Toby E. Stuart’s research while affiliated with University of California, Berkeley and other places

Research Summary Thousands of acquisitions of technology companies result in the de facto hiring of myriad individuals into new employers every year. We analyze the effects of such deals on acquired employee retention relative to a matched sample of directly hired employees joining the same acquirers in the same year. In a dataset with all acquisitions of VC-backed companies in the previous two decades paired to over 30 million resumes, we find that acquired employees turnover at a much higher rate than matched, hired employees. Importantly, this difference in turnover rates is larger for acquired employees in higher job ranks and with advanced degrees. Likewise, we show that the post-acquisition departure rate is highest for acquired employees in critical executive, technical, business development and sales roles. Managerial Summary Acquisitions of venture-backed tech-companies occur for many strategic reasons, including the acquisition of key managerial and technical human talent. The retention of acquired talent is thus an important consideration for the value of the acquisition. Through a dataset of over 30 million resumes, we examine the turnover rates of employees acquired through technology acquisitions in the previous two decades, comparing these acquired employees to their similar, organically hired counterparts. In this comparison, we find that acquired employees are more likely to turnover in general. Importantly, the higher turnover rate of acquired employees increases with seniority and education attainment, and is the highest in critical executive, technical, business development and sales roles.

We show that fraudulent firms allocate resources differently than honest companies. Resources obtained through fraudulent means are likely to be viewed as unearned gains and are less likely to be invested in productive activities, such as recruiting talent. We posit that honest and fraudulent companies also invest in different types of innovation: honest firms pursue technically significant innovations, while fraudulent companies are likely to make smaller investments in less challenging inventive opportunities that contribute to the appearance rather than the substance of innovation. We test these predictions in a longitudinal dataset tracking the personnel recruitment and patenting activities of 467 Chinese high technology firms, all of which applied for state-funded innovation grants. We identify fraud by comparing two sets of financial books prepared by each company in the data in the same fiscal year, which are legally required to be identical but are discrepant in over 50 percent of cases, in a direction that benefits the firm. We find that relative to honest companies, fraudulent firms are more likely to receive state grants and are less likely to recruit new employees or produce important inventions in the post-grant period.

Who are the neighbors of those who attain high status, and what is their fate in the wake of another actor’s status elevation? In this essay, we consider the consequences of an individual’s change in status for proximate individuals and domains. Particularly, we identify two, potentially simultaneous shifts in resources: a concentration of local recognition around high-status individuals and their immediate neighbors, and an overall elevation of recognition to the domain. We identify conditions in which within-domain or between-domain reallocation will occur, and we outline opportunities for future research.

We investigate the effect of a status-enhancing prize on the attention that a recipient’s “neighbors” subsequently receive. Do neighbors—individuals who work in economic, intellectual, or artistic domains that are proximate to prize winners—bask in the reflected glory of the ascendant actor and therefore gain as well? Or does competition for attention ensue, attenuating the recognition neighbors would otherwise have garnered? We study the spillover effects of status shocks using life sciences research articles published from 1984 through 2003. Exploiting expert-assigned article keywords, we identify papers that are topically related to publications of future appointees to the prestigious Howard Hughes Medical Institute (HHMI). In difference-in-difference specifications, we find that these scientific neighbor articles experience substantial declines in citation rates after HHMI appointments are announced. That is, neighboring articles attract less attention when authors of papers near them receive a prestigious prize. This pattern reflects more than the trivial transfer of attention from non-winners to winners: once prizes are announced, actors cede scientific territory to prize winners and pursue other opportunities. These negative spillover effects are moderated or even reversed by scientists’ social connections and by the novelty and stature of scientific domains.

It is hard to imagine a more significant topic in today's economy than “interorganizational technology”. The business press is laden with reports of technology‐driven strategic partnerships and corporate combinations, the diffusion of commerce and other technology‐based initiatives throughout the corporate community, the growth in venture capital dispersions to high tech startups, and the waging of intercorporate intellectual property disputes. These phenomena are inherently about interorganizational technology; they relate to the structure of intercorporate relations in technology‐based industries, or to the influence of supra‐organizational structures on the evolution of technology.

Actors and associates often match on a few dimensions that matter most for the relationship at hand. In so doing, they are exposed to unanticipated social influences because counterparts have broader attitudes and preferences than would-be contacts considered when they first chose to pair. The authors label as “partially deliberate” social matching that occurs on a small set of attributes, and they present empirical methods for identifying causal social influence effects when relationships follow this generative logic. A data set tracking the training and professional activities of academic biomedical scientists is used to show that young scientists adopt their advisers’ orientations toward commercial science as evidenced by adviser-to-advisee transmission of patenting behavior. The authors demonstrate this in twostage models that account for the endogeneity of matching, using both inverse probability of treatment weights and an instrumental variables approach. They also draw on qualitative methods to support a causal interpretation. Overall, they present a theory and a triangulation of methods to establish evidence of social influence when tie formation is partially deliberate.

Research summary: We document the extent of fraudulent reporting among 467 private Chinese technology companies. Comparing the financial statements concurrently submitted to two different state agencies, we demonstrate a systematic gap in reported profit figures in the two sets of books. We find: (1) more than half the sampled companies report incentive-compatible, materially discrepant profit numbers to the two agencies; (2) politically connected companies are approximately 18percent more likely to commit fraud and those with venture capital backing are 19percent more likely to do so; and (3) it pays to cheat. We estimate that companies who "cook" their books have considerably higher odds of receiving an innovation grant. Especially given its prevalence, we conclude that fraud can be a source of performance differential for emerging market companies. Managerial summary: We document that more than half of a sample of 467 private, Chinese technology companies engage in fraudulent financial reporting. By comparing the financial statements companies concurrently submitted to two different state agencies, we demonstrate a systematic gap in reported profit figures in the two sets of books. Relative to the companies without these attributes, we find that politically connected companies are approximately 18percent more likely to commit fraud and those with venture capital backing are 19percent more likely to do so. Furthermore, we show that it pays to cheat. We estimate that companies who "cook" their books have considerably higher odds of receiving a government-sponsored innovation grant. Therefore, fraud can be a source of performance differential for emerging market companies.

This paper extends niche theory to develop an intraorganizational conceptualization of the niche that is grounded in the activities of organizational members. We construe niches as positions in a mapping of individuals to formal and informal activities within organizations. We posit that positional characteristics in this activity-based system are critical determinants of members' access to information and relationships-two of the vital resources for advancement in organizations. Because activities are difficult to observe, we propose a novel empirical strategy to depict niches: we exploit a census of memberships in electronic mailing lists. We assess three niche dimensions-competitive crowding, status, and diversity-and show that these attributes affect the allocation of rewards to employees. Propositions are tested in two empirical settings: an information services firm and the R and D division of a biopharmaceutical company. Results indicate that people in competitively crowded niches had lower levels of attainment, whereas those in high status and diverse niches enjoyed higher attainment levels. We conclude with a discussion of email distribution lists as a tool for organizational research.