Ashish Arora

Ashish Arora
Duke University | DU · Fuqua School of Business

About

139
Publications
45,463
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Introduction
Skills and Expertise
Additional affiliations
January 2008 - present
Duke University
January 1997 - December 2010
Carnegie Mellon University

Publications

Publications (139)
Article
Most technology startups are set up for exit through acquisition by large corporations. In choosing when to sell, startups face a trade-off. Early acquisition reduces execution errors, but later acquisition both improves the likelihood of finding a better match and benefits from increased buyer competition. Startups’ exit strategies vary considerab...
Article
Recent accounts suggest the development and commercialization of invention has become more “open.” Greater division of labor between inventors and innovators can enhance social welfare through gains from trade and economies of specialization. Moreover, this extensive reliance upon outside sources for invention also suggests that understanding the f...
Chapter
The contractual granting of rights to use technology is commonly called a license. Licensing has become more prevalent since the 1980s. Licensing revenue has to be balanced against the lost profits from greater competition. More competition in the product market favours licensing. Stronger intellectual property (IP) protection also favours licensin...
Chapter
Trade in disembodied technology – the market for technology – has become common, giving firms more strategic options as they can buy, sell and use their technologies internally. At the industry level, this encourages a division of innovative labour between firms with a comparative advantage in the generation of innovation and those better at the de...
Article
We bridge current streams of innovation research to explore the interplay between R&D, external knowledge, and organizational structure—three elements of a firm's innovation strategy, which we argue should logically be studied together. Using within‐firm patent assignment patterns, we develop a novel measure of structure for a large sample of Ameri...
Article
This paper is a comment on Finding the Endless Frontier: Lessons from the Life Sciences Innovation System for Technology Policy by Iain M. Cockburn and Scott Stern which can be found at: http://ssrn.com/abstract=2208693.
Article
Full-text available
Analysis of these three types of purchasing--price-, cost-, and hybrid-based--shows that a slight tweaking of current policy may produce better results more in line with commercial buying practices.
Article
Over the last decade, companies have paid greater attention to the management of their intellectual assets. We build a model that helps understand how licensing activity should be organized within large corporations. More specifically, we compare decentralization—where the business unit using the technology makes licensing decisions—to centralized...
Article
Full-text available
We examine the effect of competition and vulnerability disclosure on one aspect of software quality: time taken by software vendors to release patches to software vulnerabilities. We collect a unique data set and create alternative identification strategies. Our results demonstrate that a one unit increase in the number of competitors lowers expect...
Article
Full-text available
The strategic behavior of technology owners creates important determinants of inter-firm technology licensing within a single industry when products are differentiated and knowledge is imperfectly appropriable. Transaction cost considerations factor in heavily when the net is extended to cross-industry licensing. The probability that two companies...
Article
Full-text available
We study the relationship between decentralization of R&D, innovation and firm performance using a novel dataset on the organizational structure of 1,290 American publicly-listed corporations, 2,615 of their affiliate firms, as well as characteristics of 594,903 patents that they hold. We explore the tension between centralization and decentralizat...
Article
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We analyze how entrepreneurial opportunity cost conditions performance. Departing from the common practice of using survival as a measure of entrepreneurial performance, we model both failure and cash-out (liquidity event) as conditioned by the same underlying process. High-opportunity-cost entrepreneurs prefer a shorter time to success, even if th...
Chapter
This chapter reviews the growing literature on the “market for technology,” a broad term that denotes trade in technology disembodied from physical goods. The market for technology flourished during the nineteenth century in the United States. After several decades of relative decline, the market for technology has once again grown considerably in...
Article
We study how the impact of capabilities for performance is contingent upon the environment. Using a novel dataset of Information Security startups, we study how markets for technology change the relative impact of technology and marketing capabilities on performance. Since internal technical effort enables firms to generate technology inputs instea...
Article
Auctions are widely used online to conduct commercial transactions. An important feature of online auctions is that even bidders who intend to buy a single object frequently have the opportunity to bid in sequential auctions selling identical objects. This paper studies key features of the optimal bidding strategy, assuming rational, risk-neutral a...
Article
This paper documents a shift in the nature of innovation in the information technology (IT) industry. Using comprehensive data on all IT patents granted by the USPTO from 1980-2002, we find strong evidence of a change in IT innovation that is systematic, substantial, and increasingly dependent on software. This change in the nature of IT innovation...
Article
This paper measures complementarity between two information technology adoption decisions. Assembling establishment-level data of software usage, we develop a discrete-choice model where establishments choose whether to adopt Internet Protocol-based LAN operating systems and Internet applications simultaneously. We find that complementarities exist...
Article
The Indian software industry has been widely studied. Previous studies have recognized the role of skilled labor in the growth of the industry, but have not empirically investigated the role of skilled labor. In this study we focus on the role of human capital in the regional location of the software industry. Specifically, we study the effect of t...
Article
Full-text available
This article surveys some of the recent literature on technology markets, and summarizes its main issues and insights. We structure our analysis in three parts: the supply and demand of technology; the factors that condition the formation and growth of technology markets; industry structure and dynamic issues. In addition, we summarize some of the...
Article
We empirically estimate the effect of competition on vendor patching of software defects by exploiting variation in number of vendors that share a common flaw or common vulnerabilities. We distinguish between two effects: the direct competition effect when vendors in the same market share a vulnerability, and the indirect effect, which operates thr...
Article
Full-text available
key aspect of better and more secure software is timely patch release by software vendors for the vulnera- bilities in their products. Software vulnerability disclosure, which refers to the publication of vulnerability information, has generated intense debate. An important consideration in this debate is the behavior of software vendors. How quick...
Article
Full-text available
Australian and New Zealand environmental economists have played a significant role in the development of concepts and their application across three fields within their subdiscipline: non-market valuation, institutional economics and bioeconomic modelling. These contributions have been spurred on by debates within and outside the discipline. Much o...
Article
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This paper compares the innovation performance of established pharmaceutical firms with biotech companies, controlling for differences in t he scale and scope of research. We develop a structural model estimated with data on over 3,000 drug R&D projects in preclinical and clinical trials in the US from 1980-94, and followed till 20 05. Key to our a...
Article
In the age of outsourcing, it is easy to forget that outsourcing is simply one manifestation of the division of labor. Adam Smith's dictum that the division of labor is limited by the extent of the market has created difficulties when applied to a division of labor among firms (rather than within a firm). The problems are both for analytical attemp...
Article
Does the US have a comparative advantage in research on applications software? We classify software patents into applied and upstream software based on a unique classification algorithm. We offer empirical evidence that research on applied software is less likely to be conducted outside the US than that on upstream applications. We hypothesize that...
Article
Will the software development laboratories follow the production mills?
Article
Full-text available
We study how markets for technology affect entry and survival in the information security industry. Markets for technology facilitate the entry of firms that lack proprietary technology. However, they also increase the relative advantage of downstream capabilities. Since we do not observe the entire population of potential entrants, we test these i...
Article
We analyze the effect of patenting on R&D with a model linking a firm's R&D effort with its decision to patent, recognizing that R&D and patenting affect one another and are both driven by many of the same factors. Using survey data for the U.S. manufacturing sector, we estimate the increment to the value of an innovation realized by patenting it,...
Article
Software vulnerabilities represent a serious threat to cyber security: most cyber-attacks exploit known vulnerabilities. Unfortunately, there is no agreed-upon policy for their disclosure. Disclosure policy (protected period given to a vendor to patch the vulnerability) indirectly affects the speed and quality of the patch that a vendor develops. T...
Article
The Advisory Committee on Measuring Innovation in the 21st Century Economy was established by the Secretary of Commerce in September 2006 to recommend ways to improve the measurement of innovation in the economy. In its report, the Advisory Committee outlines its recommendations to the Secretary of Commerce for steps to be taken by the government,...
Article
Full-text available
Program at Carnegie Mellon and conference participants at the NBER Location of the Biopharmaceutical Industry pre-conference for useful comments. We also thank the Sloan Foundation for supporting our data acquisition. Various practitioners from the Indian pharmaceuticals industry provided useful insights into the recent history of the industry. Bil...
Article
In this paper we study how the existence of a functioning market for technology differentially conditions the entry strategy and survival of different types of entrants, and the role of scale, marketing ability and technical assets. Markets for technology facilitate entry of firms that lack proprietary technology and increase vertical specializatio...
Article
Full-text available
We examine the question of which services are tradable within a concrete setting: the outsourcing of information technology (IT) services across a broad cross-section of establishments in the United States. If markets for IT services are local, then we should expect increases in local supply would increase the likelihood of outsourcing by lowering...
Article
Firms have typically tried to profit from their technical innovations by selling them indirectly, embedded in goods and services. Markets for technology, in which innovations are sold or licensed, have been much rarer. Yet, trade in technology has grown systematically over the past 20 years, as reflected in the growth of arrangements such as licens...
Article
We develop a model of industry evolution in which firms choose proprietary standards (closed firm) or adopt a common standard (open firm). A closed entrant can capture multiple profits whereas an open entrant faces lower entry barriers: The odds of closed entry (relative to open entry) decrease with price and eventually open entry becomes more like...
Article
Full-text available
Geographically dispersed sellers in electronic reverse marketplaces such as those hosted by market-makers like Ariba are uncertain about the number of competitors they face in any given market session. We refer to this uncertainty about the number of competitors as market-structure uncertainty. Over the course of several market sessions sellers lea...
Conference Paper
We examine the question of which services are tradable within a concrete setting: the outsourcing of IT services across a broad cross-section of establishments in the US. We analyze outsourcing decisions from 52,191 establishments with over 100 employees at the end of 2002, for two types of IT services: programming and design and hosting. Supply of...
Article
Full-text available
We examine the question of which services are tradable within a concrete setting: the outsourcing of IT services across a broad cross-section of establishments in the US. If markets for IT services are local, then we should expect increases in local supply should increase the likelihood of outsourcing by lowering the cost of outsourcing. If markets...
Article
We examine the question of which services are tradable within a concrete setting: the outsourcing of IT services across a broad cross-section of establishments in the US. If markets for IT services are local, then we should expect increases in local supply should increase the likelihood of outsourcing by lowering the cost of outsourcing. If markets...
Article
India's emergence as a major exporter of software services in less than a decade and a half has excited debate about the causes of its success and ignited hopes for similar success in other industries. The subsequent growth of exports of other business services appears to validate the belief of some observers (including myself) that India's softwar...
Article
This article contributes to more sustainable management of risk by describing frameworks for (1) valuation of avoided risks and (2) improving outsourced information security services. These contributions address the absence of a structure for rewarding successful risk management, the need for an ever-more accurate economic measure of risk, and the...
Article
Full-text available
e present a model of fixing or patching a software problem after the product has been released in the mar- ket. Specifically, we model a software firm's trade-off in releasing a buggy product early and investments in fixing it later. Just as the marginal cost of producing software can be effectively zero, so can the marginal cost of repairing multi...
Article
This paper analyzes the relationship between technology licensing and the effectiveness of patent protection. Using the 1994 Carnegie Mellon survey on industrial R&D in the United States, we develop and test a simple structural model in which the patenting and licensing decisions are jointly determined. We find that increases in the effectiveness o...
Article
Shaping the Twentieth Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries. By Alfred D. Chandler Jr. Cambridge, MA, and London: Harvard University Press, 2005. Pp. ix, 366. $29.95. - - Volume 66 Issue 1 - ASHISH ARORA
Article
Full-text available
Research in information security, risk manage- ment and investment has grown in importance over the last few years. However, without reliable estimates on attack probabilities, risk management is difficult to do in practice. Using a novel data set, we provide estimates on attack propensity and how it changes with disclosure and patching of vulnerab...
Conference Paper
Full-text available
One key aspect of better and more secure software is timely and reliable patching of vulnerabilities by software vendors. Recently, software vulnerability disclosure, which refers to the publication of vulnerability information before a patch to fix the vulnerability has been issued by the software vendor, has generated intense interest and debate....
Article
There is widespread consensus that patents have long benefited biomedical innovation. A forty-year empirical legacy suggests that patents are more effective, for example, in protecting the commercialization and licensing of innovation in the drug industry than in any other. Patents are also widely acknowledged as providing the basis for the surge i...
Article
Full-text available
Traditional engineering design discipline calls for designs to be evaluated long before they are implemented. Early design evaluations predict properties of the artifact that will result from a proper implementation of the design and the value of those properties to the client or end user. The predicted properties can include costs as well as funct...
Article
Full-text available
This paper explores the optimal commercialization strategy for disembodied patents. When the market value of the patent is uncertain and embodiment costs are irreversible, there is an option value to delay the acquisition of complementary assets to produce in-house, creating a potential incentive to license. I show that uncertainty increases the re...
Article
Software vulnerability disclosure refers to the publication of vulnerability information before a patch to address the vulnerability has been issued by the software vendor. It has generated intense interest and debate. In particular, there have been arguments made both in opposition to and in favor of alternatives such as full and instant disclosur...
Article
Full-text available
Diagnostic information allows an agent to predict the state of nature about the success of an investment project better than the prior. We analyze the optimal pricing scheme for selling diagnostic information to buyers with different, privately known, ex ante success probability. Investment costs and returns of successful projects are assumed to be...
Article
Full-text available
Traditional engineering requires evaluating designs before implementing them. Evaluating a design predicts the properties of a reasonable implementation and the value of these properties to a stakeholder. Software engineering has some (though not enough) relevant evaluation techniques but lacks frameworks to compare, develop, and apply those techni...
Article
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Information security breaches frequently exploit software flaws or vulnerabilities, causing significant economic losses. Considerable debate exists about how to disclose such vulnerabilities. A coherent theoretical framework helps identify the key data elements needed to develop a sensible way of handling vulnerability disclosure
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Brookings Trade Forum 2005 (2005) 399-409 The possibility that a significant number of skill-intensive service jobs might move from the United States to developing countries has generated widespread recent concern. The newness of the phenomenon has led to rampant speculation, by academics, in the press, and on Wall Street, about the potential scope...
Article
Full-text available
Information security problems cost millions of dollars for US companies and billions for the overall US economy. Nowadays, the question is not whether organizations need more security, but how much to spend for added security. And yet investing in IT security has always been a hard sell for IT managers. Scores of security technologies are on the ma...
Article
We present a model of fixing or patching a software problem after the product has been released in the market. Specifically, we model a software firm's trade-off in releasing a buggy product early and investments in fixing it later. Just as the marginal cost of producing software can be effectively zero, so can the marginal cost of repairing multip...
Conference Paper
IT infrastructure can be outsourced to contractors, including the primary responsibility for maintaining network security. Even though an outsourcing contract specifies the minimum level of performance, there is a need to motivate a contractor to further improve such performance. This paper discusses the outsourcing of information assurance (IA) at...
Article
Full-text available
Vulnerability disclosure is an area of public policy that has been subject to considerable debate, particularly between proponents of full and instant disclosure, and those of limited or no disclosure. This paper is an attempt to empirically test the impact of vulnerability information disclosure and availability of patches on attackers' tendency t...
Conference Paper
Full-text available
This paper summarizes the intermediate lessons learned from the analyses of the risk management problems in three technological endeavors. These problems are: the absence of a structure for rewarding successful project risk management; the need for an ever-more accurate economic measure of risk; and the difficulty of transferring risks to contract-...
Article
The proper specification of intellectual property rights (IPRs) is a delicate and controversial matter. In this paper, we consider one specialized context in which IPRs can add to efficiency. We build on contributions of both 'firm capabilities' scholars (e.g. Teece, Pisano et al.) and 'property rights' economists (e.g. Hart) to show that IPRs can...
Article
Full-text available
The spectacular growth of the software industry in some non-G7 economies has aroused both interest and concern. This paper addresses two sets of inter-related issues. First, we explore the determinants of these successful stories. We then touch upon the broader question of what lessons, if any, can be drawn from for economic development more genera...
Article
This paper explored an unusually comprehensive dataset of more than 2,000 drug R&D projects all over the world during the 1990s. This enabled us to characterise several features of the innovation process in pharmaceuticals, particularly the different role and comparative R&D performance of the large established drug companies vis-à-vis smaller high...
Article
According to Gans & Stern (1999), firms engage in R&D spending, in part, in order to improve their bargaining position as buyers in the market for technology. We test this theory empirically with data from the pharmaceutical industry. We develop and estimate a structural model of R&D spending and licensing. We find that R&D spending does improve th...
Article
When companies decide to engage in technology transfer through exclusive licensing to other firms, they have two basic options: to use standard licensing contracts or to set-up more elaborate partnership-embedded licensing agreements. We find that broader partnership-embedded licensing agreements are preferred with higher levels of technological so...
Article
Full-text available
Interviews with personnel from firms, universities, and other organizations indicate that biomedical research typically proceeds despite challenges posed by a growing number of patents on research tools. Respondents address these challenges with licensing, inventing around patents, going offshore, the development and use of public databases and res...
Article
Full-text available
We analyze the effect of patenting on R&D with a model linking a firm's R&D effort with its decision to patent, recognizing that R&D and patenting affect one another and are both driven by many of the same factors. Using survey data for the U.S. manufacturing sector, we estimate the increment to the value of an innovation realized by patenting it,...
Chapter
Although market transactions for technologies, ideas, knowledge or information are limited by several well-known imperfections, there is increasing evidence that they have become more common than in the past. In this paper we argue that these markets change the traditional mindset in which the only available option for a company wishing to introduc...
Article
The government, particularly the Department of Defense (DoD), is undergoing yet another wave of acquisition reforms, which are intended to bring commercial buying practices to DoD's purchasing operations. This research shows that, prior to these reforms, the DoD's buying practices were superior to commercial practices in terms of prices paid for a...
Article
Drawing on their previous book-length study published in 2000, the authors examine the nature and functioning of markets for technology, namely markets for intermediate technological inputs, as well as their implications for business and public policy. Markets for technology are not easy to define, given the difficulty in making a distinction betwe...
Book
The past two decades have seen a gradual but noticeable change in the economic organization of innovative activity. Most firms used to integrate research and development with activities such as production, marketing, and distribution. Today, firms are forming joint ventures, research and development alliances, licensing deals, and a variety of othe...
Article
This paper assesses the contribution of software to India’s economic development, paying particular attention to the role of software in the absorption of labour and the development of human capital in the economy. The success of the software industry has increased the relative value of professional workers, not only programmers, but also managers...
Article
Bien que les transactions portant sur les technologies, les idees, les connaissances ou les informations souffrent d’imperfections, tout indique qu’elles sont plus repandues que par le passe. Dans la presente etude, nous soutenons que ces marches changent la mentalite traditionnelle pour laquelle la seule possibilite qui s’offre a une entreprise de...
Article
In this paper we study how the development of specialized upstream technology suppliers in leading countries improves technology access and lowers investment costs for downstream firms in follower countries. We test this idea using a novel database covering all investments in chemical plants in less developed countries (LDCs) during the 1980s. We f...
Article
Although market transactions for technologies, ideas, knowledge or information are limited by several well-known imperfections, there is evidence that they have become more common than in the past. In this paper we analyze how the presence of markets for technology conditions the technology and corporate strategy of firms. The first and most obviou...
Article
This Article offers an explanation of the role of intellectual property rights (IPRs) in information-intensive vertical supply relationships. In particular, we explore the connection between stronger property rights and the enhanced viability of independent (versus vertically integrated) input supply firms when contracts are incomplete. We start by...
Article
Full-text available
Although the prospect of obtaining patent protection is believed to encourage R&D investments and thus the rate of inventive activity, there is little by way of direct evidence to support this belief. We use original data from the 1994 Carnegie Mellon survey on the appropriation of R&D in the US manufacturing sector to empirically estimate a struct...
Article
This paper analyzes the relationship between banks’ divergent strategies toward specialization and diversification of financial activities and their ability to withstand a banking sector crash. We first generate market-based measures of banks’ systemic risk exposures using extreme value analysis. Systemic banking risk is measured as the tail be...