Working Paper: NBER ID: w22095
Authors: Jorge Guzman; Scott Stern
Abstract: Assessing the state of American entrepreneurship requires not simply counting the quantity but also the initial quality of new ventures. Combining comprehensive business registries and predictive analytics, we present estimates of entrepreneurial quantity and quality from 1988-2014. Rather than a secular pattern of declining business dynamism, our quality-adjusted measures follow a cyclical pattern sensitive to economic and capital market conditions. Consistent with the role of investment cycles as a driver of high-growth entrepreneurship, our results highlight the role of economic and institutional conditions as a driver of both initial entrepreneurial quality and the scaling of new ventures over time.
Keywords: Entrepreneurship; Economic Growth; Business Dynamics
JEL Codes: C53; L26; O51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| GDP growth (O49) | quality-adjusted quantity of entrepreneurship (recpi) (L26) |
| recession (E32) | quality-adjusted quantity of entrepreneurship (recpi) (L26) |
| GDP growth (O49) | raw quantity of entrepreneurship (L26) |