Publications

This paper examines the effects of temporal distance generated by time zone separation on communication in geographically distributed organizations. We build on prior research, which highlights time zone separation as a significant challenge, but argue that employees may time shift move work-related communication to outside of regular business hours—to counteract temporal distance. We propose a theory in which employees’ tendency to time shift depends on the demands of their tasks and collaborative relationships and individuals’ ability to supply work outside of regular business hours. Analyzing communication-level data from 12,038 employees of a large multinational firm and using cities’ shifts to/from daylight saving time for identification, we find that temporal distance leads to sizable but smaller than expected reductions in volumes of rich, synchronous communication between employees. Consistent with our arguments, increased temporal distance significantly increases time shifting of work-related communication, especially among workers whose jobs are nonroutine and interactions in strong collaborative relationships. We further document that female employees and employees based incountries with stricter legal work hour limits engage in significantly less time-shifted communication. Our study improves understanding of a ubiquitous source of collaboration friction. It also sheds light on a potential source of inequities in workplace outcomes stemming from differences in individuals’ ability to work outside of regular business hours.

Scarcity of productive factors poses a challenge for firms entering underdeveloped regions. We theorize that incumbent firms can overcome scarcity of skilled human capital in local labor markets by redeploying workers from existing units. We predict that redeployment is more valuable when factor markets exhibit large differences in resource scarcity. Redeployment is also more valuable when output is highly sensitive to worker skill and is responsive to complementarities between labor and other inputs. Important implications are that redeployment can endow firms with superior resources and enable them to enter more markets. Data on sugar mills in Brazil, where a sudden demand boom incentivized expansion, corroborate the predictions. Our research identifies a new mechanism of value-creation from resource redeployment across factor markets.

We examine to what extent and when multiunit firms internally redeploy managers between units. While theory has emphasized how changes in demand conditions affect redeployment, we argue that optimal internal resource allocation involves consideration of both demand and each unit's resource supply. We formalize this argument, showing how redeployment arises from “supply-side inducements”—return advantages in new over existing resource uses resulting from changes in resource supply. Empirical tests using manager deaths as an exogenous, supply-side shock to firms' resource stocks support our arguments, showing that firms frequently redeploy resources away from better-endowed and toward negatively affected units. Incorporating supply-side inducements into redeployment theory implies additional value-creation opportunities from redeployment and carries novel predictions for the direction of intra-firm resource flows.

Prior research has extensively documented that firms tend to agglomerate, i.e., colocate with each other. To what extent and why do multi-unit firms internally agglomerate—colocate their various units? We develop a new methodology to measure internal agglomeration and document its extent and drivers in Census-like data of the U.S. manufacturing sector. We find that more than half of all firms in our sample are internally agglomerated; this tendency is higher among smaller, older, and more related-diversified firms. Consistent with prior research, access to specialized suppliers, labor pooling, and knowledge sharing all contribute to inter-firm colocation. However, intra-firm colocation is primarily related to the labor channel. Our results suggest important interdependencies between firms' spatial organization and intra-firm resource flows.

In this paper, we examine the relevance of pollution havens in firms' global sourcing strategies for green products. Because of the importance of credible and sustainable manufacturing practices throughout firm global value chains for green products, we expect country institutional contexts to have different effects on the global sourcing decisions for green versus non-green products. Our findings using data on global imports and exports for more than 5,000 distinct products over the 2002–2019 period show that green products are more likely to be sourced from countries with higher environmental stringency, while non-green product sourcing patterns align with prior research, which emphasizes the appeal of lower environmental standards and cost-efficiency considerations. These green sourcing effects are stronger for consumer-facing products and into countries where consumer engagement in environmentalism is higher and non-governmental organizations are more active. While these findings apply to both multinational (related) and third-party (unrelated) global sourcing, they are larger for third-party global sourcing, suggesting that country environmental standards may be more important when firms do not own the production processes for their green products. Unlike prior work that argues that higher environmental standards hurt exporters, our paper suggests that such standards can benefit green product exporters.

Efficient intra-firm resource allocation and redeployment positively affect firm performance, but we lack evidence of what firm characteristics enable redeployment. This paper examines the role of organizational structure, in particular, whether decision-making authority is centralized or decentralized, on worker redeployment following establishment

closures in Brazilian manufacturing firms. Using a triple-difference research design, we find that centralized firms are more likely to redeploy workers out of closing establishments than decentralized firms. An analysis of mechanisms suggests that the redeployment “advantage” is reduced in centralized firms facing greater information frictions and in

decentralized firms with stronger firm-level incentives; we find no evidence that it is moderated by stronger organizational control mechanisms. For workers, redeployment mitigates the negative effects of closure, shielding them from sharp spikes in unemployment and persistent earnings losses. These benefits are larger for workers in more

centralized firms, suggesting that following closures, centralized firms are better at matching workers to opportunities elsewhere in the firm.

How does collocating with firms in one’s industry affect firm performance? The existing evidence is mixed. I introduce a novel empirical approach that exploits changes in effective collocation driven by road improvements. Using comprehensive firm-level data from Brazil, I find that the effects of collocation differ starkly depending on the spatial scope of industries’ product markets. In locally traded manufacturing industries, collocation leads to increased exit among the smallest firms but improved survival prospects for the largest. When collocation increases, firms react strategically, relocating and switching their primary industry in ways that lower exposure to competitors. In contrast, when collocation increases in nationally traded industries, survival rates improve for firms of all sizes and fewer firms relocate. While existing research focuses on the average effects of collocation, the findings of this study suggest that collocation intensifies both spatial competition and agglomeration forces, and that its effect on firm performance depends on the relative strength of these mechanisms in different industries.

Presented at: 2024 ODC Annual Conference, 2024 Strategy Science Conference, 2022 SMS PDW, 2022 SRF, 2022 Geography of Work Brownbag, 2022 LERA Annual Meeting.

How can Rwanda, which currently has one of the lowest levels of income and exports per capita in the world, grow and diversify its economy in presence of significant constraints? We analyze Rwanda’s historical growth and trade performance and find that Rwanda’s high transportation costs and limited productive knowledge have held back greater export development and have resulted in excessive rural density. Three basic commodities—coffee, tea, and tin—made up more than 80 percent of the country’s exports through its history and still drive the bulk of export growth today. Given Rwanda’s high population density and associated land scarcity, these traditional exports cannot create enough jobs for its growing population, or sustainably drive future growth. Rwanda needs new, scalable activities in urban areas. In this report, we identify a strategy for greater diversification of exports in Rwanda that circumvents the key constraints and is separately tailored for regional and global export destinations. Our results identify more than 100 tradable products that lie at Rwanda’s knowledge frontier, are not intensive in Rwanda’s scarce resources, and economize on transportation costs. Our analysis produces a vision of a more diversified Rwanda, which can be used as a guide for investment promotion decisions. We illustrate an approach that can be applied to other settings in order to identify opportunities for export diversification that take seriously local constraints and external market opportunities.

Research has sought to understand how foreign direct investment affects host economies. This paper reviews the empirical literature, specifically addressing the question: How does FDI affect economic development of host countries and what is the role of local financial markets in mediating the potential benefits? We first define FDI and discuss general theories on types and drivers of FDI. This review takes a host-country perspective rather than a firm perspective and thus only highlights the key insights from the rich firm-level literature on MNCs. We then focus on how financial conditions in host countries affect the extent of FDI-related capital inflows, shape the operations of foreign firms, and mediate the extent of productivity spillovers from FDI to local firms. The survey focuses mainly on work related to developing countries.

Projects that cross national boundaries give rise to the complex question of how the project's taxable income should be allocated among the national entities. This chapter utilizes a hypothetical mining project with the mine and infrastructure in two different countries to illustrate the fiscal issues arising out of cross-border projects. The unitary nature of the mine and its downstream infrastructure, each fully dependent upon the other, means that any exercise to separate the two into independent entities for tax purposes is highly arbitrary. No comparable uncontrolled transactions are likely to exist for applying the traditional arms-length principle. The cost-plus method can result in estimates for taxable income allocated to the downstream jurisdiction that vary by a factor of four or more. An alternative, not without its own limitations, is to apply a profit-split or formulary allocation to apportion income between jurisdictions. These ambiguities become particularity important when tax rates in the relevant national entities differ because then they can be used strategically, namely to shift project income to the more favorable jurisdiction.

From 1989 to 2003 civil war raged in Liberia, causing GDP per capita to drop an unprecedented 90% from peak to trough. The roots of Liberia's conflict and economic decline are complex and intertwined, resting on over a century of discriminatory elite rule and twisted by ethnic politics during a military dictatorship. By late 2011, eight years of post-conflict government have restored basic order, re-opened the country to foreign investors, and jump-started the small economy. But the country's business model may unsettle its political stability. As Africa's first democratically elected female head of state (and a recipient of the Nobel Peace Prize) Ellen Johnson Sirleaf goes into her reelection campaign for Liberia's presidency, she must decide how to keep the country on its fragile but quick recovery, sowing the seeds for peace and prosperity rather than renewed conflict.