Better together: using meta-analysis to explore complementarities between ecological and institutional theories of organization


Organization Studies

novembre 2017, vol. 38, n°11, pp.1573-1601

Départements : Management et Ressources Humaines, GREGHEC (CNRS)

While sharing intellectual ancestry, organizational ecology and institutionalism are rarely used conjointly to explain population dynamics. A rapprochement would nevertheless be fruitful, as the parsimonious models developed by ecologists are better able to explain organizational founding and failure when enriched with institutional variables. We present a meta-analysis of density dependence theory, which predicts a non-monotonic relationship between population density and organizational vital events. We show that ecology and institutionalism are ‘better together’ by extending this ecological framework in four institutionalism-inspired ways. First, we show that the effects of density on organizational vital rates are moderated by two conceptions of time: ecological ‘clocks’ and institutional ‘eras’. Second, we argue that the socio-political legitimacy of organizational forms, a concept with strong institutional roots, exacerbates density-related founding while attenuating failure. Third, we illustrate how the emergence of prototypical categories in organizational fields can increase the magnitude of density effects. Fourth, we highlight how these socio-political legitimacy and categorization effects are conditioned by ecological clock time. We close by proposing a concise agenda for future research, aimed at finding a better balance between the generality and explanatory power of our most trusted organizational theories. © 2017, © The Author(s) 2017

Beyond the Target Customer: Social Effects of CRM Campaigns


Journal of Marketing Research

juin 2017, vol. 54, n°3, pp.347-363

Départements : Marketing, GREGHEC (CNRS)

Mots clés : Customer Relationship Management (CRM), Field experiments, Targeting, Churn, Retention, Mobile

Customer Relationship Management (CRM) campaigns have traditionally focused on maximizing the profitability of the targeted customers. We demonstrate that, in business settings that are characterized by network externalities, a CRM campaign that is aimed at changing the behavior of specific customers propagates through the social network, thereby also affecting the behavior of non-targeted customers. Using a randomized field experiment involving nearly 6,000 customers of a mobile telecommunications provider, we find that the social connections of targeted customers increase their consumption and are less likely to churn due to a campaign that was neither targeted at them nor offered them any direct incentives. We estimate a social multiplier of 1.28. That is, the effect of the campaign on first-degree connections of targeted customers is 28% of the effect of the campaign on the targeted customers. By further leveraging the randomized experimental design we show that, consistent with a network externality account, the increase in activity among the non-targeted but connected customers is driven by the increase in communication between the targeted customers and their connections, making the local network of the non-targeted customers more valuable. Our findings suggest that in targeting CRM marketing campaigns, firms should consider not only the profitability of the targeted customer, but also the potential spillover of the campaign to non-targeted but connected customers

Blockholder Exit Threats in the Presence of Private Benefits of Control

Ole-Kristian HOPE, H. WU, Wuyang ZHAO

Review of Accounting Studies

juin 2017, vol. 22, n°2, pp.873-902

Départements : Comptabilité et Contrôle de Gestion

Mots clés : Exit-Threat Theory, Private Benefits of Control, Liquidity, China, Split-Share Structure Reform, Operating Performance, Quasi-Experiment

Exit theory predicts a governance role of outside blockholders’ exit threats; but this role could be ineffective if managers’ potential private benefits exceed their loss in stock-price declines caused by outside blockholders’ exit. We test this prediction using the Split-Share Structure Reform (SSSR) in China, which provided a large, exogenous, and permanent shock to the cost for outside blockholders to exit. Using a difference-in-differences design combined with propensity-score matching, we find that firms whose outside blockholders experience an increase in exit threats have a greater improvement in performance than those whose outside blockholders experience no increase. Moreover, the governance effect of exit threats is ineffective in the group of firms with the highest concern for private benefits of control. Finally, a battery of theory-motivated tests show that the documented effects are unlikely explained by outside blockholder intervention or some well-known intended effects of SSSR

Catching Falling Knives: Speculating on Liquidity Shocks


Management Science

août 2017, vol. 63, n°8, pp.2573-2591

Départements : Finance, GREGHEC (CNRS)

Mots clés : supply information • nonfundamental uncertainty • market crashes • arbitrage • high-frequency trading

Many market participants invest resources to acquire information about liquidity rather than fundamentals. I show that agents using such information can reduce the magnitude of short-lived pricing errors by trading against liquidity shocks. However, the short-run stabilizing effect of this behavior also makes it more difficult to identify liquidity shocks, a signal-jamming effect that slows down price discovery in the long run. As more agents invest in nonfundamental information, market prices become more resilient to liquidity shocks but also recover more slowly from temporary price deviations.

Characterizations of Smooth Ambiguity Based on Continuous and Discrete Data


Mathematics of Operations Research

février 2017, vol. 42, n°1, pp.167 - 178

Départements : Economie et Sciences de la décision

Mots clés : smooth ambiguity; variational preferences; revealed preference; completely monotone functions; Afriat inequalities; moment problem

In the Anscombe-Aumann setup, we provide conditions for a collection of observations to be consistent with a well-known class of smooth ambiguity preferences (Klibanoff P, Marinacci M, Mukerji S (2005) A smooth model of decision making under ambiguity. Econometrica 73(6):1849–1892.). Each observation is assumed to take the form of an equivalence between an uncertain act and a certain outcome. We provide three results that describe these conditions for data sets of different cardinality. Our findings uncover surprising links between the smooth ambiguity model and classic mathematical results in complex and functional analysis.

Climate Change Assessments: Confidence, Probability, and Decision

Richard Bradley, Casey Helgeson, B. HILL

Philosophy of Science

juillet 2017, vol. 84, n°3, pp.500-522

Départements : Economie et Sciences de la décision, GREGHEC (CNRS)

The Intergovernmental Panel on Climate Change has developed a novel framework for assessing and communicating uncertainty in the findings published in its periodic assessment reports. But how should these uncertainty assessments inform decisions? We take a formal decision-making perspective to investigate how scientific input formulated in the IPCC’s novel framework might inform decisions in a principled way through a normative decision model



Journal of Financial and Quantitative Analysis

septembre 2017, vol. 52, n°5, pp.2183–2215

Départements : Finance, GREGHEC (CNRS)

Mots clés : Collateral, Counterparty Risk, Derivatives Markets, Extreme Dependence

We present CoMargin, a new methodology to estimate collateral requirements in derivatives central counterparties (CCPs). CoMargin depends on both the tail risk of a given market participant and its interdependence with other participants. Our approach internalizes trading externalities and enhances the stability of CCPs, thus, reducing systemic risk concerns. We assess our methodology using proprietary data from the Canadian Derivatives Clearing Corporation that includes daily observations of the actual trading positions of all of its members from 2003 to 2011. We show that CoMargin outperforms existing margining systems by stabilizing the probability and minimizing the shortfall of simultaneous margin-exceeding losses

Developing knowledge from entrepreneurial actions – toward a taxonomy


Journal of Small Business and Enterprise Development

2017, vol. 24, n°4, pp.793-813

Départements : GREGHEC (CNRS), Information Systems and Operations Management

Mots clés : Experiential learning, Qualitative method, Knowledge development, Entrepreneurial learning

Purpose – The purpose of this paper is to enrich our understanding of entrepreneurs’ daily deeds, tasks and activities. The research investigates the ways in which entrepreneurs seize opportunities and gain knowledge from the start to the expansion of their ventures.Design/methodology/approach – Two case studies were developed based on a longitudinal fine-grained analysis of two ventures over two years. Entrepreneurs’ success and learning were modeled in line with grounded theory methodology. Data were collected from both primary and secondary sources in the form of semi-structured interviews and archival documentation.Findings – The authors develop an original conceptual framework that consists of ten entrepreneurial learning opportunities and four knowledge development modes. There are ten generic types of actions that entrepreneurs take. There are then four distinctive ways to transform these experiences into knowledge. The model is assessed in absolute terms and relatively to existing taxonomies.Research limitations/implications – The findings question the premises on which entrepreneurial learning research traditionally relies. Opportunities can be open-ended rather than purely instrumental. Similarly, knowledge can be emerging as much as it can be espoused. This opens-up space for further research.Practical implications – For practitioners, the findings suggest new ways for making sense of the daily experience of their entrepreneurial endeavor. The learning modes suggested can be used by coaches and mentors when helping entrepreneurs in their venture.Originality/value – The research provides empirical evidence of what entrepreneurs do. This may help cast traditional debates about what there is to do (logical necessity) and what there is to know (a priori knowledge) in a new light.

Drift or alignment? A configurational analysis of law firms' ability to combine profitability with professionalism


Journal of Professions and Organization

juillet 2017, vol. 24, n°2, pp.123-148

Départements : Management et Ressources Humaines, GREGHEC (CNRS)

Hybrid structures are the result of an adaptation process through which organizations come to adhere to the demands of the multiple logics they face. Yet many unanswered questions regarding the effects of hybridity on securing organizational goals remain. In this article, we focus on law firms, hybrids that have to reach the dual objectives of profits and professionalism, rooted in the commercial/managerial and professional/trustee logics, respectively. Drawing on the institutional logics, professional service firms, and configurational theory literatures, and using set-theoretic methods on survey data collected on 278 Dutch law firms, we explore how organizational design elements that are congruent with the aforementioned logics are combined and how they contribute to securing different organizational goals. We find evidence of different types of hybrid structures occurring alongside one another, which tend to score differently on the performance dimensions. First, dominant hybrids assure superior performance along either the profitability or the professionalism dimension. Second, certain hybrids have experienced slippage. Whereas these slipped hybrids outperform in one dimension, they underperform on the alternative dimension due to their excessive focus. We also find evidence of a few aligned configurations. These ensure above-average results along both outcome dimensions, either by adopting a balanced set of core practices or by achieving balance in their overall configuration. Finally, when faced with organizational contingencies that force law firms to adopt more formal practices, these aligned hybrids restore their configurational balance by adopting core practices rooted in the professional logic

Dynamic Dependence and Diversification in Corporate Credit


Review of Finance

2017, pp.1-40

Départements : Finance, GREGHEC (CNRS)

Mots clés : Credit risk, Default risk, CDS, Dynamic dependence, Copula

We characterize dependence in corporate credit and equity returns for 215 firms using a new class of large-scale dynamic copula models. Copula dependence and especially tail dependence are highly variable and persistent, increase significantly in the financial crisis, and have remained high since. The most drastic increases in credit dependence occur in July/August of 2007 and in August of 2011 and the decrease in diversification potential caused by the increases in dependence and tail dependence is large. Credit default swap correlation dynamics are important determinants of credit spreads