September 18, 2024: 11:00 am - 12:15 pm ET

Zhuoxuan (Fanny) Li (Postoctoral Student, Stanford) - will present "Learning-by-advising? Startup Learning as an Advice-giver in Accelerators"

Abstract: Can entrepreneurs learn from advising their peers in an accelerator program? Prior research views peer advising as reciprocal and discusses the benefits mainly from the advice-receivers’ side, ignoring impacts on advice-givers. This study questions this assumption and investigates whether peer advising can benefit advice-givers via a randomized experiment in an online accelerator with real early-stage startup teams. The results showed that entrepreneurs in the treatment groups significantly improved their pitch deck quality and business idea usefulness. We also proposed two potential mechanisms for how advice-givers learn from the act of advising peers, i.e., 1) reinforced memory and benchmarking to internalize entrepreneurial knowledge and 2) activated metacognition to foster self-reflection. Furthermore, we find heterogeneity in the treatment effect. Advice-givers who have prior entrepreneurial experience or have generated sales benefit differently in their business idea quality. Our findings unveil the potential mechanisms of peer learning from an advice-giver's perspective and emphasize the necessity of distinguishing advice-givers from receivers when encouraging peer interactions in an accelerator setting.

October 9, 2024: 11:00 am - 12:15 pm ET

Jay Habegger (University of Maryland) - will present "Searching in the dark: Regional disparitites in startups' initial equity financings" (with F Honore and R Aggarwal) . 

Abstract: We investigate the differences in financial outcomes between startups in Venture Capital hubs (i.e., Silicon Valley, Boston, and NYC) and elsewhere to explore the efficiency of fungible financial capital allocation to comparatively immobile human capital. Annually, there are as many early-stage first equity investments in VC Hub startups as in non-VC Hub startups. Do non-VC Hub entrepreneurs pay a price for their immobility? Prior work might have assumed that the best startups would relocate to VC hubs or that VCs finance these remote startups through syndication (i.e., partnerships between several VC firms). We question these assumptions in an abductive analysis that documents the differences between startups’ financing transactions based on location. To do so, we collected information on the entire population of US early-stage initial equity financing transactions from 1992 to 2019 and assembled a dataset of 19,275 transactions. Specifically, we find that non-VC Hub startups often contract with fewer conventional VCs and more non-local investors. In contrast, they are more likely to receive funding from a government entity, university funds, or corporate VC. Non-VC Hub startups raise less capital in their initial equity financing, engage fewer investors, and take longer to complete the transaction than VC Hub startups. Our analyses suggest that non-VC hub startups incur high search costs, negatively affecting their financing outcomes. Our study also shows that explanations such as sorting based on startups’ quality, agglomeration, ecosystems, and VC syndication and monitoring do not fully explain the results.

November 6, 2024: 11:00 am - 12:15 pm ET

Sina Khoshsokhan (Colorado) - will present “The costs they are a-rising: Commercialization costs and the innovation process in drug development.” 

Abstract: Commercialization is a crucial phase in the innovation process and its associated costs significantly influence R&D decisions. Yet our understanding of how commercialization costs impact various stages of innovation remains underdeveloped. In this study, I investigate the effects of commercialization costs on early and late stages of the innovation process in a quasi-experimental setting. Specifically, I leverage sudden policy shifts in the US Food and Drug Administration (FDA) that increased commercialization costs for drugs in certain therapeutic areas. Employing a difference-in-differences methodology, I trace the impacts of these elevated costs on discovery and clinical trial advancement of 3,357 drug candidates between 1997 and 2015. My research places emphasis on the contrasting roles that startups and established firms have in innovation. My findings reveal that while commercialization costs diminish the late-stage efforts in commercializing innovations, especially by established firms, they stimulate an environment conducive to early-stage entrepreneurial drug discovery efforts. Furthermore, I find that the disruption that commercialization costs create in markets for technology drives these opposite findings: new discoveries remain without buyers in technology markets, failing to complete their development process as commercialized products.

January 15, 2025: 11:00 am - 12:15 pm ET

Jeff Macher (Georgetown) - will present "Does Region Scientific Leadership Translate Into Lasting Innovation Advantage?"

Abstract: Basic and applied research are interdependent and interconnected components of the innovation life cycle. We provide unique evidence of their dynamic interplay. We investigate whether "pioneer" regions -- initial leaders in the production of scientific papers in newly emerging distinct fields -- develop and maintain an innovation advantage via the production of patents in those fields. Our analysis examines 24 emergent and disruptive technologies in OECD country regions over a 20-year period. Our baseline estimation indicates that pioneer regions exhibit a substantial and lasting patenting advantage that emerges early and grows over the sample window -- resulting in roughly a 50 percent patenting advantage in comparison to non-pioneer regions. This effect is more pronounced for major and first-mover pioneer regions, underscoring the importance of timely and focused research efforts in achieving long-term innovation superiority. Our analysis further reveals that "super-cluster" regions -- initial leaders in the production of both scientific papers and patents in broad technology areas to which our emergent disruptive technologies belong to-— generate the largest and the most durable innovation advantage. These findings have important implications for business strategy and research and innovation policy, highlighting the interplay between basic research (via the production of scientific papers) and innovation (via the production of patents) for sustained regional innovation performance.