Ricard Gil, Associate Professor and Distinguished Faculty Fellow of Business Economics, Smith School of Business, Queen’s University
A firm may gain competitive advantage over its rivals through access to market information. Yet, evidence thus far suggests only large firms invest in technology that facilitates access to information, potentially increasing their leverage over smaller competitors. This paper aims to fill a gap in the literature by empirically investigating how the performance and decision making of small and medium size enterprises change when gaining access to strategically valuable market information. To do so, we evaluate the impact of an unprecedented Big Data information service diffused at zero cost by a large European bank among its small and medium size business customers. Upon programme adoption, adopting firms had monthly access to reports elaborated by the bank with rich information about each firm’s clientele portfolio and that of its competitors analysing Big Data credit card transactions. Using first differences, we find adoption is associated with a 4.5% increase in establishment revenue, whereas IV estimation results show that adoption causally increases revenue by 9% for those establishments whose adoption decision is most strongly affected by the instrument. The main mechanism behind this result appears to be the information technology prompting establishments to target existing, yet unexploited, business opportunities. Consistent with this mechanism, we find that adopting establishments increase their sales to customer segments from underrepresented gender age groups in their customer portfolio prior to adoption. Our evidence also suggests that adopting establishments improved their resource allocation efficiency between weekly peak and off peak times. These findings suggest that small and medium enterprises obtain substantial returns from information access, and therefore, managerial inattention and high adoption costs are likely to be key barriers preventing small firms from investing in resources to acquire and analyse market information.
Ricard Gil is an Associate Professor and Distinguished Faculty Fellow of Business Economics at the Smith School of Business of Queen’s University.
Ricard Gil received his PhD in economics from the University of Chicago in 2004 and a BA in economics from Universitat Pompeu Fabra in Barcelona, Spain, in 1999. His training also includes a postdoc in organisational economics at Harvard Business School, and visiting positions at the MIT Sloan School of Management and the management department of the London School of Economics.
He has held other visiting and teaching positions at other universities such as Universidad de Navarra and IESE in Spain, the University of Tokyo and Hitotsubashi University in Japan, and Yonsei University in South Korea. Prior to joining Smith in 2018, Ricard was an economics professor at the Department of Economics of the University of California in Santa Cruz from 2004 to 2011, and a professor of economics and strategy at the Carey Business School of the Johns Hopkins University from 2011 to 2018.
Ricard’s research specialises in organisational economics with a focus on industrial organisation, strategy and applied microeconomics. Some of his research interests are the effect of competition on outcomes and firm boundaries as well as the impact firm organisation on transaction performance, in various contexts such as media industries, online markets, and transportation. Ricard’s research has appeared in top economics and business journals such as American Economic Journal, Journal of Law, Economics, and Organization, Marketing Science and Management Science, among others.
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24 November 2021
Start Time: 15:00
End Time: 16:00