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Innovation in Stigmatized Industries: Liability or Asset?
Su, Long
Su, Long
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Abstract
I investigate how organizational stigma affects social audiences’ perceptions of technological innovation. Drawing on technological innovation, organizational stigma, and heterogeneity of social audiences literature, I develop a theoretical framework on the relationship between organizational stigma and social evaluation of firm innovation. I maintain that social audiences differentially react to stigmatized innovation because they differ in how likely they are subject to stigma transfer and their evaluation criteria. I apply my theoretical framework to two contexts: innovation documents and innovation employees.In Study 1 (Chapter 3), I examine two types of social audiences—future inventors and stock market investors. Specifically, I submit that future inventors negatively react to stigmatized patents to avoid negative consequences from stigma transfer. However, investors positively react to stigmatized patents because (1) they are not likely to be the target of stigma transfer and (2) they expect to earn a high return by investing in stigmatized industry innovations: stigmatized industries tend to have lower product market competition, which, in turn, can bring higher rents for investors. Results of empirical analysis with patent- and firm-level data of U.S. public firms and propensity score matching techniques provide corroborating evidence in support of my hypotheses.In Study 2 (Chapter 4), I examine how prospective non-stigmatized employers evaluate the inventors working in stigmatized industries. I argue that, since hiring can establish a connection between previous and current employers, the non-stigmatized industry firms are likely to avoid hiring the stigmatized industry inventors to prevent stigma transfer. I also submit the level of accumulated stigma is positively related to an employee's organizational tenure, resulting in a lower chance of being hired by non-stigmatized firms if they stay in stigmatized industries for long. The results of empirical analysis using patent inventor-, patent-, and firm-level data from U.S. public firms, along with propensity score matching techniques, provide corroborating evidence in support of my hypotheses.
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Date
2024-01-01
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University of Kansas
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This item contains archived web content.
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1075709_1.pdf
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Keywords
Management, Patents, Social evaluation, Stigma, Technological innovation management