Publications

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Roe, Mark J., and Jordan I. Siegel. "Political Instability: Effects on Financial Development, Roots in the Severity of Economic Inequality." Journal of Comparative Economics 39, no. 3 (September 2011): 279–309. (We here bring forward strong evidence that political instability impedes financial development, with its variation a primary determinant of differences in financial development around the world. As such, it needs to be added to the short list of major determinants of financial development. First, structural conditions first postulated by Engerman and Sokoloff (2002) as generating long-term inequality are shown here empirically to be exogenous determinants of political instability. Second, that exogenously-determined political instability in turn holds back financial development, even when we control for factors prominent in the last decade's cross-country studies of financial development. The findings indicate that inequality-perpetuating conditions that result in political instability are fundamental roadblocks for international organizations like the World Bank that seek to promote financial development. The evidence here includes country fixed effect regressions and an instrumental model inspired by Engerman and Sokoloff's (2002) work, which to our knowledge has not yet been used in finance and which is consistent with current tests as valid instruments. Four conventional measures of national political instability — Alesina and Perotti's (1996) well-known index of instability, a subsequent index derived from Banks' (2005) work, and two indices of managerial perceptions of nation-by-nation political instability — persistently predict a wide range of national financial development outcomes for recent decades. Political instability's significance is time consistent in cross-sectional regressions back to the 1960's, the period when the key data becomes available, robust in both country fixed-effects and instrumental variable regressions, and consistent across multiple measures of instability and of financial development. Overall, the results indicate the existence of an important channel running from structural inequality to political instability, principally in nondemocratic settings, and then to financial backwardness. The robust significance of that channel extends existing work demonstrating the importance of political economy explanations for financial development and financial backwardness. It should help to better understand which policies will work for financial development, because political instability has causes, cures, and effects quite distinct from those of many of the key institutions most studied in the past decade as explaining financial backwardness.)

18 Sep 2012
Working Paper Summaries

Risky Business: The Impact of Property Rights on Investment and Revenue in the Film Industry

Keywords: by Venkat Kuppuswamy & Carliss Y. Baldwin; Motion Pictures & Video

Research Summary

Selection, Reallocation, and Spillover: Identifying the Sources of Gains from Multinational Production (with Maggie Chen)

By: Laura Alfaro

Quantifying the gains from multinational production has been a vital topic of economic research. Positive productivity gains are often attributed to knowledge spillover from multinational to domestic firms. An alternative, less stressed explanation is firm selection... View Details

Keywords: Gains From Multinational Production; Firm Selection; Knowledge Spillover

05 Apr 2010
Research & Ideas

HBS Cases: iPads, Kindles, and the Close of a Chapter in Book Publishing

bookstores—the whole physical distribution system—is on the cusp of changing fundamentally." Olson has a particularly informed view of the issue. Before arriving at HBS in... View Details

Keywords: by Julia Hanna; Information; Publishing; Entertainment & Recreation

November–December 2024
Article

Loss of Peers and Individual Worker Performance: Evidence From H-1B Visa Denials

By: Prithwiraj Choudhury, Kirk Doran, Astrid Marinoni and Chungeun Yoon

We study how restrictive immigration policies that result in the unexpected loss of co-workers affect the performance of skilled migrants employed in organizations. Specifically, we examine the impact of the loss of team members on their co-workers’ performance in... View Details

Keywords: Immigration; Performance Productivity; Employees; Human Capital; Ethnicity; Groups and Teams

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05 Jul 2022
What Do You Think?

Have We Seen the Peak of Just-in-Time Inventory Management?

distribution channel on overall inventory levels and costs. One thing that may have helped generate the HBS offer was an experiment I performed using my own crude version of... View Details

Keywords: by James Heskett; Manufacturing; Shipping; Transportation

2007
Working Paper

The Dynamic Interplay of Inequality and Trust - An Experimental Study

By: Ben Greiner, Axel Ockenfels and Peter Werner

We study the interplay of inequality and trust in a dynamic game, where trust increases efficiency and thus allows higher growth of the experimental economy in the future. We find that trust is initially high in a treatment starting with equal endowments, but decreases... View Details

Keywords: Equality and Inequality; Performance Efficiency; Trust; Economics

2014
Chapter

Business History and the Impact of MNEs on Host Economies

By: Geoffrey Jones

Business history has long been recognized as providing an important dimension in international business studies. Much of this historical work has focused on mapping historical growth patterns of multinationals and exploring the determinants of their growth. However,... View Details

Keywords: Multinational; International Business; Business History; Culture; Globalization; History; Africa; Asia; Europe; Latin America; North and Central America

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Web

The Founding of U.S. Steel and the Power of Public Opinion | Baker Library | Bloomberg Center | Harvard Business School

aspects of the steel industry. In 1936, AISI distributed The Men Who Make Steel , an illustrated book intended to showcase management and labor harmoniously partnering in a mighty enterprise in which “each... View Details

01 Jun 1996
News

Keepers of the Flame

economy." Frazier further notes that the economic opportunities generated by the Games have been distributed across a wide spectrum: 30 percent of discretionary spending, including construction, has been... View Details

Keywords: Garry Emmons

26 Sep 2013
Working Paper Summaries

Playing Favorites: How Firms Prevent the Revelation of Bad News

Keywords: by Lauren Cohen, Dong Lou & Christopher Malloy; Financial Services

September 1988 (Revised June 1993)
Case

Ring Medical

By: V. Kasturi Rangan

Describes the progress of a new product launch (HCS-100, a hospital communication system). Ring Medical has sold only five systems in six months against an annual target of 30. There is a lack of agreement internally on how the new product effort should be organized.... View Details

Keywords: Conferences; Marketing Strategy; Product Launch; Distribution Channels; Performance

Educators

11 Jun 2021
News

The Power of Resilience

now channel that in a different way? That’s what led me to this realization that public speaking and experience sharing could actually be my mission. Instead of being employed by someone else, I could be an... View Details

October 1998 (Revised April 2001)
Case

United Way of Massachusetts Bay

By: David E. Bell and Ann Leamon

The United Way of Massachusetts Bay held the monopoly on workplace giving for 50 years. In the 1990s it has experienced a dramatic change in the workplace itself and in donor attitudes toward giving and toward the United Way organization. This case investigates the... View Details

Keywords: Change; Marketing Channels; Marketing Strategy; Monopoly; Relationships; Attitudes; Internet; Massachusetts

Educators

04 Apr 2007
Research & Ideas

The Business of Global Poverty

only have tens of dollars a year to spend, that disposable income, multiplied several billion times over, represents significant purchasing power. With this realization have come some dramatic shifts in business thinking, sparking... View Details

Keywords: by Garry Emmons

2010
Working Paper

The Architecture of Complex Systems: Do Core-periphery Structures Dominate?

By: Alan MacCormack, Carliss Y. Baldwin and John Rusnak

Any complex technological system can be decomposed into a number of subsystems and associated components, some of which are core to system function while others are only peripheral. The dynamics of how such "core-periphery" structures evolve and become embedded in a... View Details

Keywords: Innovation and Management; Product Design; Practice; Core Relationships; Software; Information Technology Industry

Web

Great American Business Leaders of the 20th Century - Leadership

Great American Business Leaders of the 20th Century Request the Data A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A Robert S. Abbott Chicago Defender, 1905–1940 Benjamin Abrams Emerson Radio & Phonograph Corporation, 1922–1966... View Details

Navigating the Jagged Technological Frontier: Field Experimental Evidence of the Effects of AI on Knowledge Worker Productivity and Quality

The public release of Large Language Models (LLMs) has sparked tremendous interest in how humans will use Artificial Intelligence (AI) to accomplish a variety of tasks. In our study conducted with Boston Consulting Group, a global management consulting firm, we examine... View Details

2022
Article

Diffusing Management Practices within the Firm: The Role of Information Provision

By: Michael J. Lenox and Michael W. Toffel

Why are some firms more successful in adopting profitable environmental management practices than others? A key role of corporate managers is to encourage subsidiaries to adopt innovative practices. We examine the conditions under which corporate managers use... View Details

Keywords: Environmental Strategy; Information Provision; Environmental Management; Knowledge Dissemination