D rawing on the attention-based view of the firm and the experiential learning literature, this paper develops and tests a theory on how firms learn to cope with the strains of activity load. We first empirically test the impact of activity load on the performance of a focal activity. We then study how this relationship is moderated by four dimensions of experiential learning: stock, homogeneity, pacing, and past success. We test our hypotheses on a proprietary database of 6,913 investments by 248 private equity firms in 77 countries between 1973 and 2008. We find that heavier activity loads exact a smaller toll on performance when firms have larger and more homogeneous stocks of prior experience. However, when firms' prior experience is more rapidly paced or successful, the toll of heavier activity loads on performance grows. Taken together, these four dimensions of experiential learning provide an initial theoretical basis for the development of a capability that we term attention modulation capability.

We study the impact of ownership on firm performance in an unexplored governance context: private equity (PE) firms and the buyouts in which they invest. We employ a multiple-membership, cross-classified, multilevel model on a unique database of 6,950 buyouts realized by 255 PE firms between 1973 and 2008 in 77 countries. The results document a significant PE firm effect (4.6%), the importance of which grows as time passes. We then study three contingencies that increase the importance of the PE firm effect: (1) value addition vs. selection strategies; (2) developed vs. emerging economies; and (3) economic downturns. Our findings shed new light on the sources of variance in buyouts' performance.

We propose that institutions that reduce barriers to entrepreneurship lead to intended consequences, increasing entry rate among individuals facing obstacles to entrepreneurship, such as women. But these regulations also have unintended consequences, decreasing the value appropriated by women who stay in paid employment, as these women lose support of their departing peers. Using an exogenous reduction in entry barriers in Portugal between 2005 and 2009, we find that women launch new ventures at higher rates than men, when entry barriers fall, but the same changes lead to a relative decline in women's wages in paid employment. These effects are amplified for women in managerial positions, who benefit if they leave but lose if they stay. Our study contributes to a nuanced understanding of rent-allocation in firms. Managerial Summary: We study the unintended consequences of lowering barriers to entry-an important institutional change to foster entrepreneurship, especially among those facing strongest entry barriers. We examine the effects of such regulations on women departing to entrepreneurship and those staying in incumbent firms, using the registry data from Portugal. The results show that lowering entry barriers leads to higher rates of entrepreneurial entry among women, as intended. But we also find that this deregulation reform results in a wider gender pay gap

Research summary:We investigate the impact of trade secret legal protection on firm market value in the context of acquisitions. On one hand, market value may increase because trade secret assets become better protected from rivals. On the other hand, market value may decrease because trade secret protection reduces information about the target and its competitors available to potential buyers, increasing uncertainty about its value. Buyers will discount their offers in expectation of being compensated for riskier deals. Using a sample of private equity investments in the United States, we find that trade secret protection has a positive effect in industries with high mobility of knowledge workers, but a negative effect in industries with (1) high resource-value uncertainty and (2) high poor-investment risk. Managerial summary:We argue that an increase in trade secret legal protection might not unequivocally benefit firm owners when selling their business. A stronger trade secret protection increases the market value of firms in industries with high workers' mobility, but it decreases the market value of firms in industries with uncertain resource value and/or high risk of poor-acquisition investments. Based on the contingent effect of trade secret protection, companies may want to adjust their strategic decisions, including where to locate or relocate, based in part on whether they will derive benefits or suffer losses when trade secrets are better protected. Finally, our study should help policymakers understand more fully the economic impact of government policies associated with trade secrets.