Research

Using a study of the relationship between bureaucratic work environments and individual rates of entrepreneurship, I revisit a fundamental premise of sociological  approaches to entrepreneurship, namely, that the social context shapes the likelihood of entrepreneurial activity above and beyond any effects of individual characteristics. Establishing such contextual effects empirically complicated by the possibility that unobserved individual traits influence both the contexts in which people are observed and their likelihood of becoming entrepreneurs.

This paper presents the first systematic study of the effects of bureaucracy on entrepreneurship that accounts for unobserved sorting processes. Analyses of data on labor market attachments and transitions to entrepreneurship in Denmark between 1990 and 1997 show that  people who work for large and old firms are less likely to become entrepreneurs, not of a host of observable individual characteristics. Moreover, there is strong evidence to suggest that this negative effect of bureaucracy does not spuriously reflect self-selection by nascent entrepreneurs into different types of firms.  ...

First published in Administrative Science Quarterly, 52 (2007): 387-412. A Russell Sage publication on behalf of Johnson Graduate School of Management at Cornell University.

Abstract: "We use a new database, the National Establishment Time Series (NETS), to revisit the debate about the role of small businesses in job creation. Birch (e.g. 1987) argued that small firms are the most important souce of job creation in the U.S. economy, but Davis et al. (1996a) argued that this conclusion was flawed, and based on improved methods and using data for the manufacturing sector they concluded that there was no relationship between establishment size and net job creation. Using the NETS data, we examine evidence for the overall economy, as well as for different sectors. The results indicate that small establishments and small firms create more jobs, on net, although the difference is much smaller than what is suggested by Birch's methods. However, the negative relationship between establishment size and job creation is much less clear for the manufacturing sector, which may explain some of the earlier findings contradicting Birch's conclusions."

Published in February 2008 by the National Bureau of Economic Research Working Paper 13818.

Reynolds defines biomanufacturing as "a technologically advanced, innovative industry that requires highly skilled workers with commensurately high pay." U.S. biomanufacturing originally located plants where skilled labor lived (chiefly New England and California). U.S. still leads the world in biomanufacture, but increases in productivity, better processes and tax advantages have led to "flat growth in N.A. and Europe 2010 to 2013.” The trend, writes Reynolds, is for companies to "look farther afield to seek out new markets, higher margins." She ends with policy suggestions to keep biomanufacturing, its 300,000 jobs and $90k salaries in the U.S.:

• Lower corporate taxes; encouragement of investment in capital, education and R&D.
• Increase federal R&D funding; cooperate with FDA for effective, efficient regulation.
• Encourage growth in talent pool at community college, baccalaureate and grad school levels.
• Increase communication within the biomanufacturing industry.

 Published in March 2011 by the Massachusetts Institute of Technology Industrial Performance Center.

This chapter delves in detail into the conditions that allow a country to innovate at the global technology frontier. The findings reveal the striking degree to which the national circumstances actually explain the differences across countries in innovative activity measured by U.S. patenting.

First published in the Global Competitiveness Report 2001-2002 by Oxford University Press. Available on the Institute for Strategy and Competitiveness Web site.

We analyze the role of search frictions in the market for commercial health insurance. Frictions increase the cost of insurance by enabling insurers to set price above marginal cost, and by creating incentives for inefficiently high levels of marketing. Frictions also lead to price dispersion for identical products and, as a consequence, to increases in the rate of insurance turnover. Our empirical analysis indicates that frictions increase prices enough to transfer 13.2 percent of consumer surplus from employer groups to insurers (approximately $34.4 billion in 1997), and increase employer group turnover by 64 percent  for the average insurance policy. This heightened turnover reduces insurer incentives to invest in the future health of their policy holders. Our analysis also suggests that a publicly-financed insurance option might improve private insurance markets by reducing distortions induced by search frictions.

National Bureau of Economic Research (NBER) Working Paper no. w1455

© Randall D. Cebul, James B. Rebitzer, Lowell J. Taylor and Mark E. Votruba

We examine how the social structure of existing organizations influences entrepreneurship and suggest that resources accrue to entrepreneurs based on the structural position of their prior employers. We argue that information advantages allow individuals from entrepreneurially prominent prior firms to identify new opportunities. Enterepreneurial prominence also reduces the perceived uncertainty of a new venture. Using a sample of Silicon Valley start-ups, we deomonstrate that entrepreneurial prominence is associated with initial strategy and the probability of attracting external financing. New ventures with high prominence are more likely to be innovators; furthermore, innovators with high prominence are more likely to obtain financing.

This article is made available for free and open access by the Cornell University School of Industrial and Labor Relations' Digital Commons.

Nearly two years after the official end of the "Great Recession," the labor market remains historically weak. One candidate explanation is supply-side effects driven by dramatic expansions of Unemployment Insurance (UI) benefit durations, to as many as 99 weeks. This paper investigates the effect of these UI extensions on job search and reemployment. I use the longitudinal structure of the Current Population Survey to construct unemployment exit hazards that vary across states, over time, and between individuals with differing unemployment durations. I then use these hazards to explore a variety of  comparisons intended  to distinguish  the effects of  UI extensions from other determinants of employment outcomes.

In the face of continuing fiscal crisis, the governors of some states including Wisconsin, Ohio, and New Jersey have taken to attacking public sector unions using new legislation to undermine the collective bargaining rights of state and municipal employees. The reaction has been widespread protest and a growing rift between politi­cal leaders and civil servants. ... [t]his painful struggle can not only be avoided in Massachusetts, but that the continuing fiscal crisis facing the Common­wealth and its municipalities can provide the motiva­tion for forging a fundamental change in public sector labor relations that not only could lead to more efficient and effective government service, but in the case of our teachers’ unions, could play a critical role in improving public education ...

Presented Oct. 19, 2011 at a public forum of The Boston Foundation.

Research: Russ Eckel, Andrea Tull

Editor: Theresa Dolan

Click here for forum video.

This paper examines gender differences in the participation of university life science faculty in the opportunities afforded by the emergence of commercial science. Our particular focus is on the scientific advisory boards (SABs) of biotechnology firms. In part based on interviews of faculty members, we develop hypotheses regarding how scientists’ career achievements—their productivity, co-authorship networks, institutional affiliation, and patenting activity—have different effects on the likelihood that male and female faculty will become SAB members. We then statistically examine this framework in a case cohort dataset containing the career histories of 6,000 life scientists. We find that participation in for-profit ventures appears to be a new arena in which gender differences in attainment are extensive: women life scientists are far less likely to receive paid advisory roles at for-profit biotechnology companies. Moreover, the gap in participation rates persists after conditioning on numerous measures of human and social capital. We also find that this gender difference is contoured by a number of factors; notably university prestige, co-authorship networks, and the level of institutional support for commercial science. Collectively, the qualitative and quantitative findings of this paper establish a large gender gap in the participation of university faculty members in commercial science.

Growing opportunities for academic scientists to commercialize their science has led to a new commercial marketplace. Recent evidence suggests that “commercial science” participation is characterized by gender stratification. Using interviews with life science faculty at one high-status university we examine the mechanisms that instituted, reinforced, and reduced the gender gap in commercial science between 1975 and 2005. We find gender differences from processes on both the demand- (opportunity) and supply- (interest) sides; of deeper significance are the intersections between these sides of the market.  Specifically, explicit early exclusion of women left them with fewer opportunities in the marketplace, weakening their socialization and skills in commercial science. This uneven opportunity structure left senior/mid-career women with fewer chances to confront the ambiguities of this new practice, resulting in their greater ambivalence. Gender differences remain significant among junior faculty but we find their decline prompted by greater gender-equality in advisor mentoring and the presence of institutional support which together have started to reshape the supply-side of commercial science.