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Update | Spring/Summer 2021

Now You Know: Faculty Research Answers Business Questions

WSB research that answers important questions

By Jane Burns | Illustrations by Shaysa Sidebottom

Illustration of a skyline

Q: Can “superstar cities” remain sustainable?

For many, the pull of the world’s “superstar cities” and all they have to offer is strong. Increasingly, however, fewer people can live in those cities because the very amenities that make them appealing have priced many out of the market.

That’s not sustainable anywhere in the world, says Yongheng Deng, the John P. Morgridge Distinguished Chair in Business and professor in the Department of Real Estate and Land Economics. He studies the lack of affordable housing and how it can impact cities such as New York, San Francisco, Shanghai, and Beijing. With housing being both a tool of consumption (residence) and an investment, prices keep out the people who serve those cities: firefighters, teachers, police officers, or nurses, as well as the young talent that businesses and industries require. That’s not a strictly American problem; according to the United Nations only 13% of the world’s cities have affordable housing.

There are many ways to approach that issue, and Deng focused on policy solutions. He studied housing in Singapore, where costs rose so much that the government implemented “cooling measures” to control them. After the 2008 global financial crisis, Singapore’s interventions included taxes on property sold within a year of purchase, caps on length of residential loans, and minimum cash requirements at purchase.

Residential home prices fell 10-15% in the four years that followed, Deng found, without any evidence that the policies had a major negative impact on the broader economy. Singapore’s specific methods might not apply everywhere, but show that policy can lead to solutions for pricing people out of the market.

We often think of affordable housing as an issue specific to low-income households, but “superstar cities” show that affordability issues have wide-ranging consequences. Even so, Deng’s research conveys optimism if the right policy solutions are found.

Jigsaw puzzle pieces

Q: How does founders’ experience impact startup survival?

When launching a company, two approaches have proponents. One take is that varied experience among founders drives innovation and strengthens a startup’s chance of survival. The other posits that founders’ shared experience in a firm within the startup’s industry leads to survival because of common knowledge and organizational routines.

Optimally, it takes both, according to research by Florence Honoré, assistant professor of management and human resources. She studies how prior work experiences influence startup survival, an important component for the high risk, high reward ventures that can drive economic growth.

Honoré studied data from 6,000 U.S. companies in technological manufacturing industries that launched between 2000 and 2006. Her research included startups with at least two employees who would be considered the founding team, and regarded founders to be members of the original team regardless of title. From there she identified the type of experience founding team members brought to the new venture—shared within a firm in the startup’s industry or a variety acquired through different firms and roles.

During the time of Honoré’s study, 27% of the startups failed. She found that founders’ shared experience helped a startup’s survival, while a variety of experience within the founding team was a disadvantage. When combined, however, a startup’s survival rate increased dramatically. Founders’ shared experience and knowledge create a foundation that benefits from the experience variety of other team members.

These details are important for the startup community, because entrepreneurial teams are responsible for 85% of all tech ventures. Launching a new venture with previous colleagues might have its appeal, but it’s important to understand what others can bring to the team, too. A startup’s survival might depend on it.

Watch a video summarizing this research.

Illustration of doctor e-visit

Q: Do e-visits create more or less work for physicians?

Technology has made so many things easier, from booking a flight to having a virtual visit with your doctor. But while buying an airline ticket can be done on your own, a medical e-visit requires a physician. How does that impact the doctor’s time?

Quite a bit. That’s what Hessam Bavafa, assistant professor of operations and information management, discovered as he researched 8½ years of data about physicians’ workload. His study showed that primary care physicians’ number of hours containing work, through office visits or e-visits, nearly doubled with the adoption of e-visits.

The study tracked data of more than 3.3 million patient visits, including 1 million e-visits. The data covered 2008, the first year the studied health system began incorporating e-visits, until 2016 and showed significant impact on the physicians’ time.

In short, e-visits make more work for physicians, who make up the time outside of standard office hours. Most of that comes earlier in the morning or later in the evening, but Bavafa found a significant amount of “work after work” on the weekends, too. The research also found that a day heavy with e-visits doubled the probability that some e-visits took place during a physician’s personal time.

The implications of the additional work, Bavafa says, are important to note. Fatigue-related medical error is a concern, as is physician burnout. In addition, the research provides a basis for further discussion of how multichannel (in person and virtual) service delivery can impact people in other professions.

E-visits are here to stay—especially with the uptick seen since the pandemic. But, Bavafa says, understanding their impact is a healthy step toward doing what’s best for physicians and their patients.