Working Papers

Artificial Intelligence, Education, and Entrepreneurship with Michael Gofman (Journal of Finance, forthcoming)

• Selected Media Coverage: The New York Times, The Wall Street Journal, Inside Higher ED, Tencent News, Communications of the ACM, policy.ai, TechTalks

• Included in the 2019 and 2021 Stanford AI Index Report.

• The data for our AI Brain Drain Index can be downloaded here.

We document an unprecedented brain drain of AI professors from universities from 2004 to 2018. We find that students from the affected universities establish fewer AI startups and raise less funding. The effect is significant for an AI brain drain of tenured professors, professors from top universities, and deep learning professors. Additional evidence suggests that unobserved city- and university-level shocks are unlikely to drive our results. We consider several economic channels for the findings. The most consistent explanation is that professors’ departures reduce startup founders’ AI knowledge, which we find is an important factor for successful startup formation and fundraising.

How do Large Companies Affect Entrepreneurship: Evidence From Amazon's HQ2 Search

• Selected Media Coverage: UoR Newscenter

I identify a specific channel (the prospect of getting funded or acquired by large firms) through which entrepreneurship is affected. By exploiting the variation across entrepreneurs' reactions to the two announcements of Amazon's new headquarters (HQ2) search, I find that after the announcement of the 20 finalist cities, new startups that are the potential funding or acquisition targets of Amazon are more likely to be established in one of those 20 cities. After the winning cities were selected, the newly created potential targets of Amazon are more likely to be founded only in the winning cities but not in the losing finalist cities. I also find that there exists a local competition for startups to get funded or acquired by Amazon, which is inconsistent with agglomeration explanation. I present evidence consistent with two possible underlying mechanisms: the synergy benefits from selling out to large firms and the difficulty in obtaining early-stage funding from non-corporate investors.

Do PE Buyouts Affect Innovation of the Targets' Industry Rivals?

This paper investigates the spillover effects of private equity (PE) buyouts on innovation of the targets' public industry rivals. Using patent-based metrics, I find a robust positive effect of PE buyouts on innovation outcomes of the targets' industry peers and direct competitors. Moreover, I argue that the positive effect is causal by constructing an instrumental variable as a proxy for PE firms' industry experience and focus. Finally, I present evidence that PE buyouts affect industry innovation likely through forcing the targets' rivals to become more focused.

Work in Progress

Intellectual Property Rights, Corporate Giants, and Entrepreneurship with Mingzhi Xu and John Yang

• • The ASEAN Business Research Initiative Grant ($15,000 Singapore Dollar)

We investigate how intellectual property rights (IPRs) affect new business creation and startup financing when entrepreneurs face corporate giants.