Date:
Location:
Today's Speaker
Jacob Moscona (Department of Economics), "Appropriate Entrepreneurship? The Rise of Chinese Venture Capital and the Developing World" (co-authors: Josh Lerner, Junxi Liu, David Yang)
Abstract
Global high-potential entrepreneurship was traditionally dominated by rich countries, especially the US, until the rise of China as a venture capital powerhouse. We explore the international ramifications of China's rise for entrepreneurship in emerging economies, using comprehensive data on global venture activities. We document three sets of findings. First, as the Chinese venture industry rose in importance, investment increased substantially in other emerging markets, particularly in sectors led by China. This effect was driven by country-sector pairs most economically similar to China. Second, the increase in venture investments in emerging economies was spurred by local investors and new firms whose business models more closely resembled those of their Chinese counterparts. The findings are not driven by Chinese investors, by countries politically connected to China, or by sectors explicitly prioritized by the Chinese government. Third, this growth in emerging-market investment had positive cross-sector spillovers on industries in which China was not a global leader and city-level effects on both venture activity and patenting. Taken together, our findings suggest that a system where only rich countries lead in innovation could limit the appropriateness of capital allocation and entrepreneurial activity in developing countries.
Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.
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See the seminar's full schedule at the Alesina Seminar page.
All interested faculty and students are invited to attend.