Managing Policy Reversals: Consequences for Firm Performance

The recent revival of populism and nationalism across many parts of the world threatens to unravel the market-oriented reforms of the previous era. We examine the impact of the reversal of a previously adopted market-expanding policy on organizational performance. We argue that these policy reversal...

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Detalles Bibliográficos
Autores: Jandhyala, Srividya, Blake, Daniel J.
Tipo de recurso: artículo
Fecha de publicación:2019
País:España
Institución:IE
Repositorio:Repositorio IE
OAI Identifier:oai:repositorio.ie.edu:20.500.14417/3484
Acceso en línea:https://doi.org/10.1287/stsc.2019.0083
https://hdl.handle.net/20.500.14417/3484
Access Level:acceso abierto
Palabra clave:53 Ciencias Económicas::5311 Organización y dirección de empresas ::5311.09 Organización de la producción
ODS 9 - Industria, innovación e infraestructura
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spelling Managing Policy Reversals: Consequences for Firm PerformanceJandhyala, SrividyaBlake, Daniel J.53 Ciencias Económicas::5311 Organización y dirección de empresas ::5311.09 Organización de la producciónODS 9 - Industria, innovación e infraestructuraThe recent revival of populism and nationalism across many parts of the world threatens to unravel the market-oriented reforms of the previous era. We examine the impact of the reversal of a previously adopted market-expanding policy on organizational performance. We argue that these policy reversals are contested; affected firms undertake a broad range of political and nonmarket activities to alter the implementation of the policy and buffer themselves from adverse consequences. However, these activities can increase policy uncertainty while making new demands on management, leading to diminished investment and a reallocation of finite managerial resources. The result is that firm performance on operational parameters suffers, including in locations that are not directly affected by the policy reversal. To empirically isolate this effect, we exploit an unexpected policy reversal in the context of telecommunications firms in India. Through an example caselet, we first outline the political and nonmarket activities of one firm affected by the unexpected policy reversal. We then empirically examine the performance of affected and unaffected telecommunication firms using a difference-in-differences approach to provide support for our arguments. The online appendix is available at https://doi.org/10.1287/stsc.2019.0083.yesPublishedInstitute for Operations Research and Management Scienceshttps://ror.org/02jjdwm75202520252019info:eu-repo/semantics/articleapplication/pdfapplication/pdfhttps://doi.org/10.1287/stsc.2019.0083https://hdl.handle.net/20.500.14417/3484reponame:Repositorio IEinstname:IEInglésIE Business SchoolIE UniversityStrategyAttribution-NonCommercial-NoDerivatives 4.0 Internationalhttps://creativecommons.org/licenses/by-nc-nd/4.0/deed.eninfo:eu-repo/semantics/openAccessoai:repositorio.ie.edu:20.500.14417/34842026-06-15T12:40:57Z
dc.title.none.fl_str_mv Managing Policy Reversals: Consequences for Firm Performance
title Managing Policy Reversals: Consequences for Firm Performance
spellingShingle Managing Policy Reversals: Consequences for Firm Performance
Jandhyala, Srividya
53 Ciencias Económicas::5311 Organización y dirección de empresas ::5311.09 Organización de la producción
ODS 9 - Industria, innovación e infraestructura
title_short Managing Policy Reversals: Consequences for Firm Performance
title_full Managing Policy Reversals: Consequences for Firm Performance
title_fullStr Managing Policy Reversals: Consequences for Firm Performance
title_full_unstemmed Managing Policy Reversals: Consequences for Firm Performance
title_sort Managing Policy Reversals: Consequences for Firm Performance
dc.creator.none.fl_str_mv Jandhyala, Srividya
Blake, Daniel J.
author Jandhyala, Srividya
author_facet Jandhyala, Srividya
Blake, Daniel J.
author_role author
author2 Blake, Daniel J.
author2_role author
dc.contributor.none.fl_str_mv https://ror.org/02jjdwm75
dc.subject.none.fl_str_mv 53 Ciencias Económicas::5311 Organización y dirección de empresas ::5311.09 Organización de la producción
ODS 9 - Industria, innovación e infraestructura
topic 53 Ciencias Económicas::5311 Organización y dirección de empresas ::5311.09 Organización de la producción
ODS 9 - Industria, innovación e infraestructura
description The recent revival of populism and nationalism across many parts of the world threatens to unravel the market-oriented reforms of the previous era. We examine the impact of the reversal of a previously adopted market-expanding policy on organizational performance. We argue that these policy reversals are contested; affected firms undertake a broad range of political and nonmarket activities to alter the implementation of the policy and buffer themselves from adverse consequences. However, these activities can increase policy uncertainty while making new demands on management, leading to diminished investment and a reallocation of finite managerial resources. The result is that firm performance on operational parameters suffers, including in locations that are not directly affected by the policy reversal. To empirically isolate this effect, we exploit an unexpected policy reversal in the context of telecommunications firms in India. Through an example caselet, we first outline the political and nonmarket activities of one firm affected by the unexpected policy reversal. We then empirically examine the performance of affected and unaffected telecommunication firms using a difference-in-differences approach to provide support for our arguments. The online appendix is available at https://doi.org/10.1287/stsc.2019.0083.
publishDate 2019
dc.date.none.fl_str_mv 2019
2025
2025
dc.type.none.fl_str_mv info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://doi.org/10.1287/stsc.2019.0083
https://hdl.handle.net/20.500.14417/3484
url https://doi.org/10.1287/stsc.2019.0083
https://hdl.handle.net/20.500.14417/3484
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv IE Business School
IE University
Strategy
dc.rights.none.fl_str_mv Attribution-NonCommercial-NoDerivatives 4.0 International
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.en
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Attribution-NonCommercial-NoDerivatives 4.0 International
https://creativecommons.org/licenses/by-nc-nd/4.0/deed.en
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv Institute for Operations Research and Management Sciences
publisher.none.fl_str_mv Institute for Operations Research and Management Sciences
dc.source.none.fl_str_mv reponame:Repositorio IE
instname:IE
instname_str IE
reponame_str Repositorio IE
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