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on Entrepreneurship |
| By: | Ufuk Akcigit; Sina T. Ates |
| Abstract: | In the past several decades, the U.S. economy has witnessed a number of striking trends that indicate a rising market concentration and a slowdown in business dynamism. In this paper, we make an attempt to understand potential common forces behind these empirical regularities through the lens of a micro-founded general equilibrium model of endogenous firm dynamics. Importantly, the theoretical model captures the strategic behavior between competing firms, its effect on their innovation decisions, and the resulting “best versus the rest” dynamics. We focus on multiple potential mechanisms that can potentially drive the observed changes and use the calibrated model to assess the relative importance of these channels with particular attention to the implied transitional dynamics. Our results highlight the dominant role of a decline in the intensity of knowledge diffusion from the frontier firms to the laggard ones in explaining the observed shifts. We conclude by presenting new evidence that corroborates a declining knowledge diffusion in the economy. We document a higher concentration of patenting in the hands of firms with the largest stock and a changing nature of patents, especially in the post-2000 period, which suggests a heavy use of intellectual property protection by market leaders to limit the diffusion of knowledge. These findings present a potential avenue for future research on the drivers of declining knowledge diffusion. |
| Keywords: | business dynamism, market concentration, competition, knowledge diffusion, step-by-step innovations, transitional dynamics |
| JEL: | E22 E25 L12 O31 O33 O34 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7854&r=all |
| By: | Thomas Hellmann; Ilona Mostipan; Nir Vulkan |
| Abstract: | We use equity crowdfunding data to ask how fundraising amounts can be explained by what entrepreneurs ask for, versus what investors want to invest. The analysis exploits unique features of crowdfunding where entrepreneurs not only set investment goals, but also chose when to close their campaigns. More experienced and more educated founder teams ask for more. Their campaigns succeed more often, and they raise more money. Female teams ask for less, are equally successful, yet raise significantly less. They also wait longer before closing campaigns, suggesting they want to raise more than what they originally asked for. |
| JEL: | G20 G24 M13 |
| Date: | 2019–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:26275&r=all |
| By: | Ufuk Akcigit; Emin M. Dinlersoz; Jeremy Greenwood; Veronika Penciakova |
| Abstract: | Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC-backing increases a startup’s likelihood of reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched with more experienced venture capitalists. An endogenous growth model, where venture capitalists provide both expertise and financing for business startups, is constructed to match these facts. The presence of venture capital, the degree of assortative matching between startups and financiers, and the taxation of VC-backed startups matter significantly for growth. |
| Keywords: | venture capital, assortative matching, endogenous growth, IPO, management, mergers and acquisitions, research and development, startups, synergies, taxation, patents |
| JEL: | G24 N20 O30 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7860&r=all |
| By: | Vladimir Asriyan (CREi, UPF, and Barcelona GSE) |
| Abstract: | We develop a new theory of information production during credit booms. In our model, entrepreneurs need credit to undertake investment projects, some of which enable them to divert resources towards private consumption. Lenders can protect themselves from such diversion in two ways: collateralization and costly screening, which generates durable information about projects. In equilibrium, the collateralization-screening mix depends on the value of aggregate collateral. High collateral values raise investment and economic activity, but they also raise collateralization at the expense of screening. This has important dynamic implications. During credit booms driven by high collateral values (e.g. real estate booms), the economy accumulates physical capital but depletes information about investment projects. As a result, collateral-driven booms end in deep crises and slow recoveries: when booms end, investment is constrained both by the lack of collateral and by the lack of information on existing investment projects, which takes time to rebuild. We provide new empirical evidence using US rm-level data in support of the model's main mechanism. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed019:147&r=all |
| By: | Herrade Igersheim; Charlotte Le Chapelain |
| Abstract: | This article traces the history of Amelie de Dietrich’s role - from 1806 to her death in 1855 - as the head of one of the oldest family-owned businesses: the De Dietrich company. Amelie took important strategic decisions to adapt the company to the new economic opportunities in the metal sector, which arose in the first half of the nineteenth century. Her choices were decisive for the future of the company; what is more, she succeeded in restoring the familial ownership. Given the entrenched assumptions about gender roles prevalent in the early nineteenth century, how can we explain her success in meeting such difficult challenges? Relying on Amélie de Dietrich’s own unpublished correspondence, this contribution examines the factors that explain her success in imposing herself as a Maître des Forges. It thus underlines women’s role – as business leaders – during the industrialization process. |
| Keywords: | French industrial revolution, entrepreneurship, invisible women, De Dietrich company. |
| JEL: | N63 N83 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2019-35&r=all |