I study how large-scale shocks transform firms’ strategic choices—and how those choices shape competitive and societal outcomes.

Improvements in connectivity infrastructure can stimulate innovation by reducing information frictions across locations, yet firms benefit unevenly, and the organizational sources of this heterogeneity remain insufficiently understood. Drawing on information processing theory, this study examines how the locus of managerial authority within multinational enterprises—specifically, whether R&D subsidiaries are managed by headquarters or by another subsidiary—influences the change in innovation from improved connectivity. We use a novel longitudinal dataset covering 1,004 R&D subsidiaries from 78 multinational enterprises and exploit the staggered global rollout of broadband as a quasi-exogenous shock to connectivity. Triple-difference analyses using matched samples indicate that broadband increases subsidiary innovation on average, but the effects are driven by R&D subsidiaries managed by other subsidiaries. These subsidiaries experience substantially larger post-broadband increases in innovation productivity, knowledge flows from, and co-inventions with their managing entity than headquarters-managed subsidiaries. Additional analyses indicate that the gap widens when headquarters face greater information complexity, associated with larger multinational-enterprise size, more extensive international operations, and broader roles, suggesting that headquarters’ heavier information load constrains its ability to leverage improved connectivity. Consistent with information processing under constraints, we find suggestive evidence that headquarters prioritize their most important and technologically proximate subsidiaries. In contrast, subsidiary-managed units achieve innovation gains more broadly. Overall, the findings show that the innovation benefits of connectivity infrastructure hinge on organizational structure, highlighting the pivotal role of subsidiaries in managing innovation and the conditions that can impede or enhance these effects.

This paper studies philanthropy by multinational enterprises during institutional disruptions—the sudden and unexpected, temporary, and systemic breakdowns in market-oriented institutions. The central argument is that, under institutional disruptions, multinational enterprises aim to restore factors that are essential for the market to function, such as infrastructure and labor markets, and the strength of the market-restoration motive is positively associated with the economic importance of the affected country to the firm. Analyses of donations from 2,000 multinational enterprises headquartered in 63 countries in the aftermath of 265 major epidemics, natural disasters, and terrorist attacks affecting 129 countries suggest that the economic importance of the country to the firm strongly explains donations. Country market concentration, public aid, and the country’s regulatory quality moderate this effect. These associations are robust to a matching method; a vector of firm-, country-, and event-specific time-varying and time-constant variables; and alternative motives, such as reputation, altruism, media salience, market standing, and poverty-gap avoidance. They offer evidence that company philanthropy in the aftermath of institutional disruptions may deviate from predicted behavior under stable conditions. Particularly, the findings contest the expectation that philanthropy rises in market competition. Monopolistic firms are comparatively large donors and may act as an economic stop-loss mechanism during large disruptions.

Nonprofit organizations are often identified as a natural vehicle for the engagement of firms in large-scale social issues. We evaluate this argument by examining the conditions under which nonprofit experience is more valuable than firm experience in overcoming the key challenges associated with corporate disaster giving. Findings from a quasi-experiment across 4,396 natural disasters worldwide between 2003 and 2015 demonstrate that firms could donate more by implementing aid through nonprofits—or on their own—in countries with low—or high—institutional development, especially where they lack—or have—market operations. However, firms more frequently than not chose the allocation mode that yielded comparatively low aid, raising questions about incentive alignment and communication across the business and nonprofit sectors.

Corporations are increasingly influential within societies worldwide, while the relative capacity of national governments to meet large social needs has waned. Consequently, firms face social pressures to adopt responsibilities that have traditionally fallen to governments, aid agencies, and other types of organizations. There are questions, though, about whether this is beneficial for society. We study this in the context of disaster relief and recovery, in which companies account for a growing share of aid, as compared to traditional providers. Drawing on the dynamic capabilities literature, we argue that firms are more able than other types of organizations to sense areas of need following a disaster, seize response opportunities, and reconfigure resources for fast, effective relief efforts. As such, we predict that, while traditional aid providers remain important for disaster recovery, relief will arrive faster and nations will recover more fully when locally active firms account for a larger share of disaster aid. We test our predictions with a proprietary dataset comprising information on every natural disaster and reported aid donation worldwide from 2003 to 2013. Using a novel, quasi-experimental technique known as the synthetic control method, our analysis shows that nations benefit greatly from corporate involvement when disaster strikes.

We examine whether the welfare trajectory embedded in corporate philanthropy shapes stakeholder perceptions and is differentially associated with firm profitability. Building on prospect theory’s gain-loss logic, we distinguish restorative donations, whose mission is to repair discrete welfare losses, from developmental donations, whose mission is to improve chronically constrained welfare. Using a 20-year panel of large U.S. firms, we show that restorative-dominant philanthropic profiles are associated with higher subsequent profitability than developmental-dominant profiles and non-donor years across four complementary performance measures. We then test whether these donation missions systematically shape employee perceptions as one consequential stakeholder response. Across two preregistered experiments, restorative missions consistently increase perceived donation effectiveness and perceived self-oriented risk, whereas perceived beneficiary deservingness does not reliably differentiate across conditions. These perceptual shifts map onto modest positive indirect paths to employer attractiveness, primarily through perceived effectiveness. By contrast, we find no robust evidence that restorative missions increase short-run task effort. Together, the findings identify beneficiaries’ welfare trajectory as a theoretically grounded dimension of philanthropic heterogeneity that is associated with firm profitability and systematically shapes how stakeholders interpret firms’ philanthropic actions.

Using administrative panel data covering formal-sector establishments in Brazil, the paper studies how local climate disasters affect racial pay disparities inside firms. An event-study design shows that climate shocks produce a persistent widening of the within-firm racial pay gap: white employees receive post-shock wage gains while pay for nonwhite employees remains largely unchanged.

The analysis examines workforce composition, employer concentration, skill, and urbanization to identify when firm-level pay-setting decisions amplify inequality under climate risk.

Leveraging spatially precise data on U.S. patents and natural disasters, the study compares innovation in narrowly affected locations with nearby places that narrowly avoided the same shocks. It examines whether direct exposure changes entry into new technologies and the novelty of subsequent inventions.

The findings distinguish the recalibration associated with moderate traumatic shocks from the resource constraints imposed by severe events.

Communication technologies can improve coordination while remaining limited in transmitting tacit knowledge and potentially enabling excessive managerial intervention. The paper develops a contingency framework for when reductions in communication costs improve subsidiary innovation.

Using the staggered rollout of broadband, the analysis examines how prior co-invention and managerial span of control shape the innovation effects of improved connectivity.

The paper distinguishes uncertainty shocks from conventional risks and examines how cognitive limits, organizational structure, and stakeholder pressures shape preparation, response, and recovery. Its formal model develops a behaviorally plausible account of organizational choice when the consequences of disruption exceed ordinary predictive capacity.

The study uses a global panel of large multinational firms and their subsidiary locations, matched to geocoded natural disasters. It treats a firm’s operating footprint as a portfolio of real assets whose exposure depends on the concentration, dispersion, and spatial correlation of subsidiary locations.

The design distinguishes the insurance benefits of geographic diversification from the coordination and resource-redeployment benefits of geographic concentration. It examines whether more diversified firms experience smaller post-shock performance declines and whether capital markets value resilience embedded in firms’ spatial portfolios.

The project uses a nationally representative longitudinal survey from Mexico that follows individuals over time, elicits risk preferences, and records later business creation. These data are linked to local natural disasters to distinguish stable differences in risk aversion from within-person changes after disruption.

Preliminary evidence indicates both that less risk-averse individuals are more likely to create businesses and that disasters have persistent effects on risk preferences. The project therefore develops a dynamic account of how shocks alter who becomes willing to bear entrepreneurial uncertainty.

The project constructs an operation-weighted measure of physical climate exposure for the international activities of the world’s 2,000 largest corporations. It examines whether firms with different risk profiles systematically select into climate-exposed regions before shocks occur and whether corporate risk-taking changes after climate shocks are realized.

The design reframes climate exposure as an endogenous firm outcome shaped by physical hazards, location strategy, and managerial risk preferences, with implications for climate-risk pricing, disclosure, lending, and supervision.