Anand Nandkumar
F 203, Faculty housing,
Indian School of Business
Gachibowli, Hyderabad 500 032 India
+91-40-23187205
AC2 level 1, Room # 8126
Indian School of Business
Gachibowli Hyderabad 500 032 India
+91-40-23187163; Fax:+91-40-23187032
[email protected]
ACADEMIC POSITIONS
Indian School of Business
Assistant Professor of Strategy, Fall 2008-present.
EDUCATION
Carnegie Mellon University, Pittsburgh, PA
Ph.D. in Public Policy and Management, July 2008
Dissertation title: “Securing their future? The role of Markets for technology, organization
capabilities and opportunity costs on business model and performance in the Information security
market”
Thesis committee: Professors Ashish Arora, Steven Klepper and Dr. Rahul Telang
Carnegie Mellon University, Pittsburgh, PA
Masters in Information Systems, Management May 1998
Institute of Chartered Accountants of India, India
Certified Public Accountant, June1995
University of Madras, Chennai, India,
Bachelor of Commerce, May 1991
RESEARCH INTERESTS
• Entrepreneurial strategy
• Markets for Technology, Intellectual property and innovation
• Competition in IT and pharmaceutical markets
• Economics of Information Security
PUBLICATIONS
• "Competition and quality restoration: An empirical analysis of vendor’s response to software
vulnerabilities" with Ashish Arora and Rahul Telang Information Economics and Policy, 22(2):164-77
• “Does information security attack frequency increase with vulnerability disclosure? An empirical
analysis” with Ashish Arora and Rahul Telang , Information Systems Frontier(2006) 8:350-362
• “Insecure advantage? Markets for Technology and the Value of Resources: Evidence from the
Information Security Market” with Ashish Arora (accepted, Strategic Management Journal)
• "Cash-out or flame-out! Opportunity cost and entrepreneurial strategy: Theory, and evidence
from the information security industry” with Ashish Arora (accepted, Management Science)
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WORKING PAPERS
Entrepreneurship
Startup entry strategies and opportunity costs: A group based trajectory modeling approach” (in
progress)
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A preponderance of papers in the strategy and economics literature that study the consequence of
opportunity costs of entrepreneurship deal with the influence of opportunity costs on selection into
entrepreneurship. However, to our knowledge, not many scholars have studied how opportunity costs of
entrepreneurship influences entry strategies that entrepreneurs choose at the time of entry. We develop a
model in which, an entrepreneur at the time of entry has to choose between two business models, one which
exhibits long tailed returns and the other than exhibits more stable returns albeit with a significantly lower
upside. We show that entrepreneurs with higher opportunity costs are more likely to choose more risky
business model, which not only has a higher chance of success but also a higher chance of failure. We also
empirically test this hypothesis using a very recent statistical approach called as the group based trajectory
modeling approach.
"Venture capital and financing of new industries" with Thomas Hellmann and Marco Da Rin (in
progress)
One can identify two leading hypotheses concerning the role of venture capital across the industry life cycle.
One theory is that venture capitalists use their expertise to identify an industry in its nascent state. They
invest aggressively in the very early stages of the industry cycle, but withdraw as the industry matures, gains
broader recognition, becomes more competitive. The alternative view is based on the work of Scharfstein
and Stein (1990) concerning herd behavior. This theory emphasizes that venture capitalists are investing
money on behalf of institutional investors, and therefore worry about being able to justify their investment
choices, a pattern found to be present in the mutual fund industry (Chevalier and Ellison, 1997). Given the
risky nature of venture capital investing, they therefore focus on those industries that have already proved
their viability, and avoid new, untested industries where investments may be harder to justify. The goal of
this project is to empirically identify the role VCs play in financing innovation over an industry life cycle
Innovation:
"Absorptive Capacity, Firm Capabilities & Destination in Learning by Exporting: New Evidence from
Indian Pharmaceutical Producers, 1994-2007" (Working paper, most recent version January 2011)
This paper offers new insights on learning by exporting in emerging economy firms based on a novel dataset
of Indian pharmaceutical producers between 1994 and 2007. We find that, exporting per se, results in
enhanced firm level technical efficiency as measured through reduced costs. Exporting also betters firm-level
ability to launch new products in domestic markets. These broad gains in addition to improved R&D
efficiency are manifested especially when firms export to US rather than to non-US destinations. Finally,
among exporting firms, ones with a higher level of absorptive capacity and firm-capability ( in manufacturing
or in marketing) were the ones who gained most from exporting activity than others. (This paper has been
nominated for the best paper proceedings in the Association of International Business annual conference at Rio,
2010 and won the best paper in the emerging markets category at AIB conference, 2010)
"Patently different? How does the strength of patents influence globalization of R&D? Empirical
evidence from Indian patent reforms" ( with Kannan Srikanth; Working paper, most recent version,
January, 2011)
The literature has shown that intellectual property protection is critical incentive for firms to conduct R&D
in a foreign country. A tighter IP regime enables firms increases appropriability and hence should increase
multinational R&D activity at that location. By implication one would expect multinational R&D activity to be
non-existent in a country that has weak IP regime. Contrary to this popular belief there has been a fair
amount of R&D activity even in a weak IP regime like India even prior to the enactment of the new patent
law which essentially tightened patent protection in India. The question thus not whether or not there is
R&D activity in a weak IP regime but rather which kinds of R&D activity happens in a weak IP regime versus
a strong IP regime. In order to address this question we look a how the recently enacted patent law
influenced the division of innovative labor within an organization. Looking for "within firm" effects provides
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with a lot of advantages. Most importantly, it enables us to avoid the typical pitfalls that typically arise in
cross sectional or even cross country regressions. Using a dataset comprising of US patents filed by US
companies that have an R&D facility in India and a hand-collected Indian IP litigation data, we empirically
explore how a weak versus a tight IP regime influences the division of innovative labor within an
organization.
“Optimal exclusivity period for PIV challenges” with Ram Bala (in progress)
The Hatch Waxman act, 1984 is an attempt to balance the two diverse public policy objectives -- to maintain
the incentives for large pharmaceutical companies to conduct high risk R&D. on one hand and lower prices
and greater access to medicines on the other. The act, permits potential generic manufacturers to litigate an
existing patent even before expiry (referred to as a para 4 litigation). One of the incentives to the generic
entrant to litigate is the 180 day blanket exclusivity that the FDA grants to a successful litigant. In this paper
we show that the blanket exclusivity period may be sub-optimal and may not enhance social welfare in all
cases. We also theoretically determine the optimal exclusivity period that maximizes social welfare.
Is external R&D really a silver bullet? with Kannan Srikanth (in progress)
Scholars point out that the era of industrial R&D in the US is long gone. One of the many reasons that is often
quoted is that in many industries there exists a thriving markets for technology (external R&D) which is
essentially a substitute for firms to have their own internal R&D organizations. That said, it is plausible that
the commercialization success of internal R&D versus external R&D may vary -- inventions typically require
complimentary technology for commercial success but developing complimentary technologies may require
a deep understanding of the underlying science itself. Using a dataset comprising of alliances and internal
R&D projects of top 10 research intensive global pharmaceutical firms, controlling for selection effects, this
work examines if the success rates of internal and external R&D vary. In addition this work also explores
whether certain types of firms are systematically better at commercializing external R&D than others and
whether experience in "related science" is important to successfully commercialize external R&D.
Under what conditions does weakening patent reforms increase social welfare? (in progress)
An optimal IP protection policy is one that provides enough incentives to innovation but yet limited
monopoly power to innovating firms. However a weak patent regime need not necessarily increase social
welfare (through increased product market competition). Innovating firms or incumbents have multiple
strategies to thwart competition. They can collude with the entrant and delay entry (reverse settlement) or
can make their products virtually inimitable. Or, they can increase entry barriers by essentially introducing a
low cost variant by themselves. Also whether or not weakening patent regime increases competition
depends on the capabilities of the potential entrants. Using a unique dataset comprising of generic
pharmaceutical entrants that entered 330 US pharmaceutical markets between 2001 and 2010, this work
empirically examines the conditions under which weakening patent regimes can increase social welfare.
Other
How do recessions affect managerial labor markets? with Tarun Jain (in progress)
We explore how recessions affects the nature of the managerial labor market. The recent recession has
differential effects on different sectors and using this our goal is to show that these differential shocks
impacted the nature of managerial labor that was supplied in the managerial labor market. Using a novel
dataset of ISB graduates we show that for a given individual ability level the recession affected the nature of
specialization of MBA students that graduated in the recession years relative to those in the non-recession
years.
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Time compression diseconomies and learning by doing with Samuel Kleiner and Kannan Srikanth (in
progress)
The literature on learning curves conclude that marginal cost of following the new technology decreases
with cumulative output. However, the same literature also provides evidence of the learning curve the
different industries and different firms have different learning curves. Some firms have a steeper fall in their
cost curves with cumulative output than other firms. The idea behind this proposed work is to push the
boundaries of this work to try and understand the different learning curve rates. Using a novel dataset of
board certified laparoscopy surgeons in New York state, we study how time compression diseconomies
affects learning by doing.
CONFERENCE AND SEMINAR PAPERS PRESENTED:
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Academy of Management annual conference, Montreal, August 2010, "Absorptive Capacity, Firm
Capabilities & Destination in Learning by Exporting: New Evidence from Indian Pharmaceutical
Producers, 1994-2007"
Association of International Business annual conference, Rio De Janerio, June 2010, "Absorptive
Capacity, Firm Capabilities & Destination in Learning by Exporting: New Evidence from Indian
Pharmaceutical Producers, 1994-2007"
National Bureau of Economic Research (NBER), Boston, March 2010, “Cash-out or flame-out!
Opportunity cost and entrepreneurial strategy: Theory, and evidence from the information security
industry” (presented by Ashish Arora)
Roundtable on Engineering and entrepreneurship research (REER) Georgia Institute of Technology,
Atlanta, November 2009, “Cash-out or flame-out! Opportunity cost and entrepreneurial strategy:
Theory, and evidence from the information security industry” (presented by Ashish Arora)
Duke University, October 2009, Cash-out or flame-out: How does entrepreneurial opportunity cost
influence entrepreneurial strategy? Empirical evidence from the information security industry
(presented by Ashish Arora)
University of Michigan, September 2009, Cash-out or flame-out: How does entrepreneurial
opportunity cost influence entrepreneurial strategy? Empirical evidence from the information
security industry (presented by Ashish Arora)
Economics of Innovation and Entrepreneurship Conference Queens University, Canada, June, 2009,
Cash-out or flame-out: How does entrepreneurial opportunity cost influence entrepreneurial
strategy? Empirical evidence from the information security industry (presented by Ashish Arora)
DRUID Summer conference, Copenhagen, Denmark, June 2009, "Insecure advantage? Markets for
Technology and the Value of Resources: Evidence from the Information Security Market"
Roundtable on Engineering and entrepreneurship research (REER) Georgia Institute of Technology,
Atlanta, 2008 “Securing Their Future? Markets for Technology and Survival in the Information
Security Industry”
Duke University, November, 2007, “Markets for technology, entry and survival: Evidence from the
Information Security Market” (presented by Ashish Arora)
Emory University September, 2008 “Markets for Technology and Survival in the Information Security
Industry” (presented by Ashish Arora)
UCLA, September 2008, “Markets for Technology and Survival in the Information Security Industry”
(presented by Ashish Arora)
NBER conference on Entrepreneurship, strategy and structure, Jackson, September 2007 “Securing
their future? Entry and Survival in the Information Security Industry”
CCC doctoral consortium, Georgia Institute of Technology, Atlanta, April, 2007 Understanding the
sources of entry and performance: Evidence from Information Security market.
NBER's Entrepreneurship and the Innovation Policy and the Economy pre-conference, Chicago,
January, 2007. “Understanding the Determinants of Spawning and Diversification: Empirical
Evidence from the Information Security Industry.”
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Workshop in Information Systems and Economics, Kellogg School of Management, Northwestern
University December, 2006 “Competition and quality restoration: Empirical analysis of vendor’s
response to common vulnerabilities.”
Conference on Economics of Information and Communication Technologies, ZEW , Mannheim,
Germany, July 2006. “Competition and quality restoration: Empirical analysis of vendor’s response to
common vulnerabilities.”
Fifth Workshop on the Economics of Information Security, University of Cambridge, UK, May 2006.
“Competitive and Strategic Effects in the Timing of Patch Release.”
International industrial organization conference, Boston, MA, April 2006. “Competition and quality
restoration: Empirical analysis of vendor’s response to common vulnerabilities.”
Second Workshop on Economics of Information Security, University of Minnesota, May 2004. “Impact
of Vulnerability Disclosure and Patch Availability - An Empirical Analysis.”
NYU/CeDER Summer Workshop on the Economics of Information Technology, New York University,
June 2006. “Measuring disclosure threat in information security markets.”
AWARDS & HONORS
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Best paper, emerging markets track, AIB, Rio De Janerio, June 2010
W.W. Cooper award for best dissertation in Management Science, June 2009
CCC Doctoral Colloquium fellow, April 2007.
W.W.Cooper Departmental Fellowship (partial tuition remission), Carnegie Mellon University, 199798.
CyLab Grant to support research on “Measuring user willingness to pay for software quality”, 2005 –
2006. with Ashish Arora and Rahul Telang (CyLab is a university-wide and multidisciplinary
initiative that is affiliated with the CERT Coordination Center (CERT/CC), a leading internationally
recognized center of Internet security expertise and the US-CERT, a partnership between the
Department of Homeland Security’s National Cyber Security Division (NCSD) and the private sector
to protect our national information infrastructure.)
TEACHING EXPERIENCE
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SCIS, Strategic challenges for Innovation based startups, Indian School of Business, 2009-10, 2010-11
SIMT 098, Strategic Innovation Management, Indian School of Business, 2008-09, 2009-10, 2010-11
90710 Applied Economic Analysis, Heinz School, Carnegie Mellon University, Winter 2008
ACADEMIC SERVICES
Journals
Ad-hoc Reviewer
• Strategic Management Journal
• Management Science
• Industry and Corporate Change
• Strategic Entrepreneurship Journal
• Management Information Systems Quarterly
Conferences
• Reviewer DRUID summer conference, Summer 2009.
• Reviewer for Academy of Management Conference, 2008
• Ad-hoc reviewer, International Conference on Information Systems
• Ad-hoc reviewer, Workshop on the Economics of Information Security
PROFESSIONAL EXPERIENCE
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IT Associate, Morgan Stanley Dean Witter, New York (1998-2000)
Senior Consultant, Banking and Financial Services E-commerce, SIFY (2000-2001)
Product Manager, Vergil Technologies Pvt. Ltd. San Mateo, California (2001-2002)
Advisor, Nrelate, Inc., (2009-present) and VulcanTech LLC (2008-present)
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