- 🧱[[25_TEPEI_theory]]
- from [[TEPE24_syllabus.pdf]], "rationale for entrepreneurial firms"
The nine-week “core” component will span economics and finance. It will emphasize the connections between economic theory—particularly in contract theory, organizational economics, and corporate finance--and empirical work. Among the topics that will be covered are the rationale for entrepreneurial firms, the structure of arrangements between entrepreneurs and investors, the relationship with larger entities, entrepreneurial strategy, and the decision to go public.
| Topic | Year | Author | Title | Takeaway |
| -------------------------------------------------------- | ---- | --------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Industry Evolution and Entrepreneurship | 2020 | Autor et al. | The fall of the labor share and the rise of superstar firms, Quarterly Journal of Economics, 135:2, 645–709 | |
| | 2022 | Davydova et al. | The unicorn puzzle, Working Paper 30604, National Bureau of Economic Research | |
| | 2016 | Decker et al. | Where has all the skewness gone? The decline in high-growth (young) firms in the U.S., European Economic Review 86, 4-23 | |
| | 2014 | Decker et al. | The role of entrepreneurship in us job creation and economic dynamism, Journal of Economic Perspectives, 28:3, 3-24 | |
| | 2020 | Decker et al. | Changing business dynamism and productivity: Shocks versus responsiveness, American Economic Review 110:12, 3952-90 | |
| Labor Markets and Entrepreneurship | 2020 | Azoulay et al. | Age and high growth entrepreneurship, American Economic Review: Insights, 2:1, 65-82 | |
| | 2022 | Bernstein et al. | Flight to safety: How economic downturns affect talent flows to startups. No. w27907. National Bureau of Economic Research | |
| | 2022 | Bernstein et al. | Do Startups Benefit from Their Investors' Reputation? Evidence from a Randomized Field Experiment. No. w29847. National Bureau of Economic Research | |
| | 2006 | Fallick et al. | Job-hopping in Silicon Valley: Some evidence concerning the microfoundations of a high-technology cluster, Review of Economics and Statistics 88:3, 472-481 | |
| | 2019 | Hombert et al. | Can unemployment insurance spur entrepreneurial activity? Evidence from France, Journal of Finance, 75:3, 1247-1285 | |
| | 2017 | Levine & Rubenstein | Smart and illicit, Who becomes an entrepreneur and do they earn more?, Quarterly Journal of Economics 132:2, 963-1018 | |
| | 2011 | Nanda & Sorensen | Workplace peers and entrepreneurship, Management Science 56, 1116-1126 | |
| | 2021 | Wallskog | Entrepreneurial spillovers across coworkers, Unpublished working paper, Stanford University | |
| Economic Growth and Entrepreneurship | 2019 | Garcia-Macia et al. | How destructive is innovation?, Econometrica, 87:5, 1507-1541 | |
| | 2015 | Glaeser et al. | Entrepreneurship and urban growth: An empirical assessment with historical mines, Review of Economics and Statistics 97, 498-520 | |
| | 2013 | Haltiwanger et al. | Who creates jobs? Small versus large versus young, Review of Economics and Statistics 95:2, 347-361 | |
| | 2011 | Samila & Sorenson | Venture capital, entrepreneurship and economic growth, Review of Economics and Statistics, 93:1, 338-349 | |
| Capital Constraints and Entrepreneurship | 2012 | Anderson & Nielsen | Ability or finances as constraints on entrepreneurship? Evidence from survival rates in a natural experiment, Review of Financial Studies 25:12, 3684-3710 | |
| | 2020 | Greenstone et al. | Do credit market shocks affect the real economy? Quasi-experimental evidence from the Great Recession and 'normal' economic times, American Economic Journal: Economic Policy 12:1, 200-225 | |
| | 2004 | Hurst & Lusardi | Liquidity constraints, household wealth, and entrepreneurship, Journal of Political Economy 112:2, 319-347 | |
| | 2014 | Robb & Robinson | The capital structure decisions of new firms, Review of Financial Studies, 27:1, 153-179 | |
| | 2015 | Tsoutsoura | The effect of succession taxes on family firm investment: Evidence from a natural experiment, Journal of Finance 70:2, 649-688 | |
| Public vs. Private Markets | 2015 | Bernstein | Does going public affect innovation?, Journal of Finance 70:4, 1365-1403 | |
| | 2018 | Bernstein et al. | The creation and evolution of entrepreneurial public markets, Journal of Financial Economics | |
| | 2017 | Doidge et al. | The U.S. listing gap, Journal of Financial Economics 123:3, 464-487 | |
| | 2020 | Ewens & Farre-Mensa | The deregulation of the private equity markets and the decline in IPOs, Review of Financial Studies, 33, 5463–5509 | |
| | 2014 | Ferreira et al. | Incentives to innovate and the decision to go public or private, Review of Financial Studies 27, 256-300 | |
| | 2013 | Gao et al. | Where have all the IPOs gone?, Journal of Financial and Quantitative Analysis 48:6, 1663-1692 | |
| | 1998 | Pagano et al. | Why do companies go public? An empirical analysis, Journal of Finance 53:1, 27-64 | |
| Entrepreneurial Finance: Governance and Value Added | 2016 | Bernstein et al. | The Impact of Venture Capital Monitoring, Journal of Finance, 71, 1591-1622 | |
| | 2011 | Chemmanur et al. | How does venture capital financing improve efficiency in private firms? A look beneath the surface, Review of Financial Studies 24:12, 4037-4090 | |
| | 2018 | Lerner et al. | The globalization of angel investing: Evidence across countries, Journal of Financial Economics, 127:1, 1-20 | |
| | 2004 | Lamoreaux et al. | Financing invention during the second Industrial Revolution: Cleveland, Ohio, 1870-1920, National Bureau of Economic Research Working Paper No. 10923 | |
| Entrepreneurial Finance- Selection and Deal Structuring | 2017 | Bernstein et al. | Attracting early stage investors: Evidence from a randomized field experiment, Journal of Finance 72:2, 509-538 | Uses a randomized field experiment on AngelList platform to show that information about the founding team has the strongest impact on investor interest; experienced investors focus primarily on team quality while inexperienced investors react to all signals including traction and existing investors |
| | 2020 | Gompers et al. | How do venture capitalists make decisions?, Journal of Financial Economics, 135:1, 169-190 | Based on survey responses from VCs representing over 63% of U.S. VC assets under management; finds team/management is ranked as most important factor both in deal selection and in responsibility for deal success/failure; VCs consider only about 1 deal per 100 considered |
| | 2009 | Kaplan et al. | Should investors bet on the jockey or the horse: Evidence from the evolution of firms from early business plans to public companies, Journal of Finance 64:1, 75-115 | Examines 50 venture-backed companies from business plan to IPO; finds that business ideas remain remarkably stable (98% consistency) while management teams change significantly; suggests that the business ("horse") may be more important than the team ("jockey") |
| | 2003 | Kaplan & Strömberg | Financial contracting theory meets the real world: An empirical analysis of venture capital contracts, Review of Economic Studies 70, 281-315 | Examines 200 VC financing rounds; finds convertible preferred stock is dominant security type; cash flow rights and control rights are allocated dynamically based on performance milestones; VC board control increases following poor performance; milestone-based financing more common in sectors where milestones are more verifiable (e.g., biotech) |
| | 2011 | Manso | Motivating Innovation, Journal of Finance | Optimal incentive structures for innovation should tolerate early failure and reward long-term success; traditional pay-for-performance schemes discourage exploration; venture capital provides long-term commitment that encourages innovation; milestone-based financing may undermine exploration if it creates short-term performance pressure |
| | 2002 | Cornelli & Yosha | Stage Financing and the Role of Convertible Securities, Review of Economic Studies | Models how convertible securities address the "window dressing" problem in staged financing where entrepreneurs may manipulate signals to secure additional funding; conversion feature creates a cost for manipulation because if VC converts, entrepreneur loses ownership; explains why VCs use convertible preferred securities |
| Dancing with Elephants: Entrepreneurs and Corporations | 2014 | Chemmanur et al. | Corporate venture capital, value creation, and innovation, Review of Financial Studies 27:8, 2434-2473 | |
| | 2021 | Cunningham et al. | Killer acquisitions, Journal of Political Economy, 129:3, 649–702 | |
| | 2013 | Ederer & Manso | Is pay for performance detrimental to innovation?, Management Science 59: 1496-1513 | |
| | 2010 | Lerner & Malmendier | Contractibility and the design of research agreements American Economic Review 100:1, 214-46 | |
| | 2020 | Ma | The life cycle of corporate venture capital, Review of Financial Studies, 33:1, 358–394 | |
| | 2014 | Seru | Firm boundaries matter: Evidence from conglomerates and R&D activity, Journal of Financial Economics 111:2, 381-405 | |
| Returns to Entrepreneurship | 2011 | Astebro et al. | Stars and misfits-self-employment and labor market frictions, Management Science 57, 1999-2017 | |
| | 2023 | Amornsiripanitch et al. | Failing just fine: Assessing careers of venture capital-backed entrepreneurs via a non-wage measure, National Bureau of Economic Research Working Paper No. 30179 | |
| | 2010 | Hall & Woodward | The burden of the nondiversifiable risk of entrepreneurship, American Economic Review 100:3, 1163-1194 | |
| | 2000 | Hamilton | Does entrepreneurship pay? An empirical analysis of the returns to self-employment, Journal of Political Economy 108:3, 604-631 | |
| | 2014 | Kartashova | Private equity premium puzzle revisited, American Economic Review 104:10, 3297-3334 | |
| | 2016 | Manso | Experimentation and the returns to entrepreneurship, Review of Financial Studies 29:9, 2319–2340 | |
| | 2002 | Moskowitz & Vissing-Jorgensen | The returns to entrepreneurial investment: A private equity premium puzzle? American Economic Review 92, 745-778 | |
| | 2016 | Sarada | The unobserved returns from entrepreneurship, Unpublished working paper, University of Wisconsin | |
| [[Data for enterpreneurship]] | year | authors | title | takeaway |
| | 2005 | Jaffe, Trajtenberg, et al. | Patents, Citations, and Innovations: A Window on the Knowledge Economy | Patent citations offer a way to measure innovation value but suffer from significant biases; 60% of citations are added by examiners rather than inventors; citations reflect legal considerations as much as knowledge flows |
| | 2022 | Lerner & Seru | The use and misuse of patent data: Issues for finance and beyond, Review of Financial Studies | Patent data contains systematic biases across time, geography, and technology fields that can lead to incorrect inferences in research; adjusting only for time trends is insufficient |
| | 2017 | Kogan, Papanikolaou, Seru, and Stoffman | Technological innovation, resource allocation, and growth, Quarterly Journal of Economics | Stock market reactions to patent grants provide forward-looking estimates of private value that complement citation data; median patent value estimated at $3.2M (1982 USD) |
| | 2021 | Kelly, Papanikolaou, Seru, Taddy | Measuring technological innovation over the long run, American Economic Review: Insights | Text analysis techniques can measure patent significance through novelty and impact metrics rather than just citation counts; enables consistent measurement across time periods |
| | 2024 | Ewens & Marx | Firm age and invention: An open-access dataset, Unpublished working paper | Private company patent linkage remains challenging; 40% of patents belong to 178K private entities while 60% belong to 13K public firms; created open-source database linking patents to private firms |
| | 2017 | Kaplan & Lerner | Venture capital data: Opportunities and challenges, NBER | VC data sources show significant inconsistencies; returns data varies by source; deal data from commercial databases often misses 40-60% of actual investments and has accuracy issues |
| | 2020 | Retterath & Braun | Benchmarking Venture Capital Databases, Working Paper | Different venture databases show significant reporting gaps; larger financings more likely to be reported; databases vary widely in coverage and accuracy |
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