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Scheller College of Business

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https://hdl.handle.net/1853/70690

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Office of the Provost and Executive Vice President for Academic Affairs

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Institute for Leadership and Social Impact

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https://finding-aids.library.gatech.edu/agents/corporate_entities/255

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Publication Search Results

Now showing 1 - 10 of 67

Essays on knowledge outsourcing

(Georgia Institute of Technology, 2018-07-31) Lee, Jaeseok

Due to rapid changes in technology, science, and the marketplace, while recognizing knowledge as a key resource for competitive advantage, many firms lack the internal knowledge resources to achieve their goals. To address this challenge, firms increasingly rely on outsourcing knowledge from external entities such as consultancies. Since I personally observed this global trend at Samsung, I could fully understand the importance of this challenge. While there is a substantial amount of literature examining supplier-buyer interactions for physical components and finished goods in Operations Management, studies that provide managerial implications on the interactions between a buyer (she) and a supplier (he) for knowledge outsourcing are limited. In this dissertation, I study how firms effectively manage knowledge outsourcing. In particular, I focus on investigating how factors such as absorptive capacity, uncertainty, information asymmetry, and competition impact firms’ decisions and the outcomes of knowledge outsourcing. Using a game-theoretic formulation, the first essay (Chapter 2) studies how a buyer’s ability to understand and apply outsourced knowledge (i.e., absorptive capacity) affects the interactions between the buyer and the supplier. It also investigates the impact of uncertainty about the amount of knowledge needed and asymmetric information regarding a key element of absorptive capacity on firms’ decisions and the outcomes of knowledge outsourcing. To build further implications on knowledge outsourcing, the second essay (Chapter 3) incorporates market competition between two buyers who outsource knowledge from a common supplier. It examines how competition in the downstream market impacts the buyers’ knowledge outsourcing decisions and the supplier’s service strategies. As the current literature on knowledge outsourcing remains in the early stages, the third essay (Chapter 4) reviews current studies to identify what is known and unknown about knowledge outsourcing at present, and provides a future research agenda. Overall, my dissertation contributes a significant building-block for Operation Management to better address managerial challenges in the knowledge economy.
Essays on the economics of internet enabled markets: Last mile internet, e-commerce, and digital divide

(Georgia Institute of Technology, 2018-07-27) Nattamai Kannan, Karthik Babu

Improvements in technology such as internet, mobile phones, electronic markets have helped us make enormous social and economic progress. However, there is evidence of growing inequality between those who can use these technologies to their advantage and those who don’t. In this dissertation, I examine how the internet enabled markets can potentially address three such problems. First, geographic divide – the uneven development between those who are in urban areas vs. those who are in the rural areas. Second, socioeconomic divide – the uneven development between those who have high education, income levels and those who don’t. Third, the ability for (small scale) designers to compete against well-known brands and retail giants like Amazon. In the first chapter, we examine whether improving mobile internet access is an effective method for closing the digital divide caused by geographic location or socioeconomic status. We do this by studying the adoption and use of unlimited mobile data plans offered by a large telecommunications provider. We find that adoption of an unlimited plan leads to a substantial increase in a household’s data consumption, with the increase being particularly large for rural households and those of low socioeconomic status. This suggests that unlimited plans help these households “catch up”, potentially narrowing the digital divide. Although most of the increase is accounted for by media and entertainment content, there is a significant increase in consumption of content likely to be socially beneficial: specifically news, education, and career-related content. We conclude that policy makers should encourage unlimited mobile data plans as a method to close the digital divide. They should also invest in educational programs on how to use the internet for beneficial purposes and help web site providers make their services accessible via mobile phones. The emergence of the maker movement and e-commerce platforms such as Etsy, Fab has democratized the production of goods and increased consumer demand for designer goods. However, designers with little brand recognition must overcome high buyer search costs to succeed in these markets or on their own websites. The second chapter examines two mechanisms that designers use to promote their products—flash sales and social media. Using two different identification techniques, we find that social media activities such as Facebook Likes, Pinterest Pins, and Faves have positive but different magnitudes of causal (and predictive) impact on sales, moderated by product type. Also, flash sale promotions increase average daily sales on the designer’s primary website by up to 0.8 units in the first week after a flash sale is initiated. The third chapter examines how promotion of free Wi-Fi hotspots impacts both paid mobile and free Wi-Fi data usage. Interestingly, we find promoting Wi-Fi hotspots leads to a small but significant mobile data usage, with the heavy mobile users having the highest impact. Also, increase in Wi-Fi usage is moderated by the type of business (or location) that provides the hotspots. Public places like airports, convention centers where people spend a lot of time have the highest increase in Wi-fi usage. Overall, our study reveals how and where Wi-Fi last mile channel can complement mobile internet usage. We find that internet is a tool that has the potential to reduce the barrier between the haves and have nots. However, policy makers, managers and individuals have to understand the economics, mechanisms, and limitations of this tool in order to effectively utilize these technologies.
Employee volunteering and management control in cooperative settings

(Georgia Institute of Technology, 2018-07-27) Yang, Di

This study experimentally investigates whether employee volunteering programs can serve as an informal control mechanism that improves cooperation in team settings. I posit that employees who participated in volunteering programs are more likely to be conditional cooperators, who are willing to cooperate if others also cooperate, and use others’ volunteering behavior as a signal of their type. I also posit that the effectiveness of this signal in facilitating cooperation depends on the perceived credibility of the signal. In the experiment, participants make a volunteering choice and then are paired to play a contextualized prisoners’ dilemma game. As predicted, I find that, when volunteering appears non-strategic, the cooperation rate is higher when the paired participants both volunteered than otherwise. However, when volunteering could be strategic, the cooperation rate does not differ significantly, regardless of whether one or both of the paired participants volunteered. Implications of these findings for research and practice are discussed.
A penny for your thoughts: The psychological effects of payday

(Georgia Institute of Technology, 2018-06-22) Steed, Laurens Bujold

Making an income is a primary reason why individuals seek paid employment. Further, money in itself has been shown across multiple literatures to be critically important to life and substantially influence a host of individual attitudes and behaviors. This research seeks to investigate the employee-employer exchange of money in the form of payday to uncover whether individuals experience meaningful variations in attitudes and behaviors that coincide with paydays. To explore and illuminate the potential effects of payday in the workplace, I integrate across the currently disparate literatures on compensation, temporality and temporal landmarks, and the psychology of money. In doing so, I position payday theoretically as a compensation event that recurs with regularity and yet meaningfully stands out (i.e., a temporal landmark) with significant psychologically-driven consequences. Specifically, integrating findings from these distinct literatures, I hypothesize that payday has meaningful effects on an individual’s sense of personal control, and that this sense of control mediates the relationship between payday and the outcomes of self-efficacy, stress, citizenship behaviors directed interpersonally and organizationally (i.e., OCB-Is and OCB-Os) and recovery experiences. A between-person archival study of Google search data in Sweden (Study 1) indicates that payday meaningfully stands out to individuals and thus may be considered as a temporal landmark. A within-person study of employees over three paydays and three non-paydays (Study 2) fails to find support for the meaningful effects of payday in organizational life. Theoretical and practical implications of these findings and directions for future research are discussed.
Essays on currency markets

(Georgia Institute of Technology, 2018-05-24) Wang, Minho

The first chapter investigates the dynamic behavior of exchange rates around FOMC announcements. The excess returns of holding a foreign currency are higher from 36 hours before to 12 hours after the announcements (14:15 EST). 75% of the positive drifts are cancelled out by the negative drifts from 12 hours to 24 hours after the announcements. Empirical analyses using intraday data indicate that extreme positive returns (i.e., lottery returns) drive the higher excess returns and radical reversion after FOMC announcements. These findings are consistent with the cases where U.S dollar holders require compensations for risks of sudden and large depreciation of the U.S. dollars. The second chapter investigates the predictability of jumps in currency markets and shows the implications for carry trades. Formulating new currency jump analyses, this chapter proposes a general method to estimate the determinants of jump sizes and intensities at various frequencies. This chapter reveals significant predictive relationships between currency jumps and national fundamentals. The patterns of intraday jumps are identified; multiple currency jump clustering and time-of-day effects. U.S. macroeconomic information releases -- particularly FOMC announcements -- lead to currency jumps. Using these jump predictors, investors can construct jump robust carry trades to mitigate the left tail risks. The third chapter investigates how jump risks are priced in currency markets. This chapter shows that currencies whose changes are more sensitive to negative market jumps provide significantly higher expected returns. The positive risk premium constitutes compensation for the extreme losses during periods of market turmoil. Using the empirical findings, a jump modified carry trade strategy is proposed, which has approximately two-percentage-point (per annum) higher returns than the regular carry trade strategy. These findings result from the fact that negative jump betas are significantly related to the riskiness of currencies and business conditions.
Essays on integration vs. segmentation of financial markets

(Georgia Institute of Technology, 2018-05-21) Zhang, Teng

Essay I: Uniform Mortgage Regulation and Distortion in Capital Allocation The U.S. economy is significantly influenced by local features, but most federal policies are national. In this essay, I study the unintended consequences of the uniformity of the national conforming loan limit (CLL) before 2008 on bank lending in local jumbo mortgage markets. When the national CLL increased, the jumbo share of residential mortgage markets in low-income counties was significantly reduced relative to high-income counties. I find that banks responded to the exogenous national shock by significantly increasing jumbo approval rates in low-income counties. The economic magnitude is large: a county with a \$10,000 lower median income is associated with, on average, a 6 percentage-point (or 11.77\%) higher jumbo loan approval rate compared to a county with a \$10,000 higher median income. The results are not driven by credit supply changes, borrower quality changes, home price anticipation, or the demand channel. Consistent with the competition mechanism in which lenders expand jumbo credit to defend market share, I also find that banks in low-income counties lower jumbo mortgage rates and later suffer from worse mortgage performance. Furthermore, smaller and less informed banks expand jumbo credit more aggressively, and, as a result, riskier borrowers receive more credit. Overall, my results highlight negative consequences of the uniformity of federal policy in mortgage markets by showing how it can lead to distorted bank lending and reduce efficiency of credit allocation across regions. Essay II: Housing Market Integration and Economic Convergence In this essay, I find that the increasing housing market integration in recent decades has contributed significantly to the convergence of output, income, and total employment growth across U.S. states. States with integrated housing markets also converge in their utilization of the home equity line of credit and in the prevalence of real-estate secured loans, which suggests the collateral channel as a key transmission mechanism through which housing market integration contributes to the economic convergence. To establish causality, I identify exogenous variations in state-level house prices using real estate related foreign direct investments that are orthogonal to state economic conditions. My findings are robust to controls for banking integration and geographic proximity, and are not driven by the performance of the real estate industry or changes in local demand. I also obtain similar results at the MSA level. Essay III: Global Diversification with Local Stocks: A Road Less Traveled In this essay, I document a great heterogeneity in the degree of global financial integration at the firm-level and delve into its implications for international portfolio diversification. Specifically, I estimate the degree of integration for about 14,000 sample firms per year, on average, from major developed markets over the period 1995-2014, using the R-square method. The key findings are: (i) The R-square, our measure of integration, is very widely distributed across sample firms, within and across countries; (ii) The firm-level integration is significantly affected by the three attributes tested – country, industry, and style; style exerts the greatest effect, followed by country and industry; (iii) `Local' stocks that are least driven by the common global factors are significantly more effective in portfolio risk diversification than either domestic or `global' stocks; this result holds during the recent global financial crises; (iv) Systematically identifying local stocks and holding them optimally, investors can significantly benefit from the enhanced the mean-variance efficiency within the familiar confines of developed markets. In light of the stark heterogeneity in global integration at the granular level, inferences of the diversification gains solely from stock market indices, the usual practice, are likely to understate the potential gains that world stock markets can provide.
Essays in information and asset prices

(Georgia Institute of Technology, 2018-05-21) Choi, Youngmin

This thesis uncover the dynamics of asset prices in response to informational events. These studies can provide insights to understand not only the behavior of financial market participants but also the economic mechanisms by which asset prices form. The first essay, ``Complementarity of Passive and Active Investment on Stock Price Efficiency'', examines how passive and active investment collectively affect the efficiency of stock prices. I document the complementary role of passive and active investment in the improvement of stock price efficiency. The relationship between stock price efficiency and passive/active investment, which is one of the long-standing theme in finance, is subject to an endogeneity problem. Using the annual reconstitution of Russell 1000 and 2000 indexes as an instrument, I find an improvement in efficiency due to an exogenous increase in passive investment, specifically in stocks widely held by actively managed funds. These active funds are compensated with higher returns for their effort. An increase in analyst following and a decrease in analyst forecast dispersion are identified as economic channels of the efficiency improvement. The result implies that active funds seek out inefficient stocks and ultimately experience superior returns due to the improvement in efficiency from passive investment. This study highlights the complementarity of passive and active investment on stock price efficiency, which has not been documented in the literature. In the second essay, ``The Role of Efficient Analysts in Stock and Option Markets'', we investigate the fundamental role of analyst recommendations in terms of the true efficient price discovery using the signal-to-noise volatility ratio constructed with high-frequency data. While exiting studies on the effect of analyst recommendations focus on their ex post impact on stock prices, we find that only recommendation revisions that contribute to the true efficient price discovery play an influential role in the stock and option markets. In particular, abnormal stock returns are observed in expected directions only for the recommendations that deliver information about the true efficient price of a stock. Furthermore, we observe that those informative revisions resolve uncertainty about a firm and reduce jump risk in its stock price. This study highlights the intrinsic role of analysts in financial market, and documents that the analysts who do their fundamental work indeed affect stock and option markets. In the third essay,``Realized Skewness for Information Ambiguity'', we propose realized skewness constructed using high-frequency data as a measure of information ambiguity. In this working paper, we rely on the fact that ambiguity-averse investors respond asymmetrically to ambiguous (intangible) information. We find that a significant decrease of realized skewness around analysts' earnings forecasts and recommendation releases. Furthermore, as realized skewness proxies the degree of information ambiguity, we document that negative realized skewness predicts subsequent lower returns around information releases after controlling for return continuations. To further prove an economic significance of our finding, we provide a zero-net investment strategy incorporating our finding, which achieves a Sharpe ratio of 1.766 with 0.83\% of monthly average returns. The results highlight how the asymmetric behavior of investors in response to information releases can be used to infer subsequent dynamics of asset prices.
Essays on socially and environmentally responsible operations

(Georgia Institute of Technology, 2018-05-11) Arora, Priyank

The three essays in this dissertation focus on social and environmental dimensions of managing the operations of organizations. Specifically, this dissertation: (i) employs analytical (e.g., econometric, game-theoretic and optimization models) and empirical (e.g., event study) techniques; and (ii) encompasses the following three areas: healthcare operations, sustainability, and nonprofit operations. While the majority of the healthcare operations management literature focuses on the demand side of the organ transplantation, in Essay 1, I focus on the supply-side to understand the socioeconomic costs of sub-optimal quantity and/or quality of organs recovered for transplantation. I develop an analytical model to study the effects of operational decisions of the two key supply-side entities, namely, the organ procurement organization (OPO) and hospital, on their respective payoffs and on societal outcomes, i.e., quality-adjusted-life-year increments. Through my analysis, I identify current misalignments in the objectives of the OPO, the hospital, and the social planner. Further, I recommend an administratively feasible and Pareto-improving contract that the social planner can use to achieve socially-optimal performance. Next, over the last two decades, firms have been appointing corporate sustainability executives (CSEs) to be part of their top management teams (TMTs). A CSE is the primary executive in the TMT with responsibility over the firm’s corporate sustainability strategy. In Essay 2, I add to the understanding of the empirical link between CSE appointments and financial performance by using a stock price-based performance measure. My findings suggests that although, on average, the shareholder value effect of CSE appointments is not significantly different from zero, the stock market reacts more positively under certain firm and industry-specific conditions. Finally, non-profit organizations (NPOs) that support and serve distressed individuals are often the last resort for those who are marginalized in society. To reduce mismatches between client needs and services provided, NPOs can invest in advisory effort during the intake process. While indirectly beneficial for generating social impact, advisory efforts consume resources that NPOs could have spent in delivering impact-generating services. In Essay 3, I develop an analytical model to study how an NPO should invest its limited resources between the advisory and service delivery activities. The analysis sheds light on when to invest more in an activity, and when to specialize on a single service type.
Context management of advertising in a digital environment

(Georgia Institute of Technology, 2018-05-08) Chae, Myoung-Jin

Content characteristics of advertising messaging have been well-researched in prior marketing literature, particularly in the case of traditional media. However, the effect of advertising context - where, how, and when the message is placed - on consumer response is becoming more important in today's digital media environment. As the rise of digital media has enabled (and required) marketers to respond to external changes more quickly, researchers have been more actively exploring the effect of context in marketing messages on consumer responses. My dissertation aims to deepen understanding of the effectiveness of advertising context management in today's digital environment. In my first essay, I look at the effect of "real-time marketing" (RTM) social media messages - messages that incorporate current moments or events - on consumer engagement, and I explore differences between two varieties of real-time message: planned and improvised. I find that improvised RTM messages generate lower levels consumer engagement in social media, and I explore ways that help such messages to be more engaging. My second essay explores how consumers engagement in branded social media messages is influenced by the devices on which they view those messages (in particular, mobile phones vs. desktop computers). My analyses utilize a combination of datasets collected from different sources including research agencies, consumers, and text analysis.
Controlling my boundaries: Explaining how and when workplace privacy promotes creative performance

(Georgia Institute of Technology, 2017-08-02) Keem, Se Jin

Organizational research has rarely examined the role that privacy plays in the workplace, lacking a clear conceptualization of privacy. The current research defines privacy as a perception of having control over one’s social interactions and develops a model that examines how privacy at work relates to creative performance. Taking a self-determination theory lens as the guiding theoretical framework, the current theoretical model argues that privacy leads to higher levels of creative performance through psychological empowerment because privacy enables employees to meet the need for autonomy, competence, and relatedness. The current model also theorizes that introversion and employee bonding moderate the relationship between privacy and psychological empowerment to predict creative performance. Data from a three-wave, multisource field study of 214 employees from 35 work units in multinational high-technology organization indicated that psychological empowerment mediates the relationship between privacy and creative performance. In addition, results indicated that introversion strengthens the relationship between privacy and psychological empowerment and that psychological empowerment mediates the moderated relationship between privacy and introversion. However, the results did not support the moderating role of employee bonding on this relationship. Overall, the results show that employees gain motivational benefits from having privacy at work and that privacy has important implications for creative performance.