Entrepreneurship & Innovation

Measuring the welfare impact of new product introductions is a long-standing challenge for economists. In this study, we make progress on this problem by leveraging the informational efficiency of equity markets and a scalable consumer demand model. We construct a novel database of new product announcements covering 20 years ( 2002 - 2021 ) and use stock market reactions to estimate the profits that these new products generate for the inventor firms.

How does framing strategy around competition versus collaboration affect employee idea generation? We conduct a field experiment with 317 employees across 15 ventures in Latin America to assess the causal impact of strategic framing on employee contributions. Employees were randomly assigned to view either a competitively or collaboratively framed version of their firm's strategy statement. Those in the competitive framing condition generate approximately 14% fewer ideas and report lower psychological safety.

Screening human capital based on signals such as job applications or entrepreneurial pitches is crucial for organizations. Signals are often informative insofar as they require differential knowledge and effort to produce. Generative AI (GAI) complicates screening by lowering the cost of producing impressive signals. We model the informational effects of GAI, showing that applicants' access to GAI can increase—but also decrease—an evaluator's screening mistakes. This result depends on how GAI affects experts' signals compared to non-experts'.

Organizations emphasize specific production practices to deal with authenticity pressures, but the practices that signal authenticity to audiences must be continually adapted when production environments are unstable. Changes in the environment can make production practices suddenly infeasible, compelling organizations to perform in different ways the highly visible practices that audiences have come to associate with authenticity.

Entering new markets is crucial for technology startups to scale, yet these ventures often face high uncertainty about demand in these markets. This study examines how the composition of initial users shapes startups’ new market growth amid such uncertainty. It theorizes that startups face a learning tradeoff when targeting a foreign market: Local initial users, who are more familiar to the startups, provide clearer signals due to shared language and norms; however, more representative foreign users provide more transferable insights about the target market.

Strategic fit is intrinsic to firm performance, but it is difficult to develop and maintain both external fit to a firm's environment, and internal fit—an alignment between firm objectives and activities. In this paper, we examine how scaling entrepreneurial firms develop strategic fit. We theorize that: 1) entrepreneurs at scaling firms are experienced in developing external, product-market fit, yet inexperienced in developing internal fit; 2) entrepreneurs can use firm strategy to create heuristics and assess the internal fit of novel opportunities.

Entrepreneurs form strategy under high uncertainty, often relying on either reasoning-oriented approaches that prioritize analysis ahead of decisions or action-oriented approaches that emphasize learning through execution. Yet when and why entrepreneurs lean toward one approach over the other remains under-examined. This study theorizes that entrepreneurs' perceived cost of mistakes shapes this choice.