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Declining Business Dynamism among Our Best Opportunities: The Role of the Burden of Knowledge

Thomas Astebro, Serguey Braguinsky and Yuheng Ding

No 27787, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document that since 1997, the rate of startup formation has precipitously declined for firms operated by U.S. PhD recipients in science and engineering. These are supposedly the source of some of our best new technological and business opportunities. We link this to an increasing burden of knowledge by documenting a long-term earnings decline by founders, especially less experienced founders, greater work complexity in R&D, and more administrative work. The results suggest that established firms are better positioned to cope with the increasing burden of knowledge, in particular through the design of knowledge hierarchies, explaining why new firm entry has declined for high-tech, high-opportunity startups.

JEL-codes: J24 J3 O3 (search for similar items in EconPapers)
Date: 2020-09
New Economics Papers: this item is included in nep-bec, nep-cse, nep-ent, nep-knm, nep-lma and nep-sbm
Note: PR
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