Internal Capital, External Knowledge, and Random Draws: Three Drivers of Organizational Structure

This dissertation explores the complex interactions between organizational structure and the environment. In Chapter 1, I investigate the effect of financial development on the formation of European corporate groups. Since cross-country regressions are hard to interpret in a causal sense, we exploit exogenous industry measures to investigate a specific channel through which financial development may affect group affiliation: internal capital markets. Using a comprehensive firm-level dataset on European corporate groups in 15 countries, we find that countries

with less developed financial markets have a higher percentage of group affiliates in more capital intensive industries. This relationship is more pronounced for young and small firms and for affiliates of large and diversified groups. Our findings are consistent with the view that internal capital markets may, under some conditions, be more efficient than prevailing external markets, and that this may drive group affiliation even in developed economies. In Chapter 2, I bridge current streams of innovation research to explore the interplay between R&D, external knowledge, and organizational structure–three elements of a firm’s innovation strategy which we argue should logically be studied together. Using within-firm patent assignment patterns,

we develop a novel measure of structure for a large sample of American firms. We find that centralized firms invest more in research and patent more per R&D dollar than decentralized firms. Both types access technology via mergers and acquisitions, but their acquisitions differ in terms of frequency, size, and i\ntegration. Consistent with our framework, their sources of value creation differ: while centralized firms derive more value from internal R&D, decentralized firms rely more on external knowledge. We discuss how these findings should stimulate more integrative work on theories of innovation. In Chapter 3, I use novel data on 1,265 newly-public firms to show that innovative firms exposed to environments with lower M&A activity just after their initial public offering (IPO) adapt by engaging in fewer technological acquisitions and

more internal research. However, this adaptive response becomes inertial shortly after IPO and persists well into maturity. This study advances our understanding of how the environment shapes heterogeneity and capabilities through its impact on firm structure. I discuss how my results can help bridge inertial versus adaptive perspectives in the study of organizations, by

documenting an instance when the two interact.

Full of Hot Air? Three Examinations of Climate Change in the American Political Information Environment

Climate change is thought to be one of the most pressing environmental problems facing humanity. However, due in part to failures in political communication and how the issue has been historically defined in American politics, discussions of climate change remain gridlocked and polarized. In this dissertation, I explore how climate change has been historically constructed as a political issue, how conflicts between climate advocates and skeptics have been communicated, and what effects polarization has had on political communication, particularly on the communication of climate change to skeptical audiences. I use a variety of methodological tools to consider these questions, including evolutionary frame analysis, which uses textual data to show how issues are framed and constructed over time; Kullback-Leibler divergence content analysis, which allows for comparison of advocate and skeptical framing over time; and experimental framing methods to test how audiences react to and process different presentations of climate change. I identify six major portrayals of climate change from 1988 to 2012, but find that no single construction of the issue has dominated the public discourse defining the problem. In addition, the construction of climate change may be associated with changes in public political sentiment, such as greater pessimism about climate action when the electorate becomes more conservative. As the issue of climate change has become more polarized in American politics, one proposed causal pathway for the observed polarization is that advocate and skeptic framing of climate change focuses on different facets of the issue and ignores rival arguments, a practice known as “talking past.” However, I find no evidence of increased talking past in 25 years of popular newsmedia reporting on the issue, suggesting both that talking past has not driven public polarization or that polarization is occurring in venues outside of the mainstream public discourse, such as blogs. To examine how polarization affects political communication on climate change, I test the cognitive processing of a variety of messages and sources that promote action against climate change among Republican individuals. Rather than identifying frames that are powerful enough to overcome polarization, I find that Republicans exhibit telltale signs of motivated skepticism on the issue, that is, they reject framing that runs counter to their party line and political identity. This result suggests that polarization constrains political communication on polarized issues, overshadowing traditional message and source effects of framing and increasing the difficulty communicators experience in reaching skeptical audiences.