Tag Archives: endogeneity

[5]. Does experience imply learning?

Jay Anand, Louis Mulotte and Charlotte R. Ren

Strategic management research traditionally uses experiential learning arguments to explain the existence of a positive relationship between repetition of an activity and superior performance. We propose an alternative interpretation of this relationship in the context of discrete corporate development activities, which are generally self-selected on the basis of superior performance expectations. We argue that firms are likely to choose to repeat successful activities, thereby accumulating high experience with them. To demonstrate this ‘self-selection’ effect, we examine the performance of 437 aircraft projects launched through three introduction modes. We show that the positive performance effect of the firm’s experience with the focal mode vanishes after accounting for experience endogeneity. We suggest that in a general case, experience with corporate development activities may be tinged with both learning as well as selection effects. Therefore, omitting experience endogeneity may lead researchers to draw incorrect conclusions from an “empirically observed” positive experience-performance relationship.

Strategic Management Journal., 2016, 37(7): 1395-1412. 

Click here for the paper: Anand-Mulotte-Ren_2015 SMJ

 

[4]. Disentangling the Performance Effects of Efficiency and Bargaining Power in Horizontal Growth Strategies: An Empirical Investigation in the Global Retail Industry

Valerie Moatti, Charlotte R. Ren, Jay Anand and Pierre Dussauge

M&A and organic growth are two common strategies for firms to achieve horizontal growth. In this study, we disentangle two distinct sources of firm performance corresponding to different theoretical perspectives on firm size: firms’ bargaining power with respect to suppliers and customers, and operating efficiency arising from scale economies. We conceptually argue and empirically show that relatively, M&A enhance bargaining power while organic growth enhances operating efficiency. We also find that M&A’s disadvantage on operating efficiency persists over time. In order to disaggregate these effects, we use accounting rather than financial or managerial data and test our predictions in the global retail industry over a 20 year period. We examine implications of these results for sustainability of size-based competitive advantages.

Strategic Management Journal, 2015, 36(5): 745-757.

Click here for the paper: Moatti-Ren-Anand-Dussauge 2015SMJ

 

[2]. Managing Product Variety and Collocation in a Competitive Environment: An Empirical Investigation of Consumer Electronics Retailing

Charlotte R. Ren, Ye Hu, Yu (Jeffrey) Hu and Jerry Hausman

Product variety is an important strategic tool that firms can use to attract customers and respond to competition. This study focuses on the retail industry and investigates how stores manage their product variety, contingent on the presence of competition and their actual distance from rivals. Using a unique data set that contains all Best Buy and Circuit City stores in the United States, the authors find that a store’s product variety (i.e., number of stock-keeping units) increases if a rival store exists in its market but, in the presence of such competition, decreases when the rival store is collocated (within one mile of the focal store). Moreover, collocated rival stores tend to differentiate themselves by overlapping less in product range than do non-collocated rivals. This smaller and more differentiated product variety may be because of coordinated interactions between collocated stores. In summary, this paper presents evidence of both coordination and competition in retailers’ use of product variety.

Management Science 57, no. 6 (2011): 1009-1024

Click here for the paper: Ren-Hu-Hu-Hausman 2011MS (SSRN Version).

Online Appendix