Can governments use technological innovation to regain the trust of citizens?

People tend to trust their governments less than they trust business, the media, and NGOs. Jaideep Prabhu writes that our experience with big tech companies has made us expect the same level of convenience and responsiveness from public services such as healthcare, education, and the judicial system. He suggests four principles to help governments innovate and catch up with big tech

The international growth of emerging market firms : evidence from a natural experiment

The recent international growth of some firms from emerging markets has attracted the attention of academics and managers alike. How do such emerging market firms achieve growth in international markets despite lacking foreign market knowledge and international competitiveness, and despite facing weak institutions in their home countries? The authors address this question by proposing a new concept—global market capital, the set of assets that prepare emerging market firms to compete globally. Global market capital consists of three elements: leadership capital (at the individual level), foreign marketing and financial capital (at the firm level), and network capital (at the inter-firm level). The authors argue that, taken together, these elements enable emerging market firms to overcome their weaknesses in foreign market knowledge, international competitiveness and home institutions. In particular, the authors highlight the prominent role that leadership capital, specifically CEOs’ foreign market experience, plays in helping emerging market firms grow internationally. The authors test their thesis using uniquely compiled data on Indian firms from the Bombay Stock Exchange 500 index. The Indian context helps to set up a natural experiment in which the independent variables of interest are measured prior to a major sudden and unanticipated regulatory shift in India’s outward investment policy and the dependent variable (international growth) is measured after this policy shift. Results from the paper highlight the crucial role of leadership capital in driving international growth both directly and through its synergistic interaction with the other elements of global market capital

The Impact of Price Disclosure on Dynamic Shopping Decisions

A potentially powerful way to assist consumers in making dynamic shopping decisions is to disclose price information to them before they shop, for example by posting prices on the Internet. This paper addresses the differential impact of disclosing either only current, or both current and future prices, on consumer shopping decisions in multi-period tasks involving multiple product purchases. In the context of an Internet-based experiment, we find that consumer expenditure deviates more strongly from that of a normative model when both current and future prices are disclosed than if only current prices are disclosed. We investigate the behavioral effects underlying this finding by estimating a model that allows for variations in consumer discounting, strength of store price format preferences, as well as choice consistency between different price disclosure conditions

Legacy Effects in Radical Innovation: A Study of European Internet Banking

How do firms cope with the challenges of disruptive change in their industry? Numerous studies have highlighted that success with any prior technology creates a negative legacy effect for the next radical technological shift. We question the overly pessimistic view of such legacy effects and ask how quickly firms embrace technological breakthroughs by radically innovating and who wins in the longer term? In this paper, we argue that legacy is a multi-faceted construct whose diverse aspects could simultaneously have different effects on innovation speed and market performance. We identify three main types of legacy related to technology, organizational, and country-level influences. Previous research tends to focus on technological or market effects in isolation, whereas we seek to study the effects of both firm and country legacy simultaneously on speed to radical innovation and market performance over time. Based on a conceptual framework we develop six hypotheses concerning the legacy effects on initial speed radical innovation and subsequent market performance. We chose the European retail banking industry and the focal innovation of transactional Internet banking as a suitable empirical context to employ quantitative hypothesis testing. Detailed and longitudinal (1996-2001) data were collected for a sample of 123 banks from six European countries: United Kingdom, Germany, France, Sweden, Finland, and Denmark. We specified a model and used threestage least squares (3SLS) as a method to estimate simultaneous regression equations due to endogeneity of a key variable. We show that the prevailing negative view of legacies is likely to be overstated