.Ballesteros~[organizational decision making_uncertainty_risk]+[economic consequences_business strategy]

I hold a PhD in Applied Economics and Management Wharton and degrees from the MIT and ITAM. Prior to joining academia, I worked with financial derivatives for two private banks and with policy instruments to finance catastrophic risk for two multilateral agencies.

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My research centers on the individual and institutional drivers of organizational decision making and the economic consequences of firm strategy. I am fascinated by what drives organizations to make specific choices in the context of systemic risks and uncertainty shocks (the known or unknown probability of a disruption of the market’s status quo, such as Brexit, natural disasters, and political coups), and the consequences of such decision making for firm performance and social welfare.

Deciding under systemic risk and uncertainty shocks is in the essence of contemporary entrepreneurship and a driver of global competitiveness.

What inherent risks does the firm face when expanding to a foreign market? What are the benefits and costs of taking market (e.g., investment in innovations) and non-market strategies (e.g., strategic philanthropy) to manage such risks? How such behavior will affect the relationship between the firm and key stakeholders? My research agenda centers on similar questions and the fundamental transformation that the business community is now undergoing in attention given to risk and uncertainty at the global level.

I also co-direct GLOB~S, a  platform led by business managers, policymakers, and academics toward science-based evidence on the sources and effects of the risk and uncertainty associated with the internationalization of business.


Recent findings:

  • Humanitarian aid from local for-profit organizations help countries affected by disasters recover faster and greater than aid from foreign governments, multilateral agencies, and individual charity. http://amj.aom.org/content/60/5/1682.abstract

 

  • Firms often supply disaster aid via non-profit organizations (such as the Red Cross) in countries with high institutional development (such as Japan). Our research suggests that these countries would benefit more if firms implemented their aid with their own resources. Conversely, in countries with low institutional development (such as Haiti) the social benefit is higher when firms channel their aid via NPOs. 

Yet, firms tend to do the opposite, which, arguably, reduces the economic                               implications of their pro-social behavior:  the relative of value of npo-firm experience (SMJ)

  • Over 51% of firms supplying public goods in the aftermath of disasters obtain losses than are not explained by market operation. We have found (halos or horns – 01 14 18) that the financial implications of this company pro-social behavior is a function of firms’ preexisting media reputations more than the underlying characteristics of firms’ donations. 

Moreover, there are reputational spillovers among firms that donate a similar amount than the first donor. Here is an article on this research published by Harvard Business Review.

Ongoing work:

  • Uncertainty shocks and innovation. Exposure to low-probability, high-consequence exogenous shocks reduces risk aversion and exposed firms engage frequently in comparatively risky projects.
  • Institutional shocks and market entry. Major disruptive events, such as terrorist attacks and natural disasters, generate temporal institutional changes that affect stakeholder perceptions toward foreign firms, which mitigates liability of foreignness and facilitate market entry.