JOB MARKET PAPER
1. Xuege C. Lu. “Jobs at Odds: Exploration Premium in Talent Acquisition” [Full Paper]
Presented at Wharton People and Organizations Conference (Fall 2021, Virtual); Non-Market Strategy Research Community Doctoral Conference (Summer 2021, Virtual); Cornell Johnson M&O Research Camp (Summer 2021, Virtual)
I develop a theory to explain why firms pay what I call an exploration premium for hiring. Talent acquisition can facilitate firm exploration, but there are structural challenges to firms hiring for this purpose. To attract people who can grow firms in new or different directions, firms may need to offer higher wages to (1) compensate for their industry affiliation as a categorical constraint and (2) overcome frictions associated with hiring across industries. Analyses of more than 14 million online job posts support my theory of talent acquisition for corporate sustainability: firms in environmentally sensitive (or “brown”) industries are found to offer higher wages for sustainability-related (or “green”) jobs than firms in other industries for almost identical jobs; this wage premium decreases with the rising demand for green jobs within a given brown industry over time, and when ideological conflicts or career-related risks are mitigated. Supplemental analyses using survey data, employee online reviews, and field-level placement records render further support for the mechanisms. These findings bring an intriguing paradox to light: despite firms in brown industries having the most urgent need to adopt sustainable practices, hiring people capable of delivering such changes is a challenge and can be costly. Although firm-specific efforts that alleviate jobseekers’ ideological and career-related concerns reduce the exploration premium at hiring, structural barriers are salient as firms attempt to attract people who are inherently different.
Keywords: Talent acquisition, strategic renewal, human capital, corporate sustainability, environmental-sensitive industries.
MANUSCRIPTS UNDER REVIEW
2. Xuege C. Lu, Shipeng Yan, & Lisha Liu. “Can Disclosure-Based Interventions Drive Pro-Environmental Changes in Emerging Markets? Evidence from China’s Green Credit Initiative 2007-2016” (Invited for Revise and Resubmit at Organization Science)
Winner, Best Paper Award at 2019’ Ivey/ARCS Ph.D. Sustainability Academy
Winner, Best Paper Award at 2019’ ASAC Annual Conference for Social Responsibility Division
Winner, Jeffrey Sean Lehman Fund (2018/2019) of Cornell University's East Asia Studies Program
Presented at EGOS Sub-Theme Commensuration and Sustainability (Summer 2021, Virtual); SMS Annual Conference (Fall 2020, Virtual); ARCS Seminar Series (Fall 2020, Virtual); ASAC Annual Conference (Spring 2019, St. Catherine’s)
We argue that the standardized metrics embedded in disclosure-based interventions may prompt changes in emerging markets. We propose two mechanisms by which standardized metrics facilitate change in the context of environmental governance. First, they present a learning opportunity for organizations to integrate knowledge on how to assess environmental risks (“learning”). Second, they enable peer-wise comparison by intensifying competitive pressures for the improvement of environmental performance (“comparing”). We find support to our theory in one of the world’s largest emerging markets and its nationwide disclosure mandate in the banking sector: China’s Green Credit Initiative (GCI). Using a difference-in-differences design, we find that major Chinese banks treated by the GCI become less likely to lend to polluting firms where environmental risks and peer competition are high, but this effect wanes over time and can be limiting among larger banks with a lack of private ownership.
Keywords: Information disclosure, environmental change, emerging markets, sustainable finance, commensuration.
3. Xuege C. Lu. “Should Firms Accelerate Product Development During Market Emergence?” (Invited for Reject & Resubmit at Strategy Science)
Winner, 2020' Innovation, Entrepreneurship, and Technology Research Grant at Cornell University
Presented at AOM Annual Conference (Summer 2021, Virtual)
This study challenges the notion that speeding products to market are beneficial by examining conditions under which accelerating product development as a strategy can be suboptimal. I argue that the extent to which acceleration enhances market evaluation is contingent upon (1) whether the product aligns with or deviates from market convention, and (2) the average market intensity on product development; both contingencies should be especially salient for new entrants during market emergence. Using a uniquely detailed dataset on the EnergyStar program of LED lightbulbs from 2010 to 2017, I find that although incumbent firms benefit from frequent product adaptation, new entrants may suffer from adopting such a strategy. To avoid being discounted by the market audience, new entrants should decelerate when introducing unconventional products, and resist the temptation to rush when peer pressure for speed is strong.
Keywords: Product renewal, speed-to-market, experimentation, nascent industry, entrepreneurial strategy.
WORKS IN PROGRESS
4. Xuege C. Lu & Glen Dowell. “Game of Transparency: The Role of Local Communities in Corporate Environmental Disclosure Strategy” (In preparation for submission to Strategic Management Journal)
Winner, Best Paper Award at 2019’ ASAC Annual Conference for Organization Theory Division
Presented at SMS Special Conference (Summer 2019, Frankfurt); AOM Annual Conference (Summer 2019, Boston); ASAC Annual Conference (Spring 2019, St. Catherine’s); ARCS Annual Conference (Summer 2018, Boston); Trans-Atlantic Doctoral Conference (Spring 2018, London Business School); Strategy and Business Environment Conference (Spring 2018, University of Pennsylvania)
We argue that firms are more forthcoming where communities have experienced more damages, but less so if they are themselves responsible for more such damages. The presence of social movement organizations (SMOs) positively catalyzes the effect of damages on disclosure. Using an empirical context of hydraulic fracturing (or “fracking”) in three states of the U.S. around the 2010s, we find support in our theory. Fracking disclosure is more active if a community has been exposed to more fracking spills, but less so if a firm has contributed to more spills. As environmental activism becomes stronger, firms are more likely to disclose if there have been many spills in the focal community, or if the focal firm is responsible for many such spills.
5. Xuege C. Lu* & Heeyon Kim*. “Old Wine in New Bottles? Gatekeepers, Domain Originality, and the Interdomain Adaptation of Ideas” (*Equal authorship; In preparation for submission to Organization Science)
Winner, 2021' Innovation, Entrepreneurship, and Technology Research Grant at Cornell University
Presented at SMS Annual Conference (Fall 2021, Toronto); AOM Annual Conference (Summer 2021, Virtual); EGOS Sub-Theme Generating and Recognizing New Ideas (Summer 2021, Virtual); Cornell’s Innovation, Entrepreneurship, and Technology Workshop Series (Winter 2021, Virtual)
We provide a novel explanation of why gatekeepers disfavor ideas that originate from external domains. While the prior studies have mostly attributed this phenomenon to the evaluation barriers faced by gatekeepers, we have a limited understanding of why such disfavor persists in the absence of evaluation barriers. We argue that since externally originated ideas could taint the focal domain as imitative, gatekeepers disfavor them to protect the originality of the focal domain. We examine this argument in the context of the Broadway theatrical domain, where the Tony Awards Administration Committee and the Nomination Committee collectively serve as Broadway’s key gatekeeper. Leveraging a rule change in 2002—which allows us to observe the preferences of the Committee—we test our hypotheses on over 800 Broadway shows from 1986 to 2015. We find that after the change, Broadway shows based on historical repertoires from external domains are associated with a decreased likelihood of Tony Award nominations—an association that is stronger among ideas adapted from competing domains and shows eligible for more prestigious award categories. We advance the theory on gatekeepers as strategic agents by showing how their intention to protect the domain’s originality may advance rather than impede the generative process of innovation.
Keywords: The creation of new ideas, exploratory search, originality, status competition, inter-domain adaptations.
6. Xuege C. Lu, Letian Zhang, & Mukti Khaire. “Good Fences Make Good Neighbors: The Symbiotic Relationship between Broadway and Off-Broadway” (In preparation for submission to Administrative Science Quarterly)
Presented at AOM Annual Conference (Summer 2019, Boston)
We challenge the monolithic view on the binding role of boundary and highlight its enabling effect on inter-domain collaboration. We argue that boundary enables collaboration by (1) deterring the need for identity signaling, and (2) creating demand for resource reciprocity. We use mix-methods to exemplify our theory in the context of the 1950s-2010s Broadway and off-Broadway theatres.
7. Xuege C. Lu. “The Effect of Firm Expansion in Sustainable Business on Incumbent Product Evaluation: Evidence from the US Lightbulb Industry 2006-2015” (Dissertation Chapter)
Presented at AOM Annual Conference (Summer 2021, Virtual); ARCS Annual Conference (Summer 2021, Virtual)
I argue that prosocial signaling has a stronger effect on well-known firms compared to their less-known counterparts, especially when quality perception on incumbent products is low. Using the empirical context of the US lightbulb market, I find strong support that salient prosocial signals improve rating on traditional lightbulbs when firms expand their business into energy-saving lightbulbs; this is especially true for brick-or-mortar retailers and when prior product ratings are poor.
8. Xuege C. Lu*, Hui Sun* & Ying Li*. “Status Signals and Attention Redistribution” (*Equal authorship; Data Analysis)
Using a longitudinal dataset on the weekly Broadway ticket sales during the Tony Awards seasons, we find that when award-givers deviate from the taste of the lay audience by consecrating shows that achieve poor commercial success, they redirect the audience attention to the undervalued, which subsequently increases the collective welfare across all shows in the same season.