Publications

March 1985 (Revised November 1985)
Case

Wilmington Tap and Die

By: Robert S. Kaplan

The general manager of a division manufacturing taps and dies must decide whether to continue a major capital investment program. The program was designed to replace aging mechanical machines with modern, electronically controlled equipment. A post-audit, after an... View Details

Keywords: Capital Budgeting; Investment; Accounting Audits; Cost Management; Technological Innovation; Information Technology; Performance Productivity; Production; Management Analysis, Tools, and Techniques; Manufacturing Industry

April 2022
Article

Going Out or Opting Out? Capital, Political Vulnerability, and the State in China's Outward Investment

By: Meg Rithmire

How do state-business relations interact with outward investment in authoritarian regimes? This paper examines this question in the context of China’s rapid transformation into a major capital exporter. While most political economy scholarship focuses on firms’... View Details

Keywords: Outward Investment; Capital Controls; Corruption; Foreign Direct Investment; Political Economy; State-owned Enterprises; Investment; Global Range; Capital; Globalization; Policy; Government and Politics; China

April 2021
Article

Evaluating Firm-Level Expected-Return Proxies: Implications for Estimating Treatment Effects

By: Charles M.C. Lee, Eric C. So and Charles C.Y. Wang

We introduce a parsimonious framework for choosing among alternative expected-return proxies (ERPs) when estimating treatment effects. By comparing ERPs’ measurement-error variances in the cross section and in time series, we provide new evidence on the relative... View Details

Keywords: Implied Cost Of Capital; Expected Returns; Cost of Capital; Investment Return; Performance Evaluation

Article

Agency Costs, Mispricing, and Ownership Structure

By: Sergey Chernenko, C. Fritz Foley and Robin Greenwood

Standard theories of corporate ownership assume that because markets are efficient, insiders ultimately bear all agency costs that they create and therefore have a strong incentive to minimize conflicts of interest with outside investors. We argue that if equity is... View Details

Keywords: Business and Shareholder Relations; Ownership; Conflict of Interests; Investment; Valuation

09 Jun 2010
Working Paper Summaries

Agency Costs, Mispricing, and Ownership Structure

Keywords: by Sergey Chernenko, C. Fritz Foley & Robin Greenwood

Article

Biosimilars and Follow-On Products in the United States: Adoption, Prices, and Users

By: Ariel Dora Stern, Jacqueline L. Chen, Melissa Ouellet, Mark R. Trusheim, Zeid El-Kilani, Amber Jessup and Ernst R. Berndt

Biologic drugs account for a disproportionate share of the increase in pharmaceutical spending in the U.S. and worldwide. Against this backdrop, many look to the expanding market for biosimilars—follow-on products to biologic drugs—as a vehicle for controlling... View Details

Keywords: Pharmaceuticals; Drug Spending; Drug Pricing; Health Care and Treatment; Spending; Price; Markets; Cost Management; United States

August 2020
Article

Leverage and the Beta Anomaly

By: Malcolm Baker, Mathias F. Hoeyer and Jeffrey Wurgler

The well-known weak empirical relationship between beta risk and the cost of equity—the beta anomaly—generates a simple tradeoff theory: As firms lever up, the overall cost of capital falls as leverage increases equity beta, but as debt becomes riskier the marginal... View Details

Keywords: Risk Anomaly; Leverage; Capital Structure; Risk and Uncertainty

10 Sep 2020
Research & Ideas

The COVID Two-Step for Leaders: Protect and Pivot

the core, and pivot to new opportunities. We provide a top-level overview of major topics and ideas relevant to each concept. We hope you are interested in engaging in further research about any topics that... View Details

Keywords: by Boris Groysberg and Katherine Connolly Baden

February 2018
Case

Health Savings Accounts: Enabling Consumer Participation

By: Regina E. Herzlinger and James Wallace

Health savings accounts (HSAs), a creation of the 2003 Medicare Modernization Act, had become an integral part of the drive toward consumer-driven health care. Coupled with high-deductible health plans, HSAs allowed consumers to directly control a significant part of... View Details

Keywords: Health Care; Healthcare Costs; Health Insurance; Health Care and Treatment; Cost; Insurance; Innovation and Invention; Health Industry; United States

October 2016 (Revised December 2016)
Module Note

Strategy Execution Module 6: Evaluating Strategic Profit Performance

By: Robert Simons

This module reading demonstrates how to calculate and analyze the profit generated by different business strategies. Formulas and examples are provided to calculate profit generated by changes in market share, revenue growth, efficiency improvements, and support costs.... View Details

Keywords: Management Control Systems; Implementing Strategy; Execution; Evaluating Business Performance; Profitability Analysis; Variance Analysis; Measuring Effectiveness; Measuring Efficiency; Activity-Based Costing; Flexible Budget; Accounting; Strategy

December 2022
Article

I Don't 'Recall': The Decision to Delay Innovation Launch to Avoid Costly Product Failure

By: Byungyeon Kim, Oded Koenigsberg and Elie Ofek

Innovations embody novel features or cutting-edge components aimed at delivering desired customer benefits. Oftentimes, however, we observe the need to recall new products shortly after their introduction. Indeed, a firm may rush an innovation to market in an attempt... View Details

Keywords: Innovation Management; Innovation And Strategy; Product Development Strategy; Product Introduction; Quality Control; Product Recalls; Game Theory; Market Timing; Innovation Strategy; Product Launch; Product Development

November 2012
Article

Does Management Really Work?

By: Nicholas Bloom, Raffaella Sadun and John Van Reenen

HBR's 90th anniversary is a sensible time to revisit a basic question: Are organizations more likely to succeed if they adopt good management practices? The answer may seem obvious to most HBR readers, but these three economists cast their net much wider than that. In... View Details

Keywords: Best Practices; Consulting Firms; Corporations; Cost Control; Employee Training; Executive Ability (Management); Executives—training Of; Hospitals—administration; Industrial Management—research; Productivity Incentives; School Management Teams; Work Environment; Management; Research

Register to Read

2019
Working Paper

The Comprehensive Effects of a Digital Paywall Sales Strategy

By: Doug J. Chung, Ho Kim and Reo Song

This paper explores the multiple and comprehensive effects of a digital paywall sales strategy, an increasingly common means of go-to-market for media firms. Specifically, we examine the effects of a digital paywall on a media firm’s two sources of income—subscription... View Details

Keywords: Digital Paywall; Demand Substitution; Spillover Effect; Synthetic Control; Sales; Strategy; Media; Newspapers; Publishing Industry

SSRN

August 2012 (Revised June 2017)
Case

Australia: Commodities and Competitiveness

By: Richard H.K. Vietor and Laura Alfaro

For the past few decades, Australia has dealt with the benefits and costs of repeated mining booms—inflation, a housing bubble, a current account deficit and growing dependence on China. Between 1996 and 2007, however, Australia had most of these issues under control... View Details

Keywords: Commodities; Competitiveness; Carbon Tax; Environment; Capital Flows; Current Account; Mining; Economy; Problems and Challenges; Australia

February 2002
Case

Fighting AIDS and Pricing Drugs

By: John T. Gourville

In early 2001, makers of AIDS drugs were suing to prevent developing countries from violating their patents. The issue was driven by price. The developing countries could not afford the market price for these drugs. At the same time, the drug companies were reluctant... View Details

Keywords: Developing Countries and Economies; Patents; Price; Strategy; Globalized Markets and Industries; Pharmaceutical Industry

December 2020 (Revised December 2021)
Case

Komatsu and Smart Construction

By: Rajiv Lal, David J. Collis and Akiko Saito

Komatsu, Japan's leading construction equipment manufacturer, is considering investing in a digital platform "Smart Construction" that will digitise the entire work process on a construction site, allowing for substantial reductions in cost and time while improving... View Details

Keywords: Platform; Digital Business; Construction; Business Model; Strategy; Technology Adoption; Internet and the Web; Digital Platforms; Construction Industry; Japan

February 2013
Teaching Note

Australia: Commodities and Competitiveness (TN)

By: Laura Alfaro, Richard H.K. Vietor and Hilary White

For the past few decades, Australia has dealt with the benefits and costs of repeated mining booms—inflation, a housing bubble, a current account deficit and growing dependence on China. Between 1996 and 2007, however, Australia had most of these issues under control... View Details

Keywords: Competitiveness; Inflation; Mining; Current Account; Exchange Rates; Trade; Capital Flows; Commodities; Environment; Carbon Tax; Goods and Commodities; Australia