SnO events

8 January 2015

SnO meeting: Papers presentation by Thomas Roulet and Andrea Masini

  • When: 08/01/2015
  • Where: HEC Paris

Professors Thomas Roulet and Professor Andrea Massini present their papers at SnO's monthly meeting:

"There is no such thing as bad publicity: Disapproval of investment banks as a beneficial signal of proximity to a field-level logic" - presented by Thomas Roulet, Assistant Professor of Business Economics, School of Management - University of Bath

Abstract: Contested industries derive legitimacy from well-established societal logics. When societal logics evolve, formerly legitimate industry norms are scrutinized. Members of an industry can then be identified as engaging in practices that contradict broader norms. In this context of institutional contradiction, some audiences can disapprove of the organizations engaging in those practices, while other stakeholders can interpret this negative perception as a positive signal because it indicates the extent to which the focal organization is loyal to this logic. Thomas Roulet  uses the investment banking industry as the empirical setting and hypothesize that during the financial crisis, corporate customers interpreted the disapproval of banks in the print media as a signal of the quality of service they would offer. Building on mass media content analysis, he inductively build a measure for the extent to which banks are criticized in the press for their proximity to the logic of shareholder value maximization. This measure is used to investigate the biases affecting invitation patterns during initial public offering (IPO) syndicate formation. His findings show that the more banks are disapproved of for their practices the more likely they are to be selected to join a syndicate. While the New York Times is the most hostile outlet, the Wall Street Journal has the greatest influence on corporate customers’ choices. This study suggests that disapproval can actually be beneficial in specific contexts and demonstrates the existence of reputational incentives to resist institutional change.

"Does economic growth matter? Technology-push, demand-pull and endogenous drivers of innovation in the renewable energy industry" - by Sam Aflaki, Syed Abul Basher        and Andrea Masini, presented by Andrea Masini, Professor in Operations Management and Information Technology, HEC Paris

Abstract: This paper aims to contribute to the longstanding technology-push vs. demand-pull debate and to the literature on renewable energy diffusion and renewable energy policy assessment. The argument is that in addition to the traditional push–pull dichotomy, the drivers of technological change must be differentiated by whether they are exogenous or endogenous to the economic system. It shows that a specific type of endogenous demand-pull mechanism (i.e. economic growth) is a major catalyst of environmental innovation. This perspective is applied to study the diffusion of renewable energy (RE) technologies in 15 European Union countries from 1990 to 2012. Applying different panel data estimators, findings are that public R&D investments, policies supporting RE and per capita income all have a positive impact on RE diffusion, whereas the variability of policy support has a negative impact. However, economic growth is a stronger driver than either public R&D investments or policies supporting RE, and that models that do not take it explicitly into account tend to overestimate the importance of exogenous drivers. Most importantly, the effect of economic growth on RE diffusion exhibits a nonlinear, U-shaped pattern that resonates with the well-known Environmental Kuznets Curve hypothesis. RE penetration remains negligible at low levels of growth whereas it increases sharply only after income per capita has reached a given threshold and the demand for environmental quality rises. Our findings have implications for policy making. They suggest that for RE diffusion to increase, government action should be directed not only at shielding renewables from competition with fossil fuel technologies but also at stimulating aggregated demand and economic growth.

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