical significance of present events and treating the present from the perspective of history. The authors identify four modes of historizing the present (emphasizing that: (1) the present will shape history; (2) the present is a unique moment in history; (3) the present will be remembered in history; (4) the present echoes history) and demonstrate how historizing can be employed by marketers of for‐profit and nonprofit organizations in a variety of contexts. The paper examines the psychological implications of appreciating the historical significance of the present and outlines a research agenda for studying the downstream behavioral consequences of historizing the present across diverse substantive consumer domains. It concludes with an examination of the broader societal implications of historizing the present as well as its implications for consumer well‐being

Data-Driven Investors

How does the increased use of data technologies, like machine learning, by financial intermediaries affect the allocation of capital towards innovation? I study this question in the context of startup financing by venture capitalists (VCs). While VCs adopting data technologies become better at screening startups similar to those in historical data, they tilt their investments towards this pool and become concurrently less likely to finance innovative startups that achieve rare major success. Plausibly exogenous variations in VCs’ screening automation suggest that these effects are causal. These findings highlight how investors’ adoption of data technologies can have real effects through innovation financing

Firms’ Real and Reporting Responses to Taxation: A Review

Taxation 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

A Contingency Model of Top Management Teams’ Task Conflict and Organizational-Level Outcomes: Evidence for a Curvilinear Relationship

The relationship between conflict and performance has been studied for decades, but little is known about how and under what conditions task conflict among top managers affects firm-level outcomes. In this study, we examine a curvilinear effect of task conflict in top management teams (TMTs) on both firm performance and TMT resilience efficacy, as moderated by behavioral integration. We argue and find that TMT task conflict can improve firm performance when behavioral integration is high, but the effect is not linear; rather it levels off. In contrast, we maintain and find that TMT task conflict can improve TMT resilience efficacy at an increasing rate when behavioral integration is low. We also find that behavioral integration itself is predicted by Chief Executive Officer relational leadership such that leaders with a more relationship-oriented style encourage more behavioral integration in their teams. Field data from 555 top managers from 111 organizations in South Korea provided support for our hypotheses. Theoretical and practical implications are discussed