Research Paper Series

  • Title
  • Author(s)

Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Problem definition: Process innovation is commonly claimed to be a major source of competitive advantage for firms. Despite this perceived influence it has received substantially less attention than product innovation and much uncertainty remains about its true association with firm performance. We investigate the relationship between a pharmaceutical manufacturing firm's process-innovation portfolio and its economic performance.Academic/Practical relevance: Our study uniquely conducts a multi-dimensional evaluation of a firm's portfolio of process innovations at the product level. This allows a quantitative evaluation of both the relative benefit of the different dimensions of a portfolio as well as the potential complementarities between these.Methodology: Through a collaboration with expert patent attorneys we develop a unique longitudinal dataset that combines secondary data and evaluations of a firm's portfolio of process patents along three key dimensions: novelty, scope, and locus. We conduct econometric analyses for a large-scale sample of drugs open to competition from generics, where process innovation is the main source of competitive advantage.Results: We find a positive association between overall process innovation and firm performance. When differentiating between dimensions of process innovation, results further suggest that high novelty is beneficial, and complemented by a broad scope, but only for patents applying to the later phase of the pharmaceutical manufacturing process.Managerial Implications: Our results provide important practical insights that can inform process-related R&D investments in the pharmaceutical sector. In particular, it may not be economically beneficial to invest in high-novelty process innovations in early production stages, which are characterized by numerous opportunities to innovate with potentially higher but less predictable economic payoffs. On the other hand, at later stages of the production process, where the opportunities to innovate are less numerous with potentially lower but more predictable economic payoffs, portfolios that are jointly characterized by high novelty and high scope could be more valuable.

Departments: Information Systems and Operations Management, GREGHEC (CNRS)

We examine the impact of a new mobile-based, dockless bike-sharing service on public transportation. In contrast to traditional rental bikes that are parked at fixed stations, the dockless bikes can be picked up and returned at literally anywhere. This dockless feature of the shared bikes likely provides a solution to the last mile problem, potentially making it a complement to public transportation. Assembling a unique panel data of shared-bike rides and subway traffic, we estimate the relationship between shared-bike ridership and public transportation. Our results show that increases in shared-bike rides lead to increases in subway traffic. This positive effect is stronger for peak hours during weekdays and non-peak hours during weekends. We argue this effect is most likely driven by shared bikes promoting public transportation use and substituting for private cars (substitution effect) and also stimulating new travel (stimulating effect). Overall, we find that dockless shared bikes, in contrast to most of the other sharing economy phenomenon, acts as a complement rather than a substitute for public transportation. In addition, increased use of dockless shared bikes has a positive societal impact, leading to less urban congestion and better environmental protection.

Keywords: bike-sharing, public transportation, complement, last mile problem

Departments: Finance, GREGHEC (CNRS)

This paper studies the investment decisions and price impact of non-resident foreigners in the Paris housing market, employing unique micro-level transaction data over the period 1992–2016. We find that these “out-of-country” buyers generally purchase relatively small but high-quality properties in desirable neighborhoods and in areas with high ratios of compatriots. Ceteris paribus, they pay higher prices, hold for longer, and realize lower capital gains, highlighting the importance of information asymmetries and search costs in residential real estate. Crucially, however, out-of-country buyers’ quality-controlled purchase prices are also positively affected by home-country economic conditions, which suggests that global variation in the willingness-to-pay for real estate affects pricing in hotspots such as Paris. When instrumenting out-of-country demand, we find that it has pushed up prices of ex ante less valuable properties that have nonetheless been exposed to such demand.

Keywords: foreign home buyers; secondary residences; search costs; private valuations

  • MOSI-2018-1310
  • Practices of Distributed Knowledge Collaboration

Departments: Information Systems and Operations Management, GREGHEC (CNRS)

  • MOSI-2018-1309
  • Task Novelty and Knowledge Transformation Processes in Distributed Work

Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Departments: Finance, GREGHEC (CNRS)

I study the real effects a contracting innovation that suddenly made financial markets more complete: central clearing counterparties (CCPs) for derivatives. The first CCP to provide full insulation against counterparty risk was created in Le Havre (France) in 1882, in the coffee futures market. Using triple difference-in-differences estimation, I show that central clearing changed the geography of trade flows Europe-wide, to the benefit of Le Havre. Inspecting the mechanism using trader-level data, I show that the CCP was instrumental both to mitigate adverse selection issues and to solve a ``missing market'' problem. Increased risk-sharing possibilities enabled more gains from trade to be realized. The successful contractual innovation quickly spread to new exchanges.

Departments: Accounting & Management Control, GREGHEC (CNRS)

Recent contributions in the domains of governance and regulation elucidate the importance of rule-intermediation (RI), the role that organizations adopt to bridge actors playing regulatory or “rule-making” (RM) roles, and those adopting target or “rule-taking” (RT) roles. Intermediation not only enables diffusion and translation of regulatory norms, but also allows for the representation of different actors in policy-making arenas. While prior studies have explored the roles that such RIs adopt to facilitate their intermediation functions, we have yet to consider how field-level structuring processes influence (and are influenced by) the various and changing roles adopted by RIs. In this study, we focus on the mutually constitutive relations between field-level change processes and the evolving roles of RIs by studying the rise of ICLEI (International Council for Local Environmental Initiatives/Local Governments for Sustainability), an RI serving as a bridge for sustainable urban development policies between the United Nations and urban authorities. Using ICLEI as an illustrate case, we theorize four different processes of regulatory field consolidation and fragmentation including: problematization, role specialization, marketization and orchestrated decentralization. We discuss their implications for the RI roles in the field and further theorize the changing dynamics of trickle-up intermediation processes as an RI gains power and influence.

Keywords: governance,intermediation,rule‐intermediary,sustainable development

Departments: Tax & Law, GREGHEC (CNRS)

This time was supposed 'to be different', at least this was the motto of the 2014 European Parliament elections campaign. With less than a year before the next European elections, the time is ripe to examine how different this EU political cycle has actually been. Emboldened by the Spitzenkandidaten process – which established for the first time a link between the outcome of the EU elections and the presidency of the EU Commission –, the Juncker Commission emerged as the most political yet. To shrug off the label of technocratic institution – historically insulated from citizens’ preferences –, the new Commission asked EU citizens to judge its operation by its ability ‘to deliver solutions to the big issues that cannot be addressed by the Member States alone’. While the Better Regulation Agenda might have improved the Commission’s public accountability – with both citizens and stakeholders being better informed about and engaged with EU policy-making –, without however increasing its responsiveness to public preferences. This is the case at the input, throughput and output stage. Rather, the techno-political approach to policymaking – which characterizes the Juncker’s Better Regulation – might have paradoxically led to a compression of participatory democracy and somehow chilled stakeholder engagement. At a time of unprecedented contestation of the EU project – a trend which is combined by a record-demand for new forms of political representation –, it appears paradoxical that the EU – an early promoter of participation – is missing out the chance to seize the momentum to diversify and redesign its participatory structures being busy delivering on its electoral promises no one will ever judge.At the very same time the Juncker Commission has been striving to develop its own, autonomous democratic credentials, its choice to embrace a set of well-defined institutional mechanisms that reward expert judgment over political adjudication appears at odds with its newly-acquired political nature.

Departments: Tax & Law, GREGHEC (CNRS)

This article hinges on the preliminary ruling rendered by the Court of Justice of the EU (CJEU) (Grand Chamber) on 18 October 2016 and the related judgment of the German Federal Labour Court of 26 April 2017 in the Nikiforidis case to investigate an area of private international law that is undergoing a substantial development: overriding mandatory provisions. In Nikiforidis, the CJEU excluded that two Greek laws cutting the salary of public employees may be enforced against a teacher working in Germany for the Greek Government under an employment contract governed by German law. The question addressed to the CJEU was whether the said laws were “overriding mandatory provisions” according to the Rome I Regulation. The Court denied it, and left to the referring court to determine whether they could nevertheless operate “as matter of fact” under the governing law. This article explains how the CJEU’s conclusion has broader implications by regulating third countries’ interference in international business transactions. Starting with an analysis of the case, the article examines the history and nature of overriding mandatory provisions under EU private international law and argues that the solution embraced by the CJEU leaves room for uncertainty and unpredictability in the operation of foreign mandatory provisions.

Keywords: Amendments; Applicable law; Contracts of employment; EU law; Germany; Greece; Remuneration

Departments: Economics & Decision Sciences, GREGHEC (CNRS)

This chapter briefly reviews the present state of judgment aggregation theory and tentatively suggests a future direction for that theory. In the review, we start by emphasizing the difference between the doctrinal paradox and the discursive dilemma, two idealized examples which classically serve to motivate the theory, and then proceed to reconstruct it as a brand of logical theory, unlike in some other interpretations, using a single impossibility theorem as a key to its technical development. In the prospective part, having mentioned existing applications to social choice theory and computer science, which we do not discuss here, we consider a potential application to law and economics. This would be based on a deeper exploration of the doctrinal paradox and its relevance to the functioning of collegiate courts. On this topic, legal theorists have provided empirical observations and theoretical hints that judgment aggregation theorists would be in a position to clarify and further elaborate. As a general message, the chapter means to suggest that the future of judgment aggregation theory lies with its applications rather than its internal theoretical development.

Keywords: Judgment Aggregation Theory, Logical Aggregation Theory, Law and Economics, Doctrinal Paradox, Discursive Dilemma, Canonical Theorem of Judgment Aggregation Theory, Premiss-Based Versus Conclusion-Based Method, Collegiate Courts, Issue-Based Versus Case-Based Adjudication Method