Michael Ewens, Nadya Malenko, 08 August 2020

Corporate governance of privately held firms is becoming increasingly important given the rise in the number of private firms and recent governance scandals at such firms. This column examines the structure of the board of directors at venture-capital-backed startups and documents new facts about private-firm board size, the allocation of control, and board-composition dynamics. Within firms, board control shifts over time from venture capitalists to entrepreneurs. Independent directors play a previously under-explored ‘mediation’ role, mediating and resolving disputes between venture capitals and entrepreneurs.

Flavio Calvino, Chiara Criscuolo, Rudy Verlhac, 23 June 2020

Start-ups play a key role in OECD economies, but the COVID-19 crisis is reducing their creation, challenging their survival, and limiting their growth. Business registrations have been dropping significantly in recent months and a missing generation of new firms has significant implications for economic outcomes, notably employment. This column argues that these can be mitigated by taking steps to support existing start-ups and the creation of new firms. Policymakers should tackle short-term challenges, supporting short-term liquidity and availability of funding, but also and importantly foster the ability of start-ups to grasp new business opportunities. Policies that reduce barriers to entrepreneurship, provide incentives for start-ups, and boost entrepreneurial potential could help speed up the recovery and preserve aggregate employment in the long term.

Nicolas Ajzenman, Cevat Giray Aksoy, Sergei Guriev, 05 June 2020

The impact of the 2015 refugee crisis on sending and receiving societies has received significant scholarly attention. But there is little research on how the crisis affected ‘transit countries’ through which migrants travelled. This column studies 800 localities in 18 European countries to discover how local populations responded to the temporary presence of forced migrants. Data show that entrepreneurial activity of residents living closer to refugee routes fell considerably, and while anti-migrant sentiment increased in these areas, attitudes towards other minorities remained unchanged.

Petr Sedláček, Vincent Sterk, 25 April 2020

Startups are being hit hard by the COVID-19 pandemic and the lockdown. Introducing a ‘startup calculator’ that allows anyone to compute the aggregate employment losses under various economic scenarios, this column explores the effects of a decline in startup activity on aggregate employment. Job losses may be large and may last well beyond the pandemic itself.

Sabrina Howell, Ramana Nanda, 29 February 2020

Venture capital remains a critical source of financing for new ideas and technologies, but only 10-15% of venture capital-backed entrepreneurs are women. Using data from the Harvard Business School’s New Venture Competition, this column shows that networking frictions play a significant role in the gender gap, and that structural solutions focused only on providing women entrepreneurs with more exposure to VCs may not be enough to eliminate it. Instead, networking opportunities should be encouraged or even formalised, particularly in the realm of new venture competitions and accelerators.

Dany Bahar, Raj Choudhury, Hillel Rapoport, 28 February 2020

There is considerable historical and contemporary evidence of the linkages between skilled migration and innovation, suggesting that one of the most important engines of economic growth stands to be strongly negatively affected by the growing backlash against migration around the world. Based on a 95-country sample spanning several decades, this column shows that migrant inventors play an important role in shaping the patent production of their destination countries. Arguably, these dynamics – driven by migrant inventors – can also affect broader economic outcomes, given the secondary effects of patenting and innovation on productivity and firm performance.

J Michelle Brock, Ralph De Haas, 07 October 2019

Discrimination in access to financial services can prevent women from exploiting their entrepreneurial potential. This column reports on a lab-in-the-field experiment to test for the presence of gender discrimination in small business lending in Turkey. It finds that while unconditional loan approval rates are the same for male and female applicants, there exists a more subtle form of discrimination, with loan officers 30% more likely to make loan approval conditional on the presence of a guarantor when an application appears to come from a female instead of a male entrepreneur. This discrimination is concentrated among young, inexperienced, and gender-biased officers.

Margaret Dalton, Sari Pekkala Kerr, William Kerr, 06 September 2019

Attempts to discover and describe an entrepreneurial personality – a ‘homo entreprenaurus’ – have run aground on the shoals of heterogeneity. This column makes use of a collaborative US workspace founded in 2001 to survey four groups: entrepreneurs, non-founding CEOs/leaders, inventor employees, and other employees of innovative firms. It finds that entrepreneurs display the greatest tolerance for risk as well as the strongest self-efficacy, internal locus of control, and need for achievement. The findings appear to confirm that entrepreneurs do indeed have distinct personalities.

Sari Pekkala Kerr, William Kerr, 01 March 2019

Despite recent research looking at the growing contribution that immigrants make to innovation and entrepreneurship in the US, little is known about if or how the processes immigrants and natives use in this regard differ. This column uses surveys of individuals working in shared workspaces in Boston and St Louis to examine how immigrant entrepreneurs network and how their networking behaviour differs from natives.The findings suggest that immigrants take more advantage of networking opportunities at the workspaces, especially around the exchange of advice.

Vladimir Asriyan, Luc Laeven, Alberto Martin, 15 December 2018

Credit booms are perceived to fuel resource misallocation and often end in crises that are followed by protracted periods of low growth. This column investigates the macroeconomic effects of credit booms using a new theory of information production. The theory predicts that when the economy enters a collateral boom, the price of collateral rises and lenders rely more on collateralisation and less on information-producing screening of entrepreneurs. Empirical evidence based on US data confirms the model’s predictions. 

Pehr-Johan Norbäck, Lars Persson, Roger Svensson, 03 November 2018

Most OECD countries provide subsidies to stimulate the entry and growth of small entrepreneurial firms. This column argues that a better policy would be to combine these subsidy schemes with policies that improve the merger and acquisition market for small entrepreneurial firms, because the best strategy for such firms is to make an early entry to market to signal innovation quality and overcome asymmetry problems. Entrepreneurs would be able to create bidding competition among incumbents and receive a higher acquisition price, incentivising them to develop breakthrough innovations that will raise welfare.   

Sabrina Howell, Marina Niessner, David Yermack, 23 July 2018

Initial coin offerings, whereby a blockchain-based venture raises capital by selling cryptographically secured digital assets (or ‘tokens’), may represent a significant innovation in entrepreneurial finance. This column studies a sample of 453 tokens that completed ICOs to investigate what types of issuer and token are successful. Tokens that offer voluntary disclosure, credibly commit to the project, and signal quality or potential to create substantial value tend to be more successful, and a founder or CEO with an entrepreneurial professional background is also beneficial.

Benjamin Pugsley, Petr Sedláček, Vincent Sterk, 11 May 2018

In order to design effective policies to foster high-growth startups, we must first understand what sets these ‘gazelles’ apart from other startups. This column combines data covering US employers since the late 1970s with a macroeconomic model of firm dynamics to show that much of the performance of a firm is driven by factors that are determined at or just before the time of startup. Understanding how policies affect which types of people aspire to become entrepreneurs, how they develop business models, and which ideas they ultimately pursue is therefore important.

Hans Hvide, Paul Oyer, 22 March 2018

The majority of male entrepreneurs in Norway start a firm in an industry closely related to the one in which their father is employed. These entrepreneurs outperform others in the same industry. This column uses longitudinal data to argue that 'dinner table human capital' – that is, industry knowledge learned through their parents – is an important factor. This form of capital also has effect on employee performance in the wider labour market.

Arnaldo Camuffo, Alessandro Cordova, Alfonso Gambardella, 06 January 2018

Entrepreneurs often predict future revenues using rules of thumb. The column argues that by testing precise hypotheses, 'scientist-entrepreneurs' would be less likely to invest in failures. A randomised controlled trial among Italian start-ups showed that this technique increased average returns for entrepreneurs. Used more generally, the precision effect may help screen out bad business ideas at an early stage.

Christopher Blattman, Stefan Dercon, 20 December 2016

African countries are scrambling to bring industrial firms into the continent, and workers face a choice between industrial jobs and self-employment. This column reports the results of a randomised controlled trial of 1,000 job applicants in Ethiopia, which suggests that industrial workers earned no more in a year than those given training as entrepreneurs, and had higher disability rates. Two-thirds of industrial workers chose to quit, suggesting that low wages and poor working conditions are a concern for policymakers who promote industrialisation.

Ryan Decker, John Haltiwanger, Ron Jarmin, Javier Miranda, 19 March 2016

Recent evidence suggests that transformational entrepreneurial firms – those that introduce major innovations and make substantial contributions to growth – have been in decline. This column uses US micro data to explore the behaviour of high-growth young firms between 1980 and 2010. A decline in young firm activity in the 1980s and 1990s was dominated by young firms in the retail trade sector. In the post-2000 period, in contrast, a sharp decline in high-growth young businesses in key innovative sectors like high tech suggests there has been a decline in transformational entrepreneurs in this sector. 

Andrés Rodríguez-Pose, Daniel Hardy, 04 December 2014

Cultural diversity is increasing globally. This column examines diversity from the point of view of entrepreneurship. It demonstrates that cultural diversity breeds entrepreneurship – but the nature of the diversity is critical. Recent migrants, rather than the descendants of past migrants, create the conditions for a more dynamic entrepreneurial environment. This effect is most clearly substantiated in terms of knowledge-intensive start-ups. 

Sascha O. Becker, Hans Hvide, 21 April 2013

Standard microeconomics ignores personalities, but business studies stress the importance of entrepreneurs. This column presents evidence that shows that personalities are important. Looking into the death of a firm’s founder during the first ten years of a company’s existence, the data suggest that entrepreneurs matter – they are the ‘glue’ that holds a business together.


CEPR Policy Research