Social learning and analyst behavior
| Authors | Kumar, Rantala, Xu |
| Journal | Journal of Financial Economics |
| Year | 2022 |
| Type | Published Paper |
| Abstract | This study examines whether sell-side equity analysts engage in social learning in which their earnings forecasts for certain firms are influenced by the forecasts and outcomes of peer analysts associated with other firms in their respective portfolios. We find that analyst optimism is negatively correlated with recent forecast errors, by peers, on other firms in the analyst's portfolio. An analyst is also more likely to issue bold forecasts when peers recently issued similar forecasts for other portfolio firms. Analysts learn more from peers with similar personal characteristics. Overall, social learning benefits analysts and improves their forecast accuracy. |
| URL | https://www.sciencedirect.com/science/article/abs/pii/S0304405X21002774 |
| Tags | Archival Empirical | Productivity Spillovers |
Social learning and analyst behavior
| Authors | Kumar, Rantala, Xu |
| Journal | Journal of Financial Economics |
| Year | 2022 |
| Type | Published Paper |
| Abstract | This study examines whether sell-side equity analysts engage in "social learning" in which their earnings forecasts for certain firms are influenced by the forecasts and outcomes of "peer" analysts associated with other firms in their respective portfolios. We find that analyst optimism is negatively correlated with recent forecast errors, by peers, on other firms in the analyst's portfolio. An analyst is also more likely to issue "bold" forecasts when peers recently issued similar forecasts for other portfolio firms. Analysts learn more from peers with similar personal characteristics. Overall, social learning benefits analysts and improves their forecast accuracy. |
| Keywords | Sell-side equity analysts, social learning, bold forecasts, forecast accuracy |
| URL | https://doi.org/10.1016/j.jfineco.2021.06.011 |
| Tags | Archival Empirical | Asset Pricing, Trading Volume and Market Efficiency | Productivity Spillovers | Social Network Structure |
Entrepreneurial spillovers across coworkers
| Authors | Wallskog |
| Journal | Review of Financial Studies |
| Year | 2022 |
| Type | Published Paper |
| Abstract | Using large-scale administrative data, I track the employment and entrepreneurship of over forty million Americans and investigate entrepreneurial spillovers across coworkers, based on the idea that individuals who start their own firms learn institutional knowledge and entrepreneurial skills that they may teach others. I find that an individual whose current coworkers have more prior entrepreneurship experience is more likely to become an entrepreneur themself within the next five years, and these spillovers are strongest among workers with similar jobs and demographics. Furthermore, an individual is more likely to become a successful entrepreneur if those coworkers were themselves successful entrepreneurs. To quantify the role of these spillovers, I build a structural model of entrepreneurship and learning and estimate that the aggregate entrepreneurship rate would be 10% lower in the absence of learning. |
| Keywords | Spillovers, peer effect, entrepreneurship, social learning |
| URL | https://melaniewallskog.github.io/files/wallskog_jmp.pdf |
| Tags | Archival Empirical | Experimental / Survey-Based Empirical | Productivity Spillovers | Social Network Structure |
Entrepreneurial spillovers across coworkers
| Authors | Wallskog |
| Year | 2021 |
| Type | Working Paper |
| Abstract | Using large-scale administrative data, I track the employment and entrepreneurship of over forty million Americans and investigate entrepreneurial spillovers across coworkers, based on the idea that individuals who start their own firms learn institutional knowledge and entrepreneurial skills that they may teach others. I find that an individual whose current coworkers have more prior entrepreneurship experience is more likely to become an entrepreneur themself within the next five years, and these spillovers are strongest among workers with similar jobs and demographics. Furthermore, an individual is more likely to become a successful entrepreneur if those coworkers were themselves successful entrepreneurs. To quantify the role of these spillovers, I build a structural model of entrepreneurship and learning and estimate that the aggregate entrepreneurship rate would be 10% lower in the absence of learning. |
| URL | https://wallskog.su.domains/files/wallskog_jmp.pdf |
| Tags | Archival Empirical | Manager / Firm Behavior | Productivity Spillovers |
Information sharing and spillovers: Evidence from financial analysts
| Authors | Hwang, Liberti, Sturgess |
| Journal | Management Science |
| Year | 2019 |
| Type | Published Paper |
| Abstract | We study how information sharing within an organization affects individual performance. We look at situations in which the same analyst, while working at the same broker, covers multiple mergers and acquisitions (M&As), in particular the acquirer prior to the M&A and the merged firm thereafter. We find that earnings forecasts for the merged firm are significantly more accurate when the analyst has a colleague (working at the same broker) covering the target prior to the M&A. This holds particularly true if acquirer analysts and target analysts reside in the same locale, if they are part of a smaller team, and if the target analyst is of higher quality. Our findings highlight the importance of information spillovers on individual performance in knowledge-based industries. |
| URL | https://pubsonline.informs.org/doi/10.1287/mnsc.2017.2986 |
| Tags | Archival Empirical | Productivity Spillovers |
Innovating to invest: The role of basic education
| Authors | D'Acunto |
| Year | 2017 |
| Type | Working Paper |
| Abstract | Despite the focus of entrepreneurial finance research on high-tech innovation, more than 75% of innovations are new processes and products in traditional manufacturing. I show that basic education is a key determinant of innovation in traditional industries. I document that manufacturers in European regions with 10% more high school graduates file 15% more patents, and invest 4% more in capital expenditures. To absorb spatially correlated unobservables, I construct Virtual Regions that only exploit the variation in basic education across nearby locations. To address the possibility of reverse causality, I establish that regional basic education persists for decades, and I use the quasi-exogenous diffusion of the printing press after 1450 to instrument for historical basic education. The results offer a human capital channel for innovation that feeds into the innovation-to-investment literature in finance. |
| Keywords | Enterprise innovation, human capital investment, historical shocks, literacy distribution |
| URL | https://www.eief.it/files/2015/01/02-jmp-eief_dacunto.pdf |
| Tags | Archival Empirical | Evolutionary Finance | Experimental / Survey-Based Empirical | Manager / Firm Behavior | Productivity Spillovers |
Network effects on worker productivity
| Authors | Lindquist, Sauermann, Zenou |
| Year | 2015 |
| Type | Working Paper |
| Abstract | We use data from an in-house call center of a multi-national mobile network operator to study how co-worker productivity affects worker productivity via network effects. We also exploit data from a field experiment to analyze how exogenous changes in worker productivity due to on-the-job training affect co-worker productivity, including non-trained workers. We show that there are strong network effects in co-worker productivity. This effect is driven by conformist behavior. We also show that exposure to trained workers increases the productivity of non-trained workers. This effect works through strategic complementarities (knowledge spillovers). We demonstrate how our network model of worker productivity can be used to inform a variety of practical decisions faced by personnel managers including the design of optimal training policy. |
| Keywords | On-the-job training, peer effects, social networks, worker productivity |
| URL | https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2689150 |
| Tags | Experimental / Survey-Based Empirical | Productivity Spillovers |
Learning from peers: Knowledge transfer and sales force productivity growth
| Authors | Chan, Li, Pierce |
| Journal | Marketing Science |
| Year | 2014 |
| Type | Published Paper |
| Abstract | We study how peers impact worker productivity growth among salespeople in the cosmetics department of a department store. We first exploit a shift assignment policy that creates exogenous variation in salespersons' peers each week to identify and quantify sources of worker learning. We find that peer-based learning is more important than learning-by-doing for individuals, and there is no evidence of forgetting. Working with high-ability peers substantially increases the long-term productivity growth of new salespeople. We then examine possible mechanisms behind peer-based learning by exploiting the multiple colocated firms in our setting that sell products with different task difficulties and compensate their sales forces using either team-based or individual-based compensation systems. The variation in incentives to compete and cooperate within and across firm boundaries, combined with variation in sales difficulty for different product classes, allows us to suggest two mechanisms behind peer-based learning: observing successful sales techniques of peers and direct teaching. Our paper advocates the importance of learning from one another in the workplace and suggests that individual peer-based learning is a foundation of both organizational learning curves and knowledge spillovers across firms. |
| URL | https://www.jstor.org/stable/24544760 |
| Tags | Archival Empirical | Productivity Spillovers |
Superstar extinction
| Authors | Azoulay, Graff Zivin, Wang |
| Journal | Quarterly Journal of Economics |
| Year | 2010 |
| Type | Published Paper |
| Abstract | We estimate the magnitude of spillovers generated by 112 academic "superstars" who died prematurely and unexpectedly, thus providing an exogenous source of variation in the structure of their collaborators' coauthorship networks. Following the death of a superstar, we find that collaborators experience, on average, a lasting 5% to 8% decline in their quality-adjusted publication rates. By exploring interactions of the treatment effect with a variety of star, coauthor, and star/coauthor characteristics, we seek to adjudicate between plausible mechanisms that might explain this finding. Taken together, our results suggest that spillovers are circumscribed in idea space, but less so in physical or social space. In particular, superstar extinction reveals the boundaries of the scientific field to which the star contributes-the "invisible college". |
| URL | https://doi.org/10.1162/qjec.2010.125.2.549 |
| Tags | Archival Empirical | Productivity Spillovers |
Quality matters: The expulsion of professors and the consequences for PhD student outcomes in Nazi Germany
| Authors | Waldinger |
| Journal | Journal of Political Economy |
| Year | 2010 |
| Type | Published Paper |
| Abstract | I investigate the effect of faculty quality on PhD student outcomes. To address the endogeneity of faculty quality I use exogenous variation provided by the expulsion of mathematics professors in Nazi Germany. Faculty quality is a very important determinant of short- and long-run PhD student outcomes. A one-standard-deviation increase in faculty quality increases the probability of publishing the dissertation in a top journal by 13 percentage points, the probability of becoming a full professor by 10 percentage points, the probability of having positive lifetime citations by 16 percentage points, and the number of lifetime citations by 6.3. |
| URL | https://doi.org/10.1086/655976 |
| Tags | Archival Empirical | Productivity Spillovers |
Social connections and incentives in the workplace: Evidence from personnel data
| Authors | Bandeira, Barankay, Rasul |
| Journal | Econometrica |
| Year | 2009 |
| Type | Published Paper |
| Abstract | We present evidence on the effect of social connections between workers and managers on productivity in the workplace. To evaluate whether the existence of social connections is beneficial to the firm's overall performance, we explore how the effects of social connections vary with the strength of managerial incentives and worker's ability. To do so, we combine panel data on individual worker's productivity from personnel records with a natural field experiment in which we engineered an exogenous change in managerial incentives, from fixed wages to bonuses based on the average productivity of the workers managed. We find that when managers are paid fixed wages, they favor workers to whom they are socially connected irrespective of the worker's ability, but when they are paid performance bonuses, they target their effort toward high ability workers irrespective of whether they are socially connected to them or not. Although social connections increase the performance of connected workers, we find that favoring connected workers is detrimental for the firm's overall performance. |
| URL | https://doi.org/10.3982/ECTA6496 |
| Tags | Archival Empirical | Manager / Firm Behavior | Productivity Spillovers |
Social interactions and entrepreneurial activity
| Authors | Giannetti, Simonov |
| Journal | Journal of Economics and Management Strategy |
| Year | 2009 |
| Type | Published Paper |
| Abstract | We show that individuals residing in highly entrepreneurial neighborhoods are more likely to become entrepreneurs and invest more into their own businesses, even though their entrepreneurial profits are lower and their alternative job opportunities more attractive. Our results suggest that peer effects create nonpecuniary benefits from entrepreneurial activity and play an important role in the decision to become an entrepreneur. Alternative explanations, such as entry costs, social learning, and informal credit markets, are not supported by the data. |
| Keywords | Social interaction, peer effects, entrepreneurial activity, entrepreneurs, spillovers |
| URL | https://doi.org/10.1111/j.1530-9134.2009.00226.x |
| Tags | Archival Empirical | Productivity Spillovers | Social Network Structure |
Teaching students and teaching each other: The importance of peer learning for teachers
| Authors | Jackson, Bruegman |
| Journal | American Economic Review |
| Year | 2009 |
| Type | Published Paper |
| Abstract | Using longitudinal elementary school teacher and student data, we document that students have larger test score gains when their teachers experience improvements in the observable characteristics of their colleagues. Using within-school and within-teacher variation, we show that a teacher's students have larger achievement gains in math and reading when she has more effective colleagues (based on estimated value-added from an out-of-sample pre-period). Spillovers are strongest for less experienced teachers and persist over time, and historical peer quality explains away about 20 percent of the own-teacher effect, results that suggest peer learning. |
| URL | https://www.aeaweb.org/articles?id=10.1257/app.1.4.85 |
| Tags | Archival Empirical | Productivity Spillovers |
Peers at work
| Authors | Mas, Moretti |
| Journal | American Economic Review |
| Year | 2009 |
| Type | Published Paper |
| Abstract | We study peer effects in the workplace. Specifically, we investigate whether, how, and why the productivity of a worker depends on the productivity of coworkers in the same team. Using high-frequency data on worker productivity from a large supermarket chain, we find strong evidence of positive productivity spillovers from the introduction of highly productive personnel into a shift. Worker effort is positively related to the productivity of workers who see him, but not workers who do not see him. Additionally, workers respond more to the presence of coworkers with whom they frequently interact. We conclude that social pressure can partially internalize free-riding externalities that are built into many workplaces. |
| URL | https://www.aeaweb.org/articles?id=10.1257/aer.99.1.112 |
| Tags | Archival Empirical | Productivity Spillovers |
Clean evidence on peer effects
| Authors | Falk, Ichino |
| Journal | Journal of Labor Economics |
| Year | 2006 |
| Type | Published Paper |
| Abstract | We study subjects who were asked to fill letters into envelopes with a remuneration independent of output. In the "pair" treatment, two subjects worked at the same time in the same room, and peer effects were possible. In the "single" treatment, subjects worked alone, and peer effects were ruled out. We find evidence of peer effects in the pair treatment because the standard deviations of output are smaller within pairs than between pairs. Moreover, average output is higher in the pair treatment: thus, peer effects raise productivity. Finally, low-productivity workers are the most sensitive to the behavior of peers. |
| URL | https://doi.org/10.1086/497818 |
| Tags | Archival Empirical | Manager / Firm Behavior | Productivity Spillovers |