The strength of personal relationships and social connections are the most important factors for accessing capital markets according to a recent working paper from the National Bureau of Economic Research (NBER).

In a new working paper, Sabrina T. Howell of New York University and Filippo Mezzanotti of Northwestern University provide a systematic review of state angel tax credits. One of the most notable aspects of their research is a seemingly-comprehensive index of all of the relevant programs authorized by states over the past 30 years. The results indicate that angel tax credits have some impact on investment activity but not on economic outcomes.

Jennifer Roche prepared the following summary of a recent Enrico Moretti working paper for the November 2019 issue of the NBER Digest. The summary has been edited here for length and clarity; SSTI comments are in brackets.

A review of recent reports finds the rise of financial technology (fintech) has the potential to improve the financial health and literacy of the traditionally underbanked and decrease discriminatory practices as more people gain access to services and are included in financial markets. However, regulators face new challenges as a result of fintech.

Several recent articles covered in the National Bureau of Economic Researchers (NBER) Digest suggest that current understanding of policies surrounding wages, clusters and labor concentration may warrant revisiting. In one piece of academic research, a historical argument of shared productivity gains with employees is challenged, while another article shows a loss of bargaining power for employees in concentrated labor markets.

Industry consolidation slowing wage growth, productivity

Congress so far has ignored administration budget requests that call for reducing U.S. investment in research and development.  Science and innovation advocates interpret the legislative branch’s decision as good for many reasons. Authors Nicholas Bloom, Charles I. Jones, John Van Reenen, and Michael Webb add another reason in their NBER working paper Are Ideas Getting Harder to Find? They find U.S.

One of this year’s most important books on economic development tells a story that those involved in the field need to know and might not necessarily want to hear. In Coping with Adversity: Regional Economic Resilience and Public Policy, authors Harold Wolman, Howard Wial, Travis St. Clair, and Ned Hill seek to understand why some metropolitan areas are resilient in the face of economic hardship, while others are not. This commentary will summarize the authors’ findings and provide insight into what their findings might mean for the broader economic development community.

While the increasing gaps between the coasts and the heartland continues to capture the media’s attention, a collection of recent research suggests that inequality within regions may be the greatest factor hampering economic growth. Five recent articles tell a nuanced story of how economic and racial inequities may impede regional economic development efforts. The research presented here from a variety of outlets examines the role of inequality in the overall economy of regions.

Mentoring programs may be celebrated across the nation as January marks National Mentoring Month, a movement started in 2002 to raise awareness of mentoring in all its forms. But more could be done to make programs more effective in both university and non-university settings, according to a recent working paper from the Ross School of Business at the University of Michigan.

What holds people back from starting a business? How does lifting financial constraints help promote entrepreneurship?

The state of Alaska is in the midst of a funding crisis that could devastate the viability of the University of Alaska, and recent research from a National Bureau of Economic Research (NBER) working paper shows that the loss of funding could have long-term impacts for the system.

Uncommon innovation is more likely to be found in high density areas, according to recent research.

Non-college workers who long found refuge and economic mobility in thriving cities have seen those opportunities diminish and in turn have moved out of the areas. Although cities remain vibrant for workers with advanced degrees, “the urban skills and earnings escalator for non-college workers has lost its ability to lift workers up the income ladder,” finds David Autor in his recent research brief.

Recent research revealed that exposure to innovation (e.g., mentorship program and immersive K-12 STEM education experience) during childhood and young adulthood has a greater effect on the decision to pursue careers in innovation than financial incentives. Researchers Alexander M. Bell, Raj Chetty, and their co-authors developed a model to analyze the impact of several factors on inventor career choices.

While competition between states over business incentives and headquarters attraction is often derided, new research published in the Journal of Technology in Society suggests that competition in technology-based economic development is hardly a zero-sum game.

If you are feeling that your money is not buying as much as it used to, that delinquent crime may be increasing as teenagers sit idle, that there is not enough focus on climate change or that corporate responsibility may be lacking, you may validate those feelings through the findings of several recently released research papers. SSTI received notice of the conclusions of five working papers that we thought we’d share.

The Trade War is increasing U.S prices, declines in real income.

Last year, the National Institutes of Health (NIH) considered multiple strategies to address the implicit bias toward researchers with ‘proven track records’ during its existing grant making process.

As the technology behind renewable energy continues to advance, recent research finds that the public sector plays an important role in catalyzing innovation. This can be seen in three main ways: by funding basic research on renewable energy in all 50 states; by partnering with cleantech startups; and by supporting cleantech clusters through networks, commercialization assistance, and access to capital. Taken together, this recent research suggests that public-sector partnerships can complement industry’s role in growing the green economy at the federal, state and local levels.

A recent paper published by SSRN provides a detailed look at the relationship between financial incentives and state fiscal health. The authors control for many potentially-related factors and still find significant, negative impacts of incentives. While the study helps fuel calls for critical analysis and careful implementation of tax incentives, the results may not be as clear cut as some coverage may suggest.

Since 2005, the One North Carolina Small Business Program has made 423 SBIR/STTR matching awards worth nearly $26 million to more than 250 businesses throughout the state. A new assessment, which updates an earlier report, provides academic rigor to a standard program review. The results indicate that even beyond survey-based attestations to the program’s value, there is a statistically-significant impact of North Carolina’s funding for the competitiveness of recipients.

Adding to the debate about whether smaller or larger businesses play an outsized role in the nation’s economy, a new Census Bureau report finds that the concentration of both older and larger firms has continued to increase in the U.S.

A recent study found that merit aid awards increased four-year bachelor’s degree completion rates for students – especially among students that were unlikely to pursue the four-year program in the absence of financial aid. A team of researchers from the National Bureau of Economic Research assessed the marginal effects that merit aid from the Susan Thompson Buffett Foundation (STBF) has on students attending public colleges in Nebraska.

Disruptive technology, or innovations that radically alter the way consumers, industry, or businesses operate, have long been thought to be the primary way emerging small firms can leapfrog competition and compete against large industry titans. Through innovations such as internal IT systems or logistical improvements, small firms can acquire a decisive competitive advantage over their rivals. Or so the traditional theory holds. In a new paper out of Boston University School of Law, Bessen et al.

A recent study exploring the science underlying all 356 pharmaceutical drugs approved by the Center for Drug Evaluation and Research since 2010, found each drug is based on life science investments the public sector has made through the National Institutes of Health (NIH).

A working paper from the Innovation Growth Lab (IGL) series featuring researchers from the Max Planck Institute for Innovation and Competition provides causal evidence on the effectiveness of innovation vouchers and adds to the argument for implementing small-scale government funding mechanisms like innovation vouchers.