�山ǿ�� Desautels Faculty of Management - Juan Serpa's Recent Research

2023 SSHRC Insight Development Grants

�山ǿ�� — Mon, 08 Apr 2024 15:04:00 +0000

Congratulations to the �山ǿ�� Desautels professors who received 2023 SSHRC Insight Grants.

The Social Sciences and Humanities Research Council of Canada (SSHRC) is the federal research funding agency that promotes and supports research and training in the humanities and social sciences.

Managing Airfares Under Competition: Insights from a Field Experiment

�山ǿ�� — Fri, 06 Jan 2023 16:52:46 +0000

Authors: Maxime C. Cohen, Alexandre Jacquillat, Juan Camilo Serpa and Michael Benborhoum

Publication: Management Science, Forthcoming

Inventory in Times of War

�山ǿ�� — Fri, 13 Nov 2020 17:02:37 +0000

Authors: Andres F. Jola-Sanchez and Juan Camilo Serpa

Publication: Management Science, 67(10):6457-6479

Abstract:

We study how armed conflicts affect inventory across firms’ production facilities. We track 38,916 production facilities—including plantations, livestock farms, and factories—in war-torn Colombian regions; we also collect the data of 5,138 attacks performed by the two rebel groups involved in Colombia’s civil war. To obtain exogenous variation in the conflict intensity, we use a difference-in-differences model that hinges on the peace process between the government and one of the guerrilla groups. We find that when the conflict intensity increases by one order of magnitude, inventory decreases by up to 10.38%. Firms, however, barely reduce finished inventory during war; they mainly reduce raw and work-in-process inventory. To offset this inventory reduction, firms increase their cash holdings—that is, they shift their working capital from physical inventory to liquid assets. The location of the facility moderates the effect of war: when a facility is close to a distribution center—hence, inventory travels short distances—the firm responds to violence by aggressively reducing inventory; when a facility is far from a distribution center, the firm reacts less aggressively to war.

Professor Serpa awarded grant to monitor COVID-19’s impact on business

�山ǿ�� — Fri, 08 May 2020 16:20:40 +0000

�山ǿ�� has awarded Professor Juan Serpa with MI4 Emergency COVID-19 Research Funding to monitor COVID-19’s impact on business in Canada and across the world. Titled Quebec Data Central for Impact of Covid-19 on Society and Business and for a Post-Pandemic World, the one-year project aims to support businesses, researchers and policymakers in making informed decisions in the post-COVID era.

2019 SSHRC Grants awarded

�山ǿ�� — Fri, 11 Oct 2019 16:21:35 +0000

Congratulations to the Desautels professors who received 2019 SSHRC Grants.

SSHRC Insight Development Grants

Professor Juan Camilo Serpa awarded 2019 SSHRC Insight Development Grant

�山ǿ�� — Wed, 09 Oct 2019 15:28:05 +0000

Juan Camilo Serpa, Associate Professor in Operations Management, awarded 2019 SSHRC Insight Development Grant

Oversight and Efficiency in Public Projects: A Regression Discontinuity Analysis

�山ǿ�� — Tue, 10 Jul 2018 20:47:31 +0000

Authors: Eduard Calvo, Ruomeng Cui and Juan Camilo Serpa

Publication: Management Science, Volume 65, Issue 12, December 2019, Pages 5651-5675.

Abstract:

In the U.S., four in ten public infrastructure projects report delays or cost overruns. To tackle this problem, regulators often scrutinize the project contractor’s operations. We investigate the causal effect of government oversight on project efficiency by gleaning 262,857 projects that span seventy-one U.S. federal agencies and 54,739 contractors. Our identification strategy exploits a regulatory bylaw: if a project’s anticipated budget exceeds a threshold value, the contractor’s operations are subject to surveillance from independent procurement officers; otherwise, these operational checks are waived. Using a regression discontinuity design, we find that oversight is obstructive to the project’s operations, especially when the contractor (i) has no prior experience in public projects, (ii) is paid with a fixed-price contract that includes performance-based incentives, and (iii) performs a labor-intensive task. In contrast, oversight is least obstructive — or beneficial — when the contractor (i) is experienced, (ii) is paid with a time-and-materials contract, and (iii) performs a machine-intensive task.

Supply Chain Proximity and Product Quality

�山ǿ�� — Mon, 11 Jun 2018 17:45:43 +0000

Authors: Robert Bray, Juan Camilo Serpa and Ahmet Colak

Publication: Management Science, Volume 65, Issue 9, September 2019, Pages 4079-4099.

Abstract:

We explore the effect of supply chain proximity on product quality by merging four independent data sources from the automotive industry, collecting: (i) auto component defect rates, (ii) upstream component factory locations, (iii) downstream assembly plant locations, and (iv) product-level links connecting the upstream and downstream factories. Combining these four datasets allows us to trace the flow of 27,807 products through 529 supplier factories and 275 assembly plants. We estimate that increasing the distance between an upstream component factory and a downstream plant by an order of magnitude increases the component’s expected defect rate by 3.9%. We also find that shorter inter-factory spans are associated with more rapid product quality improvements, and that supply chain distance is more detrimental to quality when automakers: (i) produce early generation models or (ii) high-end products, (iii) when they buy components with more complex configurations, or (iv) when they source from suppliers who invest relatively little in research and development

Juan Serpa's article featured in Management Science

�山ǿ�� — Thu, 22 Feb 2018 19:38:13 +0000

Professor Juan Serpa's paper "The Impact of Supply Chains on Firm-Level Productivity," together with Harish Krishnan was selected by the Editor-in-Chief of Management Science one of the three Featured Articles for the February 2018 issue.

Management Science is a scholarly journal that publishes scientific research on the practice of management. Within our scope are all aspects of management related to strategy, entrepreneurship, innovation, information technology, and organizations as well as all functional areas of business, such as accounting, finance, marketing, and operations. We include studies on organizational, managerial, and individual decision making, from both normative and descriptive perspectives.

The Strategic Role of Business Insurance

�山ǿ�� — Thu, 19 Oct 2017 18:41:09 +0000

Authors: Juan Serpa and Harish S. Krishnan

Publication: Management Science, Vol. 63, No. 2, February 2017

Abstract:

The use of business insurance has been traditionally studied in a single-firm setting, but in reality preventing operational accidents involves the (unobservable) efforts of multiple firms. We show that, in a multifirm setting, insurance can be used strategically as a commitment mechanism to prevent excessive free riding by other firms. In the presence of wealth imbalances, contracts alone leave wealth-constrained firms with inefficiently low incentives to exert effort (because of limited liability) and firms with sufficient wealth with excessive incentives. Insurance allows the latter to credibly commit to lower effort, thereby mitigating the incentives of the wealth-constrained firms to free ride. This finding shows that insurance can improve the efficiency of risk management efforts by decreasing free-riding problems.

Read full article: Management Science

The Impact of Supply Chains on Firm-Level Productivity

�山ǿ�� — Thu, 19 Oct 2017 18:32:38 +0000

Authors: Juan Serpa and Harish S. Krishnan

Publication: Management Science, Vol. 64, No. 2, February 2018

Abstract:

Firms in a vertical relationship are likely to affect each other’s productivity. Exactly how does productivity spill over across this type of relationship (i.e., through which mechanisms)? Additionally, how does the relative importance of these mechanisms depend on the structure of the supply chain?

To answer these questions, we decompose the channels of upstream productivity spillovers—from customers to suppliers—by developing a structural econometric model on a sample of approximately 22,500 supply chain dyads.

We find that the “endogenous channel” (i.e., the effect of the customer’s own productivity on the supplier’s productivity) is by far the most important source of spillovers. This is especially true if (i) the supplier has a concentrated customer base, (ii) the supplier and the customer have similar operational characteristics, and (iii) the relationship has medium maturity.

In the converse scenarios, we find, it is more important to have a partner with a portfolio of favorable “contextual” characteristics (high inventory turnover, financial liquidity, and asset turnover) than to have a productive partner.

Read full article: Management Science

Juan Serpa awarded 2017 FRQSC New Academics Grant

�山ǿ�� — Mon, 15 May 2017 17:22:11 +0000

Juan Serpa, Assistant Professor in Operations Management was recently awarded a 2017 FRQSC New Academics Grant for his project "Estimation de la relation entre la qualité du produit et la proximité de la chaîne d'approvisement".

This project will study the effect of supply chain proximity on product quality with data from the auto industry. To this end, we merge four independent data sources, collecting

(i) auto part failure rates,

(ii) upstream component factory locations,