Research

Complex Innovation and the “Visible Hand”: the Role of Knowledge Interdependence in Employee Entrepreneurship. 

Ding, Yuheng

How does growing knowledge interdependence in firm innovation activities affect potential entrepreneurs' decision to start their own business ventures? To answer this question, I adopt an abductive approach and leverage matched employee-employer data from the U.S. Census Bureau between 2000-2014. Results show that higher knowledge interdependence is negatively associated with employee entrepreneurship, and the negative effect is even stronger, not weaker, among the highest-performing individuals. This indicates that knowledge interdependence does not merely raise the bar of entry. Instead, firms implement better pay-for-performance compensation schemes to retain valuable human assets, which also leads to greater compensation dispersion within firms with higher knowledge interdependence. Together, these create a strong selection on the quality of spin-outs being formed especially by individuals ranked highest on the human capital distribution. I use an economic model to summarize these empirical insights and show that knowledge interdependence could also raise between-firm income inequality when it generates large enough profits on the product market.

• • [Ed Snider Center Working Paper No.5, 2022] [Link]

  • [Best Paper Proceedings of the 83rd Annual Meeting of the Academy of Management] [Link]

  • [Finalist of the William H. Newman Award of the 83rd Annual Meeting of the Academy of Management]

  • [Finalist of the TIM Best Student Paper Award of the 83rd Annual Meeting of the Academy of Management]

  • [Finalist of the 42nd SMS Annual Conference Ph.D. Paper Prize, 2022]

Mega Firms and Recent Trends in the U.S. Innovation: Empirical Evidence from the U.S. Patent Data

 Braguinsky, Serguey, Joonkyu Choi, Yuheng Ding, Karam Jo, and Seula Kim

We use the U.S. patent data merged with firm-level datasets to establish new facts about the role of mega firms in generating “novel patents”—innovations that introduce new combinations of technology components for the first time. While the importance of mega firms in novel patents had been declining until about 2000, it has strongly rebounded since then. The timing of this turnaround coincided with the ascendance of firms that newly became mega firms in the 2000s, and a shift in the technological contents, characterized by increasing integration of Information and Communication Technology (ICT) and non-ICT components. Mega firms also generate a disproportionately large number of “hits”—novel patents that lead to the largest numbers of follow-on patents (subsequent patents that use the same combinations of technology components as the first novel patent)—and their hits tend to generate more follow-on patents assigned to other firms when compared to hits generated by non-mega firms. Overall, our findings suggest that mega firms play an increasingly important role in generating new technological trajectories in recent years, especially in combining ICT with non-ICT components.

• NBER Working Paper No. 31460 [Link]

The Burdens of Technology Adoption on Entrepreneurship – How does the Adoption of EHRs Impact Physician Self-employment in the U.S. Healthcare Sector?

Ding, Yuheng

In the past two decades, there has been a trend of rapid adoption and implementation of health information technology (HIT), namely the Electronic Health Records (EHRs) in the U.S. healthcare sector. Meanwhile, the share of self-employed physicians dropped drastically with increasing market concentration for hospitals. I argue that efficient knowledge hierarchies and complementary capabilities of HIT in hospitals help mitigate burdens following the adoption and implementation of EHRs better than independent physician-owned practices. Preliminary results using publicly available data indicate that a higher level of adoption of EHRs at nearby hospitals is associated with a lower level of self-employment as well as lower returns to self-employment in the same county. To further investigate the causal relationship, I implement Diff-in-diffs design and an instrument variable approach by linking the HIMSS analytics survey to the employer-employee matched dataset of the U.S. Census Bureau and the American Community Survey (ACS) to trace EHRs adoption, job mobility, and entrepreneurial activities of physicians employed at a near census of non-federal hospitals in 29 U.S. states between 2005 and 2014.  Results are being prepared for disclosure clearance by the U.S. Census Bureau. 

• Preparing for disclosure clearance by the U.S. Census Bureau