Essays in innovation and entrepreneurship
Abstract/Contents
- Abstract
- In this thesis, I study sources of innovation and the choices established firms, researchers/entrepreneurs, and venture capitalist make when pursuing innovation. There are three main sources of innovation. First, an innovation can be produced by researchers working inside a large firm. Second, it can result from a collaboration among established firms, researchers, and entrepreneurial start-ups. Finally, an innovation can be created by a start-up. In the latter case, the successful start-up can be either acquired by an established firm or continue to be a stand-alone company. In most cases such a start-up needs to raise outside funding, which is often provided by a venture capital fund. Chapter 1 considers the choices firms and researchers/entrepreneurs make when deciding to pursue innovation together. In this chapter I use an incomplete contracting framework to model the choice between three innovation strategies: an acquisition, an employment contract, and an alliance. Each of these options comes with different contracting frictions that lead to distortions in the agents' innovation effort levels. The agents choose the innovation strategy that maximizes their joint surplus by minimizing the effect of these distortions. In particular, the agents are trading off the hold-up costs characterizing acquisitions, wage restrictions in employment contracts, and possible IP rights conflicts in alliances. My theoretical model generates predictions about the organizational structures used to innovate, and can explain (1) why talent acquisitions were popular among tech companies in 2010--14, (2) why large pharmaceutical companies switched from conducting research internally to pursuing acquisitions, alliances, and licensing agreements, and (3) why some companies engage in alliances, while others don't. Chapter 2 considers start-ups and their origins. I find that people who work in VC-backed start-ups are more likely to become founders of VC-backed start-ups than employees of public companies or private companies not financed by venture capital. I also show that founders come from more successful VC-backed companies. Finally, workers leave their current employment to start new companies: after an IPO or after a failure of a VC-backed company to raise another round of funding. Chapter 3 considers one of the important decisions made by venture capitalists and other partnerships. In this chapter I model the choice of the optimal number of partners. As more partners join, the profits of the partnership grow due to synergy. However, each partner's share of the profits shrinks leading to moral hazard. In addition, as the founder needs to find more partners, it becomes harder to find good candidates and the type of the marginal partner decreases. The model suggests that higher benefits from starting a fund, faster decreasing type of a marginal partner and higher type of the founder can potentially explain why VC funds are smaller than professional service firms.
Description
| Type of resource | text |
|---|---|
| Form | electronic resource; remote; computer; online resource |
| Extent | 1 online resource. |
| Place | California |
| Place | [Stanford, California] |
| Publisher | [Stanford University] |
| Copyright date | 2018; ©2018 |
| Publication date | 2018; 2018 |
| Issuance | monographic |
| Language | English |
Creators/Contributors
| Author | Anosova, Daria |
|---|---|
| Degree supervisor | Strebulaev, I. A. (Ilʹi͡a Alekseevich) |
| Thesis advisor | Strebulaev, I. A. (Ilʹi͡a Alekseevich) |
| Thesis advisor | Hodrick, L. S. (Laurie Simon) |
| Thesis advisor | Zwiebel, Jeffrey |
| Degree committee member | Hodrick, L. S. (Laurie Simon) |
| Degree committee member | Zwiebel, Jeffrey |
| Associated with | Stanford University, Graduate School of Business. |
Subjects
| Genre | Theses |
|---|---|
| Genre | Text |
Bibliographic information
| Statement of responsibility | Daria Anosova. |
|---|---|
| Note | Submitted to the Graduate School of Business. |
| Thesis | Thesis Ph.D. Stanford University 2018. |
| Location | electronic resource |
Access conditions
- Copyright
- © 2018 by Daria Anosova
- License
- This work is licensed under a Creative Commons Attribution Non Commercial 3.0 Unported license (CC BY-NC).
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