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Startups, Unicorns, and the Local Inflow of Inventors

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  • Benjamin Balsmeier
  • Lee Fleming
  • Matt Marx
  • Seungryul Ryan Shin

Abstract

We provide evidence that the arrival of technical human capital improves regional entrepreneurship, both by increasing firm entry and reducing failure. The results also indicate negative externalities upon low-tech and competing industries: the arrival of inventors in a county shifts the locus of venture capital investment away from low-tech startups to high-tech startups and moreover towards new ventures in the same sector as those inventors’ skills. Identification is provided by a shift-share instrument combining the spatial distribution of surnames in the 1940 U.S. Census with thousands of surname-specific shifts based on modern inventor mobility.

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  • Benjamin Balsmeier & Lee Fleming & Matt Marx & Seungryul Ryan Shin, 2020. "Startups, Unicorns, and the Local Inflow of Inventors," NBER Working Papers 27605, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27605
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    Cited by:

    1. Pu Liu & Yingying Shao, 2022. "Innovation and new business formation: the role of innovative large firms," Small Business Economics, Springer, vol. 59(2), pages 691-720, August.

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    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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