Public Procurement and the Private Supply of Green Buildings

We measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and supplier investments in green building expertise. Our findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter

Diversification, Diseconomies of Scope, and Vertical Contracting: Evidence From the Taxicab Industry

This paper studies how firms reorganize following diversification, proposing that firms use outsourcing, or vertical disintegration, to manage diseconomies of scope. We also consider the origins of scope diseconomies, showing how different underlying mechanisms generate contrasting predictions about the link between within-firm task heterogeneity and the incentive to outsource following diversification. We test these propositions using microdata on taxicab and limousine fleets from the Economic Census. The results show that taxicab firms outsource, by shifting the composition of their fleets toward owner-operator drivers, when they diversify into the limousine business. The magnitude of the shift toward driver ownership is larger in less urban markets, where the tasks performed by taxicab and limousine drivers are more similar. These findings suggest that (1) firms use outsourcing to manage diseconomies of scope at a particular point in the value chain and (2) interagent conflicts can be an important source of scope diseconomies

Information Technology, Productivity, and Asset Ownership: Evidence from Taxicab Fleets

We develop a simple model that links the adoption of a productivity-enhancing technology to increased vertical integration and a less skilled workforce. We test the model's key prediction using novel microdata on vehicle ownership patterns from the Economic Census during a period when computerized dispatching systems were first adopted by taxicab firms. Controlling for time-invariant firm-specific effects, firms increase the proportion of taxicabs under fleet ownership by 12% when they adopt new computerized dispatching systems. An instrumental variables analysis suggests that the link between dispatching technology and vertical integration is causal. These findings suggest that increasing a firm's productivity can lead to increased vertical integration, even in the absence of asset specificity

Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California

We study how government green procurement policies influence private-sector demand for similar products. Specifically, we measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and investments in green building expertise by local suppliers. These findings suggest that government procurement policies can accelerate the diffusion of new environmental standards, which require coordinated complementary investments by various types of private adopter

How Essential Are Standard-Essential Patents?

In this study, we explore what happens when Standard-Essential Patents (SEPs) go to court. What we found surprised us. We expected that proving infringement of SEPs would be easy-they are, after all, supposed to be essential-but that the breadth of the patents might make them invalid. In fact, the evidence shows the opposite. SEPs are more likely to be held valid than a matched set of litigated non-SEP patents, but they are significantly less likely to be infringed. SEPs, then, don\u27t seem to be all that essential, at least when they make it to court

Information Technology, Productivity, and Asset Ownership: Evidence from Taxicab Fleets

We develop a simple model that links the adoption of a productivity-enhancing technology to increased vertical integration and a less skilled workforce. We test the model's key prediction using novel microdata on vehicle ownership patterns from the Economic Census during a period when computerized dispatching systems were first adopted by taxicab firms. Controlling for time-invariant firm-specific effects, firms increase the proportion of taxicabs under fleet ownership by 12% when they adopt new computerized dispatching systems. An instrumental variables analysis suggests that the link between dispatching technology and vertical integration is causal. These findings suggest that increasing a firm's productivity can lead to increased vertical integration, even in the absence of asset specificity

How Essential Are Standard-Essential Patents?

In this study, we explore what happens when Standard-Essential Patents (SEPs) go to court. What we found surprised us. We expected that proving infringement of SEPs would be easy-they are, after all, supposed to be essential-but that the breadth of the patents might make them invalid. In fact, the evidence shows the opposite. SEPs are more likely to be held valid than a matched set of litigated non-SEP patents, but they are significantly less likely to be infringed. SEPs, then, don\u27t seem to be all that essential, at least when they make it to court

CEO Overconfidence and Innovation

Are CEOs’ attitudes and beliefs linked to their fims’ innovative performance? This paper uses Malmendier and Tate’s measure of overconfidence, based on CEO stock-option exercise, to study the relationship between a CEO’s “revealed beliefs” about future performance and standard measures of corporate innovation. We begin by developing a career concern model where CEOs innovate to provide evidence of their ability. The model predicts that overconfident CEOs, who underestimate the probability of failure, are more likely to pursue innovation, and that this effect is larger in more competitive industries. We test these predictions on a panel of large publicly traded firms for the years 1980 to 1994. We find a robust positive association between overconfidence and citation-weighted patent counts in both cross-sectional and fixed-effect models. This effect is larger in more competitive industries. Our results suggest that overconfident CEOs are more likely to take their firms in a new technological direction.