High-Tech Entrepreneurship

38 Pages Posted: 4 Apr 2011

See all articles by Serguey Braguinsky

Serguey Braguinsky

Carnegie Mellon University - Department of Social and Decision Sciences

Steven Klepper

Carnegie Mellon University - David A. Tepper School of Business

Atsushi Ohyama

Hokkaido University - Graduate School of Economics & Business Administration

Date Written: February 7, 2011

Abstract

Schumpeterian entrepreneurship is particularly prominent in high-tech industries where new ideas generated from advanced knowledge are of great importance. But case studies notwithstanding, the data used to analyze entrepreneurship have been dominated by startups in low-growth, low-tech industries. In this paper, we use a novel data set on scientists and engineers and a novel strategy in which we pare down the sample to those whose jobs are related to their education to better identify potential high-tech startups. We develop a simple model in which entry into and rewards from entrepreneurship are determined by the interaction of ability, the quality of the entrepreneurial idea, and experience in employment. The model yields distinctive implications about how labor market experience and earnings at work influence the probability of a high-tech worker becoming an entrepreneur, earnings as an entrepreneur, and persistence in entrepreneurship. Consistent with the model, we find that younger entrepreneurs are more likely to come from the upper tail of the paid wage distribution and that more pre-entry labor market experience is associated with better chances of continuing as an entrepreneur but also with lower earnings in entrepreneurship.

Keywords: Schumpeterian Entrepreneurship, Scientists and Engineers, Earnings Differentials, Self Employment

JEL Classification: M13, J31

Suggested Citation

Braguinsky, Serguey and Klepper, Steven and Ohyama, Atsushi, High-Tech Entrepreneurship (February 7, 2011). Available at SSRN: https://ssrn.com/abstract=1799642 or http://dx.doi.org/10.2139/ssrn.1799642

Serguey Braguinsky (Contact Author)

Carnegie Mellon University - Department of Social and Decision Sciences ( email )

Pittsburgh, PA 15213-3890
United States

Steven Klepper

Carnegie Mellon University - David A. Tepper School of Business ( email )

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States
412-268-3235 (Phone)
412-268-6938 (Fax)

Atsushi Ohyama

Hokkaido University - Graduate School of Economics & Business Administration ( email )

Kita-ku Kita 9 Nishi 7
Sapporo, Hokkaido, 060
Japan

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