Studying the implications of institutional change for entrepreneurship is difficult because it requires that institutions vary while other aspects of the environment remain constant. Thus, I have repeatedly studied entrepreneurship in a single country (China, Japan, and the U.S.) before and after a major institutional change that has intentionally or unintentionally altered the landscape for people who seek to found new firms.
My research is divided into three streams: (1) how formal institutions (policies, legal structures and regulations) influence entrepreneurship, (2) how informal institutions (accepted practices and norms) shape entrepreneurial opportunities, (3) how the environments of particular industries influence the success of entrepreneurial teams.
In 2012, I was winner of a prestigious and highly selective award from the National Natural Science Foundation of China (NSFC) 2012 Research Fund for International Young Scientists. I also received the 2010 Best Dissertation Award in the Business Policy and Strategy Division of the Academy of Management and am recipient of the 2007 Ewing Marion Kauffman Foundation’s Dissertation Fellowship award. My work has been generously funded by Sequoia Capital, Sohu.com, the Kauffman Foundation, the MIT Entrepreneurship Center and Stanford Technology Ventures Program (STVP).
Prior to returning to school, I worked as a research assistant at the Duke University Medical Center, publishing in medical journals and textbooks on cognition in schizophrenia and fMRI neuro-imaging studies.
Massachusetts Institute of Technology, Sloan
School of Management, 2005-2009
Ph.D., Behavioral and Policy Sciences Technological Innovation and Entrepreneurship (June 2009)
Duke University, 1998-2002 Durham, North Carolina
B.S., Major: Biological Basis of Behavior (Individualized)
School for International Training - Fall 2000 Study Abroad. North India.
● Strategic Management Journal Editorial Board (2014-2017)● Kauffman-Nesta Research Grant winner (2014)
● Stanford Center for International Development (SCID) Faculty Affiliate (2014-)
● Fellowship Award from the Stanford Center at Peking University (SCPKU) Sept.-Oct., 2013
● Winner, National Natural Science Foundation of China (NSFC) 2012 Research Fund for International Young Scientists● Lillie Award, Research Grant. Stanford University, 2011, 2012.
● Best Dissertation Award Winner. Business Policy and Strategy (BPS) Division, Academy of Management, 2010● Kauffman Foundation Dissertation Fellowship Award 2007: Comparison of High-Tech Entrepreneurs from Tsinghua University and MIT● Sohu.com Research Grant (2007)
● University of Virginia (UVA) Darden School of Business, Batten Institute Fellow● Academy of Management Best Paper Proceedings: 2005, 2006, 2010, 2012
● US Department of State - Global Innovation Through Science and Technology (GIST) Program, instructor and mentor
● IEEE International Technology and Innovation Management, 2011● The Best Student Paper award from the Society for the Advancement of Socio-Economics in 2008● Keynote talk, Inaugural International Conference on Innovation and Entrepreneurship: Theory and Practice Relevant to China. Hosted by Lancaster University and Wuhan University. Wuhan, China, July 9th, 2012.● Keynote Speaker. University of Sao Paulo, Brazil. University - Industry Partnerships: MIT and Stanford, May 30th, 2012.
● Keynote Speaker. Dominican Republic, Office of Science and Technology. Impact: Stanford University's Economic Impact via Entrepreneurship and Innovation. March 25th, 2013. Santo Domingo, DR.
● MIT Sloan Fellowship, Duke Univ. J.B. Duke Fellowship● 1st Prize: Duke Startup Challenge
Abstract: We examine different activist groups and their tactics in demanding that firms change. While work on activism against firms does not usually distinguish among activist types or examine their variety of tactics, we show that activists of different types (e.g., social movement organizations versus religious groups and activist investors) rely on dissimilar tactics (e.g., boycotts and protests versus lawsuits and proxy votes). Further, we show how protests and boycotts drag companies “through the mud” with media attention, whereas lawsuits and proxy votes receive relatively little media attention, instead relating more strongly to investor risk. This research presents a multifaceted view of activists and their tactics and suggests that using this more diverse approach in examining these phenomena can extend what we know about how and why firms are targeted.
Eesley, Charles E.; Hsu, David; Roberts, Edward B. 2013. The Contingent Effects of Top Management Teams on Venture Performance: Aligning Founding Team Composition with Innovation Strategy and Commercialization Environment. (forthcoming, Strategic Management Journal) [slides here]
Previous research indicates that having a functionally diverse founding team enhances the chances of a new venture’s success. We show that it may be a mistake to advocate functional diversity in some environments. Particularly, in cooperative industry environments where incumbents partner with entrepreneurs, a technically focused, all engineer team is superior.
Eesley, Charles; Lenox, Michael. 2006. Firm Responses to Secondary Stakeholder Action. Strategic Management Journal, 27(8):765-781.
STREAM 1: Formal Institutions and Entrepreneurship
My research in this stream examines how institutional changes influence who becomes an entrepreneur and how successful they are. I focus on three types of institutional change: (a) changes to industrial policy that affect who founds firms and how easy it is for firms to grow, and (b) changes that influence the socialization of individuals. In contrast, prior literature focuses largely on institutional changes that affect barriers to entry (fixed start-up costs).
Institutional Change: Barriers to Growth and Who Founds Firms
The influence of the institutional environment on firm performance has been of enduring interest to strategy scholars. Yet, our understanding of the institutional environment’s in the post-entry performance of ventures has been limited. This is particularly true for the earliest stages of firm formation. To better understand the relationships between business idea sources and firm performance during different institutional periods, we built a unique dataset within the setting of institutional changes in China. During transitional periods, entrepreneurs who base their business ideas on policy changes create better performing firms. During stable periods, entrepreneurs created better performing firms by choosing new market opportunities as a source of business ideas. Our findings contribute to the literature on institutions, entrepreneurship and emerging market strategy.
Armanios, Daniel; Eesley, Charles E.; Li, Jizhen; Eisenhardt, K. Filling the (network) void: how institutional intermediaries help entrepreneurs overcome a lack of social ties.
Institutional Changes: Flexible Institutions and Socialization of Individuals.
Yang, D.; Eesley, Charles; Tian, Xiaocong; Roberts, E.B. Institutional Flexibility and Entrepreneurship. (under review, 3rd round R&R)
One reason that science parks may have been so important in China is that they are extremely flexible institutions that are bound by few rules. Previous research suggests that entrepreneurs benefit from the opposite: clear, transparent rules and regulations. This paper introduces and explores the idea that institutional flexibility may encourage individual choice and entrepreneurship. Educational institutions are an ideal setting to explore flexibility because they play a key role in socializing individuals. We examined a reform that made the curricula of Chinese universities more flexible. We found that the flexibility allowed by the educational reform led students to explore interests at the boundaries of fields which, in turn, encouraged more entrepreneurial activity among students and alumni.
Eesley, Charles E.; Jamber Li; Delin Yang. Does Institutional Change in Universities Influence High-Tech Entrepreneurship?: Evidence from China’s Project 985 (R&R, under 2nd round review)
Abstract: We examine the performance of early-stage entrepreneurs before and after randomly showing them different approaches to finding an advisory social network tie, and we find important interactions between the type of social tie and the entrepreneur’s strategic process. To our knowledge, this is the first randomized, controlled field trial of both social networks and strategic process in the literature. In particular, the results show that adding a diverse network tie alone is less effective than combining a diverse tie with a specific strategic approach. In isolation, a planning strategic process is more effective than just adding a diverse mentor tie. Contrary to the finding that entrepreneurs often change their business model and strategic direction frequently, we find that instructing entrepreneurs to have a strong, persistent vision for their startup often results in better performance in the early stages. In contrast to prior work that shows that entrepreneurs often begin their ventures with a cohesive, closed network high in trust then transition later to a more diverse network, we find that early stage ventures appear to be better off with more diverse social ties in the beginning, particularly if a more adaptive approach is adopted for the venture’s strategy. The results suggest that social networks should not be altered for entrepreneurs and managers (as many recent policies attempt to do) without also taking the strategy formulation process into consideration.
Abstract: We investigate the impact of a previously under-examined type of social network tie—the mentor—on subsequent career choice. We test whether being mentored by an entrepreneur or by a non-entrepreneur with relevant industry experience has a different impact. We use a longitudinal field experiment with a pre-test/post-test design in which students in an entrepreneurship class were randomly assigned to receive mentorship from either an entrepreneur or a non-entrepreneur. We examine separately the subsequent likelihood of two career outcomes upon graduation: founding a startup (founder) or joining one (joiner). To our knowledge, this is the first randomized trial of adding a social network tie via a mentoring program in entrepreneurship.
Leatherbee, M.; Eesley, Charles E. Remodeling the Iron Cage: Micro-level Effects of Institutional Collisions
Abstract: Though institutions are typically described as immutable forces that dictate behaviors and desires, they nevertheless evolve through time. Questions remain about the antecedents, characteristics and predictability of institutional change. Prior work has typically addressed this puzzle by focusing on meso- and macro-levels of society, emphasizing the way that structure imposes itself on actions. Understudied are the micro-levels of institutional change, which illuminate the way that actions modify structure. This paper analyses Start-Up Chile, a policy aimed at changing the taken-for-granted beliefs and behaviors of domestic entrepreneurs by prompting a social interaction with foreign entrepreneurs who have different beliefs and behaviors. We discovered that domestic entrepreneurs’ institutional cognitive and normative attributes were successfully modified. We theorize that an externally induced collision of distinct institutions caused a change in the trajectory of the domestic institution, by exposing individuals to alternative beliefs and behaviors that they could employ to achieve their day-to-day tasks. An important implication is that—under the right circumstances—institutional trajectories can be redirected.
Too Much of a Good Thing: Institutional Change and New Firm Performance (with Robert Eberhart and Kathy Eisenhardt)
Cause Without Effect: How Policy to Create Innovative New Ventures is Muted by Institutional Conformity (with Robert Eberhart)
We propose that regulative institutional changes that lower the required costs of starting new ventures have strongest effects on firms entering less risky and less innovative industries, contradicting the policy intent. Using insights from research on the effects of institutional change on entrepreneurship, we find that firms starting in more risky and innovative industries will resist the adoption of lower cost organizational forms because they need to signal conformity to accepted forms to compensate for the additional risk. Thus, government policy efforts to catalyze innovative entrepreneurship by making it easier to start more risky technical firms are counteracted by the entrepreneurs’ need to signal conformity with less innovative forms.
Human Capital and Returnee Entrepreneurship with Market-oriented Institutional Change (with Delin Yang, Wenhao Li, and Yiyuan Mai)
Our understanding of institutional change and returnee entrepreneurship is limited. We extend the Roy model to examine how a changing home institutional environment influences the choices to remain abroad vs. return, and the choice of where to found a firm as well as what type of venture to create. Two indicators of innovation-related human capital, namely the business model brought back by returnees and whether they have patents are used. Unique data were collected through survey responses from alumni who graduated from a Chinese university. A shift from a planned economy to a market economy increases the importance of innovation on returnee entrepreneurship. This phenomenon shows that returnees with better technological skills and innovative ability gain better competence in a more market-based economy. The results also reveal that different factors determine firm performance during different stages of institutional reform, thus addressing the puzzle of how institutions might foster entrepreneurship under changing institutional environments.
STREAM 2: Informal Institutions and Firm Performance
I extend theory on a third aspect of the firm’s environment by examining the impact of social movement organizations. Social movements are informal institutions as distinct from the formal institutions that I study in stream 1. I explore how social movements influence a firm’s strategy and environmental outcomes. Prior work had focused on how technological change disrupts industry incumbents. In contrast, my work shows how social movements also may disrupt and create opportunities when incumbents ignore them and fail to respond to stakeholder demands for innovation. I show how activists are able to pressure firms to invest in pollution-reducing innovations in spite of weak or ineffective regulatory institutions. I demonstrate how activists create change even when policies are gridlocked. I assembled a novel, hand-collected archival database that includes 3,227 firms and 307 stakeholder groups in 602 separate actions (e.g. protests, boycotts, proxy votes, lawsuits and letter-writing campaigns) from 1971–2003.
Eesley, Charles; Lenox, Michael. Secondary Stakeholder Actions and the Selection of Firm Targets. (R&R) Also Best Paper Proceedings of the 2006 Academy of Management Conference (include only the top 10% of presented papers)I noticed a puzzle regarding why the largest firms were targeted most often, even though they were among the “cleanest” firms in their industries. Secondary Stakeholder Actions and the Selection of Firm Targets. (R&R at Strategic Management Journal, with Michael Lenox) examines how different types of social movement organizations choose to target certain firms and what tactics they adopt. Prior work had focused on why certain issues become salient. We contribute by linking stakeholder characteristics to interest vs. identity-based targeting behavior and then show who targets more visible and relatively “dirtier” firms with confrontational tactics. This paper received the Academy of Management Best Paper Proceedings in 2006 (only the top 10% of presented papers).
Much previous research has focused on how complex, unpredictable environments create a need for heterogeneous skills and less structured organizations. In contrast, my third stream of research examines how industry environments influence which entrepreneurs perform better.
Eesley, Charles; Hsu, David; Roberts, Edward B. Entrepreneurial Ideation and Organizational Performance: Imprinting Effects (2nd Round R&R)
Abstract: How does the relationship between the organizational context for venture idea formation and venture performance depend on the venture’s founding team and business environment? Using data from a survey of 2,067 firms, we show that venture ideas emerging from research lab contexts are imprinted in a way that is better aligned with a cooperative commercialization environment. Ideas from industry contexts are aligned with a competitive commercialization environment. We contribute to prior work by showing that imprinting can come both from how a venture idea interacts with the business environment and how those ideas interact with the type of founder.
Eesley, Charles E.; Hsu, David; Koo, Wesley. Effects of Strategic Change on Venture Performance: The Implications of Change Level, Location and Top Management Team Composition.
Eesley, Charles E. and Douglas Hannah. June 2012. Review of: Winds of Change: The Environmental Movement and the Global Development of the Wind Energy Industry. By Ion B. Vasi. Administrative Science Quarterly.
Edward B. Roberts and Charles E. Eesley. (2009) "Entrepreneurial Impact: The Role of MIT", Kauffman Foundation. Available at http://www.kauffman.org/what-we-do/research/2009/08/entrepreneurial-impact-the-role-of-mit
Eesley, Charles and Delin Yang. Changing entrepreneurial strategies to developing capitalist institutions: A look at Chinese technology entrepreneurs. Conference version: Technology Management Conference (ITMC), 2011 IEEE International. 27-30 June 2011: pg. 1016 - 1035.
Eesley, Charles E. Alumni Surveys as a Data Collection Methodology.Keefe, Richard; Eesley, Charles. 2012. Neurocognitive Impairments. in Lieberman, Stroup, Perkins, eds., Essentials of Schizophrenia. American Psychiatric Publishing. Washington, DC.
Keefe, Richard; Eesley, Charles. 2009. Neurocognition in Schizophrenia. in Kaplan and Sadock's Comprehensive Textbook of Psychiatry, Benjamin Sadock, M.D., Virginia A. Sadock, M.D., and Pedro Ruiz, M.D. Editors. Baltimore, MD: Lippincott, Williams, & Wilkins.
Sloan, Frank A.; Eesley, Charles. 2007. Implementing a Public Subsidy for Vaccines. in Pharmaceutical Innovation: Incentives, Competition, and Cost-Benefit Analysis in International Perspective. edited by Frank A. Sloan and Chee-Ruey Hsieh. New York: Cambridge University Press.
Sloan, Frank A; Eesley, Charles E. 2006. Governments as Insurers in Professional and Hospital Liability Insurance Markets. In William M. Sage and Rogan Kersh, eds., Medical Malpractice and the U.S. Health Care System--New Century, Different Issues. New York: Cambridge University Press.
Keefe, Richard; Eesley, Charles; Poe, Meg. 2005. Defining A Cognitive Function Decrement in Schizophrenia. Biological Psychiatry, 57:688-691.
Keefe, Richard; Eesley, Charles. Neurocognitive Impairments. in American Psychiatry Publishing Textbook of Schizophrenia. Edited by Jeffrey A. Lieberman, M.D., T. Scott Stroup, M.D., and Diana O. Perkins, M.D. American Psychiatric Publishing, Inc. 2005.
Eesley, Charles E.; Jamber Li; Delin Yang. Does Institutional Change in Universities Influence High-Tech Entrepreneurship?: Evidence from China’s Project 985
- Ghoshal Conference, London Business School. June 2nd, 2013
- Challenges for the Chinese Government. Stanford Center for International Development (SCID). May 9-10th, 2013, Tsinghua University, Beijing, China.
- Wharton Technology Conference. April 19, Philadelphia, PA
- Strategic Management Society Conference. Dec. 2013, Guangzhou, China
Successes and Failures of Public Policies for Innovation and Entrepreneurship. Startup Chile Conference. March 21st, 2013. Santiago, Chile
- Univ. of Maryland Smith School Entrepreneurship Conference. April 26th, 2013. Maryland.
- International Academy of Chinese Management Research (IACMR) Conference. June, 2012. Hong Kong.
Geographic and field differences in Entrepreneurship. Academy of Management Conference 2012. Boston, MA.
- Global Bio Forum conference. Seoul, Korea. June 14th, 2012. (video here)
- Keynote talk, Inaugural International Conference on Innovation and Entrepreneurship: Theory and Practice Relevant to China. Hosted by Lancaster University and Wuhan University. Wuhan, China, July 9th, 2012.
University of Sao Paulo, Brazil. University - Industry Partnerships: MIT and Stanford.
Failure is an Option: Failure Barriers and New Firm Performance (with Robert Eberhart)
- WCRS Conference, Sept. 7th, 2012, USC, Los Angeles.
- UCLA Entrepreneurship Seminar, May 21, 2012.
- 24th Annual Meeting of the Society for the Advancement of Socio-Economics, Massachusetts Institute of Technology, June 28 - 30, 2012
- International Research and Policy Roundtable, Kauffman Foundation, Liverpool, UK, March 12, 2012
Eesley, Charles E.; Hsu, David; Roberts, Edward B. Focus or Diversify? Aligning Founding Teams with Strategy and Environment. Copenhagen Business School, Dec. 20th, 2011. [slides here]
The Impact of Alumni Entrepreneurship: Evidence from MIT and Tsinghua University. National University of Singapore (NUS). June 21st, 2011.
The Future of Technology Entrepreneurship Research. Invited presentation at MIT's TIES group 50th anniversary. April 1st, 2011.
- Strategic Management Society Conference. Dec. 2012, Guangzhou, China
- Wharton Strategy and the Business Environment Conference, May 9th, 2011. U. Penn.
- Stanford University, Networks and Organizations Seminar, March 11, 2011.
- University of Virginia, Darden School of Business, Batten Institute Innovation and Entrepreneurship Conference, Charlottesville, VA, May 1-2nd, 2010.
- Sixth Annual Smith Entrepreneurship Research Conference. Univ. of Maryland, April 9-10th, 2010.
- STVP Research Day, Stanford University, Dec. 9th, 2009
- London Business School Ghoshal Strategy Conference, London, May 15-16th, 2010
- SIEPR Seminar, Stanford University, Sept. 23rd, 2009
- Organization Science Winter Conference. Steamboat Springs, CO, Feb. 4-7th, 2010
- BYU-Utah Winter Strategy Conference, Salt Lake City, Utah, Feb. 25-27th, 2010
- Organization Science Winter Conference. Feb. 8, 2012
- Carnegie Mellon University, SETChange Seminar. Nov. 10th, 2011
- Duke University, Fuqua School of Business, Durham, NC. Nov. 2nd, 2011
- Academy of International Business (AIB), Nagoya, Japan, June 27th, 2011
- Rice University Conference on Strategy in Emerging Markets, April 30th, 2010
- World Bank - Entrepreneurship and Growth Conference. Washington, DC. Nov. 19-20th, 2009
- Stanford University Graduate School of Business, Organizational Behavior seminar, Nov. 4th, 2009
- Washington University, Oct. 7, 2009
- National Bureau of Economic Research (NBER) Productivity Lunch, Fall, 2008
- Annual CCC Doctoral Colloquium. Carnegie Mellon. April 11-13th, 2008
- SASE Student Paper Award, Costa Rica, June, 2008.
- Babson Conference on Entrepreneurship Research (BCERC), June, 2008
- Duke Univ. Fuqua School of Business, Jan. 2008
- MIT Political Econ Breakfast; Development Lunch, Fall, 2008
- MIT Finance Lunch, Fall, 2008
- Georgia Tech Roundtable on Engineering and Entrepreneurship Research. Atlanta, GA. Nov. 2007
What Should Drive an Innovation Strategy? (with Edward B. Roberts and Delin Yang)
- Strategic Management Society. Washington DC. Oct. 13th, 2009
Cutting Your Teeth (with Edward B. Roberts)
- Organization Science Winter Conference. Steamboat Springs, CO, Feb. 4-7th, 2010.
- West Coast Research Symposium (WCRS) University of Washington. Seattle, WA. Sept. 10-12th, 2009
- Academy of Management Annual Meeting. Atlanta, GA. Aug. 11-16th, 2006.
- MIT Economics Department Theory Group, June, 2006.
Eesley, Charles & Lenox, Michael. Secondary Stakeholder Actions and the Selection of Firm Targets. Academy of Management Annual Meeting. Atlanta, GA. Aug. 11-16th, 2006. Conference Best Paper Proceedings (include only the top 10% of presented papers)
Eesley, Charles & Michael Lenox.Secondary Stakeholder Actions and the Selection of Firm Targets.Institutional Mechanisms of Industry Self-Regulation Conference.Dartmouth, Feb. 24-25th, 2006.
MIT Innovation and Entrepreneurship Seminar Series. Entrepreneurs from Technology-Based Universities: An Empirical First Look (co-presenter with Ed Roberts). Cambridge, MA. September 12, 2005.
Eesley,Charles; Lenox, Michael. Secondary Stakeholders and Firm Self-Regulation. Academy of Management Conference Best Paper Proceedings (include only the top 10% of presented papers), Honolulu, Hawaii. August 9, 2005.
Stanford University E145 - Technology Entrepreneurship
Stanford University MSE 372 - Entrepreneurial Firms, Strategy and Innovation, PhD seminar
MIT Sloan School of Management 15.024 - Applied Economics for Managers, Sloan Fellows class - Teaching Assistant for Thomas Stoker, Summer 2009.
MIT Sloan School of Management 15.354 - Innovation and Entrepreneurship: How to do it, Undergraduate class - Teaching Assistant for James M. Utterback, David J. McGrath Jr. Professor of Management of Innovation, Professor of Engineering Systems Spring 2008.
MIT Sloan School of Management 15.350 - Managing Technological Innovation and Entrepreneurship, Sloan Fellows class - Teaching
Assistant for Edward B. Roberts David Sarnoff Professor of the
Management of Technology; Chair, MIT Entrepreneurship Center
Professional and Service Activities
- Impact: Innovation and Entrepreneurship - Stanford Alumni Survey report
- Immigration, 2012
- Stanford News, 2012 - Venture Lab
- Forbes Magazine, 2012
- Bill Gates, 2011
- Promethean Power, Inc. Magazine, 2011
- Forbes - Stanford's Newest Startups, 2011
- SmartMoney, 2011
- DukeGen, 2011
- G1 Brazil, 2011
- Korean newspaper, 2010
- Outside interests include: hiking, biking, reading, Duke basketball, jogging, swimming, cooking, wine/tea/coffee, travel, and tennis.