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http://hdl.handle.net/2451/29481
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| Title: | High-Technology Entrepreneurship in Silicon Valley Opportunities
andOpportunity Costs |
| Authors: | Fairlie, Robert W. - University of California, Santa Cruz
Chatterji, Aaron K. - Duke University |
| Issue Date: | 2008 |
| Series/Report no.: | Net Institute Working Paper;08-04 |
| Abstract: | The economic expansion of the late 1990s undoubtedly created many
opportunities for business creation in Silicon Valley, but the
opportunity cost of starting a business was also high during this period
because of the exceptionally tight labor market. A new measure of
entrepreneurship derived from matching monthly files from the Current
Population Survey (CPS) is used to provide the first test of the
hypothesis that entrepreneurship rates were high in Silicon Valley
during the 'Roaring 90s.' Unlike previous measures of firm births based
on large, nationally representative datasets, the new measure captures
business creation at the individual-owner level, includes both employer
and non-employer business starts, and focuses on only hi-tech
industries. Estimates from the matched CPS data indicate that hi-tech
entrepreneurship rates were lower in Silicon Valley than the rest of the
United States during the period from January 1996 to February 2000.
Controlling for the large concentration of immigrants and highlyeducated
workforce does not change the conclusion. Examining the post-boom
period, we find that entrepreneurship rates in Silicon Valley increased
from the late 1990s to the early 2000s. In contrast, trends in
entrepreneurship rates in the United States were constant over this
period. Although Silicon Valley may be an entrepreneurial location
overall, the extremely tight labor market of the late 1990s, especially
in hi-tech industries, may have suppressed business creation during this period. |
| URI: | http://hdl.handle.net/2451/29481 |
| Appears in Collections: | NET Institute Working Papers Series
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