Guest Speaker Discusses Institutional Barriers and Industry Dynamics at Lally School Seminar

The relationship of institutional barriers and industry dynamics was the topic of a recent enterprise management and organization seminar held at the Rensselaer Lally School. The session was led by Dr. Brian Wu, assistant professor of strategy, from the Ross School of Business at the University of Michigan.

Mr. Wu’s study, written with colleague Sea-Jin Chang of the NUS Business School in Singapore, demonstrates how new entrants exhibit higher productivity but also higher exit hazard than incumbents in post-liberalization China.

According to this study, the seemingly paradoxical relationship is attributable to institutional barriers, and is defined as the hindrance in the institutional environment that prevents market selection forces to function. As a result, new entrants require higher productivity to compensate for those institutional barriers, which in turn implies a higher exit hazard after controlling for productivity.

The study’s empirical findings offer support for this argument and further show that the differences in productivity and exit hazard between new entrants and incumbents become smaller where and when institutional barriers recede. This highlights the importance of institutional factors in shaping industry evolution.

Dr. Wu received his B.S. from Tsinghua University in China, M.S. from the National University of Singapore, and Ph.D. from the Wharton School at the University of Pennsylvania.

Dr. Wu studies the interactions of firm capabilities, corporate strategy, and industry evolution. His research addresses issues such as market entry, corporate diversification, firm innovation, and entrepreneurship. His work has been published or is forthcoming in Management Science and Strategic Management Journal.

To read Dr. Wu’s full paper click here.

For more photos from this event, click here.

Published: November 9, 2012

Contact: Julie K. Tracy
Phone: (518) 276-3053
E-mail: tracyj3@rpi.edu