Management Science

Management Science /desautels/taxonomy/term/2969/all en Inventory in Times of War /desautels/channels/news/inventory-times-war-326251 Authors: Andres F. Jola-Sanchez and <a href="/desautels/juan-camilo-serpa">Juan Camilo Serpa</a> Publication: Management Science, 67(10):6457-6479 Abstract: We study how armed conflicts affect inventory across firms’ production facilities. We track 38,916 production facilities—including plantations, livestock farms, and factories—in war-torn Colombian regions; we also collect the data of 5,138 attacks performed by the two rebel groups involved in Colombia’s civil war. To obtain exogenous variation in the conflict intensity, we use a difference-in-differences model that hinges on the peace process between the government and one of the guerrilla groups. We find that when the conflict intensity increases by one order of magnitude, inventory decreases by up to 10.38%. Firms, however, barely reduce finished inventory during war; they mainly reduce raw and work-in-process inventory. To offset this inventory reduction, firms increase their cash holdings—that is, they shift their working capital from physical inventory to liquid assets. The location of the facility moderates the effect of war: when a facility is close to a distribution center—hence, inventory travels short distances—the firm responds to violence by aggressively reducing inventory; when a facility is far from a distribution center, the firm reacts less aggressively to war. Fri, 13 Nov 2020 17:02:37 +0000 julie.lapalme@affiliate.mcgill.ca 76594 at /desautels Prof. Ganju's paper selected as finalist for NIHCM Research Award /desautels/channels/news/prof-ganjus-paper-selected-finalist-nihcm-research-award-329628 Congratulations to Kartik K. Ganju, Assistant Professor in Information Systems, whose paper has been selected as a finalist for NIHCM Foundation’s 27th Annual Research Award. Professor Ganju’s Management Science paper “The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery” with co-authors Hilal Atasoy Jeffery McCullough, and Brad Greenwood was selected by the National Institute for Health Care Management Foundation (NIHCM) as one of five finalists for NIHCM Foundation’s 27th Annual Research Award from a competitive pool of nearly 100 entries. “The National Institute for Health Care Management (NIHCM) Foundation is a nonprofit, nonpartisan organization dedicated to transforming health care through evidence and collaboration (<a href="http://www.nihcm.org">www.nihcm.org</a>).” “Management Science is a scholarly journal that publishes scientific research on the practice of management. Within our scope are all aspects of management related to strategy, entrepreneurship, innovation, information technology, and organizations as well as all functional areas of business, such as accounting, finance, marketing, and operations.” Mon, 15 Mar 2021 16:28:13 +0000 angela.l.williams@mcgill.ca 80611 at /desautels The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery /desautels/channels/news/role-decision-support-systems-attenuating-racial-biases-healthcare-delivery-320957 Authors: Kartik K. Ganju, Hilal Atasoy, Brad Greenwood and Jeff McCullough Publication: Management Science, Volume 66, Issue 11, November 2020, Pages 5171-5181. Abstract: Although significant research has examined how technology can intensify racial and other outgroup biases, limited work has investigated the role information systems can play in abating them. Racial biases are particularly worrisome in healthcare, where underrepresented minorities suffer disparities in access to care, quality of care, and clinical outcomes. In this paper, we examine the role clinical decision support systems (CDSS) play in attenuating systematic biases among black patients, relative to white patients, in rates of amputation and revascularization stemming from diabetes mellitus. Using a panel of inpatient data and a difference-in-difference approach, results suggest that CDSS adoption significantly shrinks disparities in amputation rates across white and black patients—with no evidence that this change is simply delaying eventual amputations. Results suggest that this effect is driven by changes in treatment care protocols that match patients to appropriate specialists, rather than altering within physician decision making. These findings highlight the role information systems and digitized patient care can play in promoting unbiased decision making by structuring and standardizing care procedures. Tue, 03 Mar 2020 14:28:03 +0000 angela.l.williams@mcgill.ca 75568 at /desautels The Effects of Asymmetric Social Ties, Structural Embeddedness and Tie Strength on Online Content Contribution Behavior /desautels/channels/news/effects-asymmetric-social-ties-structural-embeddedness-and-tie-strength-online-content-contribution-286213 Authors: Rishika Rishika and Jui Ramaprasad Publication: Management Science, Forthcoming Abstract: For a social media community to thrive and grow, it is critical that users of the site interact with each other and contribute content to the site. We study the role of social ties in motivating user preference expression, a form of user content contribution, in an online social media community. We examine the role of three types of ties, reciprocated, follower and followee ties, and assess whether the structural and relational properties of a user’s social network moderate the social influence effect in user contribution. A unique disaggregate level panel dataset of users’ contributions and social tie formation activities from an online music platform is employed to study the impact of social ties. To address identification issues, we adopt a quasi-experimental approach based on dynamic propensity score matching. The results provide strong evidence of the influence of online network ties in online contribution behavior. We find that the influence of reciprocated ties is the greatest, followed by influence from followee ties and then follower ties. Additional analysis reveals that reciprocated and followee ties have even greater influence when they contribute new information for a focal user. Structural embeddedness and tie strength among network ties are found to amplify the effect of social contagion in online contribution. We conduct several sensitivity and robustness checks that lend credible support to our findings. The results add to the greater understanding of social influence in online contribution and provide valuable managerial insights into designs of online communities to enable greater user participation. Mon, 26 Mar 2018 19:40:53 +0000 julie.lapalme@mcgill.ca 68552 at /desautels Promotion Optimization for Multiple Items in Supermarkets /desautels/channels/news/promotion-optimization-multiple-items-supermarkets-331400 Authors: <a href="/desautels/maxime-cohen">Maxime C. Cohen</a>, J.J. Kalas, and G. Perakis Publication: Management Science, Volume 67, Issue 4, April 2021, Pages 2340-2364. Abstract: Tue, 08 Jun 2021 14:16:47 +0000 julie.lapalme@affiliate.mcgill.ca 80857 at /desautels A Simple Rule for Pricing with Limited Knowledge of Demand /desautels/channels/news/simple-rule-pricing-limited-knowledge-demand-329998 Authors: <a href="/desautels/maxime-cohen">Maxime C. Cohen</a>, G. Perakis, R.S. Pindyck Publication: Management Science, Volume 67, Issue 3, March 2021, Pages 1608-1621. Abstract: Wed, 24 Mar 2021 18:11:39 +0000 julie.lapalme@affiliate.mcgill.ca 80638 at /desautels Trust, Collaboration, and Economic Growth /desautels/channels/news/trust-collaboration-and-economic-growth-329995 Authors: <a href="/desautels/jiro-kondo">Jiro Kondo</a>, D. Li, and D. Papanikolaou Publication: Management Science, Volume 67, Issue 3, March 2021, Pages 1825-1850. Abstract: Wed, 24 Mar 2021 18:01:50 +0000 julie.lapalme@affiliate.mcgill.ca 80637 at /desautels Learning Through Crowdfunding /desautels/channels/news/learning-through-crowdfunding-328386 Authors: G. Chemla and <a href="/desautels/katrin-tinn">Katrin Tinn</a> Publication: Management Science, Volume 66, Issue 5, May 2020, Pages 1783-1801. Abstract: Tue, 09 Feb 2021 19:40:05 +0000 julie.lapalme@affiliate.mcgill.ca 79215 at /desautels Supply Chain Proximity and Product Quality /desautels/channels/news/supply-chain-proximity-and-product-quality-287599 Authors: Robert Bray, <a href="/desautels/juan-camilo-serpa">Juan Camilo Serpa</a> and Ahmet Colak Publication: Management Science, Volume 65, Issue 9, September 2019, Pages 4079-4099. Abstract: We explore the effect of supply chain proximity on product quality by merging four independent data sources from the automotive industry, collecting: (i) auto component defect rates, (ii) upstream component factory locations, (iii) downstream assembly plant locations, and (iv) product-level links connecting the upstream and downstream factories. Combining these four datasets allows us to trace the flow of 27,807 products through 529 supplier factories and 275 assembly plants. We estimate that increasing the distance between an upstream component factory and a downstream plant by an order of magnitude increases the component’s expected defect rate by 3.9%. We also find that shorter inter-factory spans are associated with more rapid product quality improvements, and that supply chain distance is more detrimental to quality when automakers: (i) produce early generation models or (ii) high-end products, (iii) when they buy components with more complex configurations, or (iv) when they source from suppliers who invest relatively little in research and development Mon, 11 Jun 2018 17:45:43 +0000 julie.lapalme@mcgill.ca 68780 at /desautels Oversight and Efficiency in Public Projects: A Regression Discontinuity Analysis /desautels/channels/news/oversight-and-efficiency-public-projects-regression-discontinuity-analysis-287995 Authors: Eduard Calvo, Ruomeng Cui and <a href="/desautels/juan-camilo-serpa">Juan Camilo Serpa</a> Publication: Management Science, Volume 65, Issue 12, December 2019, Pages 5651-5675. Abstract: In the U.S., four in ten public infrastructure projects report delays or cost overruns. To tackle this problem, regulators often scrutinize the project contractor’s operations. We investigate the causal effect of government oversight on project efficiency by gleaning 262,857 projects that span seventy-one U.S. federal agencies and 54,739 contractors. Our identification strategy exploits a regulatory bylaw: if a project’s anticipated budget exceeds a threshold value, the contractor’s operations are subject to surveillance from independent procurement officers; otherwise, these operational checks are waived. Using a regression discontinuity design, we find that oversight is obstructive to the project’s operations, especially when the contractor (i) has no prior experience in public projects, (ii) is paid with a fixed-price contract that includes performance-based incentives, and (iii) performs a labor-intensive task. In contrast, oversight is least obstructive — or beneficial — when the contractor (i) is experienced, (ii) is paid with a time-and-materials contract, and (iii) performs a machine-intensive task. Tue, 10 Jul 2018 20:47:31 +0000 julie.lapalme@mcgill.ca 70103 at /desautels Financial Returns to Firms’ Communication Actions on Firm-Initiated Social Media: Evidence from Facebook Business Pages /desautels/channels/news/financial-returns-firms-communication-actions-firm-initiated-social-media-evidence-facebook-business-326146 Authors: S. Chung, <a href="/desautels/animesh-animesh">Animesh Animesh</a>, <a href="/desautels/kunsoo-han">Kunsoo Han</a> and <a href="/desautels/alain-pinsonneault">Alain Pinsonneault</a> Publication: Information Systems Research, Volume 31, Issue 1, March 2020, Pages 258-285. Abstract: The primary goal of this study is to investigate the financial returns to firms’ communication actions on a firm-initiated social media platform by focusing on Facebook Business pages. To this end, we conceptualize and quantify two types of firms’ communication actions on social media: posts and responses to customer messages. Furthermore, we classify a firm’s responses to customer messages based on the valence of customer messages—positive versus negative—and examine the effects of volume as well as timeliness of the two types of a firm’s responses to customer messages on firm performance. Using a sample of 63 South Korean firms across industries over a three-year period (5,566 firm-week observations), we find that the volume and timeliness of a firm’s responses to negative customer messages, which are associated with an increase in customer satisfaction, have a significant positive impact on the firm’s market performance measured by abnormal returns and Tobin’s q. Interestingly, the results suggest that a firm’s posts and its responses to positive customer messages are not significantly associated with firm performance. Furthermore, we find that a firm’s posts and its responses to negative customer messages exhibit complementarities in contributing to firm performance. Our results are robust to various alternative specifications, econometric concerns, and Facebook’s policy changes, such as EdgeRank and Promoted Post. Our findings underscore the business value of firms’ actions on social media and provide unique and important implications for theory and practice regarding the appropriate ways to use social media for building and managing customer relationships. Tue, 10 Nov 2020 15:57:22 +0000 angela.l.williams@mcgill.ca 76558 at /desautels Software Patents and Firm Value: A Real Options Perspective on the Role of Innovation Orientation and Environmental Uncertainty /desautels/channels/news/software-patents-and-firm-value-real-options-perspective-role-innovation-orientation-and-326147 Authors: S. Chung, <a href="/desautels/animesh-animesh">Animesh Animesh</a>, <a href="/desautels/kunsoo-han">Kunsoo Han</a> and <a href="/desautels/alain-pinsonneault">Alain Pinsonneault</a> Publication: Information Systems Research, Volume 30, Issue 3, September 2019, Pages 1073-1097. Abstract: Although software patents have been growing steadily since 1996, when the restrictions on the patentability of software were eliminated, their value and impacts on the firm’s profits remain unclear and ambiguous. Drawing on the real options theory and the literature on exploration and exploitation, we develop a novel theoretical framework to assess the value of software patents. Moreover, we examine the impact of contextual factors related to the nature of innovation underlying firms’ patent portfolios (exploitative versus explorative) and the environmental uncertainty (competitiveness and dynamism) on the value of software patents. Specifically, we examine the interaction effect of a firm’s software patent stock and its innovation orientation on firm value in markets exhibiting different levels of environmental uncertainty. Based on a large-panel data set consisting of 602 U.S. firms, our results indicate that a software patent portfolio having higher levels of explorative orientation is associated with a higher firm value (as measured by Tobin’s q) in environments exhibiting low dynamism and high competitiveness. By contrast, a software patent portfolio with higher levels of exploitative orientation is associated with a higher firm value in environments with high dynamism and low competitiveness. We discuss the implications for research and practice. Tue, 10 Nov 2020 15:57:24 +0000 angela.l.williams@mcgill.ca 76559 at /desautels Maxime Cohen appointed Associate Editor of Management Science /desautels/channels/news/maxime-cohen-appointed-associate-editor-management-science-325803 <a href="/desautels/maxime-cohen">Maxime Cohen</a>, Associate Professor of Retail Management and Operations Management, was recently appointed Associate Editor of Management Science Fri, 30 Oct 2020 20:23:42 +0000 angela.l.williams@mcgill.ca 76521 at /desautels Informed Options Trading Prior to Takeover Announcements: Insider Trading? /desautels/channels/news/informed-options-trading-prior-takeover-announcements-insider-trading-287321 Authors: <a href="/desautels/patrick-augustin">Patrick Augustin</a>, Menachem Brenner, Marti G. Subrahmanyam Publication: Management Science, May 21, 2019 Abstract: We quantify the pervasiveness of informed trading activity in target companies' equity options before the announcements of 1,859 U.S. takeovers between 1996 and 2012. About 25% of all takeovers have positive abnormal volumes, which are greater for short-dated out-of-the-money calls, consistent with bullish directional trading before the announcement. Over half of this abnormal activity is unlikely due to speculation, news and rumors, trading by corporate insiders, leakage in the stock market, deal predictability, or beneficial ownership filings by activist investors. We also examine the characteristics of option trades litigated by the SEC for alleged illegal insider trading. While the characteristics of such trades closely resemble the patterns of abnormal option volume in the U.S. takeover sample, we find that the SEC litigates only about 8% of all deals in it. Thu, 24 May 2018 20:24:27 +0000 julie.lapalme@mcgill.ca 68727 at /desautels Professor Ramaprasad appointed Associate Editor of Management Science /desautels/channels/news/professor-ramaprasad-appointed-associate-editor-management-science-294919 <a href="/desautels/jui-ramaprasad">Jui Ramaprasad</a>, Associate Professor in Information Systems, was recently appointed as Associate Editor to Management Science. Fri, 22 Feb 2019 17:50:39 +0000 julie.lapalme@mcgill.ca 74026 at /desautels