Person: Blake, Daniel J.
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Daniel J.
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Blake
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IE University
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IE Business School
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Strategy
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Publication Managing Policy Reversals: Consequences for Firm Performance(Institute for Operations Research and Management Sciences, 2019-05-14) Jandhyala, Srividya; Blake, Daniel J.; https://ror.org/02jjdwm75The recent revival of populism and nationalism across many parts of the world threatens to unravel the market-oriented reforms of the previous era. We examine the impact of the reversal of a previously adopted market-expanding policy on organizational performance. We argue that these policy reversals are contested; affected firms undertake a broad range of political and nonmarket activities to alter the implementation of the policy and buffer themselves from adverse consequences. However, these activities can increase policy uncertainty while making new demands on management, leading to diminished investment and a reallocation of finite managerial resources. The result is that firm performance on operational parameters suffers, including in locations that are not directly affected by the policy reversal. To empirically isolate this effect, we exploit an unexpected policy reversal in the context of telecommunications firms in India. Through an example caselet, we first outline the political and nonmarket activities of one firm affected by the unexpected policy reversal. We then empirically examine the performance of affected and unaffected telecommunication firms using a difference-in-differences approach to provide support for our arguments. The online appendix is available at https://doi.org/10.1287/stsc.2019.0083.Publication The Conditional Nature of Political Risk: How Home Institutions Influence the Location of Foreign Direct Investment(Wiley, 2018-03-14) Beazer, Quintin; Blake, Daniel J.; Spanish Ministry of Economics and Competitiveness; https://ror.org/02jjdwm75What determines whether countries' institutions attract or deter investment? Although existing theories predict that multinational enterprises (MNEs) avoid locations where institutions cannot constrain public and private actors' opportunistic behavior, we argue host institutions' attractiveness depends on firms' home environment. Home country institutions shape firms' practices and capabilities, thus helping to determine the environments that firms are best prepared to face abroad. We test our predictions using multiple data sets at different levels of analysis: firm-level data on MNEs' foreign subsidiaries, data on bilateral foreign direct investment (FDI) positions, and longitudinal data on bilateral FDI flows. We find that states with independent judiciaries are particularly attractive to investment from countries also possessing independent courts. Similarly, countries with low judicial independence disproportionately send FDI to countries lacking independent judiciaries. These findings' implications challenge conventional wisdom: “Good” institutions may not attract all investors, and “bad” institutions may not always deter, as current research suggests.Publication My kind of people: Political polarization, ideology and firm location(John Wiley and Sons Ltd, 2024) Barber, Benjamin; Blake, Daniel J.; Agencia Estatal de Investigación; https://ror.org/02jjdwm75Research Summary: With increased political polarization,Americans are displaying more animus across,and affinity within,ideological identity groups. We argue this dynamic incentivizes firms to minimize ideological misalignments across their workforce by locating new establishments in areas that are ideologically proximate to their current operations. We further argue that the desire to minimize ideological distance to new establishments is stronger in knowledge-intensive industries and young organizations. We find support for these arguments through the analysis of over 220,000 new establishment openings from 2009 to 2014. Critically,we find the effect of ideological distance on location is stronger when societal polarization is high. Our theory,and findings,contribute to several literatures and advance our understanding of the impact of polarization on strategy. Managerial Summary: Being a liberal or a conservative is central to many Americans' identity. As political polarization rises,individuals increasingly trust and favor others who share their ideological identity,while distrusting and avoiding those that do not. This study investigates how these societal trends affect where firms choose to locate new facilities. Because social ties and trust across workers support collaboration,resource-sharing and organizational performance,we argue that managers will seek ideological alignment within their firms by locating new establishments in areas that are ideologically proximate to existing operations. Analysis of over 220,000 new establishment openings from 2009 to 2014 supports this contention,and shows that the tendency to avoid ideologically distant locations is stronger when societal polarization is higher. © 2023 The Authors. Strategic Management Journal published by John Wiley & Sons Ltd.Publication Populist Syndrome and Nonmarket Strategy(John Wiley and Sons Inc, 2024) Markus, Stanislav; Martínez Suárez, Julio; Blake, Daniel J.; https://ror.org/02jjdwm75Although recognized as a defining feature of the current political era,populism and its implications for non-market strategy remain undertheorized. We offer a framework that (a) conceptualizes populism and its progression over time; (b) outlines the risks populism generates for firms; and (c) theorizes effective nonmarket strategies under populism. Our framework anchors the political risk profile of populism in three interdependent elements: anti-establishment ideology,de-institutionalization,and short-term policy bias. These elements jointly shape the policymaking dynamics and institutional risks for firms under populism. Our analysis shows how firms can calibrate two nonmarket strategies – political ties and corporate social responsibility – to mitigate populism-related risks. We specify how particular configurations of political ties and CSR activities,aimed at the populist leadership,bureaucrats,political opposition,and societal stakeholders,minimize risk under populism. Further,we theorize how the effectiveness of specific attributes of political ties and CSR – namely their relative covertness (more vs. less concealed) and their relative focus (narrowly vs. widely targeted) – varies as a function of firm type (insiders vs. outsiders) and the probability of populist regime collapse. Finally,we address how motivated reasoning may bias firms' assessments of regime fragility and resulting strategy choices. © 2022 The Authors. Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd.Publication The organizational implications of Brexit(Springer, 2019-03-19) Moschieri, Caterina; Blake, Daniel J.; Fundación Ramón Areces; https://ror.org/02jjdwm75This point-of-view article examines the organizational implications of the UK’s exit from the European Union (Brexit). We identify the effects of Brexit on firms’ transaction costs in cross-border trade within Europe and highlight the importance of EU residency to secure licenses to operate. We also address how access to skilled labor may be affected by rising restrictions to immigration. Finally,we discuss the possible implications of Brexit for the organizational design of British firms and foreign firms operating in the UK. © 2019,The Author(s).Publication Risk Is Relative: Heterogeneous Responses to Institutional Risks for Foreign Investment(Oxford University Press, 2021) Beazer, Quintin; Blake, Daniel J.; https://ror.org/02jjdwm75Are economic actors equally sensitive to institutional conditions? While existing research recognizes that institutions can have varying effects on actors' interests,the implicit assumption is that actors are homogeneous in how sensitive they are to their institutional environment. We investigate this assumption in the context of foreign direct investment,arguing that actors from countries with weaker institutions will be less affected by information about host country institutional conditions-both good and bad. We test this argument using survey data from a diverse group of managers-in-training at an international business school. We find that when asked to evaluate a potential foreign investment location,respondents from developing countries are significantly less sensitive to information about the host country's courts than their counterparts from developed economies. In contrast,we find that economic actors from both developed and developing countries respond similarly to information about the stability of economic policies. The findings suggest that sensitivity to the risks and safeguards of certain institutional conditions vary systematically across actors,depending on both the home environment to which economic actors have been exposed and the type of host institution. © 2021 The Author. Published by Oxford University Press on behalf of the International Studies Association.