"The Impact of Equity Crowdfunding on Frictions in Startup Finance" (Job Market Paper)
It is well known that firms led by females and those located in areas lacking developed financial markets struggle to obtain capital investment. Equity crowdfunding, the process of financing a business with investment from a group of individuals over the internet, offers a solution to this problem by increasing firm access to investors. This fundraising process is not permitted in most parts of the world, but was recently legalized in the United States through the 2012 JOBS Act. In this study, I evaluate the effects of the legalization of accredited equity crowdfunding on startup financing in the United States. Using a novel dataset of startups and financing sources, I find that the entry of accredited equity crowdfunding mitigated the negative effects of limited local capital and decreased the gender gap in entrepreneurial finance. I estimate that the gender gap in total funding to firms decreased by 20 percentage points after equity crowdfunding was legalized, cutting the gap between total funding to male entrepreneurs and total funding to female entrepreneurs in half.
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"Estimating the Impact of Local Conditions during the Great Depression and Later in Life Investment Decisions"
In this paper, I evaluate the influence of economic conditions in childhood on investment decisions in adulthood. Using state-level income data matched with household investment data from the Panel Study of Income Dyanmics Wealth Supplement, I estimate fixed-effects linear regression models that exploit income variation across states and within birth-year cohorts. This enables me to isolate the influence of childhood economic conditions on decision-making from confounding factors that are collinear with birth cohort. I find that higher levels of state income during late childhood (12-17) increase stock investment in adulthood and decrease investment in savings accounts. The effect of state income during childhood on adult investment is larger in magnitude for those who were born during the interwar period (1919-1940). The results suggest that past dynamics in sub-national economic conditions may have a significant influence on regional, within birth-cohort differences in investment and wealth accumulation.
"Returns to Entrepreneurial Experience over the Business Cycle"
When economic conditions are poor, entrepreneurs may rely more on previous experiences to survive. This article uses geographic variation in the timing and magnitude of the Great Recession to identify whether the value of previous entrepreneurial experience in firm survival varies over the business cycle. Using a panel dataset of U.S. firms between 2004 and 2011, I show that the survival gap between serial and first-time entrepreneurs grows as economic conditions decline. Serial entrepreneurs perform better overall and their survival advantage over first-time entrepreneurs is larger as unemployment rates increase and average personal income decreases. I find that countercyclical dynamics in the value of entrepreneurial experience are driven by differences in access to financial resources and business strategies.
Research in Progress
"The Long Term Effects of Participation in the Civilian Conservation Corps" (with Price Fishback (Arizona) and Shari Eli (Toronto))
The Great Depression was the most severe economic shock in American history and considerably transformed the lives of Americans in both the 1930s and 1940s. The United States faced an unemployment rate of 25% in the height of the Depression, which meant many were unemployed and experienced harsh living conditions. In order to help those who were hit by the downturn, President Franklin Roosevelt proposed a `New Deal' for the American people. The New Deal was a series of programs designed to provide relief for the poor, recovery of the economy to normal levels, and reform so that another depression would be unlikely. This project seeks to analyze the impacts of one of the New Deal employment programs, the Civilian Conservation Corps, henceforth CCC. This study is the first to analyze long-run impacts of a large-scale unemployment relief program. The project will address the questions: Did the CCC influence migration across the country? Did participation in the CCC improve participant's subsequent careers? Were participants able to achieve more than they would have without the CCC?