William R. Kerr

Professor of Business Administration

Unit: Entrepreneurial Management


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William Kerr is a Professor at Harvard Business School. Bill teaches in the MBA, executive education and doctoral programs at HBS. He is the faculty chair of HBS’ Launching New Ventures program, and he recently created an MBA course entitled Launching Global Ventures. He has received Harvard's Distinction in Teaching award.

Bill's research focuses on entrepreneurship and innovation. One research strand examines the role of immigrant scientists and entrepreneurs in US technology development and commercialization, as well as their  impact for the global diffusion of new innovations and ideas. A second research strand considers clusters and entrepreneurship, with special interest in how government policies aid or hinder the entry of new firms, cluster formation, and growth. A final interest area is entrepreneurial finance and angel investments.

In 2013, Bill received the Ewing Marion Kauffman Prize Medal for Distinguished Research in Entrepreneurship, awarded annually to one scholar under age 40 whose research has made a significant contribution to the literature in entrepreneurship.

Bill has worked with companies worldwide on projects related to entrepreneurship and launching new ventures, with particular emphasis on innovation and global dynamics. Bill has also advised several governments about deregulation processes and their investments in the innovative capacities of their nations.

Bill and his family live in Lexington, MA. They enjoy outdoor sports and trail running, are active members of their local church, and maintain close ties to his wife's home country of Finland. Bill grew up in Alabama and remains a passionate college football fan.


Working Papers

  1. Financing Innovation

    We review the recent literature on the financing of innovation, inclusive of large companies and new startups. This research strand has been very active over the past five years, generating important new findings, questioning some long-held beliefs, and creating its own puzzles. Our review outlines the growing body of work that documents a role for debt financing related to innovation. We highlight the new literature on learning and experimentation across multi-stage innovation projects and how this impacts optimal financing design. We further highlight the strong interaction between financing choices for innovation and changing external conditions, especially reduced experimentation costs.

    Keywords: Financing and Loans; Innovation and Invention;


    Kerr, William R., and Ramana Nanda. "Financing Innovation." Harvard Business School Working Paper, No. 15-034, November 2014. View Details
  2. Global Collaborative Patents

    We study the prevalence and traits of global collaborative U.S. patents for U.S. public companies, defi…ned to be patents with at least one inventor inside the United States and one abroad. Collaborative patents are frequently observed when a U.S. public company is entering into a new foreign region for innovative work, especially in less developed settings where intellectual property protection is weak. Collaborative patents are also more frequent when the U.S.-based workforce of the fi…rm has a strong ethnic component to it, refl‡ective of global high-skilled migration. Collaborative patents tend to perform similarly to patents developed by the same companies using exclusively U.S.-based teams, and both of these groups are stronger than those developed with exclusively foreign inventor teams.

    Keywords: Patents; Partners and Partnerships; Globalization; United States;


    Pekkala Kerr, Sari, and William R. Kerr. "Global Collaborative Patents." Working Paper, September 2014. View Details
  3. Agglomeration and Innovation

    This chapter reviews academic research on the connections between agglomeration and innovation. We first describe the conceptual distinctions between invention and innovation. We then describe how these factors are frequently measured in the data and some resulting empirical regularities. Innovative activity tends to be more concentrated than industrial activity, and we discuss important findings from the literature about why this is so. We highlight the traits of cities (e.g., size, industrial diversity) that theoretical and empirical work link to innovation, and we discuss factors that help sustain these features (e.g., the localization of entrepreneurial finance).

    Keywords: Industry Clusters; Innovation and Invention;


    Carlino, Gerald, and William R. Kerr. "Agglomeration and Innovation." Harvard Business School Working Paper, No. 15-007, August 2014. View Details
  4. Firms and the Economics of Skilled Immigration

    Firms play a central role in the selection, sponsorship, and employment of skilled immigrants entering the United States for work through programs like the H-1B visa. This role has not been widely recognized in the literature, and the data to better understand it have only recently become available. This paper discusses the evidence that has been assembled to date in understanding the impact of high-skilled immigration from the perspective of the firm and the open areas that call for more research. Since much of the U.S. immigration process for skilled workers rests in the hands of employer firms, a stronger understanding of these implications is essential for future policy analysis, particularly for issues relating to fostering innovation.

    Keywords: immigration; firms; innovation; entrepreneurship; Selection and Staffing; Entrepreneurship; Innovation and Invention; Immigration; United States;


    Pekkala Kerr, Sari, William R. Kerr, and William F. Lincoln. "Firms and the Economics of Skilled Immigration." Harvard Business School Working Paper, No. 14-102, April 2014. View Details
  5. Heterogeneous Technology Diffusion and Ricardian Trade Patterns

    This study tests the importance of Ricardian technology differences for international trade. The empirical analysis has three comparative advantages: including emerging and advanced economies, isolating panel variation regarding the link between productivity and exports, and exploiting heterogeneous technology diffusion from immigrant communities in the United States for identification. The latter instruments are developed by combining panel variation on the development of new technologies across U.S. cities with historical settlement patterns for migrants from countries. The instrumented elasticity of export growth on the intensive margin with respect to the exporter's productivity growth is between 1.6 and 2.4 depending upon weighting.

    Keywords: trade; Exports; Comparative Advantage; Technological Transfer; patents; innovation; Research and Development; immigration; networks; Networks; Patents; Residency Characteristics; Technology Adoption; Trade; Research and Development; Immigration; United States;


    Kerr, William R. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns." Harvard Business School Working Paper, No. 14-039, November 2013. (NBER Working Paper Series, No. 19657, November 2013.) View Details
  6. U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence

    High-skilled immigrants are a very important component of U.S. innovation and entrepreneurship. Immigrants account for roughly a quarter of U.S. workers in these fields, and they have a similar contribution in terms of output measures like patents or firm starts. This contribution has been rapidly growing over the last three decades. In terms of quality, the average skilled immigrant appears to be better trained to work in these fields, but conditional on educational attainment of comparable quality to natives. The exception to this is that immigrants have a disproportionate impact among the very highest achievers (e.g., Nobel Prize winners). Studies regarding the impact of immigrants on natives tend to find limited consequences in the short-run, while the results in the long-run are more varied and much less certain. Immigrants in the United States aid business and technology exchanges with their home countries, but the overall effect that the migration has on the home country remains unclear. We know very little about return migration of workers engaged in innovation and entrepreneurship, except that it is rapidly growing in importance.

    Keywords: immigration; innovation; entrepreneurship; Diaspora; Diasporas; Entrepreneurship; Innovation and Invention; Immigration;


    Kerr, William R. "U.S. High-Skilled Immigration, Innovation, and Entrepreneurship: Empirical Approaches and Evidence." Harvard Business School Working Paper, No. 14-017, August 2013. View Details
  7. Transition to Clean Technology

    We develop a microeconomic model of endogenous growth where clean and dirty technologies compete in production and innovation―in the sense that research can be directed to either clean or dirty technologies. If dirty technologies are more advanced to start with, the potential transition to clean technology can be difficult both because clean research must climb several steps to catch up with dirty technology and because this gap discourages research effort directed towards clean technologies. Carbon taxes and research subsidies may nonetheless encourage production and innovation in clean technologies, though the transition will typically be slow. We characterize certain general properties of the transition path from dirty to clean technology. We then estimate the model using a combination of regression analysis on the relationship between R&D and patents, and simulated method of moments using microdata on employment, production, R&D, firm growth, entry and exit from the US energy sector. The model's quantitative implications match a range of moments not targeted in the estimation quite well. We then characterize the optimal policy path implied by the model and our estimates. Optimal policy heavily relies on research subsidies as well as carbon taxes. We use the model to evaluate the welfare consequences of a range of alternative policy structures. For example, just relying on carbon taxes or delaying intervention both have significant welfare costs―though their implications for medium run temperature increases are quite different.

    Keywords: carbon cycle; directed technological change; environment; innovation; optimal policy; Transition; Policy; Environmental Sustainability; Research and Development; Energy Sources; Technological Innovation; Patents; Weather and Climate Change; Microeconomics; Green Technology Industry; Energy Industry; Technology Industry;


    Acemoglu, Daron, Ufuk Akcigit, Douglas Hanley, and William R. Kerr. "Transition to Clean Technology." Working Paper, November 2012. View Details
  8. Innovation, Reallocation and Growth

    We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A key feature is the selection between high- and low-type firms, which differ in terms of their innovative capacity. We estimate the parameters of the model using detailed US Census micro data on firm-level output, R&D and patenting. The model provides a good fit to the dynamics of firm entry and exit, output and R&D, and its implied elasticities are in the ballpark of a range of micro estimates. We find industrial policy subsidizing either the R&D or the continued operation of incumbents reduces growth and welfare. For example, a subsidy to incumbent R&D equivalent to 5% of GDP reduces welfare by about 1.5% because it deters entry of new high-type firms. On the contrary, substantial improvements (of the order of 5% improvement in welfare) are possible if the continued operation of incumbents is taxed while at the same time R&D by incumbents and new entrants is subsidized. This is because of a strong selection effect: R&D resources (skilled labor) are inefficiently used by low-type incumbent firms. Subsidies to incumbents encourage the survival and expansion of these firms at the expense of potential high-type entrants. We show that optimal policy encourages the exit of low-type firms and supports R&D by high-type incumbents and entry.

    Keywords: entry; Growth; industrial policy; innovation; R&D; Reallocation; selection; Business Ventures; Resource Allocation; Performance Productivity; Policy; Research and Development; Innovation and Invention; Growth and Development; United States;


    Acemoglu, Daron, Ufuk Akcigit, Nicholas Bloom, and William R. Kerr. "Innovation, Reallocation and Growth." Harvard Business School Working Paper, No. 13-088, April 2013. (NBER Working Paper Series, No. 18993, April 2013.) View Details
  9. Growth through Heterogeneous Innovations

    We study how exploration versus exploitation innovations impact economic growth through a tractable endogenous growth framework that contains multiple innovation sizes, multi-product firms, and entry/exit. Firms invest in exploration R&D to acquire new product lines and exploitation R&D to improve their existing product lines. We model and show empirically that exploration R&D does not scale as strongly with firm size as exploitation R&D. The resulting framework conforms to many regularities regarding innovation and growth differences across the firm size distribution. We also incorporate patent citations into our theoretical framework. The framework generates a simple test using patent citations that indicates that entrants and small firms have relatively higher growth spillover effects.

    Keywords: Endogenous Growth; innovation; Exploration; Exploitation; Research and Development; patents; Citations; Scientists; entrepreneurs; Patents; Innovation Strategy; Entrepreneurship; Economic Growth; Research and Development; Science;


    Akcigit, Ufuk, and William R. Kerr. "Growth through Heterogeneous Innovations." Harvard Business School Working Paper, No. 11-044, October 2010. View Details
  10. Is India's Manufacturing Sector Moving Away from Cities?

    This paper investigates the urbanization of the Indian manufacturing sector by combining enterprise data from formal and informal sectors. We find that plants in the formal sector are moving away from urban and into rural locations, while the informal sector is moving from rural to urban locations. While the secular trend for India's manufacturing urbanization has slowed down, the localized importance of education and infrastructure have not. Our results suggest that districts with better education and infrastructure have experienced a faster pace of urbanization, although higher urban-rural cost ratios cause movement out of urban areas. This process is associated with improvements in the spatial allocation of plants across urban and rural locations. Spatial location of plants has implications for policy on investments in education, infrastructure, and the livability of cities. The high share of urbanization occurring in the informal sector suggests that urbanization policies that contain inclusionary approaches may be more successful in promoting local development and managing its strains than those focused only on the formal sector.

    Keywords: Urban Development; Policy; Factories, Labs, and Plants; Geographic Location; Education; Infrastructure; Manufacturing Industry; India;


    Ghani, Ejaz, Arti Grover Goswami, and William R. Kerr. "Is India's Manufacturing Sector Moving Away from Cities?" Harvard Business School Working Paper, No. 12-090, April 2012. View Details
  11. The Ethnic Composition of U.S. Inventors

    The ethnic composition of US scientists and engineers is undergoing a significant transformation. This study applies an ethnic-name database to individual patent records granted by the United States Patent and Trademark Office to document these trends with greater detail than previously available. Most notably, the contributions of Chinese and Indian scientists to US technology formation increase dramatically in the 1990s, before noticeably leveling off after 2000 and declining in the case of India. Growth in ethnic innovation is concentrated in high-tech sectors; the institutional and geographic dimensions are further characterized.

    Keywords: Technology; Patents; Nationality Characteristics; Transformation; Innovation and Invention; China; United States; India;


    Kerr, William R. "The Ethnic Composition of U.S. Inventors." Harvard Business School Working Paper, No. 08-006, May 2007. (Permanent working paper describing ethnic-name patenting data, revised December 2008.) View Details

Journal Articles

  1. Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing

    We investigate the impact of the Golden Quadrilateral (GQ) highway project on the Indian organized manufacturing sector using enterprise data. The GQ project upgraded the quality and width of 5,846 km of roads in India. We use a difference-in-difference estimation strategy to compare non-nodal districts based upon their distance from the highway system. We find several positive effects for non-nodal districts located 0–10 km from GQ that are not present in districts 10–50 km away, most notably higher entry rates and increases in plant productivity. These results are not present for districts located on another major highway system, the North-South East-West corridor (NS-EW). Improvements for portions of the NS-EW system were planned to occur at the same time as GQ but were subsequently delayed. Additional tests show that the GQ project's effect operates in part through a stronger sorting of land-intensive industries from nodal districts to non-nodal districts located on the GQ network. The GQ upgrades further helped spread economic activity to moderate-density districts and intermediate cities.

    Keywords: highways; roads; infrastructure; india; Development; manufacturing; density; rent; Infrastructure; Manufacturing Industry; India;


    Ghani, Ejaz, Arti Grover Goswami, and William R. Kerr. "Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing." Economic Journal (Royal Economic Society) (forthcoming). View Details
  2. Entrepreneurship as Experimentation

    Entrepreneurship research is on the rise, but many questions about its fundamental nature still exist. We argue that entrepreneurship is about experimentation: the probabilities of success are low, extremely skewed, and unknowable until an investment is made. At a macro level, experimentation by new firms underlies the Schumpeterian notion of creative destruction. However, at a micro level, investment and continuation decisions are not always made in a competitive Darwinian contest. Instead, a few investors make decisions that are impacted by incentive, agency, and coordination problems, often before a new idea even has a chance to compete in a market. We contend that costs and constraints on the ability to experiment alter the type of organizational form surrounding innovation and influence when innovation is more likely to occur. These factors not only govern how much experimentation is undertaken in the economy, but also the trajectory of experimentation, with potentially very deep economic consequences.

    Keywords: Entrepreneurship; Innovation and Invention;


    Kerr, William R., Ramana Nanda, and Matthew Rhodes-Kropf. "Entrepreneurship as Experimentation." Journal of Economic Perspectives 28, no. 3 (Summer 2014): 25–48. View Details
  3. Income Inequality and Social Preferences for Redistribution and Compensation Differentials

    In cross-sectional studies, countries with greater income inequality typically exhibit less support for government-led redistribution and greater acceptance of wage inequality (e.g., United States versus Western Europe). If individual nations evolve along this pattern, a vicious cycle could form with reduced social concern amplifying primal increases in inequality due to forces like skill-biased technical change. Exploring movements around these long-term levels, however, this study finds mixed evidence regarding the vicious cycle hypothesis. On one hand, larger compensation differentials are accepted as inequality grows. This growth in differentials is of a smaller magnitude than the actual increase in inequality, but it is nonetheless positive and substantial in size. Weighing against this, growth in inequality is met with greater support for government-led redistribution to the poor. These patterns suggest that short-run inequality shocks can be reinforced in the labor market but do not result in weaker political preferences for redistribution.

    Keywords: Equality and Inequality; Income Characteristics; Government and Politics;


    Kerr, William R. "Income Inequality and Social Preferences for Redistribution and Compensation Differentials." Journal of Monetary Economics 66 (September 2014): 62–78. View Details
  4. Agglomerative Forces and Cluster Shapes

    We model spatial clusters of similar firms. Our model highlights how agglomerative forces lead to localized, individual connections among firms, while interaction costs generate a defined distance over which attraction forces operate. Overlapping firm interactions yield agglomeration clusters that are much larger than the underlying agglomerative forces themselves. Empirically, we demonstrate that our model's assumptions are present in the structure of technology and labor flows within Silicon Valley and its surrounding areas. Our model further identifies how the lengths over which agglomerative forces operate influence the shapes and sizes of industrial clusters; we confirm these predictions using variations across patent technology clusters.

    Keywords: agglomeration; clusters; networks; industrial organization; Silicon Valley; entrepreneurship; Technology Flows; patents; Networks; Technology; Industry Clusters; Entrepreneurship; California;


    Kerr, William R., and Scott Duke Kominers. "Agglomerative Forces and Cluster Shapes." Review of Economics and Statistics (forthcoming). View Details
  5. Political Reservations and Women's Entrepreneurship in India

    We quantify the link between the timing of state-level implementations of political reservations for women in India with the role of women in India's manufacturing sector. While overall employment of women in manufacturing does not increase after the reforms, we find significant evidence that more women-owned establishments were created in the unorganized/informal sector. These new establishments were concentrated in industries where women entrepreneurs have been traditionally active and the entry was mainly found among household-based establishments. We measure and discuss the extent to which this heightened entrepreneurship is due to channels like greater finance access or heightened inspiration for women entrepreneurs.

    Keywords: women; female; gender; entrepreneurship; political reservations; Development; informal sector; india; South Asia; Entrepreneurship; Gender Characteristics; Manufacturing Industry; India;


    Ghani, Ejaz, William R. Kerr, and Stephen D. O'Connell. "Political Reservations and Women's Entrepreneurship in India." Journal of Development Economics 108 (May 2014): 138–153. View Details
  6. Skilled Immigration and the Employment Structures of U.S. Firms

    We study the impact of skilled immigrants on the employment structures of U.S. firms using matched employer-employee data. Unlike most previous work, we use the firm as the lens of analysis to account for a greater level of heterogeneity and the fact that many skilled immigrant admissions are driven by firms themselves (e.g., the H-1B visa). OLS and IV specifications find rising overall employment of skilled workers with increased skilled immigrant employment by firm. Employment expansion is greater for younger natives than their older counterparts, and departure rates for older workers appear higher for those in STEM occupations compared to younger workers.

    Keywords: immigration; employment; firms; age; Scientists; engineers; inventors; H-1B; Age; Employment; Immigration; United States;


    Pekkala Kerr, Sari, William R. Kerr, and William F. Lincoln. "Skilled Immigration and the Employment Structures of U.S. Firms." Journal of Labor Economics (forthcoming). View Details
  7. Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines

    Measures of entrepreneurship, such as average establishment size and the prevalence of start-ups, correlate strongly with employment growth across and within metropolitan areas, but the endogeneity of these measures bedevils interpretation. Chinitz (1961) hypothesized that coal mines near Pittsburgh led that city to specialization in industries, like steel, with significant scale economies and that those big firms led to a dearth of entrepreneurial human capital across several generations. We test this idea by looking at the spatial location of past mines across the United States: proximity to historical mining deposits is associated with bigger firms and fewer start-ups in the middle of the 20th century. We use mines as an instrument for our entrepreneurship measures and find a persistent link between entrepreneurship and city employment growth; this connection works primarily through lower employment growth of start-ups in cities that are closer to mines. These effects hold in cold and warm regions alike and in industries that are not directly related to mining, such as trade, finance and services. We use quantile instrumental variable regression techniques and identify mostly homogeneous effects throughout the conditional city growth distribution.

    Keywords: entrepreneurship; industrial organization; Chinitz; agglomeration; clusters; cities; mines; Industry Clusters; Urban Development; Entrepreneurship; City; Mining; Mining Industry; United States;


    Glaeser, Edward L., Sari Pekkala Kerr, and William R. Kerr. "Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines." Review of Economics and Statistics (forthcoming). View Details
  8. The Dynamics of Firm Lobbying

    We study the determinants of the dynamics of firm lobbying behavior using a panel data set covering 1998–2006. Our data exhibit three striking facts: (i) few firms lobby, (ii) lobbying status is strongly associated with firm size, and (iii) lobbying status is highly persistent over time. Estimating a model of a firm's decision to engage in lobbying, we find significant evidence that up-front costs associated with entering the political process help explain all three facts. We then exploit a natural experiment in the expiration in legislation surrounding the H-1B visa cap for high-skilled immigrant workers to study how these costs affect firms' responses to policy changes. We find that companies primarily adjusted on the intensive margin: the firms that began to lobby for immigration were those who were sensitive to H-1B policy changes and who were already advocating for other issues, rather than firms that became involved in lobbying anew. For a firm already lobbying, the response is determined by the importance of the issue to the firm's business rather than the scale of the firm's prior lobbying efforts. These results support the existence of significant barriers to entry in the lobbying process.

    Keywords: lobbying; political economy; immigration; H-1B; Organizational Change and Adaptation; Policy; Immigration;


    Kerr, William R., William F. Lincoln, and Prachi Mishra. "The Dynamics of Firm Lobbying." American Economic Journal: Economic Policy (forthcoming). View Details
  9. Spatial Determinants of Entrepreneurship in India

    We analyze the spatial determinants of entrepreneurship in India in the manufacturing and services sectors. Among general district traits, quality of physical infrastructure and workforce education are the strongest predictors of entry, with labor laws and household banking quality also playing important roles. Looking at the district-industry level, we find extensive evidence of agglomeration economies among manufacturing industries. In particular, supportive incumbent industrial structures for input and output markets are strongly linked to higher establishment entry rates. We also find substantial evidence for the Chinitz effect where small local incumbent suppliers encourage entry. The importance of agglomeration economies for entry hold when considering changes in India's incumbent industry structures from 1989, determined before large-scale deregulation began, to 2005.

    Keywords: entrepreneurship; agglomeration; Development; india; South Asia; Entrepreneurship; Manufacturing Industry; Service Industry; India;


    Ghani, Ejaz, William R. Kerr, and Stephen O'Connell. "Spatial Determinants of Entrepreneurship in India." Special Issue on Entrepreneurship in a Regional Context. Regional Studies 48, no. 6 (December 1, 2013). View Details
  10. Diasporas and Outsourcing: Evidence from oDesk and India

    This study examines the role of the Indian diaspora in the outsourcing of work to India. Our data are taken from oDesk, the world's largest online platform for outsourced contracts, where India is the largest country in terms of contract volume. We use an ethnic name procedure to identify ethnic Indian users of oDesk in other countries around the world. We find very clear evidence that diaspora-based links matter on oDesk, with ethnic Indians in other countries 32% (9 percentage points) more likely to choose a worker in India. Yet, the size of the Indian diaspora on oDesk and the timing of its effects make clear that the Indian diaspora was not a very important factor in India becoming the leading country on oDesk for fulfilling work. In fact, multiple pieces of evidence suggest that diaspora use of oDesk increases with familiarity of the platform, rather than a scenario where diaspora connections serve to navigate uncertain environments. We further show that diaspora-based contracts mainly serve to lower costs for the company contacts outsourcing the work, as the workers in India are paid about the market wage for their work. These results and other observations lead to the conclusion that diaspora connections continue to be important even as online platforms provide many of the features that diaspora networks historically provided (e.g., information about potential workers, monitoring, and reputation foundations).

    Keywords: Diaspora; ethnicity; outsourcing; oDesk; networks; india; South Asia; Networks; Job Cuts and Outsourcing; Diasporas; Online Technology; Ethnicity Characteristics; Service Industry; South Asia; India;


    Ghani, Ejaz, William R. Kerr, and Christopher Stanton. "Diasporas and Outsourcing: Evidence from oDesk and India." Management Science 60, no. 7 (July 2014): 1677–1697. View Details
  11. Local Industrial Structures and Female Entrepreneurship in India

    We analyze the spatial determinants of female entrepreneurship in India in the manufacturing and services sectors. We focus on the presence of incumbent female-owned businesses and their role in promoting higher subsequent female entrepreneurship relative to male entrepreneurship. We find evidence of agglomeration economies in both sectors, where higher female ownership among incumbent businesses within a district-industry predicts a greater share of subsequent entrepreneurs will be female. Moreover, higher female ownership of local businesses in related industries (e.g., those sharing similar labor needs, industries related via input-output markets) predict greater relative female entry rates even after controlling for the focal district-industry's conditions. The core patterns hold when using local industrial conditions in 1994 to instrument for incumbent conditions in 2000–2005. The results highlight that the traits of business owners in incumbent industrial structures influence the types of entrepreneurs supported.

    Keywords: Entrepreneurship; Gender Characteristics; Manufacturing Industry; Service Industry; India;


    Ghani, Ejaz, William R. Kerr, and Stephen O'Connell. "Local Industrial Structures and Female Entrepreneurship in India." Journal of Economic Geography 13, no. 6 (November 2013): 929–964. (Winner of the FPD Academy Award for Best World Bank Research in Finance and Private Sector Development.) View Details
  12. Labor Regulations and European Venture Capital

    European nations substitute between employment protection regulations and labor market expenditures (e.g., unemployment insurance benefits) for providing worker insurance. Employment regulations more directly tax firms making frequent labor adjustments than other labor market insurance mechanisms. Venture capital investors are especially sensitive to these labor adjustment costs. Nations favoring labor market expenditures as the mechanism for providing worker insurance developed stronger venture capital markets over 1990–2008, especially in high volatility sectors. In this context, policy mechanisms are more important than the overall level of worker insurance.

    Keywords: Insurance; Labor; Europe;


    Bozkaya, Ant, and William R. Kerr. "Labor Regulations and European Venture Capital." Journal of Economics & Management Strategy 23, no. 4 (Winter 2014): 776–810. View Details
  13. Immigration and Employer Transitions for STEM Workers

    We analyze the career trajectories of STEM workers and firm-level hiring of immigrants using the Longitudinal Employer-Household Dynamics (LEHD) database of the US Census Bureau. We find STEM career adjustments during periods of abnormally high immigration into the firm to be more difficult on several dimensions compared to non-STEM workers. Most notably, STEM workers do not acquire a new job as quickly as non-STEM workers; moreover, their earnings are reduced after the job transition occurs. This latter earnings effect is strongest for the first five years after the transition, abating somewhat by the tenth year.

    Keywords: Nationality Characteristics; Employment; Immigration;


    Pekkala Kerr, Sari, and William R. Kerr. "Immigration and Employer Transitions for STEM Workers." American Economic Review: Papers and Proceedings 103, no. 3 (May 2013): 193–197. View Details
  14. Ethnic Innovation and U.S. Multinational Firm Activity

    This paper studies the impact that immigrant innovators have on the global activities of U.S. firms by analyzing detailed data on patent applications and on the operations of the foreign affiliates of U.S. multinational firms. The results indicate that increases in the share of a firm's innovation performed by inventors of a particular ethnicity are associated with increases in the share of that firm's affiliate activity in their native countries. Ethnic innovators also appear to facilitate the disintegration of innovative activity across borders and to allow U.S. multinationals to form new affiliates abroad without the support of local joint venture partners. Thus, this paper points out that immigration can enhance the competitiveness of multinational firms.

    Keywords: foreign direct investment; Technology Transfer; patents; innovation; Research and Development; Ethnic Networks; diasporas; Patents; Diasporas; Ethnicity Characteristics; Multinational Firms and Management; Competitive Advantage; Research and Development; Foreign Direct Investment; Innovation and Invention; United States;


    Foley, C. Fritz, and William R. Kerr. "Ethnic Innovation and U.S. Multinational Firm Activity." Management Science 59, no. 7 (July 2013): 1529–1544. View Details
  15. From Russia with Love: The Impact of Relocated Firms on Incumbent Survival

    We identify the impact of local firm concentration on incumbent performance with a quasi-natural experiment. When Germany was divided after World War II, many firms in the machine tool industry fled the Soviet occupied zone to prevent expropriation. We show that the regional location decisions of these firms upon moving to western Germany were driven by non-economic factors and heuristics rather than existing industrial conditions. Relocating firms increased the likelihood of incumbent failure in destination regions, a pattern that differs sharply from new entrants. We further provide evidence that these effects are due to increased competition for local resources.

    Keywords: Geographic Location; Competition; Supply and Industry; Labor; West Germany; Soviet Union;


    Falck, Oliver, Christina Guenther, Stephan Heblich, and William R. Kerr. "From Russia with Love: The Impact of Relocated Firms on Incumbent Survival." Journal of Economic Geography 13, no. 3 (May 2013): 419–449. View Details
  16. The Consequences of Entrepreneurial Finance: Evidence from Angel Financings

    This paper documents that ventures that are funded by two successful angel groups experience superior outcomes to rejected ventures: they have improved survival, exits, employment, patenting, web traffic, and financing. We use strong discontinuities in angel funding behavior over small changes in their collective interest levels to implement a regression discontinuity approach. We confirm the positive effects for venture operations, with qualitative support for a higher likelihood of successful exits. On the other hand, there is no difference in access to additional financing around the discontinuity. This might suggest that financing is not a central input of angel groups.

    Keywords: Business Ventures; Financing and Loans; Interests; Employment; Patents; Web; Operations; Entrepreneurship; Business Exit or Shutdown;


    Kerr, William R., Josh Lerner, and Antoinette Schoar. "The Consequences of Entrepreneurial Finance: Evidence from Angel Financings." Review of Financial Studies 27, no. 1 (January 2014): 20–55. View Details
  17. Economic Impacts of Immigration: A Survey

    This paper surveys recent empirical studies on the economic impacts of immigration. The survey first examines the magnitude of immigration as an economic phenomenon in various host countries. The second part deals with the assimilation of immigrant workers into host-country labor markets and concomitant effects for natives. The paper then turns to immigration's impact for the public finances of host countries. The final section considers emerging topics in the study of immigration. The survey particularly emphasizes the recent experiences of Northern Europe and Scandinavia and relevant lessons from traditional destination countries like the U.S.

    Keywords: Surveys; Corporate Social Responsibility and Impact; Immigration; Economic Systems; Human Capital; Economic Slowdown and Stagnation; Fluctuation; Situation or Environment; Labor and Management Relations; United States; Europe;


    Pekkala Kerr, Sari, and William R. Kerr. "Economic Impacts of Immigration: A Survey." Finnish Economic Papers 24, no. 1 (spring 2011): 1–32. View Details
  18. The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Invention

    This study evaluates the impact of high-skilled immigrants on U.S. technology formation. We use reduced-form specifications that exploit large changes in the H-1B visa program. Higher H-1B admissions increase immigrant science and engineering (SE) employment and patenting by inventors with Indian and Chinese names in cities and firms dependent upon the program relative to their peers. Most specifications find limited effects for native SE employment or patenting. We are able to rule out displacement effects, and small crowding-in effects may exist. Total SE employment and invention increases with higher admissions primarily through direct contributions of immigrants.

    Keywords: Engineering; Governing Rules, Regulations, and Reforms; Policy; Immigration; Innovation and Invention; Patents; Business and Government Relations; Science; United States;


    Kerr, William R., and William F. Lincoln. "The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Invention." Journal of Labor Economics 28, no. 3 (July 2010): 473–508. (Winner of H. Gregg Lewis Prize for Best Paper in Journal of Labor Economics 2010-2011.) View Details
  19. What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns

    Why do firms cluster near one another? We test Marshall's theories of industrial agglomeration by examining which industries locate near one another, or coagglomerate. We construct pairwise coagglomeration indices for US manufacturing industries from the Economic Census. We then relate coagglomeration levels to the degree to which industry pairs share goods, labor, or ideas. To reduce reverse causality, where collocation drives input-output linkages or hiring patterns, we use data from UK industries and from US areas where the two industries are not collocated. All three of Marshall's theories of agglomeration are supported, with input-output linkages particularly important.

    Keywords: Production; Economics; Industry Clusters; Data and Data Sets; Labor; Theory; Goods and Commodities; United States; United Kingdom;


    Ellison, Glenn, Edward Glaeser, and William R. Kerr. "What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns." American Economic Review 100, no. 3 (June 2010): 1195–1213. (Appendix.) View Details
  20. Banking Deregulations, Financing Constraints and Firm Entry Size

    We examine the effect of US branch banking deregulations on the entry size of new firms using micro-data from the US Census Bureau. We find that the average entry size for startups did not change following the deregulations. However, among firms that survived at least four years, a greater proportion of firms entered either at their maximum size or closer to the maximum size in the first year. The magnitude of these effects were small compared to the much larger changes in entry rates of small firms following the reforms. Our results highlight that this large-scale entry at the extensive margin can obscure the more subtle intensive margin effects of changes in financing constraints.

    Keywords: Business Startups; Financing and Loans; Governing Rules, Regulations, and Reforms; Market Entry and Exit; Banking Industry; United States;


    Kerr, William R., and Ramana Nanda. "Banking Deregulations, Financing Constraints and Firm Entry Size." Journal of the European Economic Association 8, nos. 2-3 (April–May 2010): 582–593. View Details
  21. Breakthrough Inventions and Migrating Clusters of Innovation

    We investigate the speed at which clusters of invention for a technology migrate spatially following breakthrough inventions. We identify breakthrough inventions as the top one percent of U.S. inventions for a technology during 1975-1984 in terms of subsequent citations. Patenting growth is significantly higher in cities and technologies where breakthrough inventions occur after 1984 relative to peer locations that do not experience breakthrough inventions. This growth differential in turn depends on the mobility of the technology's labor force, which we model through the extent that technologies depend upon immigrant scientists and engineers. Spatial adjustments are faster for technologies that depend heavily on immigrant inventors. The results qualitatively confirm the mechanism of industry migration proposed in models like Duranton (2007).

    Keywords: History; Technological Innovation; Patents; Labor; Immigration; United States;


    Kerr, William R. "Breakthrough Inventions and Migrating Clusters of Innovation." Journal of Urban Economics 67, no. 1 (January 2010): 46–60. View Details
  22. Clusters of Entrepreneurship

    Employment growth is strongly predicted by smaller average establishment size, both across cities and across industries within cities, but there is little consensus on why this relationship exists. Traditional economic explanations emphasize factors that reduce entry costs or raise entrepreneurial returns, thereby increasing net returns and attracting entrepreneurs. A second class of theories hypothesizes that some places are endowed with a greater supply of entrepreneurship. Evidence on sales per worker does not support the higher returns for entrepreneurship rationale. Our evidence suggests that entrepreneurship is higher when fixed costs are lower and when there are more entrepreneurial people.

    Keywords: Economic Growth; Entrepreneurship; Cost; Employment; Market Entry and Exit;


    Glaeser, Edward L., William R. Kerr, and Giacomo A.M. Ponzetto. "Clusters of Entrepreneurship." Journal of Urban Economics 67, no. 1 (January 2010): 150–168. View Details
  23. Democratizing Entry: Banking Deregulations, Financing Constraints, and Entrepreneurship

    We examine entrepreneurship and creative destruction following US banking deregulations using Census Bureau data. US banking reforms brought about exceptional growth in both entrepreneurship and business closures. Most of the closures, however, were the new ventures themselves. Although we do find evidence for the standard story of creative destruction, the most pronounced impact was a massive increase in churning among new entrants. We argue that creative destruction requires many business failures along with the few great successes. The successes are very difficult to identify ex ante, which is why democratizing entry is an important trait of well-functioning capital markets.

    Keywords: Entrepreneurship; Governing Rules, Regulations, and Reforms; Market Entry and Exit; Capital Markets; Banks and Banking; Growth and Development; Disruptive Innovation;


    Kerr, William R., and Ramana Nanda. "Democratizing Entry: Banking Deregulations, Financing Constraints, and Entrepreneurship." Journal of Financial Economics 94, no. 1 (October 2009): 124–149. View Details
  24. Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?

    Why are some places more entrepreneurial than others? We use Census Bureau data to study local determinants of manufacturing startups across cities and industries. Demographics have limited explanatory power. Overall levels of local customers and suppliers are only modestly important, but new entrants seem particularly drawn to areas with many smaller suppliers, as suggested by Chinitz (1961). Abundant workers in relevant occupations also strongly predict entry. These forces plus city and industry fixed effects explain between sixty and eighty percent of manufacturing entry. We use spatial distributions of natural cost advantages to address partially endogeneity concerns.

    Keywords: Business Startups; Entrepreneurship; Geographic Location; Employment; Market Entry and Exit; Supply Chain; Manufacturing Industry;


    Glaeser, Edward L., and William R. Kerr. "Local Industrial Conditions and Entrepreneurship: How Much of the Spatial Distribution Can We Explain?" Journal of Economics & Management Strategy 18, no. 3 (Fall 2009): 623–663. View Details
  25. Ethnic Scientific Communities and International Technology Diffusion

    This study explores the importance of knowledge transfer for international technology diffusion by examining ethnic scientific and entrepreneurial communities in the US and their ties to their home countries. US ethnic research communities are quantified by applying an ethnic-name database to individual patent records. International patent citations confirm knowledge diffuses through ethnic networks, and manufacturing output in foreign countries increases with an elasticity of 0.1-0.3 to stronger scientific integration with the US frontier. To address reverse-causality concerns, reduced-form specifications exploit exogenous changes in US immigration quotas. Consistent with a model of sector reallocation, output growth in less developed economies is facilitated by employment gains, while more advanced economies experience sharper increases in labor productivity. The ethnic transfer mechanism is especially strong in high-tech industries and among Chinese economies. The findings suggest channels for transferring codified and tacit knowledge partly shape the effective technology frontiers of developing and emerging economies.

    Keywords: Technology; Ethnicity Characteristics; Production; Integration; Knowledge Sharing; Patents; Employment; Performance Productivity; Entrepreneurship; Change; Developing Countries and Economies; Immigration; China; United States;


    Kerr, William R. "Ethnic Scientific Communities and International Technology Diffusion." Review of Economics and Statistics 90, no. 3 (August 2008): 518–537. (Appendix.) View Details
  26. The Survey of Industrial R&D--Patent Database Link Project

    This paper details the construction of a firm-year panel dataset combining the NBER Patent Dataset with the Survey of Industrial R&D conducted by the Census Bureau and National Science Foundation. The dataset constitutes a platform that offers an unprecedented view of the R&D-to-patenting innovation process and a close analysis of the strengths and limitations of the R&D survey. The files are linked through a name-matching algorithm customized for uniting the firm names to which patents are assigned with the firm names in the Census Bureau's SSEL business registry. Through the Census Bureau's file structure, R&D can be linked to the operating performances of each firm's establishments, further facilitating innovation-to-productivity studies.

    Keywords: Data and Data Sets; Patents; Surveys; Research and Development; Innovation and Invention; Performance Productivity; Projects; Management Practices and Processes; Management Analysis, Tools, and Techniques;


    Kerr, William R., and Shihe Fu. "The Survey of Industrial R&D--Patent Database Link Project." Journal of Technology Transfer 33, no. 2 (April 2008): 173–186. View Details
  27. Entrepreneurship and Urban Success: Toward a Policy Consensus

    Like all politics, all entrepreneurship is local. Individuals launch firms and, if successful, expand their enterprises to other locations. But new firms must start somewhere, even if their businesses are conducted largely or exclusively on the Internet. Likewise, policymakers at local and state levels increasingly recognize that entrepreneurship is the key to building and sustaining their economies' growth. Although this is a seemingly obvious proposition, it represents something of a departure from past thinking about how local, state, or regional economies grow. Historically, state and local policymakers have put their energies into trying to attract existing firms from somewhere else, either to relocate to a particular area or to build new facilities there. Such smokestack chasing - or, in this cleaner era, simply firm chasing - often has degenerated into what is essentially a zero-sum game for the national economy. When one city or state offers tax breaks or other financial inducements to encourage firms to locate new plants or headquarters, and succeeds, some other city or state loses out in the process. Local, state, and regional economic development centered on entrepreneurship, however, is a fundamentally different phenomenon. The formation and growth of new firms, especially those built around new products or ways of doing things, wherever this occurs, is clearly a positive sum game, not just for the locality, but for the nation as a whole. This essay provides a guide to policymakers and citizens to what is known about the effects of various local and state policies aimed at fostering entrepreneurially driven growth. There is also much we do not know; thus, the essay identifies subjects that require further research.

    Keywords: Business Headquarters; Business Startups; Development Economics; Economy; Entrepreneurship; Policy; Taxation; Growth and Development Strategy; Product Development; Business Processes; Expansion; Internet;


    Acs, Zoltan J., Edward L. Glaeser, Robert E. Litan, Lee Fleming, Stephan J. Goetz, William R. Kerr, Steven Klepper, Stuart S. Rosenthal, Olav Sorenson, and William C. Strange. "Entrepreneurship and Urban Success: Toward a Policy Consensus." Kauffman Foundation Research Report (January 2008). View Details
  28. Does Employment Protection Reduce Productivity? Evidence from U.S. States

    Theory predicts that mandated employment protections may reduce productivity by distorting production choices. Firms facing (non-Coasean) worker dismissal costs will curtail hiring below efficient levels and retain unproductive workers, both of which should affect productivity. These theoretical predictions have rarely been tested. We use the adoption of wrongful-discharge protections by U.S. state courts over the last three decades to evaluate the link between dismissal costs and productivity. Drawing on establishment-level data from the Annual Survey of Manufacturers and the Longitudinal Business Database, our estimates suggest that wrongful-discharge protections reduce employment flows and firm entry rates. Moreover, analysis of plant-level data provides evidence of capital deepening and a decline in total factor productivity following the introduction of wrongful-discharge protections. This last result is potentially quite important, suggesting that mandated employment protections reduce productive efficiency as theory would suggest. However, our analysis also presents some puzzles including, most significantly, evidence of strong employment growth following adoption of dismissal protections. In light of these puzzles, we read our findings as suggestive but tentative.

    Keywords: Theory; Production; Selection and Staffing; Cost; Employment; Capital; Performance Productivity; United States;


    Autor, David H., William R. Kerr, and Adriana D. Kugler. "Does Employment Protection Reduce Productivity? Evidence from U.S. States." Economic Journal (Royal Economic Society) 117, no. 521 (June 2007): 189–217. View Details
  29. Limits on Interest Rate Rules in the IS Model

    There has been a substantial amount of research on interest rate rules. This literature finds that the feasibility and desirability of interest rate rules depends on the structure of the model used to approximate macroeconomic reality. We employ a series of macroeconomic models to shed light on how aspects of model structure influence the limits on interest rate rules. In particular, we show that a simple respecification of the IS schedule, which we call the expectational IS schedule, makes the textbook model generate the same limits on interest rate rules as the fully articulated models. We then use this simple model to study the design of interest rate rules with nominal anchors. If the monetary authority adjusts the interest rate in response to deviations of the price level from a target path, then there is a unique equilibrium under a wide range of parameter choices: all that is required is that the authority raise the nominal rate when the price level is above the target path and lower it when the price level is below the target path. By contrast, if the monetary authority responds to deviations of the inflation rate from a target path, then a much more aggressive pattern is needed: the monetary authority must make the nominal rate rise by more than one-for-one with the inflation rate. Our results on interest rate rules with nominal anchors are preserved when we further extend the model to include the influence of expectations on aggregate supply.

    Keywords: Inflation and Deflation; Macroeconomics; Interest Rates; Price; Governing Rules, Regulations, and Reforms; Performance Expectations;


    Kerr, William R., and Robert G. King. "Limits on Interest Rate Rules in the IS Model." Federal Reserve Bank of Richmond Economic Quarterly 82, no. 2 (1996): 47–75. View Details

Book Chapters

  1. Clusters of Entrepreneurship and Innovation

    This chapter reviews recent academic work on the spatial concentration of entrepreneurship and innovation in the United States. We discuss rationales for the agglomeration of these activities and the economic consequences of clusters. We identify and discuss policies that are being pursued in the United States to encourage local entrepreneurship and innovation. While arguments exist for and against policy support of entrepreneurial clusters, our understanding of what works and how it works is quite limited. The best path forward involves extensive experimentation and careful evaluation.

    Keywords: entrepreneurship; innovation; agglomeration; clusters; place making; Industry Clusters; Entrepreneurship; Innovation and Invention; United States;


    Chatterji, Aaron, Edward Glaeser, and William R. Kerr. "Clusters of Entrepreneurship and Innovation." In Innovation Policy and the Economy, Volume 14, edited by Josh Lerner and Scott Stern. University of Chicago Press, 2014. View Details
  2. Financing Constraints and Entrepreneurship

    Financing constraints are one of the biggest concerns impacting potential entrepreneurs around the world. Given the important role that entrepreneurship is believed to play in the process of economic growth, alleviating financing constraints for would-be entrepreneurs is also an important goal for policymakers worldwide. We review two major streams of research examining the relevance of financing constraints for entrepreneurship. We then introduce a framework that provides a unified perspective on these research streams, thereby highlighting some important areas for future research and policy analysis in entrepreneurial finance.

    Keywords: Economic Growth; Entrepreneurship; Financing and Loans; Investment; Policy; Research;


    Kerr, William R., and Ramana Nanda. "Financing Constraints and Entrepreneurship." In Handbook of Research on Innovation and Entrepreneurship, edited by David Audretsch, Oliver Falck, and Stephan Heblich, 88–103. Cheltenham, U.K.: Edward Elgar Publishing, 2011. (NBER WP 15498, HBS WP 10-013.) View Details
  3. Breakthrough Inventions and the Growth of Innovation Clusters

    This report provides a comprehensive look at the role of innovation in promoting economic and social development. It examines the impact of innovation on the economic growth of developing countries and the future role of technological innovation in international efforts to mitigate the effects of climate change, amongst many other issues.

    Keywords: Technological Innovation; Developing Countries and Economies; Society; Growth and Development; Weather and Climate Change; Social Issues; Industry Clusters; Business and Government Relations;


    Kerr, William R. "Breakthrough Inventions and the Growth of Innovation Clusters." In The Innovation for Development Report 2010-2011, edited by Augusto Lopez-Carlos, 103–107. Hampshire, England: Palgrave Macmillan, 2010. View Details
  4. The Agglomeration of U.S. Ethnic Inventors

    The ethnic composition of US inventors is undergoing a significant transformation - with deep impacts for the overall agglomeration of US innovation. This study applies an ethnic-name database to individual US patent records to explore these trends with greater detail. The contributions of Chinese and Indian scientists and engineers to US technology formation increase dramatically in the 1990s. At the same time, these ethnic inventors became more spatially concentrated across US cities. The combination of these two factors helps stop and reverse long-term declines in overall inventor agglomeration evident in the 1970s and 1980s. The heightened ethnic agglomeration is particularly evident in industry patents for high-tech sectors, and similar trends are not found in institutions constrained from agglomerating (e.g., universities, government).

    Keywords: Technology; Geographic Location; Patents; Ethnicity Characteristics; City; Innovation and Invention; United States;


    Kerr, William R. "The Agglomeration of U.S. Ethnic Inventors." In Agglomeration Economics, edited by Edward Glaeser, 237–276. Chicago, IL: University of Chicago Press, 2010. View Details
  5. Labor Market Regulations and European Venture Capital Investment

    Keywords: Venture Capital; Investment; Human Capital; Governing Rules, Regulations, and Reforms; Government and Politics; Business and Government Relations; Europe;


    Bozkaya, Ant, and William R. Kerr. "Labor Market Regulations and European Venture Capital Investment." In European Productivity Conference Scientific Proceedings, edited by Pekka Malmberg, 165–172. Helsinki, Finland: Paintek Oy, 2007. View Details
  6. The Rationales and Performance of Public Venturing: Survey Evidence from Belgium and Finland

    Keywords: Public Sector; Public Ownership; Mission and Purpose; Performance; Belgium; Finland;


    Bozkaya, Ant, and William R. Kerr. "The Rationales and Performance of Public Venturing: Survey Evidence from Belgium and Finland." In Essays in Entrepreneurial Finance, by Ant Bozkaya, 95–139. Université libre de Bruxelles, 2007. (Reprinted in Entrepreneurial Finance: Financing of Young, Innovative Ventures (Saarbrücken, Germany: VDM Verlag, 2009, 95-139.) View Details
  7. Labor Market Regulations and European Restructuring: Evidence from Private Equity Investments

    Keywords: Labor; Governing Rules, Regulations, and Reforms; Restructuring; Private Equity; Investment; Europe;


    Bozkaya, Ant, and William R. Kerr. "Labor Market Regulations and European Restructuring: Evidence from Private Equity Investments." In Essays in Entrepreneurial Finance, by Ant Bozkaya, 151–189. Université libre de Bruxelles, 2007. (Reprinted in Entrepreneurial Finance: Financing Young, Innovative Ventures, (Saarbrüken, Germany: VDM Verlag, 2009), 140-176.) View Details

Cases and Teaching Materials

  1. Entrepreneurship Reading: Financing Entrepreneurial Ventures

    Core Curriculum in Entrepreneurship is a series of Readings that cover fundamental course material in Entrepreneurship. Readings include Interactive Illustrations which help students master complex concepts quickly.


    Kerr, William R., Ramana Nanda, and James McQuade. "Entrepreneurship Reading: Financing Entrepreneurial Ventures." 2014. (Core Curriculum Readings.) View Details
  2. AVA.ph: Growing a Filipino E-Commerce Company

    AVA is a three-year old e-commerce company in the Philippines. From its early start mimicking the Gilt Groupe concept of online flash sales, the company has grown into a broader e-commerce platform for local fashion commerce. Oliver Segovia needs to evaluate where AVA should go next and answer some complicated personal questions. The case considers issues related to e-commerce platforms, diaspora-based international exchanges, business location choice, and global entrepreneurship broadly.

    Keywords: Market Platforms; Business Growth and Maturation; Internet; Entrepreneurship; Growth and Development Strategy; Fashion Industry; Retail Industry; Philippines;


    Kerr, William R., and Henry Motte-Munoz. "AVA.ph: Growing a Filipino E-Commerce Company." Harvard Business School Case 813-188, June 2013. (Revised August 2013.) View Details
  3. Blink Booking

    Rebeca Minguela hopes to create an arbitrage platform, similar to Rocket Internet, that can bring start-up ideas and opportunities to Spain. However, Blink Booking, her first venture and proof of concept, is rocked by a co-founder's breach of confidence and departure. Minguela must repair the damage to Blink's management team, restore investor confidence, and continue Blink's rapid growth to deliver on the venture's initial promise. The case explores management team roles, equity splits, and related entrepreneurial challenges that Minguela must navigate. Minguela must also decide whether her long-term goal of an incubator-like platform for Spain is really feasible. The case describes how her vision differs from Rocket Internet—a large German incubator that also provides its entrepreneurs with ready-made business models from existing companies—allowing students to compare the models and discuss the ethics of cloning.

    Keywords: entrepreneurship; clones; cloning; ethics; Rocket Internet; start-up; equity split; arbitrage; incubator; mobile app; Expansion; Spain; Europe; Entrepreneurship; Ethics; Information Technology Industry; Accommodations Industry; Travel Industry; Spain; Europe;


    Kerr, William R., Magnus Thor Torfason, and Alexis Brownell. "Blink Booking." Harvard Business School Case 813-121, December 2012. View Details
  4. Cherrypicks

    Cherrypicks is a Hong Kong communications start-up approaching a large Korean mobile operator for a partnership to take the operator's products to markets outside of Korea. SK Telecom's (SKT) Ring Back Tones (RBT) product is a spectacular success in South Korea, but the partnership will require major changes in Cherrypick's business model. Further complicating matters, SKT is also a strategic investor in Cherrypicks, a very large service provider focused on South Korea and China, and typically partners with Korean entrepreneurial firms. The Cherrypicks management team must decide how they should pitch the partnership opportunity to SKT and what their preferred deal structure would be.

    Keywords: Business Model; Business Startups; Communication Strategy; Entrepreneurship; Partners and Partnerships; Communications Industry; China; Hong Kong; South Korea;


    Kerr, William R. "Cherrypicks." Harvard Business School Case 807-106, March 2007. (Revised March 2009.) View Details
  5. Convertible Notes in Angel Financing

    This note introduces convertible notes in angel financing. It begins by delineating the differences between a priced and non-priced round. It then describes a specific example of a convertible note, with attention paid to technical details regarding valuation caps.

    Keywords: financing; Finance; Entrepreneurship;


    Nanda, Ramana, and William R. Kerr. "Convertible Notes in Angel Financing." Harvard Business School Background Note 813-017, September 2012. View Details
  6. Entrepreneurial Finance in Finland?

    This case describes a new venture attempting to bring early-stage entrepreneurial financing to Finland and other Nordic countries. Entrepreneurship is taking off in Finland, an area that historically has had little venture capital or high-growth start-up activity, but a gap remains for seed-stage financing. The founders are evaluating the best way to structure their private equity fund to reflect their own assets and abilities and the needs and resources of the entrepreneurial scene in the Nordics. The case evaluates whether to organize as an accelerator, a micro-VC fund, an incubator, a normal VC fund, or as a hybrid.

    Keywords: angels; angel investors; VC; micro-VC; accelerator; incubator; entrepreneurship; entrepreneurial finance; venture capital; Entrepreneurship; Venture Capital; Private Equity; Business Startups; Financial Services Industry; Finland; Scandinavia; Europe;


    Kerr, William R., Ramana Nanda, and Alexis Brownell. "Entrepreneurial Finance in Finland?" Harvard Business School Case 813-068, September 2012. (Revised March 2013.) View Details
  7. Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture

    EFL provides credit-scoring services in developing countries using psychometric assessment, but the potential loss of a large customer makes them reconsider their scaling narrative.

    Keywords: entrepreneurship; finance; developing countries; lending; psychometrics; scaling; Entrepreneurship; Credit; Developing Countries and Economies; Growth and Development Strategy; Financial Services Industry; Banking Industry; Africa; Latin America;


    Farre-Mensa, Joan, William R. Kerr, and Alexis Brownell. "Entrepreneurial Finance Lab: Scaling an Innovative Start-up Financing Venture." Harvard Business School Case 814-073, January 2014. View Details
  8. EverTrue: Mobile Technology Development (A)

    Brent Grinna is evaluating different options for the technology development of his start-up's iPhone app, including hiring local programmers, finding a CTO, or outsourcing. He only has a little over two months before he presents his alumni networking app to Brown University, in the hope that they will adopt it and fund his company, EverTrue. He lacks the technical knowledge necessary to make the prototype himself, and so has to quickly decide on the best option. He is considering multiple ways to find a developer, including hiring a local programmer or making use of a local app-development company; using an outsourcing platform like oDesk; contracting with Dashfire, a friend's company that charges low fees for product development in exchange for equity; or finding and hiring a CTO or technical co-founder. Grinna must weigh issues like cost, speed of development, equity retention, proximity and ease of collaboration, and control of intellectual property. The case further provides an opportunity for discussing the business models of global firms like oDesk and Dashfire.

    Keywords: entrepreneurship; start-up; mobile app; oDesk; outsourcing; CTO; minimum viable product; app development; intellectual property; globalization; Business Startups; Decisions; Entrepreneurship; Mobile Technology; Intellectual Property; Product Development; Globalization; Technology Industry; Massachusetts; Boston; India;


    Kerr, William R., and Alexis Brownell. "EverTrue: Mobile Technology Development (A)." Harvard Business School Case 813-122, January 2013. (Revised February 2013.) View Details
  9. EverTrue: Mobile Technology Development (B)

    Brent Grinna has one customer signed up for his alumni-networking mobile app, and is now trying to choose among three possibilities for a CTO. He decided to contract with a friend's company, Dashfire, to create a prototype of the app, and has signed up Brown University as a customer. Since the end of the events of the A case, Grinna's company, EverTrue, has launched the app, found an advisor and office space, and been covered in the Boston Globe. He is still unsure about how to move forward with EverTrue, and is struggling with issues like a conflict in his B2B2C business models or what his next steps should be, as well as personal concerns. At the moment, he is trying to decide between three candidates for CTO, and he must weigh the importance of having an MBA and having experience in app development, and also must consider how hiring a CTO will affect his relationship with Dashfire.

    Keywords: entrepreneurship; start-up; mobile app; CTO; hiring; scaling; Business Startups; Decisions; Entrepreneurship; Growth and Development; Mobile Technology; Technology Industry; Massachusetts; Boston;


    Kerr, William R., and Alexis Brownell. "EverTrue: Mobile Technology Development (B)." Harvard Business School Supplement 813-123, January 2013. View Details
  10. FanMode: Launching a Global Sports Venture

    Keywords: entrepreneurship; app development; Location choices; structure of the firm; sports industry; social media; global; Entrepreneurship; Sports Industry; Entertainment and Recreation Industry; United Kingdom; South Africa;


    Ghosh, Shikhar, William R. Kerr, and Alexis Brownell. "FanMode: Launching a Global Sports Venture." Harvard Business School Case 813-190, June 2013. (Revised February 2014.) View Details
  11. Home Essentials: Building a Global Service Business with Local Operations

    Chris Exline founded Home Essentials, a furniture rental business targeted toward expatriates, in Singapore but rapidly moved the base of operations to Hong Kong. The company was highly successful in Singapore and Hong Kong and then pursued rapid global expansion. Lacking frameworks for deciding upon countries to enter and services to deliver in each country, Exline used gut instinct. Lacking control systems and information, he failed to identify problems early and had trouble understanding the root cause of failures. The global financial crisis intensified the problems. The case ends by describing how Exline was able to turn around the troubled company and develop necessary governance systems. The question of whether to once more attempt to grow beyond Hong Kong and, if so, the approach to take in selecting countries, is a central issue Exline faced at the time of the case.

    Keywords: Growth Management; Renting or Rental; Corporate Governance; Global Strategy; Failure; Singapore; Hong Kong;


    Applegate, Lynda M., William R. Kerr, and David Lane. "Home Essentials: Building a Global Service Business with Local Operations." Harvard Business School Case 811-078, June 2011. (Revised January 2013.) View Details
  12. Homestrings, Inc.: Diaspora-Based Financing and the Crowd Funding of Development

    Homestrings is an online investment platform for overseas diasporas to link financially with their home countries. The founder believes crowd-funding can become a pillar for development, but U.S. regulatory hurdles and resources constraints are substantial. The company is considering targeting non-diaspora investors, introducing new products like insurance or banking, and related expansion strategies.

    Keywords: entrepreneurship; diasporas; Investments; regulations; Africa; crowd-funding; development finance; Entrepreneurship; Business Growth and Maturation; Financial Services Industry; Africa; United States;


    Kerr, William R., and Alexis Brownell. "Homestrings, Inc.: Diaspora-Based Financing and the Crowd Funding of Development." Harvard Business School Case 814-031, September 2013. View Details

    In their second year, two Mexican HBS MBAs joined forces to start a search fund based in Mexico City. They had raised money to acquire an existing private company in Mexico with an initial enterprise value between $5 million and $15 million. Just seven months after raising the fund, they were about to close a deal on a target company, but the seller wants to renegotiate.

    Keywords: Business Exit or Shutdown; Corporate Entrepreneurship; Investment Funds; Corporate Finance; Mexico City;


    Nanda, Ramana, William R. Kerr, and Carin-Isabel Knoop. "INNOVA-MEX's Bid for ENKONTROL." Harvard Business School Case 812-008, October 2011. (Revised August 2012.) View Details

    In their second year, two Mexican HBS MBAs joined forces to start a search fund based in Mexico City. They had raised money to acquire an existing private company in Mexico with an initial enterprise value between $5 million and $15 million. Just seven months after raising the fund, they were about to close a deal on a target company, but the seller wants to renegotiate.

    Keywords: entrepreneurial finance; Finance; Strategy; Entrepreneurship; Mexico;


    Kerr, William R., and Ramana Nanda. "INNOVA-MEX's Bid for ENKONTROL (TN)." Harvard Business School Teaching Note 813-087, January 2013. View Details
  15. Internet Securities, Inc.: Path to Sustainability

    Founded in 1994 when the Internet was still a "toy for techies," the case is set in 1998 when Internet IPOs were red-hot. Internet Securities provides hard-to-find financial, business, economic, and political information on emerging markets. Information from over 600 information suppliers in more than 25 emerging markets (e.g., China, Russia, Poland, Venezuela, Argentina, Chile, Turkey) is provided to over 650 institutional clients, including J.P. Morgan, Deutsche Morgan Grenfell, KPMG, and ING Barings. After ruling out seeking another round of VC financing, the cash-strapped founder of this Internet information service provider must decide whether to IPO or accept an offer to be acquired by Euromoney, a global publishing and information content provider that is eager to launch an Internet information service. The case contains a term sheet that can be reviewed to support analysis and decision making.

    Keywords: Acquisition; Business Model; Business Startups; Decision Choices and Conditions; Venture Capital; Cash Flow; Initial Public Offering; Data and Data Sets; Growth and Development Strategy; Valuation;


    Applegate, Lynda M., William R. Kerr, and Ryan Johnson. "Internet Securities, Inc.: Path to Sustainability." Harvard Business School Case 811-098, April 2011. (Revised June 2011.) View Details
  16. Location Choice for New Ventures: Cities

    Location choice is a critical decision for entrepreneurs. This note explores how entrepreneurs should think about different city options through a systematic framework that encompasses professional and personal issues. We use the intellectual frameworks of the cluster and industry agglomeration literatures to organize these factors. We then provide some tactical advice and worksheets for entrepreneurs to consider when selecting the location for their new venture.

    Keywords: City; Business Startups;


    Kerr, William R., and Ramana Nanda. "Location Choice for New Ventures: Cities." Harvard Business School Background Note 811-106, May 2011. (Revised March 2013.) View Details
  17. micro Home Solutions: A Social Housing Initiative in India

    mHS is a social enterprise for the provision of affordable housing in India. After India's microfinance industry collapses, mHS needs to reposition itself for continued operations and long-term growth.

    Keywords: entrepreneurship; india; Housing; loans; social enterprise; Development; Poverty; Micro Finance; Entrepreneurship; Housing; Social Enterprise; Poverty; India;


    Kerr, William R., and Alexis Brownell. "micro Home Solutions: A Social Housing Initiative in India." Harvard Business School Case 813-092, September 2012. (Revised February 2013.) View Details
  18. Online Research Guide

    This note provides students with an approach to using online databases to analyze companies, industries, markets, including country markets.

    Keywords: Business Model; Decisions; Data and Data Sets; Markets; Supply and Industry; Planning; Research; Online Technology;


    Applegate, Lynda M., William R. Kerr, Ann Cullen, and Alexis Brownell. "Online Research Guide." Harvard Business School Background Note 811-095, April 2011. View Details
  19. Pitching Business Opportunities

    This note can be used to develop a business plan pitch for a new venture.

    Keywords: Business Plan; Business Startups; Spoken Communication; Competency and Skills; Entrepreneurship;


    Applegate, Lynda M., William R. Kerr, and Alexis Brownell. "Pitching Business Opportunities." Harvard Business School Background Note 811-086, March 2011. View Details
  20. PunchTab, Inc.

    PunchTab was a Silicon Valley startup, founded in 2011, that was developing an Internet-based turnkey customer loyalty program for website owners, mobile applications developers, and brands. Founder/CEO Ranjith Kumaran must make strategic decisions about how to fund PunchTab's early operations and growth given the many options available: individual angel investors, super angel funds, incubators, and seed funds inside traditional venture capital firms.

    Keywords: Financial Strategy; Investment; Investment Funds; Web Sites; Mobile Technology; Corporate Entrepreneurship; Venture Capital; San Francisco;


    Nanda, Ramana, William R. Kerr, and Lauren Barley. "PunchTab, Inc." Harvard Business School Case 812-033, October 2011. View Details
  21. PunchTab, Inc. (TN)

    A Teaching Note for the PunchTab case, which discusses how high-tech startups structure seed financing, merits of angels vs. super angels vs. VCs, and related topics (e.g., convertible notes, priced versus non-priced financing rounds, entrepreneurial finance networks).

    Keywords: venture capital; finance; entrepreneurial finance; Venture Capital; Entrepreneurship;


    Nanda, Ramana, and William R. Kerr. "PunchTab, Inc. (TN)." Harvard Business School Teaching Note 812-141, June 2012. (Revised September 2012.) View Details
  22. PunchTab, Inc. Investor Presentation Deck

    This case examines the PowerPoint presentation that Ranjith Kumaran, founder of the start-up PunchTab, Inc., is using for his investment pitches to venture capital firms. Students can discuss the materials that Kumaran has included, his presentation style, and what they would retain or remove from the presentation.

    Keywords: Entrepreneurship; Management; Presentations; Venture Capital; Business Startups;


    Kerr, William R., and Ramana Nanda. "PunchTab, Inc. Investor Presentation Deck." Harvard Business School Case 812-172, June 2012. View Details
  23. ReSource Pro

    Matt Bruno, founder and general manager of ReSource Pro, left his job working for a New York City-based insurance program shortly after the World Trade Center bombing and arrived in China. Initially he planned to teach English, but soon the entrepreneurial spirit of the country caused him to begin exploring opportunities. He returned to New York and talked his former boss into allowing him to start a back-office services firm for their insurance company clients, which grew into ReSource Pro. By year-end 2007, ReSource Pro employed 250 people, of whom only 4 were U.S.-based. With aggressive growth plans, Bruno began examining potential cities in China for expansion. After narrowing his list of potential expansion sites to the five Chinese cities of Chengdu (the capital of Sichuan Province), Jinan (capital of Shandong Province), Nanjing (capital of Jiangsu Province), Suzhou (Jiangsu), and Wuhan (capital of Hubei Province), he now had to make a final choice.

    Keywords: Geographic Location; Talent and Talent Management; Corporate Entrepreneurship; Cross-Cultural and Cross-Border Issues; Insurance Industry; Service Industry; China;


    Applegate, Lynda M., William R. Kerr, Elisabeth Koll, and David Lane. "ReSource Pro." Harvard Business School Case 812-031, December 2011. (Revised May 2014.) View Details
  24. Start-Up Chile: April 2012

    Start-Up Chile is a unique program to encourage entrepreneurs to bring their new ventures to Chile. Policymakers must evaluate its effectiveness in achieving economic and social goals.

    Keywords: Entrepreneurship; Venture Capital; Policy; Chile;


    Applegate, Lynda M., William R. Kerr, Josh Lerner, Dina D. Pomeranz, Gustavo A. Herrero, and Cintra Scott. "Start-Up Chile: April 2012." Harvard Business School Case 812-158, May 2012. View Details
  25. TA Energy (Turkey): A Bundle of International Partnerships

    Stimulates discussion of entrepreneurship in emerging economies, especially for entrepreneurs returning to their home countries to start businesses with global technologies and partners. Focuses on the partnership tensions between global firms and local family-dominated conglomerates. Addresses new venture financing in an asset-intensive business through the assembly of strategic contrasts. More broadly, highlights the opportunities and challenges for returnee entrepreneurs.

    Keywords: Family Business; Developing Countries and Economies; Entrepreneurship; Venture Capital; Globalized Firms and Management; Partners and Partnerships; Conflict and Resolution; Turkey;


    Kerr, William R., Daniel J. Isenberg, and Ant Bozkaya. "TA Energy (Turkey): A Bundle of International Partnerships." Harvard Business School Case 807-175, June 2007. (Revised June 2011.) (This case replaces "Bundling the Contracts: TA-Energy", Harvard Business School Case 807-075, by Kerr and Bozkaya.) View Details
  26. Take Advantage of Your Diaspora Network

    Diaspora networks (DNs) are an important resource for global entrepreneurs. Discusses several features of DNs, combining both academic and practitioner perspectives. Describes the history and prevalence of DNs in many ethnicities, documents the broad resources DNs can provide to founders, and specifies potential pitfalls or traps from working through DNs. Closes with some practical advice for entrepreneurs accessing and utilizing their DNs.

    Keywords: Business Startups; Diasporas; Entrepreneurship; Globalized Markets and Industries; Social and Collaborative Networks;


    Kerr, William R., and Daniel J. Isenberg. "Take Advantage of Your Diaspora Network." Harvard Business School Background Note 808-029, August 2007. (Revised July 2008.) (Featured in a 2008 Harvard Business Review write-up.) View Details


Other Publications and Materials

  1. The Impact of the SIC-NAICS Conversion on Industrial Organization Metrics: Evidence Building from Establishment Data

    Keywords: Measurement and Metrics; Organizations;


    Ellison, Glenn, Edward Glaeser, and William R. Kerr. "The Impact of the SIC-NAICS Conversion on Industrial Organization Metrics: Evidence Building from Establishment Data." United States, Bureau of the Census Technical Paper , U.S. Bureau of the Census, January 2006. View Details

    Research Summary

  1. Examples of current projects

    • Entrepreneurship, innovation and growth
    • Corporate innovation and venturing
    • High-skilled immigration and the structure of US firms
    • Agglomeration forces and cluster structure
    • Global on-line labor markets 


  1. Launching New Ventures—Jump-Starting Innovation for Entrepreneurs and Business Owners (Executive Education)

    Starting up a new venture amid rapid change is fraught with challenges. Whether you are starting a new business, launching a new business line, or building an entrepreneurial culture within a small-to-midsize company, this program provides a new perspective and core skills that you can immediately put to use. Topics include—identifying and analyzing entrepreneurial opportunities; turning a viable opportunity into a focused strategy and well-defined business initiative; developing an effective business plan; creating "pitches" to sell the idea to investors, customers, partners, and key employees; attracting the top talent and vital resources required to turn a vision into reality; building the organization and capabilities needed to launch and nurture early-stage ventures; evolving the strategy, organization, and leadership model as the business grows; and recognizing and managing risk, while creating and measuring value. LNV shows you how to build a successful business by turning disruptive innovation into a competitive advantage. (http://www.exed.hbs.edu/programs/LNV/Pages/default.aspx)
  2. Launching Global Ventures (MBA Education—Elective Curriculum)

    Globalization and technological advances have forever changed the landscape of high-growth ventures. High-impact entrepreneurship is worldwide, and many ventures launch today with a presence in multiple countries from Day One. Launching Global Ventures (LGV) first explores the business models behind global ventures (e.g., Rocket Internet, Skype), identifying which critical elements of the business are being globalized and assessing how well ventures are harnessing globalization into their strategic core. LGV then considers the managerial challenges that global ventures encounter (e.g., distributed teams), how to conduct effective location choice decisions, the optimal design of cross-border partnerships, etc. The course brings together these two sides to identify why global ventures encounter difficulties scaling and what managers must do to break through the intermediate barriers and become exceptional global businesses.
  3. The Entrepreneurial Manager (MBA Education—Required Curriculum)

    Entrepreneurial managers transform opportunities into companies and institutions that make a difference in the world. In their successful “pursuit of opportunity without regard to resources currently controlled,” they make decisions under conditions of profound uncertainty and do so while balancing great risks against potentially attractive rewards. Moreover, they operate without the benefit of well-defined processes for making such choices and with few resources. As a consequence, entrepreneurial companies offer an ideal platform for understanding the challenges facing a general manager. Building on the foundation laid by other RC courses, The Entrepreneurial Manager (TEM) provides students with an understanding of issues facing entrepreneurs and an exposure to the skills involved in addressing them. TEM explores how executives should approach making critical decisions during the different phases of an entrepreneurial company's life. (http://www.hbs.edu/faculty/units/em/Pages/curriculum.aspx)
  4. Theoretical and Empirical Perspectives on Entrepreneurship (Doctoral Education)

    TEPE explores scholarly work from economics and finance disciplines regarding entrepreneurship--the formation and growth of new firms. While work on this topic dates back to Schumpeter and earlier, academic research regarding entrepreneurship has exploded over the last decade. Reflecting the complex nature of the entrepreneurship, TEPE touches on multiple academic disciplines and research methodologies. There are now two complementary doctoral classes, each taught every other year, with the Spring 2015 course focusing on topics related to corporate finance, including entrepreneurial finance and behavioral economics. The 2016 course will focus on entrepreneurship and its relationship to other disciplines in economics, such as its link to industrial organization, organizational economics, and economic growth. Offered jointly with the Faculty of Arts and Sciences as Economics 2726. (http://www.people.hbs.edu/wkerr/TEPE.pdf)
  1. Winner of the 2013 Ewing Marion Kauffman Prize Medal for Distinguished Research in Entrepreneurship, awarded annually to one scholar under age 40 whose research has made a significant contribution to the literature in entrepreneurship.

  2. Winner of the 2012 FPD Academy Award for Best World Bank Research in Finance and Private Sector Development.

  3. Winner of the 2010-2011 H. Gregg Lewis Prize from the Journal of Labor Economics for his paper with William F. Lincoln “The Supply Side of Innovation: H-1B Visa Reforms and U.S. Ethnic Innovation” (July 2010).

  4. Awarded the 2011 Marvin Bower Fellowship to support research by outstanding scholars.

  5. Awarded a 2009 Faculty Research Fellowship from the National Bureau of Economic Research.

  6. Awarded the 2009 Kauffman Foundation Junior Faculty Fellowship in Entrepreneurship Research.

  7. Named Harvard Business School MBA Class of 1961 Fellow in 2008.

  8. Named a fellow of the 2006-2007 Innovation Policy and the Economy Group at the National Bureau of Economic Research.

  9. Awarded a 2004 Harvard University Certificate of Distinction in Teaching from the Derek Bok Center for Teaching and Learning at Harvard University.