Startups and Entrepreneurship
Friday, Jan. 5, 2018 8:00 AM - 10:00 AM
- Chair: Amanda Ross, University of Alabama
Inventor CEOs and Corporate Innovation
AbstractOne in four U.S. high-tech firms are led by CEOs with hands-on innovation experi-ence as inventors. We show that these “Inventor CEOs” stimulate higher quality firm-level innovation, especially when they have a personal history of high-impact patents. A CEO’s technology-class specific inventor experience also predicts the tech-nology classes in which a firm has its greatest innovation success. Utilizing exogenous CEO turnovers and R&D tax credit shocks to address the endogenous matching of firms with CEOs suggests these effects are causal. One channel through which Inven-tor CEOs stimulate higher quality innovation is through a superior ability to evaluate innovation-intensive investment opportunities.
Learning From Feedback: Evidence From New Ventures
AbstractHow do entrepreneurs respond to credible new information about the quality of their firms? To assess the effect of feedback, I use application and judging data from 96 new venture competitions. The empirical strategy is a difference-in-differences design comparing low ranked losers to higher ranked losers, across competitions in which ventures were and were not privately informed of their ranks. Receiving negative feedback increases the probability of venture abandonment by about 26 percent. Feedback also appears to increase the efficiency of serial entrepreneurship, particularly when it comes from a judge who is an entrepreneur, despite venture capitalist judge scores being just as predictive of outcomes. I find evidence that founders with elite college degrees are overconfident. Broadly, however, the results are consistent with a view of entrepreneurship as experimentation, and have implications for theories of innovation and firm dynamics.
Management as a basis for innovation: Evidence from randomized experiments and repeated surveys in Vietnam
AbstractWe conducted randomized experiments to provide management training for 312 Vietnamese small manufacturers in 2010 and repeatedly collected follow-up data in 2011, 2013, and 2016. Analyzing panel data constructed from our surveys with negligible incidence of attrition (less than 2 percent of the baseline sample), we find that the treated firms were 17 percentage points more likely to continue business five years after the training, when a five-year survival rate among the control group was 52 percent. Our training not only improved management capacity of the treated entrepreneurs but also motivated them to continue learning management as well as to upgrade their product. Due to these changes triggered by the training, the treated firms, particularly a sub-group that received both classroom and on-site training programs, continued to have significantly higher business performance than the control group.
- O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights