Lowering the Bar? External Conditions, Opportunity Costs, and High-Tech Start-Up Outcomes

• 成果类型: Article
• 署名作者: Conti, Annamaria; Roche, Maria P.
• 署名单位: University System of Georgia; Georgia Institute of Technology; Harvard University
• 刊物名称: ORGANIZATION SCIENCE
• ISSN/ISSBN: 1047-7039
• DOI: 10.1287/orsc.2020.1411
• 发表日期: 2021
• 页码: 965-986
• 关键词: start-ups; opportunity costs; economic conditions; recessions; start-up performance

摘要

We assess the heterogeneous impact of economic downturns on individuals' decisions to bring high-technology ideas to the market in the form of new ventures. We thereby examine how worsening labor market conditions influence individuals' opportunity costs of starting new ventures, the resulting composition of the entrepreneurial pool, and start-up performance outcomes. Using a rich data set of start-up founders in the biotechnology and medical device sectors, we find that an increase in the unemployment rate is associated with a substantial rise in the share of entrepreneurs who are most sensitive to worsening labor market conditions. Additionally, we find that start-ups founded by these entrepreneurs display lower financial and innovative performance than start-ups founded by entrepreneurs who are relatively insensitive to business cycles. Finally, we provide suggestive evidence that individuals' heterogeneous response to worsening labor market conditions is a relevant factor in explaining the negative relationship between unemployment and start-up performance outcomes.