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ABSTRACT Dissertation Title: THE EFFECTS OF INFOMEDIARIES, NONMARKET STRATEGIES AND CORPORATE POLITICAL ACTION ON INNOVATION ADOPTION By: Scott Benjamin Management and Organization Department Robert H. Smith School of Business University of Maryland, College Park June 20, 2012 Directed By: Rhonda K. Reger, PhD Associate Professor Management and Organization Department Strategic management research has recently become interested in the role of strategies that effect social stakeholders, such as the media, and how they affect the adoption of technological innovation. This dissertation consists of two essays that investigate how these stakeholders affect technological innovation adoption and how firms can increase the likelihood of having their products adopted by influencing these stakeholders. The first essay takes a fine-grained approach at investigating how the content of media coverage influences the adoption of wind projects in the United States wind energy industry. By focusing on certain characteristics of media coverage, I develop a theoretical framework that examines how coverage facilitates perception formation of an innovation in the market. Using content analysis, I examine certain characteristics of media coverage including media attention, positivity of tenor, issue diversity, economic & aesthetic issues and complexity of messaging, and hypothesize about the impact these characteristics have on how quickly stakeholders coalesce around a unified vision of a new technology. The second essay builds on the first essay by exploring how firms employ strategies in both social and political markets in an attempt to influence different segments of the general environment. I argue theoretically that general environmental segments, such as sociocultural and political markets, that were typically thought of as exogenous to the firm may be impacted by the firm. By introducing media specific concepts from the organizational literature and political strategies from the public policy domain to strategic management, this study investigates how firms can achieve more rapid technological innovation adoption by strategically using 1) social exchange mechanisms with the media for the facilitation of perception formation in the market and 2) corporate political activity to influence policy makers for the creation of beneficial legislation. I study both of these phenomena using a comprehensive sample of U.S. based wind projects that have either been proposed or are commercially operational between 2000 and 2009. The findings from both of these essays advance strategic management research by connecting themes from organizational research, mass communications and public policy research to help explain perception formation and technological innovation adoption in the market. THE EFFECTS OF INFOMEDIARIES, NONMARKET STRATEGIES AND CORPORATE POLITICAL ACTIVITY ON INNOVATION ADOPTION By Scott Benjamin Dissertation submitted to the Faculty of the Graduate School of the University of Maryland, College Park, in partial fulfillment of the requirements of the degree of Doctor of Philosophy 2012 Advisory Committee Rhonda K. Reger, PhD, Chair J. Robert Baum, PhD David Kirsch, PhD Michael D. Pfarrer, PhD Charles Stangor, PhD (Dean’s Representative) Copyright Scott Benjamin 2012 Dedication To my understanding wife and children ii ACKNOWLEDGEMENTS I want to take a moment to acknowledge the people that have been responsible for supporting me through this journey. I would never have been able to complete this dissertation had it not been for the guidance from my committee members and the support from my wife and children. My sincerest gratitude goes out to my advisor, Rhonda Reger. I thank Dr. Reger for her courage in taking me on as her student when few else would. I thank her for the exceptional guidance in managing this process, teaching me how to write like an academic and providing me with a supportive atmosphere for conducting my research. I want to thank Mike Pfarrer for patiently teaching me a variety of empirical methodologies and working weekly with me to hone these skills. Thank you for generously sharing your gifts with me. I would also like to thank Bob Baum who has been in my corner supporting my return to academia from the very beginning, sometimes believing in me more than I believed in myself. I thank David Kirsch who shaped my theoretical thinking over the past several years and provided sound career advice throughout the entire process. I also thank Chuck Stangor who introduced me to the concepts of social psychology which helped guide my research in social cognition. You have all given freely of your time, knowledge and support and for that my deepest gratitude. I also need to thank fellow doctoral students Annie Zavyalova and Seth Carnahan. You both were instrumental in helping me work through empirical models. I would also like to thank my children Noah and David. They sacrificed the presence of their dad for several years as I was immersed in classes, preparing for my comprehensive exam and writing my dissertation. Know that I am coming back to full time Dad status this fall. Finally, I want to thank my partner in life, Jill Benjamin. She has always been supportive of my crazy hair-brained entrepreneurial schemes and was equally supportive when I told her that I wanted to pursue my passion and change careers late in life. She has had to sacrifice so much by becoming a single parent on many occasions as I was consumed by this process and for that – my sincerest love, appreciation and gratitude. I’m looking forward to our adventure. “Choose a job you love, and you will never have to work a day in your life” − Confucius iii DECLARATION I, the undersigned, hereby declare that this dissertation entitled, “The Effects of Infomediaries, Nonmarket Strategies and Corporate Political Action on Innovation Adoption” is my own work, and that all the sources I have used or quoted have been indicated or acknowledged by means of completed references. __________________________ __________________________ Scott Benjamin Date iv TABLE OF CONTENTS Dedication……………………………………………………………………………………. ii Acknowledgement………………………………………………………………………….... iii Declaration…………………………………………………………………………………… iv Table of Contents…………………………………………………………………………….. v LIST OF TABLES…………………………………………………………………………… vii LIST OF FIGURES………………………………………………………………………….. viii DISSERTATION INTRODUCTION……………………………………….......................... 1 References…………………………………………………………………………………… 6 ESSAY 1 The Effects of Infomediaries on Innovation Adoption: Speed of Adoption in the US Wind Energy Industry Abstract……….……………………………………………….…………………….. 8 Introduction.…………………………………………………………………………. 9 Theory Development and Hypotheses………………………………………………. 12 Methodology………………………………………………………………………… 32 Sample Construction…………..…………………………………………………….. 35 Dependent and Independent Variables………………………………………………. 41 Control Variables…………………………………………………………………….. 53 Method of Analysis………………………………………………………………….. 57 Results…………..…………………………………………………………………… 60 Robustness Checks…………..………………………………………………………. 67 Contributions………………………………………………………………………… 71 Practical Implications……………………………………………………………….. 76 Directions for Future Research and Limitations…………………………………….. 77 Conclusions………………………………………………………………………….. 80 Figures………………………………………………………………………………. 83 Tables………………………………………………………………………………… 89 References…………………………………………………………………………… 98 ESSAY 2 The Effects of Nonmarket Strategies and Corporate Political Activity on Innovation Adoption Abstract……………………………………………………………………………… 110 Introduction………………………………………………………………………….. 111 Theory Development and Hypotheses………………………………………............. 114 Methodology ………………………………………….………………...................... 134 Sample Construction……………………………………………………………….... 136 Dependent and Independent Variables………....……………………………………. 140 Control Variables…………………………………………………………………….. 148 Method of Analysis…….…………………………………………………………….. 151 Results…………………………………………………………………...................... 156 v TABLE OF CONTENTS (CONT) Robustness Checks……...…………………………………………………………… 160 Contributions…..…………………………………………………………………….. 162 Limitations and Future Research…………………………………………………….. 165 Conclusions………………………………………………………………………….. 168 Figures……………………………………………………………………………….. 171 Tables………………………………………………………………………………… 180 References……………………………………………………………………………. 189 vi LIST OF TABLES ESSAY 1: Table 1: Secondary Phase Wind Power Plant Development……………………….. 89 Table 2: Coding of Issue Diversity ………………………………………………… 91 Table 3: Renewable Portfolio Standards by State………………………………….. 92 Table 4: Descriptive Statistics……………………………………………………… 93 Table 5: Correlations……………………………………………………………….. 94 Table 6: Variable Inflation Factors………………………………………………… 95 Table 7: Results from Cox Proportion Hazard Model Predicting Likelihood of Adoption Main Effects……………………………………………………………... 96 Table 8: Results from Cox Proportion Hazard Model Predicting Likelihood of Adoption Interaction Effects ………………………………………………………. 97 ESSAY 2: Table 1: A Description of General Environmental Factors…………………………. 180 Table 2: Wind Power Development Companies……………………………………. 181 Table 3: Sample Data Reduction……………………………………………………. 183 Table 4: Renewable Portfolio Standard……………………………………………... 184 Table 5: Descriptive Statistics………………………………………………………. 185 Table 6: Pairwise Correlations………………………………………………………. 186 Table 7: Results of Fixed Effects Cox Proportional Hazard Rate Analysis for Adoption of Wind Farms…………………………………………………… 187 Table 8: Part 2 – Results of Cox