New Technology and Business Dynamics

Hans K. Hvide and Tom Meling
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Hans K. Hvide: U of Bergen and U of Aberdeen
Tom Meling: Ohio State U

Working Paper Series from Ohio State University, Charles A. Dice Center for Research in Financial Economics

Abstract: How does the economy adapt to new technologies? While existing literature focuses on the response by established firms, we highlight the response by entrepreneurs. The context is a natural experiment: the staggered rollout of broadband internet in Norway. We find that the new technology had small effects on the survival, employment, and asset growth of established firms, but led to a sustained 25% increase in startup rates. Startup quality did not decline. Our findings support ideas from Schumpeter (1934) and Arrow (1962) that startups play an important role in adapting the economy to new technologies.

JEL-codes: D21 D24 G39 J23 L11 L25 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-ino, nep-lma, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:ohidic:2023-19

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