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Startups, Unicorns, and the Local Influx of Inventors

Benjamin Balsmeier¹; Lee Fleming^2,3; Matt Marx^4,5; Seungryul Ryan Shin⁶

¹ University of Luxembourg, Luxembourg [email protected] · ² Haas School of Business, UC Berkeley, CA, USA [email protected] · ³ Department of Industrial Engineering and Operations Research, UC Berkeley, CA, USA · ⁴ Cornell University, Ithaca, NY, USA [email protected] · ⁵ National Bureau of Economic Research, Cambridge, MA, USA · ⁶ Ulsan National Institute of Science and Technology, Ulsan, Republic of Korea [email protected]

Abstract We provide evidence that an influx of technical human capital improves regional entrepreneurship, both by increasing firm entry and reducing entrepreneurial failure. The results also indicate negative externalities upon lowtech and competing industries: an influx 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. We strengthen causal inference with a shift-share instrument which combines the spatial distribution of surnames in the LM>= U.S. Census with thousands of surnamespecific shifts based on modern inventor mobility.

DOI

10.1162/rest_a_01547

Pages

1-44

Language

en

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