📚25contents - amoon.world🌙

|Section/Subsection|🔐Research Question|🧱Literature Brick|🔑Key Message|📊Empirical Evidence/Mathematical Formalization| |---|---|---|---|---| |1. Industry Evolution|How do industries evolve over time and what is the role of entrepreneurs?|• Gibrat (1931) - Law of proportionate effect • Viner (1932) - U-shaped cost structures • Lucas (1978) - Formal modeling of firm size • Jovanovic (1982) - Selection effects|🧍‍♀️Entrepreneurs have different efficiency levels (e.g., managerial talent) → 🌏Industry evolves as efficient firms grow while inefficient firms exit, creating patterns that deviate from Gibrat's Law|• Small firms grow faster than large firms • Small firms have more variation in growth • More exit among small firms • Fig 1-4: Decker et al. (2014/2016) shows declining business dynamism and high-growth firms • Autor et al. (2020) documents falling labor share and rise of superstar firms| |2. Inventor Employment|Where have creative talents gone and how has employment of inventors changed over time?|• Akcigit and Goldschlag (2023) • Cunningham et al. (2021) - Killer acquisitions • Decker et al. (2014) - Business dynamism|🧠Inventors are increasingly concentrated in large incumbents and less likely to become entrepreneurs → Incumbents pay inventors more but produce less innovative output|• Akcigit & Goldschlag (2023) linked LEHD and patent data to show inventor employment patterns • Increasing inventor concentration in large firms • Lower productivity of inventors at incumbents • Strategic considerations lead incumbents to offer higher wages but not implement ideas • Paradox: Declining entrepreneurship despite rising VC investment| |3. Unicorn Phenomenon|Why don't billion-dollar private companies go public?|• Davydova et al. (2022) • Beck et al. (2004) • Prior literature on public vs. private firm costs|🗺️Two explanations: (1) Greater access to private funding reduces liquidity motive for IPOs, and (2) Greater cost of disclosure for intangible-intensive firms → Remaining private until building sufficient intangible assets|• Fig 1: Proliferation of unicorns since 2010 • Table 3: Changes in investor composition and distance when firms reach unicorn status • Table 6: Panel regressions showing determinants of unicorn status, including industry funding flows • Unicorn IPOs have median sales more than 25 times larger than other IPOs| |4. Theoretical Models of Industry Evolution|What mechanisms explain the observed patterns of industry evolution?|• Jovanovic (Econometrica, 1982) - Selection and evolution • Cabral and Mata (AER, 2003) - Firm size distribution • Jovanovic and McDonald (JPE, 1994) - Innovation cycles • Hopenhayn et al. (Econometrica, 2022) - Firm demographics|🧭Firms discover their efficiency over time, leading to selection and "up or out" dynamics → 🧠Different mechanisms (efficiency discovery, financial constraints, technological innovation, demographic changes) can explain industry patterns|• Jovanovic: Fig 1 shows trajectory of high vs. low-cost firms • Cabral/Mata: Fig 3-5 show distribution of firm sizes evolves from skewed to more symmetric • Jovanovic/McDonald: Fig 3 predicts patterns in tire industry with dramatic shakeout • Hopenhayn: Entry rate = labor force growth - growth in average size + exit rate| |5. Entrepreneurial Clusters|Why do entrepreneurial firms cluster geographically and what are the consequences?|• Marshall (1890) - Three rationales for agglomeration • Chinitz (1961) - Small suppliers promoting entrepreneurship • Jacobs (1970) - Local diversity • Saxenian (1994) - Silicon Valley labor markets • Florida (2001) - Creative class|🌏Entrepreneurial clusters form through three mechanisms: (1) labor pooling, (2) customer-supplier interactions, (3) knowledge spillovers → 👓Location affects entrepreneurial productivity|• Darby & Zucker (1998): Biotech firm creation tied to star scientists' locations • Glaeser et al. (2015): Doubling VC-funded firms leads to 0.48-2.21% more establishments • Moretti (2021): Moving from median to 75th percentile tech cluster increases productivity by 8-12% • Andrews (2023): Prohibition reduced patenting by 12% by disrupting informal social interactions • Lerner et al. (2024): University affiliation affects commercial spillovers of academic research|