March 7th (register): "Propagation and Amplification of Local Productivity Spillovers"
by Xavier Giroud (Columbia Business School), Simone Lenzu (NYU), Quinn Maingi (NYU) and Holger M. Mueller (NYU)
This paper shows that local productivity spillovers propagate throughout the economy through the plant-level networks of multi-region firms. Using confidential Census plant-level data, we show that large manufacturing plant openings not only raise the productivity of local plants but also of distant plants hundreds of miles away, which belong to multi-region firms that are exposed to the local productivity spillover through one of their plants. To quantify the significance of plant-level networks for the propagation and amplification of local productivity shocks, we develop and estimate a quantitative spatial model in which plants of multi-region firms are linked through shared knowledge. Our model features heterogeneous regions, which interact through goods trade and labor markets, as well as within-location, across-plant heterogeneity in productivity, wages, and employment. Counterfactual exercises show that while knowledge sharing through plant-level networks amplifies the aggregate effects of local productivity shocks, it widens economic disparities between individual workers and regions in the economy.
April 4th (register): "Diversity and Performance in Entrepreneurial Teams"
by Sophie Calder-Wang (Wharton), Paul A. Gompers (HBS) and Kevin Huang (UCLA)
We study the role of diversity on the performance in entrepreneurial teams by exploiting a unique experimental setting of over 3,000 MBA students who participated in a business course to build startups. First, we find strong selection based upon shared attributes when students are allowed to choose teammates. Second, when team memberships are randomly assigned, greater racial/ethnic diversity leads to worse performance. Interestingly, the negative performance effect of diversity is alleviated in cohorts where teams are formed voluntarily. Finally, we find that teams with more female members performed substantially better when their faculty section leader was female. These findings suggest that to prevent unintended negative outcomes, policy interventions targeting greater diversity should incorporate match-specific qualities in forming teams and aim to reduce existing biases against certain groups. Our results on vertical diversity suggest that capital allocators could also play an important role in the mentoring and advising of minority entrepreneurs.
April 18th (register): "Does Mentorship Drive Startup Performance? Yes, But Only for High Learners"
Mentorship is a staple component of private sector accelerators designed to maximize equity value and also of public sector initiatives created to support economic development. Despite the prevalence of mentorship, it is striking how little we know about it. This paper provides among the first empirical evidence on whether, how, and when mentorship enhances startup performance. Using a novel panel of 289 high-technology startups that participate in a global program for seed-stage companies, we find that mentorship has a large and significant effect on startup performance three years later. To address endogeneity concerns, we exploit randomness in the availability of mentors to spend time with startups due to personal scheduling conflicts. Our results indicate that a channel through which mentorship operates is learning. However, founders are not uniform in their propensity to learn. We find that the effect of mentorship on performance is concentrated among entrepreneurs who learn fast. Further examination suggests that the propensity of entrepreneurs to learn from mentorship appears to be more “nature” than “nurture.”
May 2nd: Student Workshop (details soon)
We show that the acquisition of a startup inventor's first patent has a negative effect on the subsequent productivity of the patent's inventor, leading to 6.7 fewer patents being granted to the inventor over five years. This effect is not due to the inventor focusing on high-quality patents—in fact, the opposite appears to be the case. Our novel identification strategy is motivated by two new findings: Incumbent firms are more likely to acquire the patents of startups that patent examiners ask them to cite, and examiners are more likely to cite patents that they have reviewed in the past. When combined with the quasi-random assignment of patent applications to examiners, these two findings give rise to quasi-random linkages between startups and potential acquirers that help identify the causal effect of patent acquisitions on inventor productivity.
June 6th (register): Knowledge Cycles and Corporate Investment
by M. Cecilia Bustamante (Univ. of Maryland), Julien Cujean (Univ. of Bern) and Laurent Frésard (USI Lugano)
We examine how firms invest along their knowledge cycles. We show that if investment is only a means to accumulate capital, it declines over the cycle and moves exactly together with value. But in fact because investment also creates knowledge—serendipitously—it is high early and late in the cycle. Its relation with value spikes before new cycles start and declines thereafter. We uncover this pattern in the data, identifying new cycles using sharp changes in patents’ citations to prior technologies. Cycles’ length has tripled in recent years, coinciding with concurrent changes in the investment-value relation.
Discussant: Yufeng Wu (UIUC)