On-going Projects

[1] Ballesteros, L., & Colleen Cunningham (2018), Innovation and Uncertainty Shocks: Can Exposure to Exogenous Shocks Affect Risk Taking within the Organization?

Risk taking is at the essence of innovation and the literature traditionally assumes risk preferences to be stable across time. We evaluate the argument that exposure to exogenous high-consequence shocks alter risk preferences and thus risk taking. To identify this causal effect, we construct panel data on patents by U.S. county from 1990 and 2015 as proxy for innovation and then use large geophysical and meteorological disasters as natural experiments that generate substantial and sudden changes in uncertainty at the local level. We expect that counties exposed to natural disasters will observe comparatively large number of patents. Additionally, we test the moderating effects of the frequency and magnitude of exposure to disasters.

[2] Ballesteros, L., &  Aseem Kaul, (2017). Is Altruistic Philanthropy more Socially Valuable than Strategic Philanthropy?

This study connects the antecedents of corporate philanthropy and its consequences. We tackled the question of whether corporate philanthropy that is driven by altruism generates greater value for its beneficiary than corporate philanthropy than is driven by strategic considerations. The findings of a quasi-experimental design suggest that disaster-affected countries received greater average donations from firms whose behavior had, arguably, comparatively strong strategic implications (i.e., these firms have operations in the affected country, their headquarters-country is economically proximate and culturally distant to the affected country, and their donation was top-management driven) than from counterfactual firms whose behavior is, arguably, comparatively altruistic (i.e., these firms do not have operations in the affected country, their headquarters-country is economically distant and culturally proximate to the affected country, and their donation is employee-driven). This suggests that stressing altruism or, more broadly, the social preferences behind corporate pro-social behavior, as opposed to its strategic value, may result in an economic loss from the perspective of the beneficiary of firm action.

[3] Ballesteros, L. and Aseem Kaul, 2018, How Uncertainty Shocks offer Opportunities for Market Entry. Evidence from Natural Experiments

The literature that studies the country-specific determinants of market entry predominantly approaches the institutional environment as relatively stable (North 1990). However, uncertainty shocks are known to generate systemic disruptions that reshape norms, values, and rules which otherwise change incrementally (Bloom 2009).  It is during these disruptions when local perceptions of geopolitical and economic conflict or cooperation are comparatively vulnerable to be deviated by the behavior of strategic foreign actors. Particularly, the actions undertaken by foreign national governments to help the shock-affected country may reduce the negative local perceptions of firms that are co-national to the responding government. The liability of foreignness that these firms may be mitigated, at least temporarily and thus increasing their opportunities for market entry.