Elaine Pak

The increasing adoption of artificial intelligence (AI) presents firms with an important choice between using these new technologies for short-term optimization (monitoring) or long-term adaptation (innovation). This study examines how corporate ownership structures influence AI implementation patterns. We argue that governance systems that emphasize optimization and rigorous performance metrics may inadvertently trigger the “exploitation trap,” where AI-driven changes undermine the exploratory activities essential for long-term adaptation and competitive advantage. By comparing owners with short-term horizons (e.g., private equity and hedge funds) against long-term-oriented owners (e.g., dedicated institutional investors), we analyze how varying levels of owner commitment and monitoring capacity shape AI adoption patterns, as well as the resulting trade-offs between exploitation and exploration. The findings contribute to the literature on strategy, corporate governance, and technological adoption, suggesting that ownership structure is an important factor in whether and how firms adopt new technologies.…Read More

The private equity industry has grown significantly in the past decades, and this explosive growth has generated much interest on the impact of private equity’s footprint on the economy and the labor market. Using career history data from nearly 11 million employees at 16,137 private equity-backed firms from 2000 to 2024, I find that firms controlled by private equity recruit specialized managerial workforce. Post-deal, newly hired senior executives and middle managers are more likely to have previously worked at a private equity-backed firm. Moreover, they are also more likely to have worked at a firm backed by the same private equity owner. I find evidence that some private equity firms facilitate managerial mobility within their portfolio, creating an “internal” network of senior and middle managers that mirrors the way public corporations have traditionally groomed executives internally. Altogether, my results suggest that private equity firms rely on specialized managerial workforce who are familiar with private equity operations and with a specific owner’s playbook.…Read More