Rajshree Agarwal’s research interests focus on the implications of entrepreneurship and innovation for industry and firm evolution. Her recent projects examine the micro-foundations of macro phenomena, linking knowledge diffusion among firms, industries, and regions to the underlying mechanisms of employee entrepreneurship and mobility.
|The COVID-19 pandemic will lead companies to relocate infrastructure and employees away from dense urban locations. Disagree|
|In the wake of recent climate-related disasters and related events, such as the bankruptcy of PG&E, corporations are now planning for the increased operational risks and potential liabilities caused by climate change. Disagree||“Climate change-related warnings and environmental disasters have been around for more than 50 years with significant debate on if and what impact it has on economics and society. In light of this history, it is questionable whether one can make blanket statements on all corporations increasing attention to operational risks and liabilities based on one or two firms‘ fates.”|
|U.S. regulations have been rolled back in a number of areas, including emissions standards and clean water. Companies will decide to voluntarily adhere to rules that closely resemble the original standards. Disagree||“There will be a huge variation in firms’ responses.”|
The Business Roundtable’s new Statement on the Purpose of a Corporation indicates a shift away from shareholder value maximization as the sole purpose of the corporation and toward a broader view of value creation.
This shift will have material impact on the well-being of U.S. workers. Disagree
|“The statement presupposes an inherent conflict between shareholder value maximization and other stakeholders’ interests. Long-run profitable businesses ensure a win-win and a vertical alignment of all relevant stakeholders, so I see little difference between good practice in the past and the expressed interest.”|
|A hard Brexit will have a significant negative impact on many businesses, even if they do not have a U.K. or European presence. Agree||“Any institutional shock to business as usual, whether positive or negative, creates a negative short-term impact to businesses who operate in that environment. So firms who are doing business in the U.K. and Europe will be most affected, with spillovers for firms who have indirect connections. The longer-term impact is more open to question.”|
|China is no longer the most attractive growth opportunity for Western multinationals. Neither Agree nor Disagree||“It is not clear that China was ever the ‘most’ attractive opportunity across the board for all Western multinationals. It will remain a very attractive opportunity for some, but not all Western multinationals. It is all a question of where China fits into each firm’s business model, relative to alternative sourcing and selling options.”|
|In the next five years, the blockchain will have a transformative effect on finance in emerging markets. Disagree||“While long-term transformation will no doubt occur, new industries and technologies have a long gestation period. Blockchain [is] in the pre-firm and sales takeoff stages, and it will take more than five years for it to reach the ‘hockey stick’ inflection point and subsequent takeoff.”|
|In the absence of a carbon tax, industry self-regulation can help mitigate the worst fallout from climate change. Neither Agree nor Disagree|
|Amazon’s new $15 per hour minimum wage will force other companies to follow suit. Disagree||“By itself, Amazon lacks the ability to influence labor markets to this degree. Similar to Ford raising its ‘minimum wage’ in the early 20th century, Amazon will attract better talent at the higher price, but this does not mean it will set price for all firms. It cannot ‘force’ as a business organization. Only governments have a legal monopoly on force.”|
|Restrictions on skilled immigration will cause US firms to to shift more operations overseas. Strongly Agree||“This is very consistent with the law of supply and demand in a global market for human capital. And we already see evidence of this phenomenon in U.S. firm operations across the Canadian border.”|
|Uber has to develop self-driving cars in the next 10 years in order to remain viable. Strongly Disagree||“There are many strategic directions a firm can take to renew itself; narrowing the performance outcome to one particular option seems to be unduly restrictive of the potential innovative landscape.”|
|A trade war will be more disruptive to business than to consumers. Strongly Agree||“A trade war is going to impact both businesses and consumers — the immediate effect will likely be felt more in business-to-business transactions, but cumulatively, there will be a lasting impact on consumers.”|
|Concern over consumer privacy will fundamentally limit businesses’ ability to use big data. Agree||“Consumers differ in the value assigned to privacy; policies that ignore differences will result in fundamental limitations to business value creation.”|