Startups, Unicorns, and the Local Inflow of Inventors

Benjamin Balsmeier, Lee Fleming, Matt Marx and Seungryul Ryan Shin

No 27605, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We provide evidence that the arrival of technical human capital improves regional entrepreneurship, both by increasing firm entry and reducing failure. The results also indicate negative externalities upon low-tech and competing industries: the arrival of inventors in a county shifts the locus of venture capital investment away from low-tech startups to high-tech startups and moreover towards new ventures in the same sector as those inventors’ skills. Identification is provided by a shift-share instrument combining the spatial distribution of surnames in the 1940 U.S. Census with thousands of surname-specific shifts based on modern inventor mobility.

JEL-codes: J24 J61 L26 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-ent, nep-lab, nep-mig, nep-sbm, nep-tid and nep-ure
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