Primary Research Focuses: Macroeconomics and Economic Growth

Secondary Research Focuses: Entrepreneurship and Finance

References: 

• Ufuk Akcigit (Committee Co-chair)
• Greg Kaplan (Committee Co-chair)
• Mikhail Golosov

Job Market Paper: "Startups and the State"

[Abstract] Can governments in developing countries identify and selectively promote high-growth startups? How much additional gain does selective targeting provide over uniform startup subsidies? I develop a quantitative endogenous growth model of selective targeting in which the entry and growth of different startup types respond heterogeneously to the government’s ability to filter and select startups. To estimate this selection ability and quantify the resulting gains, I collect new data on startup selections and rejections from an online registry and bureaucratic board meeting minutes, as well as novel patent application data and hand-collected income statements, in the context of the Startup India Program—one of the largest such policies, launched in 2016. I find substantial variation in selection ability across components of the program: startup labeling selects average-quality firms and distorts exit decisions, whereas provisions of R&D benefits and tax-holiday approvals by a bureaucratic board successfully identify innovative, high-growth startups. The latter double the net welfare returns relative to uniform subsidies. I also derive implications for optimal program design by evaluating counterfactual policies that vary the duration and composition of subsidies.