MS&E Associate Professor Chuck Eesley and Professor Kathy Eisenhardt, together with Robert Eberhart (PhD '13), won an award for Responsible Research in Management from the organization Responsible Research for Business and Management (RRBM).
Their winning publication is titled "Failure is an option: Institutional change, entrepreneurial risk, and new firm growth."
The purpose of the award is to discover good management scholarship published between 2015-2019. The topics of the selected works focus on important issues in business and society, utilize sound research methods, and yield credible results.
In their study, Profs. Eesley, Eisenhardt, and Eberhart (now an Assistant Professor of Management at Santa Clara University) sought to understand the impact of loosened bankruptcy regulation on the growth of new Japanese start-up technology ventures. Using a quasi-natural experiment with longitudinal data, they found that lenient bankruptcy regulations increased the number of bankruptcy cases, but also surprisingly motivated more capable founders to start new technology ventures.
The authors assert that lenient bankruptcy laws are beneficial to capable founders who often have the most to lose, and the flow of human and social capital that these capable founders bring leads to the foundation of higher-performing firms.
The paper engaged academic cooperation and obtained funding from practitioners who were interested in the study. The practitioners in Japan actively participated by providing examples and quotes that broadened the paper's appeal.
This paper, by its effect in policy circles, has added to academic theories of institutional change. Its findings have since been incorporated into new public policy in Sweden, and the Japanese government continues to use the research to reform business regulations to energize its entrepreneurial environment.