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on Entrepreneurship |
| By: | Andrea Bellucci (University of Insubria and MoFiR); Alexander Borisov; Gianluca Gucciardi (University of Milano-Bicocca and MoFiR); Alberto Zazzaro (University of Naples Federico II, CSEF and MoFiR.) |
| Abstract: | Technological advancements and globalization of venture capital (VC) point to a diminishing role of direct face-to-face (F2F) interactions between VCs and entrepreneurs seeking funding. We show that ability to conduct such interactions remains an important factor for segments of the VC market, and especially for its internationalization. Using a sample of VC deals around the world, and the staggered implementation of travel restrictions across countries in response to the spread of Covid-19 in 2020, we find that investment by foreign VCs in a country drops after it halts inbound travel. Our analysis of possible channels suggests that information asymmetry between contracting parties is the main driver of the importance of F2F, while technological constraints on the transmission of information and cultural differences are less significant. |
| Keywords: | Face-to-Face Interaction, Investments, Venture Capital |
| JEL: | G24 F21 D81 E22 E44 |
| Date: | 2024–06–23 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:721&r= |
| By: | Shi, Xiangyu; Zhang, Xin |
| Abstract: | We study how extreme (high) temperatures affect firm dynamics---entry, exit, and aggregate productivity---in Chinese manufacturing sectors. Existing studies focus on the effects on incumbent firms (intensive margin), while we examine the effects on entry and exit (extensive margin), and their relationship with the aggregate productivity. Extreme temperatures lower the productivity of incumbent firms (productivity effects), while selecting firms with higher productivity to survive (selection effect). Exploiting a unique data set on the registration information of the universe of firms allows us to document this novel general equilibrium mechanism, whereby resources released by eliminated low-productivity firms are reallocated to firms with higher productivity. Thus, the combined effects on aggregate productivity are muted, a finding that differs from the consensus in the literature that extreme (high) temperatures worsen productivity and economic outcomes. We quantify these effects using a heterogeneous firm framework a la Melitz (2003). The results shed light on the importance of firm dynamics in stipulating climate policies. |
| Keywords: | C15, D21, D22, E23, Q56 |
| JEL: | C1 D2 E2 L2 Q5 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121351&r= |
| By: | Shi, Xiangyu; Wang, Chang |
| Abstract: | Input-output linkages among sectors and firms are largely overlooked when assessing regulatory policies. Using a carbon emissions regulation in China as an example, we find that the regulation facilitates the transition to green technologies and reduces entry and carbon emissions in the regulated sectors with large carbon emissions. We also find unintended spillovers via the input-output network, resulting in more entry and innovation in the downstream sectors; and less entry and innovation in the upstream sectors. These facts can be rationalized by a firm-dynamics model with input-output linkages. The results of quantitative exercises are much different when taking input-output linkages into account. |
| Keywords: | carbon emissions regulation; firm dynamics; innovation; input-output networks |
| JEL: | C1 D2 E2 L2 Q5 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121359&r= |