PHD Publications

Thesis Summary In the first chapter, I ask if short-sellers are superiorly informed about sovereign auctions. I find a large average increase in demand for short-selling prior to auctions. Yet, the demand for short-selling a bond does not predict a subsequent increase in the bond's yield.Overall, there is no evidence that short-sellers or edict or interpret auction outcomes better than the market. In the second chapter, I develop and test a model explaining the gradual price decrease observed in the days leading to large anticipated asset sales such as Treasury auctions. In the model, risk-averse investors anticipate an asset sale which magnitude, and hence price, are uncertain. I show that investors face a trade-off between hedging the price risk with a long position, and speculating on the difference between the pre-sale and the expected sale prices. Due to hedging, the equilibrium price is above the expected sale price. As the sale date approaches, uncertainty about the sale price decreases, short speculative positions increase and the price decreases. In line with the predictions, I find that the yield of Italian Treasuries increases by 1.2 bps after the release of auction price information, compared to non-information days.In the third chapter, I study the link between prices and repo rates during the subprime crisis. I find that the no-arbitrage relationship between prices and repo rates in Duffie (1996) fares worse during the crisis. However, low-reporate bonds have an 18.0% higher probability of being more expensive than identical high-reporate bonds during the crisis, compared to only 9.0% before the crisis. Overall, while there are high limits of arbitrage, prices and repo rates feature larger co-movements during the crisis.

Thesis Summary This work centers on the tenet that organizational rationality is bounded: decision makers search, satisfice, and think in a way that is typical (in its integrity) only of humans. The dissertation explores this interplay between search and decision maker’s cognition and demonstrates how biases in characteristic aspects of our thinking can be instruments of behavioral strategy. As a starting point, I take search, sequential generation and evaluation of alternatives, as the first primitive of bounded rationality and complement it with integral elements of human cognition, such as automatic, intuitive thinking, specifically affect heuristic, and imperfect mental representations of reality. With the help of computational models, I track the effects of the corresponding biases (systematic affective preferences and systematic errors in mental representations) over time as organizations adapt to complex environments. This allows me to identify life cycles of the elements of human cognition and show that organizations should manage (rather than eliminate) some biases over time. Finally, I derive predictions and empirically test a subset of my propositions. In conclusion, this work aims to advance the emerging theory of behavioral strategy by jointly considering different primitives of bounded rationality and integrating them with the existing knowledge in organization sciences. A broad question that motivates this work is how organizations can manage the many bounds to human rationality.

Thesis Summary Explaining why individuals enter into entrepreneurship has been challenging. In this thesis, I take a behavioral perspective and analyze the effects on entrepreneurial entry of behavioral mechanisms that have been understudied in the entrepreneurship literature.The first essay proposes to disentangle the effects on market entry of two mechanisms that may have been confounded: overconfidence and attitude toward ambiguity. This essay highlights the critical role of ambiguity attitude on the decision to enter a market, particularly when the result depends on one’s skills, such as entry into entrepreneurship. The very nature of entrepreneurship is to invest capital and time with the hope of receiving future financial benefits. I therefore argue that understanding entrepreneurs’ temporal preferences for time and money can provide new insights on the determinants of entry into entrepreneurship.While intertemporal choice involving money has been studied extensively in the behavioral literature, very few studies have analyzed the way people discount time, despite the fact that it is a scarce and valuable resource. The second essay investigates this issue in a laboratory experiment. Finally, using a lab-in-the-field experiment, the third essay analyzes temporal preferences for money and time of a comparable sample of future entrepreneurs and future managers.

Thesis Summary This dissertation addresses unexplored issues on the antecedents, management, and outcomes of corporate venture capital (CVC). More specifically, I examine how negative performance feedback and corporate governance influence the direction of organizational change ? in terms of exploration and exploitation ? and how balancing such change over time influences firm performance in the CVC context. I first review the extant literature on CVC and lay out the unique contributions of my research. Then, in the first essay, I theorize on how poor firm performance influences the resource allocation decisions on exploration and exploitation and how such decisions are affected by the concentration of dedicated and transient shareholders and by the board of directors' monitoring and advising intensities. In the second essay, I empirically examine how the resource allocation decisions on exploration and exploitation are influenced by dedicated and transient shareholders in the context of CVC investing. In the third essay, I examine how balancing exploration and exploitation over time and the characteristics of oscillation impact firm performance. The empirical analysis in the latter two essays is based on CVC investments made by 287 companies during 1993-2013. This dissertation contributes to the Behavioral Theory of the Firm and Corporate Governance research by introducing how shareholders and boards influence managerial decision-making in search and change, Ambidexterity research by studying how continuous change and organizational inertia impact temporal spillover between exploration and exploitation, and CVC research by examining the antecedents and consequences of explorative and exploitative initiatives in CVC investing.

Thesis Summary My dissertation expands the line of inquiry of the contingent value of social capitalto individual performance by raising three novel questions. In the first essay of my dissertationI focus on “How to bridge and how to bond” and propose a new theoretical framework foranalyzing social capital, which deconstructs its major function beyond bridging or bonding intoits substance as social relations versus position in network structure. Considering these twodimensions of social network analysis I propose four distinct sources of social capital that havedifferent predictive value for individual achievements: bridging network, bridging relations,bonding network and bonding relations. The lead question in the second chapter of mydissertation is “When to bridge and when to bond”. Joining the research on the contingentvalue of social capital, I look at organization and individual level factors to predict the value ofeach social capital source to performance and theorize about the strategies individuals shouldpursue in order to achieve better performance. In the third essay I ask “Should one start withbridging or with bonding?” Building on the categorization proposed in the first chapter Iinvestigate the most successful social capital path to on-the-job performance.

Thesis Summary This dissertation is made ofthree distinct chapters. The first chapterexamines the causal link between banks’syndicated loan supply and non-financial firms’campaign contributions for US elections duringthe 2007-2008 financial crisis. The resultsindicate that a 10% decrease in loan supply of agiven firm by its pre-crisis relationship lendersduring the early crisis period leads to a 9%increase in firm’s campaign contributions in2008. Further, firms’ level of past campaigncontributions is positively associated withfavorable loan terms for the future. Thefindings lend support to the idea that campaigncontributions are an investment in politicalcapital rather than merely a form ofconsumption good.The second chapter identifies the effect ofbanks’ industry exposures prior to market-entryon the output growth of manufacturing sectorsthrough US bank-entry deregulations. Thefindings indicate that the larger the discrepancyin specialization in an industry between a statepair,the higher the impact of bankingintegration on the growth of that sector in thestate that is less-specialized. The last chapterexamines whether banking integration acrossregions has any impact on the market forcorporate control between them. The resultsshow that there are more M&As and divestituresacross state-pairs whose banking systems haveexperienced a higher integration, compared tostate-pairs with no such integration. The findingsin the last two chapters indicate a bankingchannel that shapes the states’ industriallandscape.

Thesis Summary This thesis analyzes the introduction of an internal audit function in the French government administration, following a reform launched in June 2011. It is based on qualitative data collection, composed of semi-structured interviews (n=121), a five-month participant observation, the attendance of several meetings and document analysis. Our thesis shows that the introduction of an internal audit function was made possible not only by a buoyant context, characterized by the success of the audit, but also by a previous set of reforms. This set of reforms had several effects, including a weakening of the legitimacy of government controllers.Internal audit, as it is implemented in the administration, is shaped, firstly by power struggles within the administration, which triggered the reform, secondly by a confrontation of government controllers in charge of implementing the reform in their ministries. Lastly, our research shows that the introduction of internal audit not only destabilizes the previous organization of government control, but also reveals a transformation of state power.

Thesis Summary I integrate external and internal analyses in competitive strategy in a way that complements the micro-foundations movement. I am motivated by two hiatus in the literature that constitute a single literature gap: First, the field tends to look at either resource or positioning for competitive advantage with little integration. Second, the field has overlooked how heterogeneous resource and positioning form endogenous micro-environment and interact in transactions. I adopt a game-theoretic approach that harmonizes (a) heterogeneity in firms that echoes internal analysis, (b) strategic interaction among firms that captures external analysis, and (c) the endogenous micro-environment. Under this overarching theme, I have focused my attention on three scenarios, in three separate chapters, that share four common connections beyond the concerted effort to crack open the black box: (i) All three chapters are deeply rooted in transactions. (ii) I extract patterns that cumulatively impact the competitive advantage of firms. (iii) I focus on firm-level constructs. (iv) I simultaneously consider external and internal determinants. Specifically, Chapter 1 introduces the ex ante cost perspective which consummates ex post cost and ex ante incentive analyses. Chapter 2 presents the theoretical framework of evolutionary advantage through the lens of contracting strategy. Chapter 3 shows that firms’ behavioural difference in negotiation sustains an additional dimension of strategic manoeuvrability which ultimately affects value appropriation. Collectively, my dissertation contributes to the understanding of the dynamics surrounding transactions among firms. It sets a valuable precedent in integrating external and internal analyses while at the same time providing a complement to the micro-foundations movement.

Thesis Summary This dissertation explores family firms’ organizational identity from a non-family member’s perspective. The family identity of these firms constitutes both an intangible asset, that is difficult to imitate – and a crucial stake as during their growth process, family firms incorporate external members who tend to progressively represent the majority of the payroll. This stake is even more salient as owning families aim at durably influencing their firms’ identity since the family’s and the firm’s history and reputation are interrelated. However, the role of non-family members’ in the family firm’s identity has not been directly investigated by researchers so far. My dissertation aims at filling in this gap, by investigating the way non-family members contribute to enacting the family identity of the firm. The case study I conducted in a French family firm leads me to formulate three main sets of results. First, the exploration of non-family members’ perceptions of the firm reveals that they associate what they consider to be the core attributes of the firm with the owning family. Secondly, I investigate the mechanisms leading to such perceptions and identify that the family’s image and values are “brought” into the organization through four mechanisms – embodiment, reminding, spreading and adaptation – that together constitute the overall process of “familization” of the firm. Lastly, I suggest a typology of non-family members depending on their motives for contributing to “familization” mechanisms. Two categories (the adopted and the converted) play a crucial role in these mechanisms. Moreover, I show that the top management is composed of adopted and converted, who use this specific family of owners as a managerial tool having a role-modeling function. They do it because they perceive this family as embodying an axiology that is symbolized by the Family – as a generic entity –, an axiology that they consider to be valuable in an organizational context. The theoretical and practical contributions of these results are discussed.

Thesis Summary This dissertation is an inquiry into the phenomenon of social media use in organizational context with a focus at self-presentation transparency. It drives attention to the processes of enactment of this new technology and investigates how these developments are embedded in the context of occupational norms, social roles, organizational control and autonomy. The research setting is based on the 19-month social media implementation campaign by a central European media organization as a means of enhancing communication and coordination within the organization. The implementation encompassed two departments, journalists and advertising agents, who were asked to create and open their online social media profiles and befriend their colleagues. The dissertation comprises four research papers each taking a separate perspective on the phenomenon. Methodologically, the dissertation builds on qualitative case-study approach and abductive and inductive reasonings. The thesis provides theoretical and practical contributions to the understanding of the normative prerequisites, process and consequences of social media use in organizational context for occupational norms, online knowledge collaboration and organizational control while presenting co-evolution of the technology meaning and use.