Where do Good Research Ideas Come From?

PhD seminar, IIM-A, 2016

Lilac NachumBaruch College, City University New York

A Theory of the Interesting:Interesting Defined

• In ‘wide circulation’

A Theory of the Interesting: What is Interesting?

Theoretically?• Not routine (not taken-for-

granted)• Not trivial• Not obvious.

Practically?• Has utility• Theory utility?• Explains the world, has

practical consequences:• Answers for the ‘so

what?’ ‘Why should we care?’ ‘What is it good for?’ questions.

What is Interesting?Types of Interesting (index)

• Characterization of a single phenomenon– Heterogeneity – elements comprising and

their interrelationships– Generalization – across contexts and over

time (stability)• Relationships among multiple phenomena

– Co-existence– Co-variations.

So What is Interesting?Some examples

• Negation of an accepted wisdom• Areas in which there is no consensus• Assumptions that are sensitive to context, to

time – Negation/re-examination of the ‘traditional view’.

Crossing Boundaries:The Medici Effect

• Moving (trivial) knowledge across disciplinary boundaries

• The Intersection as a place of innovation, creativity in the ideas space

• Connect separated worlds in a meaningful way

• The challenge; the rewards.

The Theory of the Interesting meets the Medici Effect?

• ‘Propositions are interesting or uninteresting only in relation to the assumption-ground of some audience. …assumption about the topic is conditioned by their [the audience] intellectual specialty or discipline.’ Davis, p. 328-9

• The Medici Effect – the same idea; different audiences.

Hymer Theory of International Business (1960/1976)

• International business theory before Hymer• Hymer contribution:• Search for higher return on intangible assets

whose return is higher via investment than export trade versus FDI

• Better utilization of intangible assets across borders internally [within the firm] than via the market FDI versus licensing.

Hymer theory of International Business to the Test

The ‘test of the interesting’: ‘wide circulation’• Theoretically:• Assumptions challenged/negated?• Cross-border activity as a financial transaction• Homogenous firms• Activities via the market or the firm• Practically – what is it good for • Theories combined?• Industrial organization, Coase theory of the firm.

ILLUSTRATION:MNE Location Choice

The Study of Strategic Choices

OutcomeChoiceDrivers of Choice

Descriptive Normative

Single choice

vs overall

Level of

choice

Level of Analyses

The Study of MNEs’ Location Choices

OutcomeChoiceDrivers

of Choice:Exogenous

Endogenous

Descriptive

Normative

Level of AnalysesSingle choice

vs overall

Level of

choice

My Contributions

OutcomeChoice

Drivers of

Choice:Exogenous

Endogenous

DescriptiveNormative

Level of Analyses

Single choice

vs overall

Level of

choice

Location as a competitive advantage;

Location choice and

performance [GSJ]

Location choice as a

portfolio [JIBS]

Unit of Analysis:Location Choice within a Portfolio• The MNE as a multi-unit organization (a

portfolio) – Value creation by MNEs

• The state of theory and research– The MNE as a whole– Individual units

• Theoretical underpinning– Finance theory– Modular theory.

Location Choice and Performance

• Performance consequences of different location choices (portfolios)

• Performance consequences: – sum of individual choices + the interactions – the whole not the sum of the part

• Theoretical foundations: • Modularity and organization architecture

theories.

Location as a Competitive Advantage• Creating Firm-specific value from location

resources• Location resources – not exclusive to firms

– available on the market• Not possession but modification

– Not ownership but management • C.K.Prahalad and M.S. Krishnan. 2008. The New Age of Innovation.

• Firms not identical in the ability to turn location resources into competitive advantages

• Theoretical underpinning: RBV, Strategic management (Porter).

Revised theory of MNE location choice to the test: Your turn

Interesting?• Statistically?• Practically?

Theories combined?