Experience matters: The role of academic scientist mobility for industrial innovation

Research Summary: A learning‐by‐hiring approach is used to scrutinize scientists' mobility in relation to the recruiting firms' subsequent innovation output. Our starting point is that among firm hires, individuals with university research experience—hired from universities or firms—can be particularly valuable. However, conflicting institutional logics between academia and industry makes working with academic scientists challenging at times for firms. We suggest two solutions to this difficulty: hiring “ambidextrous” individuals with a mix of experience of university research and working for a technologically advanced firm, and a strong organizational research culture in the recruiting firm reflected by the presence of a scientist on the top management team. We track the mobility of R&D workers empirically using patent and linked employer‐employee data. Managerial Summary: An important way to make organizations more innovative is hiring individual researchers with the right types of skills and experience. We show that individuals with university research experience beyond their final degree are particularly likely to help boost firm‐level innovation output after hiring compared to R&D workers with other types of skills and experience. However, to obtain good returns to innovation from hiring such individuals, firms need a university research–friendly organizational culture when hiring individuals with university research experience, from either firms or academia.     

Beyond the Sharpe ratio: An application of the Aumann–Serrano index to performance measurement

We propose a performance measure that generalizes the Sharpe ratio. The new performance measure is monotone with respect to stochastic dominance and consistently accounts for mean, variance and higher moments of the return distribution. It is equivalent to the Sharpe ratio if returns are normally distributed. Moreover, the two performance measures are asymptotically equivalent as the underlying distributions converge to the normal distribution. We suggest a parametric and a non-parametric estimator for the new performance measure and provide an empirical illustration using mutual funds and hedge funds data.     

Innovation timing games: a general framework with applications

We offer a new algorithm for analyzing innovation timing games. Its main advantage over the traditional approach is that it applies to problems that had previously been intractable. We use the algorithm to examine two classical innovation problems. We find that the competition takes the form of a waiting game with a second-mover advantage either for any level of R&D costs (process innovation) or for high R&D costs (product innovation). Moreover, both models predict that the second-mover advantage is monotonically increasing in the costs of R&D.     

Die wirtschaftlichen Wirkungen des technischen Fortschritts

Ohne Zusammenfassung     

The use of trading strategies by fund managers: some first survey evidence

A questionnaire survey has found that most fund managers rely on the strategies of buy-&-hold, momentum and contrarian trading. These strategies are typically applied mutually. Their use is rooted in the attributes and beliefs of the respective fund managers: buy-&-hold traders are fundamentally oriented, risk averse and are less (over)confident than others. Momentum traders appear as the least risk-averse professionals, going aggressively with the trend. Contrarian traders, however, show signs of overconfidence and peculiar risk aversion, both indicating difficulties in successful strategy implementation. The behavioural patterns revealed are not easily reconciled with efficient markets.     

Absorptive capacity and firm performance: an integrative framework of benefits and downsides

Research underscores the important role a firm's absorptive capacity plays in developing knowledge, promoting open innovation, managing alliances, facilitating organisational learning, creating strategic variety, and enhancing financial performance. However, prior research often overlooks how absorptive capacity could increase a firm's costs associated with building this capacity, perpetuate and even increase inertia because of reduced variety and limited organisational search, handicap internal knowledge development, and complicate knowledge sharing. Research also ignores the growing complexity of absorptive capacity, a factor that could reduce a firm's gains from exploiting external knowledge. Our discussion builds on the knowledge-based view to provide an integrative framework for the performance effects of absorptive capacity. Based on different benefits and downsides of absorptive capacity at multiple levels of analysis, it points to an inverted U-shaped relationship between absorptive capacity and a firm's financial performance, highlighting several promising avenues for future research.     

A note on outbound open innovation and firm performance

The concept of open innovation has attracted a lot of interest over the past decade. In light of a relative emphasis on inbound open innovation (indicating an outside‐in process) in prior research, this brief note addresses the relationship between outbound open innovation (indicating an inside‐out process) and firm performance. In particular, it suggests that outbound open innovation may have positive and negative effects on firm performance based on potential benefits and risks of transferring technology. To what degree these effects materialize depends on internal factors, e.g. desorptive capacity, and external factors, e.g. appropriability. Consequently, a proficient internal management of outbound open innovation is critical to avoid its potential risks and to capture its substantial benefits. In this regard, future research may substantially deepen the insights into the relevance and role of outbound open innovation.