Working Papers

The Malleability of Expertise: The Influence of Peers’ Work Styles on Expert Behavior

with Jillian Chown

Abstract. Experts are valued for their ability to solve complex work problems. While experts are expected to adapt their solutions to fit each problem they encounter, there is growing recognition that the ways they apply their expertise—i.e., how they decide which tasks to perform to solve the problems they face—may also be influenced by contextual and relational factors in the workplace. In this paper, we examine the extent to which an expert’s peers’ work styles influence the way they apply their expertise in a highly consequential setting: physicians’ decisions to perform a birth via C-section or vaginal delivery. Using data on over 5 million births performed by over 17,000 physicians across 920 hospitals in Brazil, we find that working near peers who favor more aggressive solutions (i.e., C-sections) will lead the focal physician to adopt more aggressive solutions. We show that this effect is stronger when the appropriate solution is more uncertain. Lastly, through post-hoc analyses, we provide evidence that the observed patterns of behavior are consistent with the mechanism of information-sharing between experts. This study highlights that the development and deployment of expertise is malleable, influenced by the expert’s peers’ work styles and the nature of the work.

Resource Redeployment as an Entry Advantage in Resource-Poor Settings

with Jasmina Chauvin and Chris Poliquin 

Abstract. Scarcity of productive factors poses a challenge for firms entering underdeveloped regions. We develop a model in which incumbent firms can overcome scarcity of skilled human capital in local labor markets by redeploying workers from existing units. The model predicts that redeployment is more valuable when factor markets exhibit large differences in resource scarcity. Redeployment is also more valuable when output is highly sensitive to worker skill and is responsive to complementarities between labor and other inputs. Important implications are that redeployment can endow firms with superior resources and enable them to enter more markets. Data on sugar mills in Brazil, where a sudden demand boom incentivized expansion, corroborate the predictions. Our research identifies new mechanisms of value-creation from resource redeployment across factor markets.

Individuals’ Direct and Indirect Contributions in Organizations: Evidence from Temporary Absences of Physicians

Abstract. This study investigates how individuals affect organizational performance. It isolates the role of an individual’s direct contributions from the role of their indirect contributions—i.e., the influence on the performance of coworkers in the organization. I examine this question using data on physicians treating patients with ischemic heart disease in several hospitals in Brazil. Exploiting temporary absences of high-volume physicians, I find that in-hospital patient mortality increases 17 percent during these absences. The impact of an absence on the performance of colleagues—the role of indirect contributions—accounts for 40 percent of the increase in patient mortality. The increase in patient mortality during an absence of a high-volume physician correlates with declines in percutaneous coronary interventions (PCI), necessary for stent implantation, and is weaker when colleagues use PCI more intensively. This study contributes to a growing body of research examining the influence of individuals on organizational performance by assessing how highly productive individuals affect organizational performance as a result of their own contributions and their influence on the others.

Journal Articles

Election Cycles and Organizations: How Politics Shapes the Performance of State-Owned Enterprises Over Time

Administrative Science Quarterly, 65(3), 2020.

Abstract. This study develops a dynamic perspective on how elected state officials’ political incentives shape the behavior and performance of organizations, particularly state-owned enterprises (SOEs). Drawing on theoretical views about the relationship between politicians and firms, I argue that state officials seeking votes manipulate SOEs to boost employment before elections. As a result, SOEs exhibit both higher employment levels and lower financial performance in election years. The positive relationship between elections and SOE employment, however, is not uniform across firms and geographic communities: it is likely to be stronger in economically disadvantaged communities and weaker for SOEs with private investors. Data from Brazil’s water sector—an industry managing a crucial societal resource—support these predictions. These results shed light on the mechanisms linking officials’ political incentives and SOE behavior and show that SOE performance is politically contingent and thus varies systematically over time. More broadly, this study reveals how firm responses to political pressures depend on both organizational and community attributes and highlights how the interplay of election cycles, organizations, and communities shapes the performance of organizations in state capitalism.

Leviathan as a Minority Shareholder: Firm-Level Implications of State Equity Purchases

with Sergio Lazzarini and Aldo Musacchio

Academy of Management Journal, 56(6), 2013.

Minority state ownership can enhance the performance of financially constrained firms with investment opportunities.

Abstract. In many countries, firms face institutional “voids” that raise the costs of doing business and thwart entrepreneurial activity. We examine a particular mechanism that may address those voids: minority state ownership. Minority stakes are less affected by the “agency distortions” commonly found for full-fledged state ownership. Using panel data from publicly traded firms in Brazil, where the government holds minority stakes through its development bank, we find a positive effect of those stakes on firms’ returns on assets and on the capital expenditures of financially constrained firms with investment opportunities. However, these positive effects are substantially reduced when minority stakes are allocated to business group affiliates and as local institutions develop. Therefore, we shed light on the firm-level implications of minority state ownership, a topic that has received scant attention in the strategy literature.

Book Chapters

Commodities no Brasil: Maldição ou Benção? [Commodities in Brazil: A Curse or a Blessing?] 

with Sergio Lazzarini and Marcos Jank 

In O Futuro da Indústria no Brasil: Desindustrialização em Debate. [Ed.] Edmar Bacha and Monica de Bolle. Rio de Janeiro: Civilização Brasileira, 2015.