24-25 TEPE papers tested by Josh Lerner

[hyunjimoon]

Theoretical and Empirical Perspectives on Entrepreneurship

Mar.19-26

I shared my belief on inspection paradox (whenever the probability of observing a quantity is related to the quantity being observed) can help me model the difference between system-level and (two) agent-level (perceived) uncertainty. I framed it as bilateral information asymmetry, but "different observer type" seems to be more fundamental. Josh recommended a paper (digesting) and also reaching out to Bob Gibbons. Based on my current belief and goal, I made mockup to get Josh's evaluation.

Belief: different types of observer (actor and environment) from inspection paradox is relevant to different ENT dynamics (e.g. Decker et al, guzman-stern)

Goal: understand different ENT dynamics with the help of concrete models of observation and their relation in transportation

Action: prepare mockup to get Josh's evaluation on my goal; start from different observer types which is fundamental cause of inspection paradox. Mockup from process which synthesized traffic flow with Josh's Entrepreneurship and Industry Evolution slide:

Observer/Measurement Type	Entrepreneurial Dynamics (Including Cause of Heterogeneity)	Traffic Flow (Including Cause of Non-Stationary Traffic)
Quantities of Interest (QoI)	Growth	Speed
Global Observer	Macro: May overlook nuances of local markets and trends, leading to generalized growth understanding. Cause: Sector-specific trends and macroeconomic factors can obscure individual dynamics.	Aerial Survey: Observes overall flow, missing finer details. Cause: Environmental factors and broad policies affect overall flow.
Local Observer	Micro: In-depth understanding of specific markets or sectors, identifying unique growth opportunities. Cause: Micro-level factors like firm strategies and local market conditions influence dynamics.	Stationary Observer: Captures detailed, location-specific dynamics. Cause: Localized events and regional policies affect traffic flow in particular areas.
QoI Observed by Global Observer Across Time	Longitudinal Studies: Focuses on evolutionary entrepreneurial activities over time, possibly overlooking cross-sectional differences. Cause: Changes in macro conditions and sector-wide shifts.	Time Mean Speed: Measures dynamics change over time, missing spatial variations. Cause: Infrastructure developments or major policy shifts altering traffic patterns over time.
QoI Observed by Local Observer Across Space	Cross-sectional Studies: Highlights geographical or sectoral growth differences, possibly missing temporal trends. Cause: Geographic and sector-specific heterogeneity, including local economic conditions.	Space Mean Speed: Captures spatial variations in dynamics, missing temporal changes. Cause: Physical characteristics of road network and localized demand fluctuations affect flow.
Cause of Heterogeneity	Variability stems from entrepreneurship types (subsistence vs. transformational), innovation rates, and sector dynamics.	Variations in driver behavior, vehicle types, and travel purposes lead to fluctuating traffic characteristics.
Information Asymmetry	In entrepreneurial ecosystems, startups have more detailed knowledge about their potential, while investors need to screen the best opportunities.	Drivers have more information about their intended routes and timings than the system designed to optimize traffic flow.
Role of Intermediaries	Intermediaries like venture capitalists and incubators help bridge the information gap between investors and startups, facilitating efficient resource allocation.	GPS and traffic management systems act as intermediaries, using real-time data to optimize routes and reduce congestion.
Integration with Cause of Heterogeneity	Information asymmetry and the strategic role of intermediaries contribute to the observed heterogeneity in entrepreneurial success, growth rates, and innovation levels.	Technology-mediated intermediation mitigates inefficiencies caused by asymmetric information, leading to smoother traffic flow and reduced congestion.

This integrated table elucidates the complex interplay between observation perspectives, the dynamic nature of entrepreneurial activities and traffic flows, and the myriad causes contributing to the observed heterogeneity. It demonstrates how different observational lenses (global vs. local; across time vs. space) influence our understanding of growth and speed in these domains while underscoring the multifaceted factors that contribute to the variability in observed phenomena. This approach provides a nuanced perspective that acknowledges the richness and complexity of analyzing dynamic systems, whether they be in the realm of entrepreneurship or traffic flow analysis.

Mar.26 Q

• does the table make sense to you?
• is it correct across sector and across firm size are different layers of heterogeneity? How would it affect measurements of growth based on the table above?
  

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raw materials in https://github.com/Data4DM/BayesSD/discussions/214

[hyunjimoon]

from updated TEPE25_syllabus.pdf and given that i took below four classes, i'm interested in auditing the five below.

2024

Class 4: Capital Constraints and Entrepreneurship
Class 8: Dancing with Elephants: Entrepreneurs and Corporations
Class 9: Returns to Entrepreneurship
Class 11: Academia, Hubs, and Entrepreneurship

2025

? Class 1: January 28 (Josh) Course Introduction The Mystery of Disappearing Entrepreneurship and Industry Evolution
? Class 4: February 18 (Josh) Entrepreneurship and the Developing World
Class 6: March 4 (Josh) Data for Studying Entrepreneurship
Class 7: March 11 (Shai) Entrepreneurial Finance: Selection and Deal Structuring
Class 8: March 25 (Josh) Entrepreneurial Finance: Governance and Value Added Referee Report Due!

[hyunjimoon]

EMPIRICS

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

THEORY

Topic	Year	Author	Link	Takeaway
Industry Evolution and Entrepreneurship	2003	Cabral & Mata	On the evolution of firm size distribution: Facts and theory
	2022	Hopenhayn et al.	From population growth to firm demographics: Implications for concentration, entrepreneurship and the labor share
	1982	Jovanovic	Selection and the evolution of industry
	1994	Jovanovic & McDonald	The life cycle of a competitive industry
Labor Markets and Entrepreneurship	1979	Khilstrom & Laffont	A general equilibrium entrepreneurial theory of firm formation based on risk aversion
	2005	Lazear	Entrepreneurship
Economic Growth and Entrepreneurship	2018	Akcigit & Kerr	Growth through heterogeneous innovations
	1990	Baumol	Entrepreneurship: Productive, unproductive, and destructive
	1991	Murphy et al.	The allocation of talent: Implications for growth
Capital Constraints and Entrepreneurship	2006	Cagetti & De Nardi	Entrepreneurship, frictions, and wealth
	1989	Evans & Jovanovic	An estimated model of entrepreneurial choice under liquidity constraints
	1994	Holtz-Eakin et al.	Sticking it out: Entrepreneurial survival and liquidity constraints
	1981	Stiglitz & Weiss	Credit rationing in markets with imperfect information
Public vs. Private Markets	2006	Brau & Fawcett	Initial public offerings: An analysis of theory and practice
	1999	Chemmanur & Fulghieri	A theory of the going-public decision
	2001	Maksimovic & Pichler	Technological innovation and initial public offerings
	1995	Zingales	Insider ownership and the decision to go public
Entrepreneurial Finance: Governance and Value Added	1994	Aghion & Tirole	On the management of innovation
	2005	Dessein	Information and control in ventures and alliances
	2017	Nanda & Rhodes-Kropf	Financing risk and innovation
	1999	Neher	Staged financing: An agency perspective
	1994	Admati & Pfleiderer	Robust financial contracting and the role of venture capitalists
	2003	Cornelli & Yosha	Stage financing and the role of convertible securities
Dancing with Elephants: Entrepreneurs and Corporations	2011	Hellmann & Perotti	The circulation of ideas in firms and markets
	2011	Manso	Motivating innovation
Returns to Entrepreneurship	2009	Vereshchagina & Hopenhayn	Risk taking by entrepreneurs

[hyunjimoon]

🚨todo (help welcome!!)
archive and summarize each lecture note + transcript

TEPEI25_lec1to5.pdf

TEPEI Class 7 Shai_otter_ai.txt
TEPEI Class 7 Shai (2_2)_otter_ai.txt