Research

My research explores drivers of organizational innovation and technological change. I am interested in how different types of environmental pressures affect invention, refinement and technology adoption through firm innovative effort and knowledge flows within as well as across industry boundaries. I examine how firms direct their innovation activity in the wake of industry and regulatory shocks, leveraging novel databases in the contexts of conventional oil and gas drilling, hydraulic fracturing, wind energy and digital platforms.

Ongoing Research

In a paper investigating trade secrets, Keeping invention confidential (with Colleen Cunningham), we study use of a prevalent but rarely studied form of intellectual property protection: trade secrets. Building on existing survey evidence of firm-level, cross-sectional use of secrecy, we explore the effect of stronger legal trade secret protection on the use of trade secrets, and the rate and nature of secret innovation. Our setting is the US oil and gas hydraulic fracturing (fracking) industry, from 2013 to 2018, in states where firms are required to disclose fracking ingredients to regulators barring substantiated claims of trade secrets. We examine how the enactment of the federal 2016 Defend Trade Secrets Act (DTSA) affects well-level trade secret use across states with varying levels of pre-DTSA trade secret protection. We find substantial increases in the use of trade secrets, the generation of new trade secrets, recombination across sources, and the breadth and complexity of secret invention. Our results provide rare systematic empirical evidence on actual trade secret use and documents how stronger formal appropriability shapes secret innovation.

In the paper entitled “Solutions looking for problems: idle capacity, resource repurposing and the technological landscape”, I explore why similar technologies may be used in distinct product markets. Prior literature posits that technologies used in one setting often invade other application domains, but a puzzle in the innovation literature remains: what drives such events? I argue that negative industry shocks create idle resources, setting up incentives for resource repurposing (exaptation) from the original industry into other industries that are related in terms of resources but not necessarily product market. Firms facing idle resources have lower opportunity costs to repurpose resources and introduce seemingly novel capabilities in resource-related industries. In turn, the repurposing of existing resources in other industries enables firms to technologically differentiate from competitors. As a result, we may observe similar technologies used in seemingly distinct markets related at the resource level. Finally, lower redeployment costs strengthen the relationship between industry downturns and technology differentiation in resource-related industries. I exploit a precipitous oil price drop in 2014 to study the effect of idle capacity on the redeployment of resources from the oil and gas industry to the wind power industry. I find evidence consistent with the argument that following a downturn, firms were likely to repurpose such resources as large-scale maritime equipment from the oil and gas to the wind industry, driving an influx of novel “solutions”. The study contributes to the literature on technological change by highlighting the role of industry conditions on the innovative activity in resource-related industries.

“Do innovation possibilities decline with technological age?” (with Sendil Ethiraj), is motivated by the observation that innovation appears to have become more difficult over time, as evidenced by larger R&D teams and a lower patent to R&D expenditure ratio. Distance from the innovation possibility frontier is potentially a crucial determinant of feasible technological change, yet little consensus has been reached about its impact on firm behavior. One reason could be that the underlying theoretical models differ in their assumptions about the world. In the industrial organization literature, for example, the predominant assumption is that technologies rely on a set of resources, which, when exhausted, foreclose the possibility of further technological improvement (the resource space view). An alternative convention prevalent in evolutionary economics and behavioral theory of the firm is that technologies evolve by addressing and solving problems that arise in the environment (the problem space view). Differentiating between the two conventions may enable theoretical consensus, delineating empirical tests that allow to tease out competing theories. We describe and test the predictions arising from these two conventions—resource space and problem space view—on around 100,000 oil wells drilled in the U.S. in 2010-2017. We exploit an exogenous shock to the incentives to innovate across technologies and document mechanisms driving the results. The findings are consistent with the problem space view, suggesting that technology age may render lower innovation possibilities as firms solve available problems in the environment.

"Platform entry and innovation: the role of adjustment costs in shaping complementor innovation strategies" (with Ahmadreza Mostajabi), addresses the conflicting findings regarding complementors’ response to platform entry including both higher and lower complementor innovation in domains affected by entry. We reconcile these findings by introducing resource redeployment lens to platform entry. We argue that complementors with high adjustment costs focus and increase their innovative effort on the focal platform and the affected domain, whereas complementors with low adjustment costs shift their innovation effort to a competing platform. We empirically test our hypothesis in the context of mobile app platforms and analyze Apple’s entry in the App Store with the “Files” application in 2017. We compare 340,474 affected and unaffected applications produced by 30,044 developers. Supporting our arguments, we find that high-adjustment-cost developers increase ex-post innovation on the focal platform (Apple App Store), whereas low-adjustment-cost developers redeploy resources to a competing platform (Google Play Store). We contribute to literature on platform innovation strategy by highlighting complementor heterogeneity in response to platform entry and to resource redeployment literature by demonstrating the relevance of adjustment costs to digital settings.

In a paper entitled “Platform complementors: downstream vs. upstream orientation and product performance”, I examine the drivers of product performance in a platform setting. I explore the role of complementor-platform orientation and complementor-customer orientation as drivers of value creation in digital settings. A platform owner may be conceptualized as a supplier of market access to a complementor firm in a vertical relationship. A longer experience of trading on a platform may entail a level of established knowledge flows and relational capital. Indeed, prior literature argues that experience on a platform increases value creation; however, platform owners make unilateral decisions to maximize the ecosystem rather than a specific complementor’s value creation. I argue that firms trading on multisided markets such as digital platforms with a high number complementors have significant influence on product performance not through upstream but rather through downstream orientation. A downstream orientation with a focus on product customization for specific customers provides fast performance feedback and is more conducive to higher performance. I base this study in the mobile apps setting. In contrast to the prior literature, I find that a longer experience of trading on a platform (upstream orientation) has a negligible effect on product performance; instead product customization (downstream orientation) such as app translation and cultural proximity to customers has a large and significant effect on product performance. I conduct a battery of tests to uncover the mechanisms, studying the effect of launching multiple products on a platform and following “spray and pray” strategies. I exploit the fact that the same app is available in multiple markets simultaneously, thus holding the quality of the product constant. The (negligible) effect for upstream orientation does not vary across the ten countries in the sample, but the effect varies significantly for downstream orientation, suggesting that there is a high level of heterogeneity across different markets. This study contributes to the literatures on inter-firm relationships and multisided markets, highlighting the departure from established theory in digital platform settings.