Xun (Brian) Wu
Academic affiliations
2007 – Present Ross
School of Business, University of Michigan
Assistant Professor of Strategy
2012 – Present Center for Chinese Studies, University of
Michigan
Faculty Associate
Education
PhD,
Management, Wharton School of the University of Pennsylvania, 2007 Research
Industry
Evolution, Corporate Scope, Technological Innovation, Entrepreneurship Institutional
barriers and industry dynamics. (with Sea-Jin Chang). 2013. Conditional
acceptance. Strategic Management Journal. The
Economist, April 27th 2013 Abstract:
This study demonstrates new entrants exhibit higher productivity but also
higher exit hazard than incumbents in post-liberalization China. We argue
this seemingly paradoxical relationship is attributable to institutional
barriers, defined as the hindrance in the institutional environment that
prevents market selection forces to function. New entrants require higher
productivity to compensate for those institutional barriers, which in turn
implies a higher exit hazard after controlling for productivity. Our
empirical findings support this argument and further show that the
differences in productivity and exit hazard between new entrants and
incumbents become smaller where and when institutional barriers recede. By
integrating economic and institutional perspectives, we highlight the
importance of institutional factors in shaping industry evolution. Complementary
assets as pipes and prisms: Innovation incentives and trajectory choices.
(with Zhixi Wan and Daniel Levinthal). 2013. Forthcoming. Strategic Management Journal. Abstract:
Under-investment in radical innovation is often pointed to as the basis for
incumbent failure in the face of radical change. However, it is also commonly
observed that incumbents make substantial investments in radical innovations.
To address the paradox of incumbent failure despite heavy investments, we
develop an analytical model that considers firm heterogeneity with respect to
both technical trajectories and complementary capabilities. In this model,
complementary assets play a dual role in incumbents’ investment behavior
toward radical technological change: complementary assets are not only
resources [pipes] that can buffer firms from technology change, but are also
prisms through which they view those changes, in terms of both the magnitude
of resources that should be invested and the trajectory to which these
resources should be directed. Opportunity costs, industry dynamics, and
corporate diversification: Evidence from the cardiovascular medical device
industry, 1976-2004. 2012. Forthcoming. Strategic
Management Journal. Abstract:
This paper examines how demand conditions across alternative markets impact
diversification decisions and firm performance by influencing the opportunity
costs of deploying non-scale free capabilities. Using data within the
cardiovascular medical device industry, this study shows that: (1) firms with
a larger stock of pre-entry innovation experience are more likely to
diversify; (2) firms in a current market with greater relative demand
maturity are more likely to diversify; (3) diversification is associated with
a performance decrease in the current market; and (4) diversification is
associated with a performance increase at the corporate level. These findings
shed new light on the self-selection process of corporate scope, the
conceptualization of firm capabilities, and the connection between industry
dynamics and resource deployment. Opportunity costs
and non-scale free capabilities: Profit maximization, corporate scope, and
profit margins. (with Daniel Levinthal). 2010. Strategic
Management Journal, 31(7): 780-801. Abstract:
The resource-based view on firm diversification, subsequent to Penrose
(1959), has focused primarily on the fungibility of resources across domains.
We make a clear analytical distinction between scale free capabilities and
those that are subject to opportunity costs and must be allocated to one use
or another, thereby shifting the discourse back to Penrose’s (1959) original
argument regarding the stock of organizational capabilities. The existence of
resources and capabilities that must be allocated across alternative uses
implies that profit-maximizing diversification decisions should be based upon
the opportunity cost of their use in one domain or another. This opportunity
cost logic provides a rational explanation for the divergence between total
profits and profit margins. Firms make profit-maximizing decisions to
increase total profit via diversification when the industries in which they
are currently competing become relatively mature. Due to the spreading of
these capabilities across more segments, we may observe that firms’
profit-maximizing diversification actions lead to total profit growth but
lower average returns. The model provides an alternative explanation for
empirical observations regarding the diversification discount. The
self-selection effect noted in recent work in corporate finance may not be
indicative of inferior capabilities of diversifying firms but of the limited
opportunity contexts in which these firms are operating. Spillover
asymmetry and why it matters. (with Anne-Marie Knott and Hart Posen).
2009. Management Science, 55(3): 373-388. Abstract:
Although spillovers are a crucial factor in determining the optimal
environment for innovation, there is no consensus regarding their impact on
firm behavior. One reason for this may be that models differ in their
assumptions for the functional form of the spillover pool. In industrial
organization and economic geography, for example, the predominant convention
is that all innovation within an industry/region contributes to a spillover
pool that has a common value for all firms. An alternative convention
prevalent in endogenous growth and evolutionary economics is that spillovers
have directionality—the size of the relevant pool differs across firms.
Knowing the correct functional form may facilitate theoretical consensus,
either analytically (by modifying models’ assumptions) or empirically (by
supporting a critical test of competing theories). We characterize and test
the functional form of spillover pools for efficiency-enhancing innovation
across 50 markets in the banking industry. Our results in that setting are
consistent with expectations for asymmetric spillovers but inconsistent with
expectations for pooled spillovers. Entrepreneurial risk
and market entry. (with Anne-Marie Knott). 2006. Management
Science, 52(9): 1315-1330. Winner of the 2005 Annual Best Student
Paper Award from the Office of Advocacy of the US Small Business
Administration. Abstract: This paper attempts to reconcile the
risk-bearing characterization of entrepreneurs with the stylized fact that
entrepreneurs exhibit conventional risk-aversion profiles. We propose that
the disparity arises from confounding two distinct dimensions of uncertainty:
demand uncertainty and ability uncertainty. We further propose that
entrepreneurs will be risk averse with respect to demand uncertainty, yet
“apparent risk seeking” (or overconfident) with respect to ability
uncertainty. To examine this view, we construct a reduced-form model of the
entrepreneur’s entry decision, which we aggregate to the market level, then
test empirically. We find that entrepreneurs in aggregate behave as we
predict. Accordingly, risk-averse entrepreneurs are willing to bear market
risk when the degree of ability uncertainty is comparable to the degree of
demand uncertainty. Potential market failures exist in instances where there
is a high demand uncertainty but low performance dispersion (insufficient
entry), or low demand uncertainty but high performance dispersion (excess
entry). Lessons from
Alibaba.com: Government’s role in electronic contracting. (with Qin Hu and Clement Wang). 2003. INFO – The Journal of Policy, Regulation
and Strategy for Telecommunications, Information and Media, 6(5): 298-307.
Product
market competition and financial conservatism: A theoretical model and the
case of Yanjing Brewing Corporation. (with Hanmei Chen and Wuxiang Zhu).
2002. Journal of Economic Research (a
leading economics journal in China), 52(8): 28-36.
Working papers
"Organizational Constraints to Adaptation:
Intra-Firm Asymmetry in the Locus of Coordination" (with Vikas Aggarwal)
"Schumpeterian Competition, Inter-Organizational
Learning, and the Dynamics of Spillover Pools" (with Gianluigi
Giustiziero)
Teaching
Doctoral dissertation advisor: Gianluigi Giustiziero
(Ph.D. in Strategy), Sara Ryoo (Ph.D. in Strategy)
Doctoral dissertation committee: Thunyarat (Bam) Amornpetchkul (Ph.D.
in Operations Management), David Knapp (Ph.D. in Economics), Anyan Qi (Ph.D.
in Operations Management), Dadi Wang (Ph.D. in Operations Management), Yan
Yin (Ph.D. in Operations Management), Bo Zhao (Ph.D. in Business Economics)
Doctoral Seminar in Strategy: Boundaries of the Firm
Fall, 2012 evaluation 5/5
Nominated for the PhD Teaching Excellence Award for 2013
Mergers, Acquisitions, and Corporate Development (Ross
School of Business MBA elective)
Winter, 2012, 2013 evaluation 4.16/5.0 across 5 sections
Increased enrollment to three sections for 2013
Corporate Strategy (Ross School of Business Weekend MBA
core course)
Fall, 2010 evaluation 4.52/5.0
Corporate Strategy (Ross School of Business BBA core
course)
Fall, 2007-2010 average evaluation 4.4/5.0 across 11
sections
Nominated by the Ross BBA Class of 2011 for the Ross
Teaching Excellence Award
Lectures (corporate strategy, China, etc.)
American Society of Mechanical Engineers, University of
Michigan
Theta Tau Professional engineering fraternity, University
of Michigan
The Asia Law Society, University of Michigan
The National
Committee on U.S.-China Relations Fifth Annual CHINA Town Hall
Reviewing
Ad hoc reviewer for Academy of Management Journal, Academy of
Management Review, Management and Organization Review, Management Science,
Organization Science, Strategic Management Journal, Academy of Management
annual conference, and INFORMS Organization Science Dissertation Proposal
Competition
Running |
|
Slow,
avid runner. Dexter Ann Arbor Half Marathon 2012. 2:14:12.
Updated April 2013 |
