Pre-entry experience,technological complementarities,and the survival of de-novo entrants. Evidence from the US telecommunications industry

We investigate the effect of pre-entry experience on firms’ performance in terms of survival. In particular we focus on entrants from a related upstream industry – semiconductors – into a downstream industry – telecommunications. We examine a sample of 336 de-novo start-ups in the US telecommunication industry and we estimate a discrete time hazard model of firm exit. Our findings show that, after controlling for both firms and founders’ characteristics, firms whose founders had prior experience in a related upstream industry such as semiconductors enjoy a relatively lower hazard of exit with respect to intra-industry spinoffs and other types of start-ups. Additionally, background heterogeneity of the founding team is an important determinant of survival for the firms in our sample. Our results point to the role of interdependences and technological complementarities between two vertically related industries in affecting the performance of new entrants.     

A Unifying Framework and Comparison of Algorithms for Non-negative Matrix Factorisation

Non-negative matrix factorisation (NMF) is an increasingly popular unsupervised learning method. However, parameter estimation in the NMF model is a difficult high-dimensional optimisation problem. We consider algorithms of the alternating least squares type. Solutions to the least squares problem fall in two categories. The first category is iterative algorithms, which include algorithms such as the majorise–minimise (MM) algorithm, coordinate descent, gradient descent and the Févotte-Cemgil expectation–maximisation (FC-EM) algorithm. We introduce a new family of iterative updates based on a generalisation of the FC-EM algorithm. The coordinate descent, gradient descent and FC-EM algorithms are special cases of this new EM family of iterative procedures. Curiously, we show that the MM algorithm is never a member of our general EM algorithm. The second category is based on cone projection. We describe and prove a cone projection algorithm tailored to the non-negative least square problem. We compare the algorithms on a test case and on the problem of identifying mutational signatures in human cancer. We generally find that cone projection is an attractive choice. Furthermore, in the cancer application, we find that a mix-and-match strategy performs better than running each algorithm in isolation.     

Exchange Rates and the Conversion of Currency‐Specific Risk Premia

How do the risk factors that drive asset prices influence exchange rates? Are the parameters of asset price processes relevant for specifying exchange rate processes? Most international asset pricing models focus on the analysis of asset returns given exchange rate processes. Little work has been done on the analysis of exchange rates dependent on asset returns. This paper uses an international stochastic discount factor (SDF) framework to analyse the interplay between asset prices and exchange rates. So far, this approach has only been implemented in international term structure models. We find that exchange rates serve to convert currency‐specific discount factors and currency‐specific prices of risk – a result linked to the international arbitrage pricing theory (IAPT). Our empirical investigation of exchange rates and stock markets of four countries presents evidence for the conversion of currency‐specific risk premia by exchange rates.     

Heterogeneity in Urban Park Use of Aging Visitors: A Latent Class Analysis

This study describes and predicts urban parks use patterns for various age groups, with specific attention to the growing group of older adults. Park use intensity of various age groups is described. Subsequently, a multinomial logit model is estimated to describe urban park choice as a function of park features, activities, and socio-demographics. To identify segments in park use patterns of aging visitors a latent class model is estimated. Data are collected from a sample of 1,107 residents of the Eindhoven region in The Netherlands in 2002. The results indicate that age significantly affects park choice behavior. Specifically, four segments of older visitors were identified that clearly differed in their park use patterns: active health oriented users, active socially oriented users, passive local users, and moderate users.     

Influence of Socio-Demographics and Residential Environment on Leisure Activity Participation

Participating in leisure activities provides important benefits for all people. However, there is a substantial reduction of (green) leisure opportunities in cities, and the green spaces that are available often are poorly accessible. The purpose of this study is to analyze the diversity of participation in various types of leisure activities and to determine the relationship between leisure activity participation and characteristics of the residential environment depending on socio-demographic characteristics. Diary data from 803 respondents living in the Eindhoven region in the Netherlands were used. Four segments were identified that differ regarding their leisure activity participation, and a modest impact of green space accessibility was found.     

Market Conduct and Endogenous Lobbying: Evidence from the U.S. Mobile Telecommunications Industry

This paper empirically explores the relationship between firms' market behavior and their lobbying activities in a regulated market. In particular, we investigate whether the amount of contributions offered by cellular service providers to fund the campaigns of political parties affected market conduct in the early US mobile telecommunications industry. We structurally estimate market interactions while taking the potential endogeneity of lobbying decisions into account. Our results show that competition was more intense in those states where campaign contributions by the cellular industry have been higher. Furthermore, we reject the hypothesis that lobbying activities can be regarded as exogenous in the study of market conduct.     

Price cap regulation and water quality

Journal of Regulatory Economics - A number of studies suggest that price cap regulation may reduce the quality of the regulated good. This paper analyzes the impact on drinking water quality of a...     

Do Smaller Classes Always Improve Students’ Long‐run Outcomes?

We exploit the strict class size rule in Norway and matched individual and school register information for 1982–2011 to estimate long‐run causal effects on income and educational attainment. Contrary to recent evidence from the US and Sweden, we do not find any significant average effect on long‐run outcomes of reduced class size. We further use the large register data set and quasi‐experimental strategy to estimate whether the class size effect depends on external conditions facing students and schools, such as teacher quality, extent of upper secondary school choice, school district size, local fiscal constraints and labour market conditions. Overall, we find that the class size effect does not depend on these factors measured at the school district level. The absence of class size effects on long‐run outcomes in Norway is consistent with earlier findings for short‐run outcomes, using comparable data and empirical strategies.     

Images of entrepreneurship: towards a new categorization of entrepreneurship

Based on a systematic literature review of contemporary entrepreneurship process research, the article provides a supplementary way of categorizing research on the entrepreneurial process which takes philosophy of science into account to a higher extent than done in previous categorizations. The motivation for doing so is to minimize problems of communication and comparison of concepts, results and theoretical contributions often experienced in entrepreneurship research. Applying Burrell and Morgan’s (1979) paradigmatic framework to analyse the selected literature, it is suggested that the essence of past and present entrepreneurship process theory can be captured in five images of entrepreneurship: 1) The Image of Machines; 2) The Image of Evolution; 3) The Image of Contingencies; 4) The Image of Mind; and 5) The Image of Social Becoming. The five images are considered to be concise and easily recalled tools, which will be valuable in the continuous development and organization of future ideas in entrepreneurship research.