Learn More
We develop a simple model that links the adoption of a productivity-enhancing technology to increased vertical integration and a less skilled workforce. We test the model’s key prediction using novel microdata on vehicle ownership patterns from the Economic Census during a period when computerized dispatching systems were first adopted by taxicab firms.(More)
Using the universe of patient transitions from inpatient hospital care to skilled nursing facilities and home health care in 2005, we show how integration eliminates task misallocation problems between organizations. We find that vertical integration allows hospitals to shift patient recovery tasks downstream to lower-cost organizations by discharging(More)
Diversification, Diseconomies of Scope and Vertical Contracting: Evidence from the Taxicab Industry Evan Rawley The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104, rawley@wharton.upenn.edu Timothy S. Simcoe Boston University, Boston, Massachusetts 02215, tsimcoe@bu.edu This paper studies how firms reorganize following(More)
This paper studies inherited agglomeration effects, which we define as human capital that managers acquire while working in an industry hub that may be transferred to a spinoff. We test for inherited agglomeration effects in the hedge fund industry and find that hedge fund managers who previously worked in New York and London outperform their peers by about(More)
We propose that higher skilled firms diversify in equilibrium even though managers exploit idiosyncratic performance shocks to time diversification moves. We formalize this intuition in a mistakefree equilibrium and test our predictions using a large panel dataset on the hedge fund industry 19772006. The results show that returns fall following new fund(More)
We use exogenous incentive variation to separate how convex incentives influence performance and risk-taking. In a hedge fund setting, we show that when managers fall below a threshold beyond which they earn performance fees, risk-taking increases and performance drops. Using predictions of non-monotonic risk-taking, we disentangle the shirking and(More)
Managerial incentives induce risk-taking as well as e ort. Theoretical research has long considered risk-taking a potential side e ect of incentives, but empirical investigation is limited. This paper uses exogenous variation in hedge fund manager's incentives to examine both performance and risk-taking. I nd, consistent with theory, that being farther(More)
Entrepreneurs often have prior experience at incumbent firms. We present a new mechanism by which prior employment can influence transitions into entrepreneurship. We propose that some employees divert effort toward unproductive activities to learn about their own fitness for alternative employment. Based on the results of this costly learning experience,(More)
This paper studies inherited agglomeration effects, how human capital that accrues to managers while working at a parent firm in an industry hub can be subsequently transferred to a spinoff. We test for inherited agglomeration effects in the context of the hedge fund industry and find that hedge fund managers who previously worked in New York and London(More)