Measuring the Impact of Household Innovation using Administrative Data
Javier Miranda, Nikolas Zolas
NBER Working Paper,
No. 25259,
2018
Abstract
We link USPTO patent data to U.S. Census Bureau administrative records on individuals and firms. The combined dataset provides us with a directory of patenting household inventors as well as a time-series directory of self-employed businesses tied to household innovations. We describe the characteristics of household inventors by race, age, gender and U.S. origin, as well as the types of patented innovations pursued by these inventors. Business data allows us to highlight how patents shape the early life-cycle dynamics of nonemployer businesses. We find household innovators are disproportionately U.S. born, white and their age distribution has thicker tails relative to business innovators. Data shows there is a deficit of female and black inventors. Household inventors tend to work in consumer product areas compared to traditional business patents. While patented household innovations do not have the same impact of business innovations their uniqueness and impact remains surprisingly high. Back of the envelope calculations suggest patented household innovations granted between 2000 and 2011 might generate $5.0B in revenue (2000 dollars).
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Information Feedback in Temporal Networks as a Predictor of Market Crashes
Stjepan Begušić, Zvonko Kostanjčar, Dejan Kovač, Boris Podobnik, H. Eugene Stanley
Complexity,
September
2018
Abstract
In complex systems, statistical dependencies between individual components are often considered one of the key mechanisms which drive the system dynamics observed on a macroscopic level. In this paper, we study cross-sectional time-lagged dependencies in financial markets, quantified by nonparametric measures from information theory, and estimate directed temporal dependency networks in financial markets. We examine the emergence of strongly connected feedback components in the estimated networks, and hypothesize that the existence of information feedback in financial networks induces strong spatiotemporal spillover effects and thus indicates systemic risk. We obtain empirical results by applying our methodology on stock market and real estate data, and demonstrate that the estimated networks exhibit strongly connected components around periods of high volatility in the markets. To further study this phenomenon, we construct a systemic risk indicator based on the proposed approach, and show that it can be used to predict future market distress. Results from both the stock market and real estate data suggest that our approach can be useful in obtaining early-warning signals for crashes in financial markets.
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Urban Occupational Structures as Information Networks: The Effect on Network Density of Increasing Number of Occupations
Shade T. Shutters, José Lobo, Rachata Muneepeerakul, Deborah Strumsky, Charlotta Mellander, Matthias Brachert, Teresa Farinha, Luis M. A. Bettencourt
Plos One,
forthcoming
Abstract
Urban economies are composed of diverse activities, embodied in labor occupations, which depend on one another to produce goods and services. Yet little is known about how the nature and intensity of these interdependences change as cities increase in population size and economic complexity. Understanding the relationship between occupational interdependencies and the number of occupations defining an urban economy is relevant because interdependence within a networked system has implications for system resilience and for how easily can the structure of the network be modified. Here, we represent the interdependencies among occupations in a city as a non-spatial information network, where the strengths of interdependence between pairs of occupations determine the strengths of the links in the network. Using those quantified link strengths we calculate a single metric of interdependence–or connectedness–which is equivalent to the density of a city’s weighted occupational network. We then examine urban systems in six industrialized countries, analyzing how the density of urban occupational networks changes with network size, measured as the number of unique occupations present in an urban workforce. We find that in all six countries, density, or economic interdependence, increases superlinearly with the number of distinct occupations. Because connections among occupations represent flows of information, we provide evidence that connectivity scales superlinearly with network size in information networks.
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Effectiveness and (In)Efficiencies of Compensation Regulation: Evidence from the EU Banker Bonus Cap
Stefano Colonnello, Michael Koetter, Konstantin Wagner
Abstract
We investigate the (unintended) effects of bank executive compensation regulation. Capping the share of variable compensation spurred average turnover rates driven by CEOs at poorly performing banks. Other than that, banks‘ responses to raise fixed compensation sufficed to retain the vast majority of non-CEO executives and those at well performing banks. We fail to find evidence that banks with executives that are more affected by the bonus cap became less risky. In fact, numerous results indicate an increase of risk, even in its systemic dimension according to selected measures. The return component of bank performance appears to be unaffected by the bonus cap. Risk hikes are consistent with an insurance effect associated with raised the increase in fixed compensation of executives. The ability of the policy to enhance financial stability is therefore doubtful.
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Do Director Elections Matter?
Vyacheslav Fos, Kai Li, Margarita Tsoutsoura
Review of Financial Studies,
No. 4,
2018
Abstract
Using a hand-collected sample of election nominations for more than 30,000 directors over the period 2001–2010, we construct a novel measure of director proximity to elections called Years-to-election. We find that the closer directors of a board are to their next elections, the higher CEO turnover-performance sensitivity is. A series of tests, including one that exploits variation in Years-to-election that comes from other boards, supports a causal interpretation. Further analyses show that other governance mechanisms do not drive the relation between board Years-to-election and CEO turnover-performance sensitivity. We conclude that director elections have important implications for corporate governance.
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Do Venture Capital Firms Benefit from a Presence on Boards of Directors of Mature Public Companies?
Iftekhar Hasan, Arif Khurshed, Abdulkadir Mohamed, Fan Wang
Journal of Corporate Finance,
2018
Abstract
This paper examines the benefits to venture capital firms of their officers holding directorships in mature public companies in terms of fundraising and investment performance. Our empirical results show that venture capital firms raise more funds, set higher fund-raising targets, and are more likely to successfully exit their investments post-appointment of their officers to boards of directors of S&P 1500 companies. Directorship status in mature public firms provides venture capital firms with enhanced networks, visibility, and credibility, all of which facilitate their fundraising activities. In addition, the knowledge, expertise, and experience acquired through holding directorships in mature public firms are beneficial for their portfolio companies, as measured by the likelihood of successful exits.
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"The Good News about Bad News": Information about Past Organisational Failure and its Impact on Worker Productivity
Sabrina Jeworrek, Vanessa Mertins, Michael Vlassopoulos
Abstract
Failure in organisations is a very common phenomenon. Little is known about whether past failure affects workers’ subsequent performance. We conduct a field experiment in which we follow up a failed mail campaign to attract new volunteers with a phone campaign pursuing the same goal. We recruit temporary workers to carry out the phone campaign and randomly assign them to either receive or not receive information about the previous failure and measure their performance. We find that informed workers perform better – in terms of both numbers dialed (about 14% improvement) and completed interviews (about 20% improvement) – regardless of whether they had previously worked on the failed mail campaign. Evidence from a second experiment with student volunteers asked to support a campaign to reduce food waste suggests that the mechanism behind our finding relates to contextual inference: Informing workers/volunteers that they are pursuing a goal that is hard to attain seems to add meaning to the work involved, leading them to exert more effort.
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Does It Pay to Get Connected? An Examination of Bank Alliance Network and Bond Spread
Iftekhar Hasan, Céline Meslier, Amine Tarazi, Mingming Zhou
Journal of Economics and Business,
forthcoming
Abstract
This paper examines the effects of bank alliance network on bonds issued by European banks during the period 1990–2009. We construct six measures capturing different dimensions of banks’ network characteristics. In opposition to the results obtained for non-financial firms, our findings indicate that being part of a network does not create value for bank’s bondholders, indicating a dark side effect of strategic alliances in the banking sector. While being part of a network is perceived as a risk-increasing event by market participants, this negative perception is significantly lower for the larger banks, and, to a lesser extent, for the more profitable banks. Moreover, during crisis times, the positive impact on bond spread of a bank’s higher centrality or of a bank’s higher connectedness in the network is stronger, indicating that market participants may fear spillover effects within the network during periods of banks’ heightened financial fragility.
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Does Intermunicipal Cooperation Increase Efficiency? A Conditional Metafrontier Approach for the Hessian Wastewater Sector
F. Blaeschke, Peter Haug
Local Government Studies,
No. 1,
2018
Abstract
This paper analyses the relationship between intermunicipal cooperation and efficiency of public service provision. Organisational arrangements of public service production, including self-provision, joint provision or contracting, affect incentives and internal transaction costs. Hence, cooperation gains from scale effects need to be balanced against technical inefficiencies. We analyse relative efficiency of wastewater disposal for German municipalities. We employ a conditional analysis in conjunction with a metafrontier approach to calculate relative efficiency measures and technology gap ratios controlling for organisational arrangements and further environmental variables. Jointly providing municipalities and contractor municipalities exhibit lower technical efficiency than self-providing and contracting municipalities. As confirmed by previous research, scale effects from cooperation and contracting apply to small municipalities primarily.
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