Rachelle Sampson Directory Page
Ph.D., University of Michigan
Rachelle C. Sampson is Associate Professor of Logistics, Business and Public Policy at the Smith School of Business, University of Maryland. She is also a Research Fellow at the ESG Institute at the Wharton School, University of Pennsylvania, and a Senior Policy Scholar at Georgetown University's Center for Business and Public Policy. Rachelle’s research focuses on how organization structure and ownership forms influence firm investment time horizons and R&D productivity. Her recent work exposes rising short-termism in US firms and capital markets, outlining implications for firm productivity and growth, the changing nature of R&D within firms, as well as environmental impact. Rachelle has a particular interest in the impact of sustainability practices and ESG performance on employee engagement and productivity, as well as how this translates into long-term financial performance. She is also a co-principal investigator on the Connected Leadership Study, a study exploring the impact of consciousness expanding experiences on leadership styles and organizational change.
Her research has been published in several academic outlets, including Management Science, Strategic Management Journal, Academy of Management Journal and Case Western Law Review, and has received press coverage, including Bloomberg and Vox.com. She serves as associate editor at Management Science and on the editorial boards of Strategic Management Journal and Organization Science.
Rachelle regularly presents her research work to practitioner forums, particularly within the ESG investment community. She sits on corporate advisory boards supporting firms seeking to integrate ESG into firm strategy and valuation models. Formerly a professor at NYU-Stern and Georgetown University, Rachelle started her professional career as a consultant for Ernst & Young and as a corporate attorney in Australia. She received her PhD from the University of Michigan and her law degree from Queensland University of Technology, Australia.
Since returning to the U.S., Rachelle has received several awards for her research and teaching, including the inaugural Panmure House Prize for research into long-term investing and the relationship with innovation, the Ross School of Business (University of Michigan) Distinguished PhD Alumni Award, the Ameritech Foundation Research Fellowship, the Krowe Award for Teaching Excellence, the Curt M. Grimm PhD Mentor Award, and recognition from Poets and Quants as a favorite business school professor. She teaches MBA and PhD courses in corporate strategy, managerial economics as well as firm ESG and environmental strategy. Rachelle is an active participant in several activities related to expanding the sustainability curriculum across disciplines at the University of Maryland, including serving as a faculty mentor and facilitator for the Sustainability Teaching Fellows for over a decade. Rachelle is also founder of Blue Prism, a leadership coaching practice focused on supporting individuals, leaders and organizations in aligning with values and purpose. She has received certification for her coaching experience, skills and training from the International Coaching Federation.
Sustainability Solutions: Business Lab (Undergraduate honors seminar)
Environmental and their related social problems present the some of the most significant issues facing society and business today. In this seminar, we discuss the underlying economics and market failures that have led to many of these environmental problems. With an understanding of the issues, students work in cross-disciplinary teams to develop a business canvas for a new idea created to solve a sustainability related problem.
Managerial Economics & Public Policy (Core MBA Class)
This class covers the fundamentals of optimal firm production and market functioning as well as linking microeconomic foundations to firm decision making and competitive dynamics. In addition to analyzing competition and firm strategy via economics, students examine common sources of market failures.
- Krowe Award for Teaching Excellence
- Distinguished Teaching Award
- Voted Most Effective Core Professor
- Top 15% teaching list
Industrial Organization Economics: Applications to Strategy (PhD Seminar)
This PhD level course is on industrial organization economics foundations applied to strategy. Both industry attributes and firm behavior result in differential firm performance. We examine several topics at this interface of the industry environment and firm behavior, with each of these topics having spawned areas of strategy research.
Sustainability: Economics & Strategy (MBA Elective)
This class applies economics to understand market failures and firm strategic responses in the area of sustainability. The goal is to better understand issues of sustainability facing firms in a series of different contexts and highlight market-based solutions to these problems. The contexts include common property problems, such as natural resource depletion, energy, carbon emissions, and issues specific to business, such as manufacturing and construction.
The Hill: If Black Lives Matter, Transform Your Leadership Team
September 3, 2020
Forbes: "A New Way to Teach Management"
January 23, 2019
Smith Brain Trust: Rise of the Impact Investor
November 27, 2018
Stanford Social Innovation Review, "Redesigning Management Education for the Long-Term."
September 25, 2018
Smith Brain Trust, "Think Long-Term"
March 20, 2017
Poets & Quants, Favorite Business School MBA Professors
August 17, 2016
Smith Business Close-up, "Sustainability in Practice"
July 9, 2009
Rachelle C. Sampson and Yuan Shi. 2020. "Are US firms becoming more short-term oriented? Evidence of shifting firm time horizons from implied discount rates, 1980-2013." Strategic Management Journal, 1-33, 2019. Strategic Management Journal.
We provide evidence that investors in US public markets are increasingly discounting firms' expected future cash flows during 1980-2013. This trend is shown not only on average across firms, but also within firms over time after alternative explanations are accounted for. To corroborate a link with firm time horizons, we estimate the relationship between an implied discount rate ('IDR') and factors relevant to firm long-term strategy. We find that IDR is correlated in expected ways with firm investments, management incentives, financial health, ownership and external pressures - measures that have been argued to correlate with firm time horizons. This paper represents one of the first attempts to document market-wide evidence of shortening firm time horizons. These changing horizons bear important implications for firm strategy.
- Pacific Standard (12 June 2018): "Is our focus on quarterly earnings hurting the economy?"
- Harvard Business Review (13 December 2017): "The Real Reasons Companies are so Focused on the Short Term."
- Bloomberg (7 October 2016): "Maybe Companies Aren't Too Focused on the Short Term."
- Vox (3 October 2016): "Short-term thinking in corporate America is strangling the economy."
Rachelle C. Sampson and Y. Maggie Zhou. 2018. "Public vs. Private Firms: Energy Efficiency, Toxic Emissions and Abatement Spending." In Advances in Strategic Management: Sustainability, Stakeholder Governance and Corporate Social Responsibility, edited by Sinziana Dorobantu, Ruth Aguilera, Jiao Luo, and Frances Milliken, 38: 37-68. Emerald Insight, 2018. Publisher's Version.
We examine the effect of firm ownership status on three environmentally relevant variables: energy efficiency, toxic emissions and spending on pollution abatement. Prior research has demonstrated that public firms invest less than private firms and suggests this difference is due pressure from investors to strongly favor short over long-term earnings. We extend this logic to other firm behavior, examining whether publicly owned facilities invest in energy efficiency and pollution reduction differently than privately owned facilities. Using data from the US Census of Manufactures from 1980-2009, information on pollution from the EPA Toxic Release Inventory (TRI) and pollution abatement spending from the PACE survey, we find that facilities switching to public ownership are less energy efficient and spend less on pollution abatement than their privately owned counterparts. However, we also find that facilities switching to public ownership have lower toxic emissions than other facilities. We also examine how different sources of external pressures alter these results and find that increased regulatory scrutiny is correlated with increased energy efficiency, toxic emissions and abatement spending. More concentrated institutional ownership in public firms is associated with lower energy efficiency as is a greater brand focus. These latter results are broadly consistent with the idea that publicly owned firms respond to pressures from investors with a reduced focus on environmentally relevant variables. However, since facilities switching to public ownership have lower toxic emissions, this suggests that there are two competing pressures in publicly owned facilities: cost pressures, consistent with lowered energy efficiency, and public perceptions, consistent with lower toxic emissions, particularly since TRI data became available. In this sense, the combination of ownership and transparency of information appears to influence how firms prioritize different stakeholders.
The rise in quarterly capitalism in corporate America—increased pressure to meet quarterly earnings predictions and cater to shareholder preferences for short-term returns—has gained significant coverage in the business world and popular press in recent years. Increasingly, popular opinion suggests that firms bow to shareholder pressures, taking steps to smooth earnings and boost share prices in the short-term; firms do so by cutting Research and Development (R&D) investment, engaging in extensive cost-cutting, or increasing dividends and share buybacks. Recent estimates at the industry level show that investor discount rates have increased in recent years, supporting the notion that shorttermism is on the rise. However, we do not have evidence at the firm level documenting whether and how market discounting is changing over time or how such discounting differs between firms according to firm behavior and characteristics. A recent article by Sampson and Shi estimates market discounting at the firm level as a proxy for investor time horizons, which not only reveals how time horizons have changed but also how they vary between firms. Below, we discuss some observations on changing investor behavior, followed by a review of the evidence presented by Sampson and Shi. We conclude with a brief evaluation of why increased market discounting suggests that investor time horizons are shortening as well as what this means for firms.
Michael D. Ryall and Rachelle C. Sampson. 2017. "Contract Structure for Joint Production: Risk and Ambiguity under Compensatory Damages." Management Science, 4, 63: 1232-53, 2017. Publisher's Version.
We develop a model in which the parties to a joint production project have a choice of specifying contractual performance in terms of actions or deliverables. Penalties for noncompliance are not specified; rather, they are left to the courts under the legal doctrine of compensatory damages. We analyze three scenarios of increasing uncertainty: full information, where implications of partner actions are known; risk, where implications can be probabilistically quantified; and ambiguity, where implications cannot be so quantified. Under full information, action requirements dominate: they always induce the maximum economic value. This dominance vanishes in the risk scenario. Under ambiguity, deliverables specifications can interact with compensatory damages to create a form of "ambiguity insurance," where ambiguity aversion is assuaged in a way that increases the aggregate, perceived value of the project. This effect does not arise under contracts specifying action requirements. Thus, deliverables contracts may facilitate highly novel joint projects that would otherwise be foregone as a result of excessive uncertainty. Suggested empirical implications include the choice of contract clause type depending on the level of uncertainty in a joint development project, one application being the level of partner experience with interfirm collaborations.
Rachelle C. Sampson and Yuan Shi. 2017. "Is Corporate Short-termism on the Rise in the U.S.?" The CLS Blue Sky Blog: Columbia Law School Blog on Corporations and the Capital Markets. Article.
Rachelle C. Sampson. 2016. "Short-term thinking in corporate America is strangling the economy." Vox.com. Article.
Joanne Oxley, Rachelle C. Sampson, and Brian Silverman. 2009. "Arms Race or Détente? How Inter-firm Alliance Announcements Change the Stock Market Valuation of Rivals." Management Science, 8, 55: 1321-37. Publisher's Version.
Most prior event studies find that the announcement of a new alliance is accompanied by a positive stock market response for the partners. This result has usually been interpreted as evidence for the prevailing view that alliances are effective vehicles for partners to acquire or access new skills and thus become stronger competitors. However, partners should also earn positive abnormal returns if alliances are used to shape competitive interactions, attenuating competitive intensity industry-wide.
In this study, we disentangle these different mechanisms by examining how alliance announcements affect the stock market's evaluation of allying firms' rivals: if an alliance is expected to make partner firms more competitive, this should lead to negative abnormal returns for partners' rivals; if an alliance is expected to facilitate a reduction in competitive intensity, this should lead to positive abnormal returns for rivals. Results from an event study analysis of research and development alliances in the telecommunications and electronics industries during 1996–2004 provide evidence consistent with competition attenuation in some alliances. Our research thus challenges the increasingly narrow focus on learning and resource accumulation through alliances, and calls for broader consideration of the roles and effects of collaboration, both for individual firms and for industry structure.
Michael D. Ryall and Rachelle C. Sampson. 2009. "Formal Contracts in the Presence of Relational Enforcement Mechanisms: Evidence from Technology Development Contracts." Management Science, 6, 55: 906-25. Publisher's Version.
Formal contracting addresses the moral hazard problems inherent in interfirm deals via explicit terms designed to achieve incentive alignment. Alternatively, when firms expect to interact repeatedly, relational mechanisms may achieve similar results without the associated costs. However, as we now know from a growing body of theoretical and empirical work, the resulting intuition—that relational mechanisms will be substituted for formal ones whenever possible—does not generally hold. The extent to which firms substitute relational mechanisms for formal ones in the presence of repeated interaction is an empirical question that forms the basis of this paper. We study a sample of 52 joint technology development contracts in the telecommunications and microelectronics industries and devise a coding scheme to allow empirical comparison of contract terms. Counter to the above intuition (but consistent with recent research), we find that a firm's contracts are more detailed and more likely to include penalties when it engages in frequent deals (whether with the same or different partners). Our results suggest complementarity between formal and relational contracts, and have implications for optimal contracting, particularly in high technology sectors.
Rachelle C. Sampson. 2007. "R&D Alliances & Firm Performance: The Impact of Technological Diversity and Alliance Organization on Innovation." Academy of Management Journal, 2, 50: 364-86. Publisher's Version.
Research profiled in "Maximizing Innovation in Alliances," MIT Sloan Management Review (2004) 46(1):5-6.
In this paper, I examine the impact of partner technological diversity and alliance organizational form on firm innovative performance. Using a sample of 463 R&D alliances in the telecommunications equipment industry, I find that alliances contribute far more to firm innovation when technological diversity is moderate, rather than low or high. Although this relationship holds irrespective of alliance organization, I find that hierarchical organization, such as an equity joint venture, improves firm benefits from alliances with high levels of technological diversity. Thus, alliance organizational form likely influences partner ability and incentives to share information, which affects performance.
Rachelle C. Sampson and Michael D. Ryall. 2006. "Do Prior Alliances Influence Contract Structure?" In Strategic Alliances: Governance and Contracts, edited by A. Arino and J.J. Reuer. London: Palgrave Macmillan. Publisher's Version.
Rachelle C. Sampson. 2005. "Experience Effects and Collaborative Returns in R&D Alliances." Strategic Management Journal, 11, 26: 1009-31. Publisher's Version.
Focusing on the link between prior alliance experience and firm benefits from R&D collaborations, this paper explores whether firms learn to manage their alliances. While prior experience should increase collaborative benefits from the current alliance, I expect these returns: (1) to be most beneficial when alliance activities are more uncertain; and (2) to diminish at high levels of experience. Results from a sample of 464 R&D alliances in the telecom equipment industry generally match these expectations. The positive benefits of prior experience in complex alliances suggest that a broader set of alliance management processes allows the firm to manage situations of ambiguity more readily. The lack of cumulative benefits from prior experience appears to be partly due to knowledge depreciating over time, since only recent experience has a positive impact on collaborative returns. Overall, these results provide empirical evidence of the effect of prior experience on collaborative benefits, both directly and conditionally on alliance characteristics, and have implications for learning to manage organizations more generally.
Rachelle C. Sampson. 2004. "The Cost of Misaligned Governance in R&D Alliances." Journal of Law, Economics & Organization, 2, 20: 484-526. Publisher's Version.
Transaction cost economics argues that aligning transactions with governance structures leads to more efficient outcomes. While empirical evidence demonstrates that firms choose governance consistent with transaction cost predictions, the performance implications of governance choices are less well explored. Here I examine the cost of misaligned governance in the context of research and development (R&D) alliances. Two costs of misalignment are evaluated: excessive contracting hazards and excessive bureaucracy. Using a sample of R&D alliances in the telecom equipment industry, I find that alliance governance selected according to transaction cost arguments improves collaborative benefits substantially over governance not so selected. Interestingly, governance misalignments imposing excessive bureaucracy reduce collaborative benefits more than misalignments imposing excessive contracting hazards. These results provide empirical evidence of the cost of misaligned governance and have implications for research on the limits of internal organization and links between organizational form and innovation.
Rachelle C. Sampson. 2004. "Organizational Choice in R&D Alliances: Knowledge Based and Transaction Cost Perspectives." Managerial & Decision Economics, 25: 421-36. Publisher's Version.
This study examines how firms choose organizational form for their R&D alliances. Encouraging cooperation in these alliances is often challenging, given the difficulties in knowledge sharing between partners and protecting the property rights over partner knowledge. Interestingly, knowledge‐based and transaction cost perspectives generate different hypotheses on alliance organization choice in this setting. When partner knowledge bases are very different, the risk of unintended transfer or leakage is reduced, yet the need for enhanced communication and knowledge sharing mechanisms remains undiminished. With a sample of 232 R&D alliances, I find more thorough support for the transaction cost hypothesis. Firms more likely select an equity joint venture as partner knowledge bases diverge and knowledge transfer becomes more difficult. When such knowledge bases are very different, however, firms are less likely to choose an equity joint venture over more contractual forms of alliance organization. Thus, these results provide empirical evidence on alliance organization choice and also have important implications for the fundamental question of why firms exist.
Rachelle C. Sampson and Joanne Oxley. 2004. "The Scope and Governance of International R&D Alliances." Strategic Management Journal, 8-9, 25: 723-49. Publisher's Version.
Participants in research and development alliances face a difficult challenge: how to maintain sufficiently open knowledge exchange to achieve alliance objectives while controlling knowledge flows to avoid unintended leakage of valuable technology. Prior research suggests that choosing an appropriate organizational form or governance structure is an important mechanism in achieving a balance between these potentially competing concerns. This does not exhaust the set of possible mechanisms available to alliance partners, however. In this paper we explore an alternative response to hazards of R&D cooperation: reduction of the 'scope' of the alliance. We argue that when partner firms are direct competitors in end product or strategic resource markets even 'protective' governance structures such as equity joint ventures may provide insufficient protection to induce extensive knowledge sharing among alliance participants. Rather than abandoning potential gains from cooperation altogether in these circumstances, partners choose to limit the scope of alliance activities to those that can be successfully completed with limited (and carefully regulated) knowledge sharing. Our arguments are supported by empirical analysis of a sample of international R&D alliances involving electronics and telecommunications equipment companies.
Rachelle C. Sampson, Bernard Yeung, and Jack Mutti. 2000. "The Effects of the Uruguay Round: Empirical Evidence from US Industry." Contemporary Economic Policy, 1, 18: 59-69. Publisher's Version.
This article uses an event study to evaluate the anticipated results of the Uruguay Round on U.S. industry. Economists commonly use computable general equilibrium (CGE) models to predict the net economic efficiency effects of trade agreements. The event study method represents a complementary approach that relies on stock price movements to assess how investors predict that an event, in this case the conclusion of the Uruguay Round, will affect industry profitability. The empirical estimates indicate that U.S. industries with comparative advantage (disadvantage) experience positive (negative) stock price reactions, reflecting an increase (a decrease) in the industry trade and investment opportunities as well as an increased (decreased) return to existing tangible and intangible assets. For the market as a whole, the variation in stock prices does not differ significantly from zero, and the economic magnitude of industry gains and losses is small. These results are consistent with most CGE assessments and with the skeptical attitude that the real impact of the Uruguay Round Agreement remains uncertain.
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