Sari Pekkala Kerr, William Kerr, 21 September 2018

There is a contentious global debate surrounding the impact of immigrants on local labour markets. One less contentious aspect has been the notion that immigrant entrepreneurs can have major positive effects for the host economy. This column uses novel US data to explore how immigrant entrepreneurs affect local labour markets and compare with native entrepreneurs. Key findings include substantial geographic variation in immigrant startup rates, lower hiring and salaries, and slightly higher female ownership in immigrant-owned firms. 

Bronwyn Hall, 19 July 2018

Patent protection is assumed to benefit entrepreneurs seeking investment, because patents signal quality and are an asset that can be resold if a startup fails. This column argues that the evidence for these benefits is inconclusive. Notably, patents acquired in a secondary market may be used for rent-seeking, rather than to incentivise innovation.

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.

Erika Färnstrand Damsgaard, Per Hjertstrand, Pehr-Johan Norbäck, Lars Persson, Helder Vasconcelos, 23 November 2017

Most developed economies provide significant subsidies to small businesses to encourage innovation. This column argues that while subsidies to reduce entry costs may increase entrepreneurial entry, they can also lead to a reduction in the likelihood of ‘breakthrough’ inventions. Entry costs, which are incurred when an innovation project is successful, prompt small firms and entrepreneurs to pursue high-risk, high-reward innovations.

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