Syllabus: Theoretical and Empirical Perspectives on Entrepreneurship: Economics
Winter 2016
Thursdays 2:30-5:30
Baker 103
Harvard Business School
Version: January 22, 2016
TEPE explores scholarly work from economics and finance disciplines regarding
entrepreneurship—the formation and growth of new firms. While work on this topic dates
back to Schumpeter and earlier, academic research regarding entrepreneurship has
exploded over the last decade. Reflecting the complex nature of the entrepreneurship,
TEPE touches on multiple academic disciplines and research methodologies.
There are two complementary doctoral classes, each taught every other year, with the
Spring 2016 course focusing on entrepreneurship and its relationship to economics fields
like industrial organization, labor economics, and economic growth. The Spring 2017
course focuses on the entrepreneurship research about corporate finance, including
entrepreneurial finance and behavioral economics.
Papers are provided via a shared drive. Access is available through Galen Byrne in Rock
Center, 201A (Harvard Business School) one week before the first class. Students who
cannot access the online links should contact Galen (gbyrne@hbs.edu) to arrange for an
alternative way to access the course materials.
There will be some updates to the syllabus and papers as the semester unfolds. An email list
maintained by Galen will provide alerts and materials as appropriate.
Three referee reports will be due over the course of the semester. These are indicated in
bold italics. Each referee report is a recent, unpublished academic paper that is receiving
lots of attention. In addition, there will be a final paper proposal, which can build off work
you are doing for another class or your thesis.
Bill Kerr and Josh Lerner will teach all sessions, with guest half-day lectures by Danielle
Li, Gareth Olds, and Chris Stanton.
Course Outline
Class 1: Kerr (January 28)
Course Introduction
Measuring Entrepreneurship
Class 2: Lerner/Li (February 4)
Entrepreneurship and Innovation
Innovation and Public R&D Policies
Class 3: Lerner (February 11)
Entrepreneurship and Patents
Entrepreneurship and Open Source
Class 4: Lerner (February 18)
Industry Races and Entrepreneurial Strategy
Clinical Studies
Class 5: Kerr (February 25)
Economic Geography and Entrepreneurship
Class 6: Kerr (March 3)
Labor Markets and Entrepreneurship
Class 7: Kerr/Stanton (March 10)
Immigrant Entrepreneurship
Online Entrepreneurship
3/17: No Class for GSAS Spring Break
Class 8: Kerr (March 24)
Industrial Evolution and Entrepreneurship
Class 9: Kerr (March 31)
Economic Growth and Entrepreneurship
Class 10: Kerr (April 7)
Economic Development and Entrepreneurship
Class 11: Kerr/Olds (April 14)
Global Entrepreneurial Networks
Public Policy and Entrepreneurship
Class 12: Lerner (April 21)
Experimentation and Entrepreneurship Research
Preview of TEPE 2017
2
Class 1: Kerr (January 28)
Course Introduction
Astebro, Thomas, Holger Herz, Ramana Nanda, and Roberto A. Weber, 2014, Seeking the roots
of entrepreneurship: Insights from behavioral economics, Journal of Economic Perspectives 28,
49-70.
Decker, Ryan, John Haltiwanger, Ron Jarmin, and Javier Miranda, 2014, The role of
entrepreneurship in US job creation and economic dynamism, Journal of Economic Perspectives
28, 3-24.
Kerr, William, Ramana Nanda, and Matthew Rhodes-Kropf, 2014, Entrepreneurship as
experimentation, Journal of Economic Perspectives 28, 25-48.
Measuring Entrepreneurship
Guzman, Jorge, and Scott Stern, 2015, Nowcasting and placecasting entrepreneurial quality and
performance, Working Paper.
Hall, Robert, and Susan Woodward, 2010, The burden of the nondiversifiable risk of
entrepreneurship, American Economic Review 100, 1163-1194.
Hurst, Erik, and Benjamin Pugsley, 2011, What do small businesses do?, Brookings Papers on
Economic Activity 2, 73-118.
3
Class 2: Lerner/Li (February 4)
Entrepreneurship and Innovation
Bernstein, Shai, Xavier Giroud, and Richard R. Townsend, 2015, The impact of venture capital
monitoring, Journal of Finance, Forthcoming.
Ewens, Michael, Ramana Nanda, and Matthew Rhodes-Kropf, 2015, Cost of experimentation
and the evolution of venture capital. Harvard Business School Working Paper, No. 15-070.
Kortum, Samuel, and Josh Lerner, 2000, Assessing the impact of venture capital on innovation,
Rand Journal of Economics 31, 674-692.
Seru, Amit, 2014, Firm boundaries matter: Evidence from conglomerates and R&D activity,
Journal of Financial Economics 111, 381-405.
Innovation and Public R&D Policies (Li Teaching)
Azoulay, Pierre, Josh Graff-Zivin, Danielle Li, and Bhaven Sampat, 2015, Public R&D
investments and private sector patenting: Evidence from NIH funding rules, NBER Working Paper
20889.
Galasso, Alberto and Mark Schankerman, 2015, Patent rights and innovation by small and large
firms, NBER Working Paper 21769.
Budish, Eric, Benjamin N. Roin, and Heidi Williams, 2015, Do firms underinvest in long-term
research? Evidence from cancer clinical trials, American Economic Review, 105:7, 2044-2085.
4
Class 3: Lerner (February 11)
Entrepreneurship and Patents
Jaffe, Adam B., and Manuel Trajtenberg, 2005, Patents, Citations, and Innovations: A
Window on the Knowledge Economy, Cambridge, MIT Press, Chapters 12 and 13.
Cohen, Lauren, Umit Gurun, and Scott Duke Kominers, 2015, Patent trolls: Evidence
from targeted firms, Working Paper.
Lerner, Josh, and Amit Seru, 2015, The use and abuse of patent data, Working Paper.
Entrepreneurship and Open Source
Boudreau, Kevin, Nicola Lacetera, and Karim Lakhani, 2011, Incentives and problem
uncertainty in innovation contests: An empirical analysis, Management Science 57, 843863.
Hann, Il-Horn, Jeff Roberts, Sandra Slaughter, and Roy Fielding, 2002, Economic
incentives for participating in open source software, Proceedings of the 23rd
International Conference on Information Systems, 365-372.
Lerner, Josh, and Jean Tirole, 2002, Some simple economics of open source, Journal of
Industrial Economics 52, 197-234.
Williams, Heidi, 2013, Intellectual property rights and innovation: Evidence from the
human genome, Journal of Political Economy 121, 1-27.
Referee Report 1: Cao, Jerry, Fuwei Jiang, and Jay Ritter, 2015, Patents, innovation, and
performance of venture capital-backed IPOs, Working Paper.
5
Class 4: Lerner (February 18)
Industry Races and Entrepreneurial Strategy
Gans, Joshua, and Scott Stern, 2003, The product market and the market for “ideas”:
Commercialization strategies for technology entrepreneurs, Research Policy 32, 333-350.
Gilbert, Richard, and David Newbery, 1982, Preemptive patenting and the persistence of
monopoly, American Economic Review 72, 514-526.
Lerner, Josh, 1997, An empirical exploration of a technology race, Rand Journal of Economics
28, 228-247.
Reinganum, Jennifer, 1984, Uncertain innovation and the persistence of monopoly, American
Economic Review 73, 741-748.
Clinical Research
Braguinsky, Serguey, and David A. Hounshell, History and nanoeconomics in strategy and
industry evolution research: Lessons from the Meiji-Era Japanese cotton spinning industry,
Strategic Management Journal, forthcoming.
Chacko, George, Peter Tufano, and Geoffrey Verter, 2001, Cephalon, Inc.: Taking risk
management theory seriously, Journal of Financial Economics, 60, 449-485.
Desai, Mihir, and Alberto Moel, 2008, CzechMate: Expropriation and investor protection
in a converging world, Review of Finance 12, 221-251.
Jensen, Michael, Eugene Fama, John Long, Richard Ruback, G. Schwert, Clifford Smith,
and Jerold Warner, 1989, Clinical papers and their role in the development of financial
economics, Journal of Financial Economics 24, 3-6.
6
Class 5: Kerr (February 25)
Economic Geography and Entrepreneurship
Classics
[Read in chronological order]
Chinitz, Benjamin, 1961, Contrasts in agglomeration: New York and Pittsburgh, American
Economic Review 51:2, 279-289.
Florida, Richard, 2005, Cities and the Creative Class, New York: Routledge. Selected readings.
Jacobs, Jane, 1970, The Economy of Cities, New York: Vintage Books. Selected readings.
Marshall, Alfred, 1920, Principles of Economics, London: MacMillan and Co. Selected readings.
Saxenian, Annalee, 1994, Regional Advantage: Culture and Competition in Silicon Valley and
Route 128, Cambridge: Harvard University Press. Selected readings.
Empirics
Arzaghi, Mohammad, and J. Vernon Henderson, 2008, Networking off Madison Avenue, Review
of Economic Studies 75, 1011-1038.
Glaeser, Edward, and William Kerr, 2009, Local industrial conditions and entrepreneurship:
How much of the spatial distribution can we explain?, Journal of Economics and Management
Strategy 18, 623-663. [skim]
Kerr, William, and Scott Kominers, 2015, Agglomerative forces and cluster shapes, Review of
Economics and Statistics 97, 877-899.
Michelacci, Claudio, and Olmo Silva, 2007, Why so many local entrepreneurs?, Review of
Economics and Statistics 89:4, 615-633.
Zucker, Lynne G., Michael R. Darby, and Marilynn B. Brewer, 1998, Intellectual human capital
and the birth of U.S. biotechnology enterprises, American Economic Review 88, 290-306.
7
Class 6: Kerr (March 3)
Labor Markets and Entrepreneurship
Theory
Feng, Ying, and James Rauch, 2015, The impact of entrepreneurial risk aversion on wages in
general equilibrium, NBER Working Paper 20992.
Khilstrom, R., and Jean-Jacques Laffont, 1979, A general equilibrium entrepreneurial theory of
firm formation based on risk aversion, Journal of Political Economy 87, 719-748.
Lazear, Edward, 2005, Entrepreneurship, Journal of Labor Economics 23, 649-680.
Lucas, Robert, 1978, On the size distribution of business firms, Bell Journal of Economics 9,
508-523. [skim]
Empirics
Evans, David, and Linda Leighton, 1989, Some empirical aspects of entrepreneurship, American
Economic Review 79, 519-535. [skim]
Fallick, Bruce, Charles Fleischman, and James Rebitzer, 2006, Job-hopping in Silicon Valley:
Some evidence concerning the microfoundations of a high-technology cluster, Review of
Economics and Statistics 88:3, 472-481.
Hurst, Erik, and Benjamin Pugsley, 2015, Wealth, tastes, and entrepreneurial choice, NBER
Working Paper 21644.
Levine, Ross, and Yona Rubenstein, 2015, Smart and illicit, Who becomes an entrepreneur and do
they earn more?, NBER Working Paper 19276.
8
Class 7: Kerr/Stanton (March 10)
Immigrant Entrepreneurship
Fairlie, Robert W., and Magnus Lofstrom, 2015, Immigration and entrepreneurship, Handbook
on the Economics of International Migration, North Holland: Chiswick & Miller.
Hunt, Jennifer, 2011, Which immigrants are most innovative and entrepreneurial? Distinctions
by entry visa, Journal of Labor Economics 29:3, 417-457.
Kerr, William, and William Lincoln, 2010, The supply side of innovation: H-1B visa reforms
and U.S. ethnic invention, Journal of Labor Economics 28:3, 473-508. [Skim]
Kerr, William, and Martin Mandorff, 2015, Social networks, ethnicity, and entrepreneurship,
NBER Working Paper 21597.
Kerr, Sari Pekkala, and William Kerr, 2015, Immigrant entrepreneurship, Working Paper. [Skim]
Online Entrepreneurship (Stanton Teaching)
Stanton, Christopher, and Catherine Thomas, 2015, Information frictions and observable
experience: The new employer price premium in an online market, Working Paper.
Stanton, Christopher, and Catherine Thomas, 2015, Landing the first job: The value of
intermediaries in online hiring, Review of Economic Studies, forthcoming.
Referee Report 2: Becker, Sascha, and Hans Hvide, 2015, Do entrepreneurs matter?, Working
Paper.
9
3/17: No Class for GSAS Spring Break
Class 8: Kerr (March 24)
Industrial Evolution and Entrepreneurship
Theory
Cabral, Luis, and Jose Mata, 2003, On the evolution of firm size distribution: Facts and theory,
American Economic Review 93, 1075-1090.
Hopenhayn, Hugo, 1992, Entry, exit, and firm dynamics in long run equilibrium, Econometrica
60:5, 1127-1150. [skim]
Jovanovic, Boyan, 1982, Selection and the evolution of industry, Econometrica 50, 649-70.
Jovanovic, Boyan, and Glenn McDonald, 1994, The life cycle of a competitive industry, Journal
of Political Economy 102, 322-347.
Empirics
Dunne, Timothy, Mark Roberts, and Larry Samuelson, 1988, Patterns of firm exit and entry in
U.S. manufacturing industries, Rand Journal of Economics 19, 495-515.
Holmes, Thomas, and James Schmitz, Jr., 1995, On the turnover of business firms and business
managers, Journal of Political Economy 103, 1005-1038. [skim]
Klepper, Steven, and Elizabeth Grady, 1990, The evolution of new industries and the
determinants of market structure, Rand Journal of Economics 21, 27-44.
Pakes, Ariel, and Richard Ericson, 1998, Empirical implications of alternative models of firm
dynamics, Journal of Economic Theory 79:1, 1-45.
10
Class 9: Kerr (March 31)
Economic Growth and Entrepreneurship
Theory
Acemoglu, Daron, Ufuk Akcigit, Nick Bloom, and William Kerr, 2015, Innovation, reallocation
and growth, NBER Working Paper 18993. [skim]
Akcigit, Ufuk, and William Kerr, 2015, Growth through heterogeneous innovations, Working
Paper.
Baumol, William, 1990, Entrepreneurship: Productive, unproductive, and destructive, Journal of
Political Economy 98, 893-921.
Murphy, Kevin, Andrei Shleifer, and Robert Vishny, 1991, The allocation of talent: Implications
for growth, Quarterly Journal of Economics 106, 503-530.
Empirics
Davis, Steven, John Haltiwanger, and Scott Schuh, 1996, Job Creation and Destruction,
Cambridge, MIT Press. Selected readings.
Glaeser, Edward, Sari Pekkala Kerr, and William Kerr, 2015, Entrepreneurship and urban
growth: An empirical assessment with historical mines, Review of Economics and Statistics 97,
498-520.
Haltiwanger, John, Ron Jarmin, and Javier Miranda, 2013, Who creates jobs? Small versus large
versus young, Review of Economics and Statistics 95:2, 347-361.
Samila, Sampsa, and Olav Sorenson, 2011, Venture capital, entrepreneurship and economic
growth, Review of Economics and Statistics, 93:1, 338-349.
11
Class 10: Kerr (April 7)
Economic Development and Entrepreneurship
Akcigit, Ufuk, Harun Alp, and Michael Peters, 2015, Lack of selection and limits to delegation:
Firm dynamics in developing countries, Working Paper.
Bandiera, Oriana, Robin Burgess, Narayan Das, Selim Gulesci, Imran Rasul, and Munshi
Sulaiman, 2015, The misallocation of labor in village economics, Working Paper.
Banerjee, Abhijit, and Andrew Newman, 1993, Occupational choice and the process of
development, Journal of Political Economy 101, 274-298. [skim]
de Mel, Suresh, David McKenzie, and Christopher Woodruff, 2008, Returns to capital in
microenterprises: Evidence from a field experiment, Quarterly Journal of Economics 123, 132972.
Ghani, Ejaz, Arti Grover, and William Kerr, 2015, Highway to success: The impact of the
Golden Quadrilateral Project for the location and performance of Indian manufacturing,
Economic Journal, forthcoming.
Hsieh, Chang-Tai and Peter Klenow, 2014, The life cycle of plants in India and Mexico,
Quarterly Journal of Economics 129:3, 1035-1084.
Johnson, Simon, John McMillan, and Christopher Woodruff, 2002, Property rights and finance,
American Economic Review 92, 1135-56.
Klapper, Leora, Raphael Amit, and Mauro Guillén, 2009, Entrepreneurship and firm formation
across countries, in Lerner, Josh, and Antoinette Schoar (eds.), International Differences in
Entrepreneurship, Chicago, IL: University of Chicago Press.
12
Class 11: Kerr/Olds (April 15)
Global Entrepreneurial Networks
Kerr, William, 2008, Ethnic scientific communities and international technology diffusion,
Review of Economics and Statistics 90, 518-537.
Nanda, Ramana, and Tarun Khanna, 2010, Diasporas and domestic entrepreneurs: Evidence
from the Indian software industry, Journal of Economics and Management Strategy 19, 9911012.
Saxenian, AnnaLee, 2006, The New Argonauts, Cambridge, MA: Harvard University Press.
Selected readings.
Saxenian, AnnaLee, with Yasuyuki Motoyama and Xiaohong Quan, 2002, Local and Global
Networks of Immigrant Professionals in Silicon Valley, San Francisco, CA: Public Policy
Institute of California. [skim]
Public Policy and Entrepreneurship (Olds Teaching)
Akcigit, Ufuk, Salome Baslandze, and Stephanie Stantcheva, 2015, Taxation and the
international mobility of inventors, Working Paper.
Hombert, Johan, Antoinette Schoar, David Sraer, and David Thesmar, 2015, Can unemployment
insurance spur entrepreneurial activity? Evidence from France, Working Paper.
Olds, Gareth, 2015, Entrepreneurship and public health insurance, Working Paper.
Referee Report 3: Agrawal, Ajay, Carlos Rosell, and Timothy Simcoe, 2015, How do tax
credits affect R&D expenditures by small firms? Evidence from Canada, Working Paper.
13
Class 12: Lerner (April 21)
Experimentation and Entrepreneurship Research
Bernstein, Shai, Arthur Korteweg, and Kevin Laws, 2015, Attracting early stage
investors: Evidence from a randomized field experiment, Journal of Finance,
forthcoming.
Bloom, Nick, Benn Eifert, Aprajit Mahajan, David McKenzie, and John Roberts, 2013,
Does management matter? Evidence from India, Quarterly Journal of Economics 128, 151.
Duflo, Esther, Rachel Glennerster, and Michael Kremer, 2007, Using randomization in
development economics research: A toolkit, in Schultz, Paul, and John Straus (eds.),
Handbook of Development Economics Volume 4, Chapter 61.
Ederer, Florian and Gustavo Manso, 2013, Is pay-for-performance detrimental to
innovation, Management Science 59, 1496-1513.
McKenzie, David, and Christopher Woodruff, 2014, What are we learning from business
training and entrepreneurship evaluations around the developing world?, World Bank
Research Observer 29, 48-82.
Preview of TEPE 2017 – key topics and lessons
No readings
14