Prithwiraj Choudhury

Charting Dynamic Trajectories: Multinational Enterprises in India

In this article, we provide a synthesizing framework that we call the “dynamic trajectories” framework to study the evolution of multinational enterprises (MNEs) in host countries over time. We argue that a change in the policy environment in a host country presents an MNE with two sets of interrelated decisions. First, the MNE has to decide whether to enter, exit, or stay in the host country at the onset of each policy epoch; second, conditional on the first choice, it has to decide on its local responsiveness strategy at the onset of each policy epoch. India, which experienced two policy shocks — shutting down to MNEs in 1970 and then opening up again in 1991 — offers an interesting laboratory to explore the “dynamic trajectories” perspective. We collect and analyze a unique dataset of all entry and exit events for Fortune 50 and FTSE 50 firms (as of 1991) in India in the period from 1858 to 2013 and, additionally, we document detailed case studies of four MNEs (that arguably represent outliers in our sample).

Return Migration and Distributed R&D in Multinationals – A Study Using Micro Data

Is the phenomenon of multinational firms (MNCs) conducting distributed R&D across emerging markets related to the return migration of engineers and scientists from the U.S. to emerging markets? I hypothesize that local inventors at emerging market R&D centers of MNCs face constraints in securing resources from the headquarters for knowledge creation projects and that returnees can act as resource brokers. I then test for whether or not reporting to a returnee manager leads to higher patenting. I test this using hand-collected employment, travel, demographic and patent data for 1315 inventors at a Fortune 50 multinational R&D center in India. To account for endogenity and selection in measuring the impact of returnee managers, I consider new graduates, for whom manager assignment is plausibly random. I find that having a returnee manager leads to higher patenting. I also find support for the resource brokerage role of returnees - having a returnee manager leads to higher patenting but not higher headquarter co-patentees or patent citations back at the headquarters. In summary, this is one of the first empirical studies of return migration and multinationals using firm level micro data.

Seeking Resources or Seeking Knowledge? A Study of Mobility and Knowledge Creation Using Micro Data

I study the effect of inventor mobility on knowledge creation and make two significant departures from prior literature. In contrast to prior studies based on large patent datasets or surveys, I use employment, travel and demographic data for 1315 inventors at an emerging market R&D center of a Fortune 50 multinational. Also, the prior literature has focused on how mobility helps inventors access distant knowledge. In contrast I hypothesize that mobility could additionally help inventors secure resources centralized at a distant location. To test this and to account for endogeneity and selection, I consider inventors who could not travel because they got married/had children and match them to similar inventors without such constraints. I find that not being to travel leads to lower patenting over the next two years. I also find support for the resource seeking hypothesis - travel to the headquarters leads to higher patenting, however travel to non-headquarter R&D locations in Europe and Asia does not have the same effect. Given the centralization of resources at the headquarters for the MNC that I study, I argue that in this context mobility of inventors is related to securing resources for knowledge creation.

Sink or Swim: The Role of Workplace Context in Shaping Career Advancement and Human-Capital Development

We develop and test predictions on how early career challenges arising from the workplace context affect short- and long-term career advancement of individuals. Typically an organization’s decision to deploy a manager to one of several possible contexts is endogenous to unobservable factors, and selection makes it challenging to disentangle the effect of workplace context on individual career advancement. We work around this problem by studying an organization, the Indian Administrative Services, which deploys entry-level managers quasirandomly across India. We find that managers deployed to more challenging contexts early in their careers experience faster career advancement in the short term. We present suggestive evidence that this is because challenging contexts provide managers more opportunities to develop skills (“crucible experiences”), and a greater motivation to relocate out of the challenging context. We also find that managers deployed to a challenging context early in their careers continue t...

Innovation Outcomes in a Distributed Organization: Intrafirm Mobility and Access to Resources

Prior research has established a relation between intrafirm mobility and innovation outcomes at distributed organizations. The literature has also uniformly agreed on the mechanism underlying this relationship: the sharing of tacit knowledge and recombination of ideas that occurs because of intrafirm mobility. But a second mechanism may also be at work: intrafirm mobility might help distant employees secure access to resources for their innovative projects. Using unique data on travel, employment, and patenting for 1,315 inventors at the Indian research and development (R&D) center of a Fortune 50 multinational, I find that intrafirm mobility in the form of short-duration business trips from a distant R&D location to headquarters is positively related to higher subsequent patenting at the individual level. I also find mobility immediately prior to meetings at which R&D funds are most likely to be disbursed to be related to higher subsequent patenting. This study sheds new light on how intrafirm mobility a...

Privatization of Innovation: Evidence from India's State Owned Laboratories

Improving performance of state owned entities (SOEs) can have significant economic impact in countries like India, where SOEs comprise around 30% of aggregate industrial sales. Though the literature on SOE reform is focused on privatization, privatization often has its limits. We suggest an alternative policy prescription based on evidence from 42 Indian state owned labs with 12,500 employees. We posit that monetizing intellectual property (IP) and leveraging the private sector could help reform SOEs that have underutilized IP. From a base of negligible U.S. patents, the Indian labs collectively emerged as a leading emerging market patentee, licensing patents to multinationals. Also, technology commercialization did not adversely affect publication quality and quantity. This followed incentive policy reform and leadership change. We exploit exogeneity of the timing of leadership change (driven by rigid government rules) as the basis for identification. Unlike prior SOE reform studies, mostly focused on China, we document that in the Indian context, collaboration between the state and private sector formed the engine of SOE reform.

Do Managers Matter? A Natural Experiment from 42 R&D Labs in India

We exploit plausibly exogenous variation in the staggered entry of new managers into India’s 42 public R&D labs between 1994 and 2006 to study how alignment between the CEO and middle-level managers affects research productivity. We show that the introduction of new lab managers aligned with the national R&D reforms raised patenting and multinational licensing revenues by 58% and 75%, respectively, and scientist research productivity, including: a 16%, 10%, 11%, and 22% increase in h-indices, number of coauthors, publications, and citations per scientist, respectively. Using natural language processing techniques on the set of research abstracts produced among these scientists, we also find that overall mood and sentiment increased by 8.5% following the first managerial change. (JEL L22, L23, O32, O33)

Physical, Social, and Informational Barriers to Domestic Migration in India

In fast-growing large emerging markets like China and India, labor market inefficiency is palpable. Firms in high-growth sectors face labor shortages while a large proportion of the population continues to live in regions with low employment opportunities. This is a puzzle for neoclassical growth models which suggest that the relative homogeneity in technology, preferences, and institutions across provinces within a country should lead to within-country migration and towards allocative efficiency in the labor market.