The Spillover Effects of Health IT Investments on Regional Healthcare Costs

Authors: Hilal Atasoy, Pei-Yu Chen and Kartik K. Ganju

Publication: Management Science, Vol. 64, No. 6, 2018


Electronic health records (EHR) are often presumed to reduce the significant and accelerating healthcare costs in the United States. However, evidence on the relationship between EHR adoption and costs is mixed, leading to skepticism about the effectiveness of EHR in decreasing costs. We argue that simply looking at the hospital-level effects can be misleading because the benefits of EHR can go beyond the adopting hospital by creating regional spillovers via information and patient sharing. When patients move between hospitals, timely and high-quality records received at one hospital can affect the costs of care at another hospital. We provide evidence that although EHR adoption increases the costs of the adopting hospital, it has significant spillover effects by reducing the costs of neighboring hospitals. We further show that these spillovers are linked to information and patient sharing. Specifically, the spillovers are stronger when more hospitals in the region are in health information exchange networks and in the same integrated delivery systems, which can share information more easily. Furthermore, utilizing regional characteristics that can affect the extent of patient sharing such as urban versus rural areas, population density, average distance between hospitals, and hospital density, we find that locations with higher patient and hospital concentration experience stronger regional spillovers. Additionally, spillovers are stronger after the HITECH (Health Information Technology for Economic and Clinical Health) Act that increased EHR adoption and use. Overall, our findings suggest that we need to take into account externalities to understand the benefits of health IT investments and form policy decisions.

Read full article: Management Science

Published: 17 Oct 2017

E-Mail Interruptions and Individual Performance: Is There a Silver Lining?

Authors:  Shamel Addas and Alain Pinsonneault

Publication: MIS Quarterly, Vol. 42, No. 2, January 2018

Abstract: Interruption of work by e-mail and other communication technologies has become widespread and ubiquitous. However, our understanding of how such interruptions influence individual performance is limited. This paper distinguishes between two types of e-mail interruptions (incongruent and congruent) and draws upon action regulation theory and the computer-mediated communication literature to examine their direct and indirect effects on individual performance.

Two empirical studies of sales professionals were conducted spanning different time frames: a survey study with 365 respondents and a diary study with 212 respondents. The results were consistent across the two studies, showing a negative indirect effect of exposure to incongruent interruptions (interruptions containing information that is not relevant to primary activities) through subjective workload, and a positive indirect effect of exposure to congruent interruptions (interruptions containing information that is relevant to primary activities) through mindfulness.

The results differed across the two studies in terms of whether the effects were fully or partially mediated, and we discuss these differences using meta-inferences. Technology capabilities used during interruptions episodes also had significant effects: rehearsing (fine-tuning responses to incoming messages) and reprocessing (reexamining received messages) were positively related to mindfulness, parallel communication (engaging in multiple e-mail conversations simultaneously) and leaving messages in the inbox were positively related to subjective workload, and deleting messages was negatively related to subjective workload.

This study contributes to research by providing insights on the different paths that link e-mail interruptions to individual performance and by examining the effects of using capabilities of the interrupting technology (IT artifact) during interruptions episodes. It also extends the experimental tradition that focuses on isolated interruptions. By shifting the level of analysis from specific interruption events to overall exposure to interruptions over time and from the laboratory to the workplace, our study provides realism and ecological validity.

Read full article: MIS Quarterly

Published: 17 Oct 2017

Power Distance Belief, Power, and Charitable Giving

Authors:  Dahee Han, Ashok K. Lalwani and Adam Duhachek

Publication: Journal of Consumer Research, Vol. 44, No. 1, June 2017


Three studies examine the relation between power distance belief (PDB), the tendency to accept and expect inequalities in society; power, the control one has over valued resources; and charitable giving. Results suggest that the effect of PDB depends on the power held by the donor. In low-PDB contexts, people high (vs. low) in psychological power tend to be more self-focused (vs. other-focused), and this leads them to be less charitable. In high-PDB contexts, however, people high (vs. low) in psychological power tend to be more other-focused (vs. self-focused), and this leads them to be more charitable. The authors also explore several boundary conditions for these relationships and conclude with the implications of these findings.

Read full article: Journal of Consumer Research

Published: 17 Oct 2017

Illiquidity Premia in the Equity Options Market

Authors: Peter Christoffersen, Ruslan Goyenko, Kris Jacobs, Mehdi Karoui

Publication: Review of Financial Studies, Vol. 31, No. 3, March 2018


Standard option valuation models leave no room for option illiquidity premia. Yet we find the risk-adjusted return spread for illiquid over liquid equity options is 3:4% per day for at-the-money calls and 2:5% for at-the-money puts. These premia are computed using option illiquidity measures constructed from intraday effective spreads for a large panel of U.S. equities, and they are robust to different empirical implementations. Our findings are consistent with evidence that market makers in the equity options market hold large and risky net long positions, and positive illiquidity premia compensate them for the risks and costs of these positions.

Read full article: Review of Financial Studies

Published: 17 Oct 2017

Value is in the Eye of the Beholder: The Relative Valuation Roles of Earnings and Book Value in Merger Pricing

Author: MaryJane Rabier 

Publication: The Accounting Review, Vol. 93, No. 1, 2018, pp. 335-362


Gupta and Gerchek (2002) argue that different acquirers can arrive at different equity valuations for the same target depending on their strategic intent. A reason for acquirers' equity valuations to vary, holding target fundamentals constant, may be that individual acquirers place different weights on underlying fundamentals. I examine this possibility using Burgstahler and Dichev (1997)'s theoretical framework. They argue that the relative importance of earnings and book value depends on expected adaptation, which is the likelihood that the existing earnings generating process will be altered. Using restructuring costs to proxy for expected adaptation at the individual acquirer level, I find that the association between the target's earnings (book value) and acquirers' bid prices is decreasing (increasing) in expected adaptation, consistent with theoretical predictions. These findings are less pronounced during merger waves and intense bid competition for the target.

Read full article: The Accounting Review

Published: 28 Sep 2017

Acquisition Motives and the Distribution of Acquisition Performance

Author: MaryJane Rabier

Publication: Strategic Management Journal, Vol. 38, No. 13, 2017


Research summary:

I examine how acquisition motives relate to the distribution of post-acquisition performance. I argue that acquisitions motivated by operating synergies have the potential to experience greater gains than acquisitions driven by financial synergies but are harder to value and implement, making them more uncertain. Using SEC filings, conference calls and press releases to capture acquisition motives, I find that acquirers pursuing operating synergies are more likely to experience highly positive and highly negative long-term returns than acquirers pursuing financial synergies.

I also find that acquisition experience and geographic proximity to targets soften acquirers' extreme downside outcomes in operating synergy acquisitions. My theory and results suggest that approaches that emphasize average outcomes for acquirers and use industry classifications to capture acquisition motives may be incomplete.

Managerial summary: 

Managers engage in acquisitions for various reasons. In this study, I find that reasons related to operating synergies (e.g., revenue growth through new product offerings or cost savings through economies of scale) are more likely to result in extreme high and low performance outcomes for the acquiring firm compared to reasons related to financial synergies (e.g., diversification of cash flow streams).

In addition, I find that the acquirer's prior acquisition experience and the geographic proximity between the target and acquirer help soften the extreme low performance outcomes related to operating synergies. 

Read full article: Strategic Management Journal

Published: 28 Sep 2017

Monetizing Freemium Communities: Does Paying for Premium Increase Social Engagement?

Authors: Bapna, R., Ramaprasad , J., Umyarov , A.

Publication: MIS Quarterly, 42(3), 719-735


Making sustainable profits from a baseline zero price and motivating free consumers to convert to premium subscribers is a continuing challenge for all freemium communities. Prior research has causally established that social engagement (Oestreicher-Singer and Zalmanson 2013) and peer influence (Bapna and Umyarov 2015) are two important drivers of users converting to premium subscribers in such communities. In this paper, we flip the perspective of prior research and ask whether the decision to pay for premium subscription causes users to become more socially engaged. In the context of the music listening freemium social community, we establish, using a novel 41 month long panel dataset, a look-ahead propensity score matching (LA-PSM) procedure coupled with a difference-in-difference estimator of the treatment effect, that payment for premium leads to more social engagement. Specifically, we find that paying for premium leads to an increase in both content-related and community-related social engagement. Free users who convert to premium listen to 287.2% more songs, create 1.92% more playlists, exhibit a 2.01% increase in the number of forum posts made, and gain 15.77% more friends. Thus, premium subscribers create value not only for themselves by consuming more content, but also for the community and site by organizing more content and adding more friends, who are subsequently engaged by the social diffusion emerging from the focal user’s activities.

Read full abstract: MISQ, December 15, 2016 

Published: 11 Jan 2017

Measuring the Efficiency of Category-Level Sales Response to Promotions

Authors: Trivedi, M., Gauri, D.K., Yu, M. 

Publication: Management Science, Vol. 63, No. 10, October 2017  


Published: 6 Oct 2016


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