With a Little Help from My (Random) Friends: Success and Failure in Post-Business School Entrepreneurship

To what extent do peers affect our occupational choices? This question has been of particular interest in the context of entrepreneurship and policies to create a favorable environment for entry. Such influences, however, are hard to identify empirically. We exploit the assignment of students into business school sections that have varying numbers of classmates with prior entrepreneurial experience. We find that the presence of entrepreneurial peers strongly predicts subsequent entrepreneurship rates of students without an entrepreneurial background but in a more complex way than the literature has previously suggested: a higher share of entrepreneurial peers leads to lower rather than higher subsequent rates of entrepreneurship. However, the decrease in entrepreneurship is entirely driven by a significant reduction in unsuccessful entrepreneurial ventures. The effect on the rate of successful post-MBA entrepreneurs, instead, is insignificantly positive. In addition, sections with few prior entrepreneurs have a considerably higher variance in their rates of unsuccessful entrepreneurs. The results are consistent with intra-section learning, where the close ties between section-mates lead to insights about the merits of business plans

Lost in the Clouds: The Impact of Changing Property Rights on Investment in Cloud Computing Ventures

Our analysis seeks to understand the impact of changing allocations of property rights on investment in new firms. We focus on the Cartoon Network, et al. v. Cablevision decision in the U.S., which narrowed the protection enjoyed by content creators (e.g., movie studios) and gave greater rights to downstream technology firms, as well as decisions in France and Germany that took an opposite view. Our findings regarding relative venture capital investment in the U.S. and Europe, across Europe, and between the various judicial circuits of the U.S. suggest that decisions around the allocation of property rights can have economically and statistically significant impacts on investment in innovative enterprises

Patent Disclosures and Standard-Setting

A key role of standard setting organizations (SSOs) is to aggregate information on relevant intellectual property (IP) claims before deciding on a standard. This article explores the firms’ strategies in response to IP disclosure requirements—in particular, the choice between specific and generic disclosures of IP—and the optimal response by SSOs, including the royalty rate setting. We show that firms with a stronger downstream presence are more likely to opt for a generic disclosure, as are those with lower quality patents. We empirically examine patent disclosures made to seven large SSOs, and find results consistent with theoretical predictions

The Disintermediation of Financial Markets: Direct Investing in Private Equity

We examine twenty years of direct private equity investments by seven large institutions. These direct investments perform better than public market indices, especially buyout investments and those made in the 1990s. Outperformance by the direct investments, however, relative to the corresponding private equity fund benchmarks is limited and concentrated among buyout transactions. Co-investments underperform the corresponding funds with which they co-invest, due to an apparent adverse selection of transactions available to these investors, while solo transactions outperform fund benchmarks. Investors' ability to resolve information problems appears to be an important driver of solo deal outcomes

Private Equity and Financial Fragility during the Crisis

Do private equity firms contribute to financial fragility during economic crises? We find that during the 2008 financial crisis, PE-backed companies increased investments relative to their peers, while also experiencing greater equity and debt inflows. The effects are stronger among financially constrained companies and those whose private equity investors had more resources at the onset of the crisis. PE-backed companies consequentially experienced higher asset growth and increased market share during the crisis

The Globalization of Angel Investments: Evidence across Countries

This paper examines investments made by 13 angel groups across 21 countries. We compare applicants just above and below the funding cut-off and find that these angel investors have a positive impact on the growth, performance, and survival of firms as well as their follow-on fundraising. The positive impact of angel financing is independent of the level of venture activity and entrepreneur friendliness in the country. But we find that the development stage and maturity of start ups that apply for angel funding (and those that are ultimately funded) is inversely correlated with the entrepreneurship friendliness of the country, which may reflect self-censoring by very early stage firms who do not expect to receive funding in these environments

Financial Patent Quality: Finance Patents After State Street

In the past two decades, patents of inventions related to financial services (“finance patents”), as well as litigation around these patents, have surged. One of the repeated concerns voiced by academics and practitioners alike has been about the quality of these patents in particular, and business method patents more generally. In particular, because so much of the prior work in these areas has not been patented, concerns have been expressed as to the extent to which the awards reflect this knowledge. Inspired by these issues, this paper empirically examines the quality of finance patents in the years after the landmark litigation between State Street Bank and Signature Financial Group. We show that relative to two sets of comparison groups, finance patents in aggregate cite fewer non-patent publications and especially fewer academic publications. This finding holds across the major assignee groups. In addition, it appears that patents assigned to individuals and associated with non-practicing entities (NPEs) cite less academic work than those assigned to non-NPE corporations. While not statistically significant due to the small number of academic citations in finance patents, we observe qualitatively similar patterns of under-citation when we restrict our analysis to finance patents held by individuals and NPEs, as opposed to non-NPE corporations. These findings raise questions about the quality of finance patents. We also explore litigated finance patents and discuss how the results here may reflect differences in the quality of finance patents relative to other areas. We find that, as earlier work has suggested, finance patents are more likely to be litigated than non-finance patents, but increased academic citations appear to reduce that possibility relative to others. Collectively, these findings raise important questions about the quality of finance patents and the proliferation of litigation in this domain

Maintaining Treatment Fidelity of Mindfulness-Based Relapse Prevention Intervention for Alcohol Dependence: A Randomized Controlled Trial Experience

Background. Treatment fidelity is essential to methodological rigor of clinical trials evaluating behavioral interventions such as Mindfulness Meditation (MM). However, procedures for monitoring and maintenance of treatment fidelity are inconsistently applied, limiting the strength of such research. Objective. To describe the implementation and findings related to fidelity monitoring of the Mindfulness-Based Relapse Prevention for Alcohol Dependence (MBRP-A) intervention in a 26-week randomized controlled trial. Methods. 123 alcohol dependent adults were randomly assigned to MM (MBRP-A and home practice, adjunctive to usual care; N=64) or control (usual care alone; N=59). Treatment fidelity assessment strategies recommended by the National Institutes of Health Behavior Change Consortium for study/intervention design, therapist training, intervention delivery, and treatment receipt and enactment were applied. Results. Ten 8-session interventions were delivered. Therapist adherence and competence, assessed using the modified MBRP Adherence and Competence Scale, were high. Among the MM group participants, 46 attended ≥4 sessions; over 90% reported at-home MM practice at 8 weeks and 72% at 26 weeks. They also reported satisfaction with and usefulness of MM for maintaining sobriety. No adverse events were reported. Conclusions. A systematic approach to assessment of treatment fidelity in behavioral clinical trials allows determination of the degree of consistency between intended and actual delivery and receipt of intervention