— Effects of the 1996 Telecom Act on Entrepreneurial Activity and
Venture Performance in Georgia
Chad Navis, PI, Emory University
My research explores the impact of public policy on entrepreneurship through a multi-level study of the 498 entrepreneurial ventures that pursued the opportunity to become Competitive Local Exchange Carriers (CLECs) in the state of Georgia over the past 10 years, resulting from the Telecommunications Act of 1996. I will develop a typology of entrepreneurs based on their backgrounds and strategic intentions and will explore variance in entrepreneurial processes, testing empirically the relative use and implications of different mechanisms to secure constituent support, within and across categories of entrepreneurs. The findings will inform the evolutionary dynamics of the CLEC organizational form.

— Technological Innovation through Public-Private Partnerships
Ajay Subranian and Conrad Ciccotello, PIs, Robinson College of Business, Georgia State University; Richard Fu, Co-PI, San Jose State University
Over the past two decades, federal research and development (R&D) policy has tilted toward encouraging the sharing of technology across public-private sector boundaries. Despite this policy shift, the question remains as to whether the government is contracting efficiently in these relationships. In this paper, we develop a model where the government's choices of partner and contract duration are endogenously determined in terms of the characteristics of the underlying project. We test the model with data from 582 federal cooperative R&D agreements. Our findings suggest that the government chooses both partner and duration in a manner consistent with efficient contracting.

— Highly innovative Small Firms and Technology Clusters
Diana Hicks, PI, Georgia Institute of Technology
The focus of this project is technology clusters and universities and their relation to small firms with a sustained public record of successful innovation that are part of a well- defined population of serial innovator firms. The major aim of the project is to test some central premises underlying agglomeration theory: (1) clustering of innovative activity and (2) increasing returns to locating in agglomerations. Three questions are addressed: (1 and 2) Are serial innovator firms more likely to be located in a technology cluster/research university than a control firm? (3) Are serial innovator firms located in a technology cluster performing better than control firms?

— Show Me the Money! Decision Models for Investing In Technology-Based Entrepreneurial Ventures
Denis Grégoire, Alice J. de Koning, and Benjamin M. Oviatt, Co-PIs, Georgia State University
Although much research describes criteria used by potential investors to decide on investments in new technology ventures, little research has focused on that ubiquitous and important bottleneck of technology commercialization, the oral presentation to investors by technology entrepreneurs. We conduct a study of ‘live’ presentations made to investors during a financing event organized by the American Electronics Association (Aea). By extending scholarly understanding of the impact that verbal and non-verbal decision cues may have in ‘live’ presentations made to investors, our results suggest ways for entrepreneurs to make better presentations, and for investors to better understand their own decision processes.

— Fostering Firms
Robert S. Chirinko, Corresponding PI, Emory University and CESifo, and Daniel J. Wilson, Co-PI, Federal Reserve Bank of San Francisco
This project exploits the information available at state borders to gain a better understanding of the impacts of state policies on the formation of new firms. Applied policy research faces the central problem of separating policy effects, the primary object of this research effort, from the nonpolicy effects. This problem is overcome by exploiting the spatial discontinuity in policies that occurs at state borders; that is, the different state policies prevailing in two counties that are geographically close provides the key piece of identifying information. These innovative econometric techniques are combined with panel data at the county and state-levels.

— Enforcing Patent Rights: Implications for Entrepreneurship and the State of U.S. Patent Reform
Stuart J. H. Graham, PI, Georgia Institute of Technology and Dietmar Harhoff, Co-PI, Ludwigs-Maximillian University, Munich, ZEW, and CEPR, Co-PIs.
In this study, we build upon prior research (Graham and Harhoff, 2006) by examining the enforcement of patent rights, and how proposed changes to the U.S. patent system, particularly the "post-grant review" (opposition) may effect the enforcement of patent rights, both by entrepreneurs, and against them. Following findings by Lanjouw and Schankerman (2004), we analyze how the additional risks and disadvantages faced by individuals and small firms in U.S. litigation may change after the adoption in the U.S. of a "post-grant review." One of the contributions we make is to offer empirical evidence on how the patent system is being used by individuals and entrepreneurs--extending to the international arena, and to changes over time. References:
• Graham, S. and D. Harhoff (2006). "Can Post-Grant Reviews Improve Patent System Design? A Twin Study of US and European Patents." CEPR Discussion Paper No. 5680
• Lanjouw, J. and M. Schankerman (2004). "Protecting Intellectual Property Rights: Are Small Firms Handicapped?" Journal of Law and Economics, April.

— Competition Among Public and Private Preschools: Evidence from Georgia
Mary Beth Walker, PI, Georgia State University
Increasing competition in educational markets has the potential to improve the quality of education provided by public elementary and secondary schools. Although the existing institutional framework in the U.S. allows very little direct competition among private and public providers, some states and districts have begun innovative programs that foster competition. The Georgia system for public funding of pre-kindergarten (pre-k) programs provides an unusual opportunity for analyzing the impacts of increased entrepreneurial activity and competition among education providers. This study examines the effects of competition among public and providers of pre-kindergarten programs, using a unique longitudinal sample of children who attended different types of preschool programs in Georgia during the 2001-2002 school year.

— Risk, Uncertainty and Optimism in Venture Capital Relationships
Ajay Subramanian, PI , Georgia State University, Yahel Giat, Co-PI, Jerusalem College of Technology , Steven T. Hackman, Co-PI, Georgia Institute of Technology.
We propose to develop a dynamic, structural model to quantitatively assess the effects of risk, uncertainty and asymmetric beliefs about project quality on the characteristics of venture capital relationships. We plan to estimate the model parameters with data about the distributions of total investments, payoffs, risks and returns of venture capital projects. We will use the calibrated model to examine the extent to which entrepreneurial optimism mitigates the agency costs of risk-sharing between venture capitalists (VCs) and entrepreneurs (ENs). We will investigate whether the EN optimism premium implied by the data explains the huge discrepancy between the discount rates used by VCs (approximately 40%), which adjust for optimistic payoff projections by ENs, and the average expected return of VC projects (approximately 15\%). We will also explore whether the equilibrium dynamic contracts predicted by the model have features observed in real-world contractual arrangements between VCs and ENs.

— Entrepreneurship and Advancement of Women Faculty in Computer Science
Mary Frank Fox, PI, Georgia Institute of Technology
This project focuses upon the relationship between entrepreneurship and projected advancement to the critical rank of full professor among women faculty in computer science, and the role of a complex of individual and organizational/institutional factors in understanding that relationship. The data are collected in a survey of women associate professors in computing within US and Canada, with supplemental institutional data and interviews. The project addresses key issues of the Kauffman Foundation's Roadmap: (1) ways that entrepreneurship is (or is not) facilitated by organizational/reward structures that "justify the risks" and (2) the importance of entrepreneurship being "open to all," including underrepresented groups.

— The Impact of Firm Preference on the Allocation of Control Rights in the Biopharmaceutical Industry
Matthew J. Higgins, PI, Georgia Institute of Technology and Carolin Haeussler, PI, Ludwig-Maximilian University of Munich
Pharmaceutical firms have been engaging in an increasing number of alliances with biotechnology firms in response to declining R&D productivity. How control rights are allocated determines how value accrues to each party. We utilize an international sample of biotechnology firms in order to determine the impact firm preferences has on the allocation of rights. We aim to determine: whether firm preferences for rights differ from actual allocations; which rights are firms willing to give up; can any rights be bought; are royalty payments used to purchase rights; and, are firm preferences consistent across the international sample.