We examine if the geographic proximity of knowledge workers' residences (i.e., residential proximity) affects the likelihood that they collaborate. We expect that the underlying mechanisms for why proximity in the workplace affects collaboration extend beyond the workplace and hypothesize that residential proximity enhances workplace collaboration. By examining patent outcomes and inventor residential location in the Warsaw, Indiana orthopedic device cluster-a setting that provides many research design advantages to isolate our predicted effect-we find support for this hypothesis. Moreover, we find that the residential proximity effect is manifest for employees in different divisions and manifests among workers of the same gender. This suggests that residential proximity can relax organization-imposed constraints to collaboration (i.e., divisional affiliation) subject to social constraints (i.e., gender differences). Documenting residential proximity as a within-firm agglomeration measure provides a novel theoretical rationale to explain different innovation outcomes between firms and across regions, and it better isolates how social mechanisms stemming from geographic proximity affect collaboration.

Migration is one of the most significant forces shaping economies and societies, yet it remains largely understudied in organizational research. At the same time, scholars in other fields with long traditions of studying migration tend to overlook the essential role of organizations. This lack of dialogue is striking because organizations are often the central arena in which migrants interact with others and through which they impact society and the economy. We explain how scholars of migration and organizations can benefit each other by exploring two broad issues. First, we consider what an organizational lens can add to the existing migration literature. We argue that organizational heterogeneity plays an essential role in determining the causes and effects of migration. Second, we consider how taking migration seriously can yield theoretical advancements for organizational scholars. We present examples that introduce potentially novel theoretical concepts or that enrich existing theories. Our aim is to broaden the research agenda for scholars interested in migration or organizations and to motivate organizational scholars to engage more deeply with one of the most consequential issues of our time.

Research SummaryAssessing whether network position causes firm outcomes is difficult because networks result from firms' strategic choices. To address this issue, we develop a research design that separates self-driven network change from other-driven change. Because other-driven change suppresses the focal firm's agency, outcomes resulting from it can be interpreted as causal-under verifiable assumptions. We apply this method to reassess whether alliance network position affects firm innovation. Using data from the biotechnology industry, we find that structural holes (but not closure) increase firm innovation when self-driven network change is involved but not when other-driven change is involved. This raises two possibilities: network effects spuriously capture unobservable firm characteristics or network theories must be updated to account for agency.Managerial SummaryWe examine a crucial question for managers making decisions about alliance networks: Does a firm's position in its alliance network drive innovation, or is it a reflection of the firm's inherent qualities? Our research explores this question by examining network changes outside a firm's control. We find that bridging disconnected partners (structural holes) enhances innovation, but only when firms actively create these positions and not when these positions result from others' actions. Our findings suggest that network position alone does not drive innovation. Acknowledging that network position, per se, is not advantageous provides nuanced insight to better guide managerial decisions.

Research SummaryWe discuss two research design considerations that jointly influence the choice of financial performance metrics in strategy research: (a) expected temporal payoff of the strategic choice and (b) source of variation invoked in the research design (i.e., within-firm vs. between-firm comparisons). We map existing performance metrics commonly used in the research literature to these considerations, and highlight the lack of performance metrics well suited for the combination of strategies with not-well-defined temporal payoffs and within-firm research designs. To remedy this, we introduce a value partitioning methodology that provides a performance metric we call dynamic value. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance.Managerial SummaryThis article introduces the value partitioning methodology for interpreting two distinct elements of stock market valuations: (a) the firm's implied future value from continuing operations in a "steady state" and (b) the market's estimate of dynamic future value associated with the firm's strategic choices or competitive positioning. We describe situations where the latter element is useful for measuring strategy performance. We apply this methodology and demonstrate how it generates additional insights about how cash holdings affect firm performance.

We re-examine the finding that new ventures employing individuals with industry experience have survival advantages and conclude that it is unlikely a reflection of the underlying theoretical mechanism advanced in the literature—individuals applying their industry-specific knowledge. We come to this conclusion by leveraging detailed linked employer-employee data from Denmark and conducting an inferred pattern analysis where we analyze several empirical relationships that we interpret in tandem. After replicating the industry experience–venture survival relationship, we identify several empirical puzzles if the underlying causal mechanism is leveraging industry-specific knowledge. In light of these puzzles, analysis of their robustness, and initial exploratory empirical investigations, we propose that other human capital characteristics that correlate with industry experience (i.e., overall experience and wages) are better explanatory factors. The analysis illustrates how the data-grounded steps of an inferred pattern analysis can guide future theoretical development and empirical investigations to identify the causal mechanism underlying a well-established empirical relationship in the literature. Supplemental Material: The online appendix is available at https://doi.org/10.1287/stsc.2022.0033 .

Research Summary: To grow, startup ventures often require the skills of professional managers familiar with running larger organizations. However, risk considerations may discourage such candidates from departing high-paying, stable jobs. Interpreting the manager's decision within a household holding a "portfolio " of jobs, we hypothesize that having a spouse whose career is prioritized mitigates risk as a barrier to joining a startup. Survey data corroborate that both men and women with a career-prioritized spouse are less likely to report risk as a barrier. However, having a career-prioritized spouse only translates to a greater interest in startup employment among men. Our findings have implications for understanding the challenges startup ventures face when attracting managerial talent, how dual careers and gender affect managers' careers, and regional entrepreneurial ecosystems.Managerial Summary: Using survey data from professional managers working in corporate headquarters, we show that being in a dual-career household increases one's willingness and lowers the perceived risk of leaving their job and joining a startup venture-especially if the household prioritizes their spouse's career. However, the increased willingness to join a startup in households that prioritize their spouse's career is only manifest for men. These findings highlight how dual-career households can be a talent source for startup ventures and suggest that regions with greater concentrations of dual-career households might be especially advantageous for startup ventures. Nevertheless, our results also suggest that gender norms are an impediment for dual-career women when considering employment in startup ventures.

Research Summary An extensive body of research examines concentration levels (i.e., “mass”) of industry clusters; however, little attention is paid to their dynamics (i.e., “motion”). Understanding cluster dynamics is important because how clusters change over time may have implications for firm strategies and outcomes that are not attributable to cluster mass alone. To advance scholarship, we derive a theoretically grounded measure of cluster motion. Applying this measure to data on establishments in the U.S. computer and semiconductor industries, we document the dynamic nature of clusters both within and across regions. We demonstrate that our measure of cluster motion is distinct from cluster mass. Furthermore, we document that regions rarely follow stylized descriptions of cluster life cycles, which underscores the importance of measuring and investigating cluster dynamics. Managerial Summary Industry clusters have been considered important for firm strategy due to their influence over organizational processes and outcomes. Therefore, many firms attend closely to how clusters change over time. However, strategy researchers have devoted relatively little attention to cluster dynamics and their implications for firms. In this study, we develop a framework for understanding cluster dynamics, including an empirical technique. We suggest that improved understanding of cluster dynamics may be useful for helping firms make better location decisions and react more appropriately to changes in clusters within which they have an established presence.

This study leverages a unique research design, a proximate industry peer’s outbound relocation, to examine how knowledge spillover drives the positive association between agglomeration with industry peers and firm innovation. We expect a firm’s innovation performance to decrease when a proximate industry peer moves to another region because knowledge spillover from the industry peer to the focal firm is disrupted. Contrary to our expectation, we find that a proximate industry peer’s outbound relocation increases the focal firm’s innovation performance. Taking an abductive approach, we investigate the nature of the impact of outbound relocations of industry peers and provide a theoretical explanation to our unexpected founding. We argue a proximate industry peer’s outbound relocation creates an inter-region knowledge channel, which creates opportunities for firms to absorb distant knowledge from the relocated peer’s new region. To evaluate these ideas, we utilize novel data on relocations of nanotechnology R&D firms over 24 years. This study provides evidence on the association between a proximate industry peer’s outbound relocation and a focal firm’s innovation performance and on the creation of inter-region knowledge channels.

The purpose of this panel symposium is to generate new insights into the theoretical and empirical challenges and opportunities that lie ahead for scholars interested in agglomeration research. Though the extensive literature on agglomeration has documented the positive externalities, boundary conditions, and moderators of outcomes among clustered firms, there are a variety of theoretical and methodological aspects related to agglomeration literature that remains to be explored. This panel symposium will bring together thought leaders engaged in scholarly work at the frontiers of agglomeration research to reflect on the state of agglomeration research and its implications for management scholars. The scholars will identify questions, mechanisms and phenomena that can guide frontier scholarly work by STR, TIM, and ENT division members.

This chapter discusses general trends in quantitative research methods since the early 1980s. It then highlights five contemporaneous issues with respect to the application of quantitative methods within the field—including the tension of simultaneously seeking causal identification and examining meaningful strategy questions. Taking the perspective that a key goal of quantitative strategy research is to aid decision-makers by providing rigorous evidence-based strategic management insights, the chapter proposes practices that, if embraced, will advance the rigor and impact of future quantitative research. A central consideration is addressing issues of causal identification through a cumulative body of research and the importance that research designs play in this consideration. In concluding, the chapter acknowledges significant advances in quantitative methods in the field while noting directions in which the field should continue to evolve.

Researchers have made significant progress in understanding the role of geography in innovation and firm strategy (e.g., Alcácer & Chung, 2007; Audretsch & Feldman, 1996; Porter, 1998; Saxenian, 1996; Shaver & Flyer, 2000; Sorenson and Baum, 2003). Recently, scholars have shown renewed interest in understanding how geography affects inventors and firms, paying increasing attention to its relation to issues such as gender inequality (Ghani, Kerr & O’Connell, 2013; Sorenson & Dahl, 2016), regional dynamics (Safford, 2009; Wang, Madhok & Li, 2014), intellectual property litigation (Alcácer, Beukel, & Cassiman, 2017; Beukel & Zhao, 2018), and political uncertainty (Cerqueiro, Mão-de-Ferro, & Penas, 2019; Jens, 2017). This symposium aims to extend this conversation by including four empirical studies that explore the following questions: 1) How does geography affect the inventor gender gap (i.e., female vs. male inventor activity)? 2) How do the dynamics of industry clusters (i.e., the patterns of growth or decline) affect the novelty of firm innovation? 3) Why is patent litigation so geographically concentrated across countries? and 4) How does political risk affect firms’ decision to locate in the center of power (i.e., the capital city)? We expect that this symposium will encourage cross-fertilization of ideas between different literatures in management and between literatures in management and other fields. The Role of Location on the Inventor Gender Gap: Are Women Geographically Constrained? Presenter: Mercedes Delgado; Copenhagen Business School and MIT Presenter: Luca Gius; MIT Presenter: Myriam Mariani; Bocconi U. Presenter: Fiona Murray; Massachusetts Institute of Technology Cluster Dynamics, Employee Mobility, and Novelty of Firms’ Technological Innovation Presenter: Min Jung Kim; U. of Illinois at Urbana-Champaign Presenter: J. Myles Shaver; U. of Minnesota Why is Patent Litigation Geographically Concentrated? Presenter: Minyuan Zhao; Washington U. in St. Louis, Olin Business School Presenter: Shixiang Wang; Zhejiang U. Locating in the Center of Power: Washington DC Headquarters as a Political Strategy Presenter: Jing Deng; U. of Colorado, Boulder

I highlight why taking causal identification seriously is important for the study of strategy and organizations. Nevertheless, the nature of the questions that are central to our field and the nature of the data we have to answer these questions complicates doing so. Because of this, I suggest that we explicitly consider identification as an issue that can be addressed only through a cumulative body of empirical research. I outline current research norms and practices that impede adopting this approach and recommend a set of actions to help overcome these norms and practices.

I present three points to complement the issues raised by Reeb, Sakakibara and Mahmood (Journal of International Business Studies 43 (3): 211–218, 2012). First, accounting for endogeneity (i.e., attempting to establish causal identification) requires that we expend effort in thinking through rival theories to the theories we wish to test. Second, because approaches to account for endogeneity have limitations, it is important that we view accounting for endogeneity as an effort accomplished through a cumulative body of research. Finally, access to more or ‘big’ data will not solve this issue in its own right.

Fixed-effect regression models use within-firm variation to identify coefficient estimates, which is advantageous for mitigating certain endogeneity concerns and ruling out spurious relationships. I demonstrate that fixed-effect regression models with interaction terms (and by extension quadratic or higher-degree terms) confound within-firm and between-firm variation in identifying interaction coefficient estimates. Thus, in these specifications coefficient estimates lack a desirable property of standard fixed-effect estimates. I substantiate this concern using simulations and an empirical example. I also demonstrate how segmented regression aids assessing whether within-firm or between-firm variation identifies interaction coefficient estimates in fixed-effect models. The online appendix is available at https://doi.org/10.1287/stsc.2018.0065 .

This article outlines a temporal dynamics approach to the study of industry clusters. Despite extensive work on clusters, little attention has been paid to their temporal dynamics. We propose that understanding cluster dynamics is important, however, because clusters are seldom stable entities, and cluster dynamics may have strategic implications not accounted by existing approaches. Within this context, we develop a novel measure of cluster dynamics. Applying this measure to data on establishment population in the U.S. computer and semiconductor industries, we document wide variation in cluster size over time, both within and across regions. Furthermore, utilizing data on patents, we find that cluster dynamics correlate with localized knowledge spillovers in ways different from cluster size, suggesting that our approach may offer novel insight to strategy researchers.

AboutSectionsRequest Access ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareShare onFacebookTwitterLinked InEmail Go to Section HomeStrategy ScienceVol. 4, No. 2 Special Issue Introduction: International Strategy in an Era of Global FluxRuth Aguilera, Witold Henisz , Joanne E. Oxley , J. Myles Shaver Ruth Aguilera, Witold Henisz , Joanne E. Oxley , J. Myles Shaver Published Online:24 Jun 2019https://doi.org/10.1287/stsc.2019.0087 Back to Top Next FiguresReferencesRelatedInformationCited byInnovation on Wings: Nonstop Flights and Firm Innovation in the Global ContextDany Bahar, Prithwiraj Choudhury, Do Yoon Kim, Wesley W. Koo3 March 2023 | Management Science, Vol. 0, No. 0 Volume 4, Issue 2Special Issue on International Strategy in an Era of Global FluxJune 2019Pages 61-174 Article Information Metrics Information Published Online:June 24, 2019 Copyright © 2019, INFORMSCite asRuth Aguilera, Witold Henisz, Joanne E. Oxley, J. Myles Shaver (2019) Special Issue Introduction: International Strategy in an Era of Global Flux. Strategy Science 4(2):61-69. https://doi.org/10.1287/stsc.2019.0087 PDF download

Research Summary : We investigate the extent to which firms rely on supranational institutional safeguards versus their non‐market capabilities to offset the risks of investing abroad. We argue that firms with non‐market capabilities are insensitive to supranational institutional safeguards when choosing the location of their international investments. We show that supranational agreements between an investor's home and host nation, operationalized as bilateral investment treaties (BITs), increase the likelihood of investment, but there is substantial firm heterogeneity with respect to this relationship. Firms with various forms of non‐market capabilities are not sensitive to BITs, whereas other firms are more likely to invest under BITs. We advance the understanding of how firm non‐market capabilities can substitute for supranational institutional arrangements in addressing risks associated with host country institutional weaknesses. Managerial Summary : The risk of expropriation is one of the main concerns companies have when investing abroad. Because of this, many countries implement bilateral investment treaties (BITs) to safeguard foreign investments, alleviate foreign investor concerns, and promote investments. We show that only those companies without political competence or political connections favor countries with BITs when choosing where to invest. Companies with political competence or political connections, on the other hand, ignore BITs and apparently rely on their ability to influence governments whenever their foreign investments face expropriation threats. As a result, politically connected or competent companies can enter markets most of their competitors lacking these capabilities shy away from. They can, therefore, do business in environments in which they face less competition.

This chapter presents metropolitan areas around the world with concentrations of headquarters of the world’s largest companies. From here, the chapter discusses how the insights from the research presented in the book can be applied across many different metropolitan areas. Of note is that a headquarters economy need not be an exclusive source of regional vitality. It can co-exist with other sources of regional vitality; however, focusing exclusively on these other sources can mask the importance of the headquarters economy dynamics. The chapter then revisits the importance of considering headquarters as pools of managerial talent and the implications that stem from this. It concludes by discussing limitations of the research and avenues for further development.

A key argument in Chapter 3 is that low levels of outward migration accelerate the positive dynamic of managerial mobility across companies and industries within a region. This chapter examines the migration patterns of employed, highly educated, high-earning individuals (i.e., the demographic in which professional managerial talent belong) across the largest metropolitan areas in the United States. As expected, Minneapolis-St. Paul has the lowest or among the lowest rate of outward migration over forty years, and over that time period the region consistently adds to this talent pool. In addition, this migration pattern is pronounced for employed, highly educated, high-earning individuals with school-aged children. The chapter introduces the Talent Migration Map to help discern different migration dynamics.