In recent years, more and more consumer goods firms have started to tap into the creative potential of their user communities to fuel their new product development pipelines. In this talk I will present a series of studies on the value of involving users into the firm’s innovation process via methods such as crowdsourcing. The studies address questions pertaining to innovation-related outcomes (quality of new product ideas) as well perceptual effects on participating and observing consumers. The talk will also discuss how recent advancements in the context of AI may further help leverage the innovation potential of user communities.

This paper examines the eco-innovation effects of foreign direct investment (FDI) in the context of emerging economies, with a focus on boundary conditions of environmental regulations and pollution intensity. We develop hypotheses by combining the economic rationality of the natural-resource-based view and the institutional rationality of the institution-based view. Using the propensity score matching method to match domestically-owned enterprises (DOEs) with foreign-invested enterprises (FIEs) in China during the period of 2001–2013, we find clear evidence that FIEs outperform their domestic counterparts of similar characteristics in conducting eco-innovation. This superior performance is particularly pronounced in cities with higher levels of environmental regulations and in industries with higher levels of pollution intensity. Furthermore, we assess the local impact of FDI on the eco-innovation of DOEs and find evidence that their activities through the actions of FIEs, in particular, their linkages with DOEs within cities, lead to increased eco-innovation in DOEs. FIEs’ eco-innovation spillover effects within a city are conditional on environmental regulations and pollution intensity. Thus, in China, multinational enterprises, the economic agents of FDI, are found to act as agents of change who not only conduct eco-innovation in the host country but also stimulate the eco-innovation of DOEs. This study has important practical implications as the transition of China, the world’s largest polluter and the second largest economy, to a green economy is a key concern for the world. Policies could continue with the encouragement of more FDI and their eco-innovation activities, further developing cities as the enablers of innovation and strengthening the formulation and implementation of the environmental policy instruments. Additionally, our finding of employment-based FDI spillovers having positive effects along both city and industry dimensions points to the need for government actions to further liberalize the labor market.

We show how to measure the welfare effects arising from increased data availability. When lenders have more data on prospective borrower costs, they can charge prices that are more aligned with these costs. This increases total social welfare, and transfers surplus from borrowers to lenders. We show that the magnitudes of the welfare changes can be estimated using only quantity data and variation in prices. We apply the methodology on bankruptcy flag removals, and find that removing prior bankruptcy information increases the surplus of previously bankrupt consumers substantially, at the cost of decreasing total social welfare modestly, suggesting that flag removals have low efficiency costs for redistributing surplus to previously bankrupt borrower.