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Tag Archives: Entrepreneurship
Reconstruction following Destruction: Entrepreneurship in the Aftermath of a Natural Disaster
by Richard Lombardo
Abstract
Entrepreneurship is thought to be the engine of growth in many developing countries. There is, however,
a paucity of evidence on the role that entrepreneurship plays in rebuilding economic livelihoods both in
the short and longer-term in the aftermath of a large-scale shock. This is an important gap in the literature
given the increasing frequency and severity of shocks across the globe. This paper contributes to filling that
gap by investigating the evolution of entrepreneurial success following the 2004 Indian Ocean tsunami, a
large-scale and unexpected shock. Using longitudinal survey data, the Study of the Tsunami Aftermath and
Recovery (STAR), I find large declines in business ownership, profits, and capital for those most exposed
to the tsunami that persisted through 10 years following the tsunami. These estimates can be given a causal
interpretation under the plausible assumption that exposure to the tsunami can be treated as exogenous after
taking into account individual-specific unobserved heterogeneity with fixed effects, including pre-tsunami
geographical features that drove exposure. Individuals living in rural areas and individuals with the least
resources pre-tsunami fared the worst in terms of developing new businesses. However, the massive Build
Back Better reconstruction program promoted entrepreneurship. Receipt of housing aid as part of that
program is linked to an increase in the development of non-agricultural businesses that spurred gains in real
profits.
Duncan Thomas, Faculty Advisor
Michelle Connolly, Faculty Advisor
JEL classification: D1; H84; L26; Q54
Investigating Underpricing in Venture-Backed IPOs Using Statistical Techniques
By Michael Tan
This paper concerns applying statistical methods to investigate under-pricing in VC-backed technology Initial Public Offerings (IPOs) since the great recession. In particular, firm, market, and IPO-specific variables were explored to determine if there were any significant relationships to under-pricing. The paper focused on the Bank Preference theory of under-pricing, where under-pricing is said to occur because investment banks running IPO processes are incentivized to under-price to decrease the risk that they will not be able to allocate all the issuance to price-sensitive public markets investors.
Advisors: Professor Daniel Xu, Professor Shawn Santo, Professor Grace Kim| JEL Codes: G3, G33, G24
Entrepreneurial Attractiveness: Amazon, Google, and the Search for Innovative Hot Spots
By Anna Katherine Kropf
Recent economic literature suggests that entrepreneurship in technological fields can spur economic growth, making it a popular topic for city development officials. Yet, this increasingly popular phenomenon is met by many economic questions. One of those questions is which characteristics of metropolitan areas are attractive to entrepreneurs. To answer the question of attractiveness on both the small business and corporate levels, I compare across two case studies: Amazon’s search for a second headquarters and Google’s tech hub network. Using principal component analysis, I statistically deduce seven components of attractiveness from an original 34 variables. These components are then weighted using three methods—a case study, a survey, and an empirical method—to produce comparable indices of attractiveness. Generally, I find that sizeable population and healthy economy are the strongest components. However, the statistically insignificant components that can change an urban area’s ranking considerably are talent and geographic network effects. Ultimately, creating policy to maximize these aspects can change a city’s innovative
trajectory.
Advisor: Dr. Charles Becker | JEL Codes: O, O3, R, R1, R11
The Effect of Social, Cultural, and Political Values on Entrepreneurial Perceptions and Venture Creation: A Global Investigation
By Repton Salisbury
The effect of entrepreneurial activity on economic development has been researched thoroughly. New firm creation spurs economic growth by creating employment opportunities, cultivating innovation, and encouraging competition. Globally, there are countless areas that could benefit from a livelier entrepreneurial ecosystem. So how does a government or population first spur entrepreneurial activity? An entrepreneur’s perceptions are among the most powerful factors that impact the life or death of a new venture, but the determinants that influence how these perceptions first form are still largely unknown. Using survey data collected by the Global Entrepreneurship Monitor in 2010 across the United States, Japan, Switzerland, Israel, United Kingdom, Peru, Russia, Iran, and China, I conduct binary logistic regressions of individual level characteristics, social ideals, cultural norms, human development, and other environmental attributes on the most important perceptions of entrepreneurs. These perceptions have been identified by previous research as an entrepreneur’s perception of local opportunities, internal skills, and fear of failure in creating a new venture. I find that several social, cultural, and political values have a significant effect on the psychological behavior of nascent entrepreneurs.
Advisor: Alison Hagy, Grace Kim | JEL Codes: L2, L26, O17 | Tagged: Culture, Entrepreneurship, Perceptions, Venture Creation
