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Research Papers

Research publications and working papers from this research agenda are available here. Please send feedback and questions to Scott Stern at and Jorge Guzman at 

Overview and Methodology

The Startup Cartography Project: A Map Of Entrepreneurial Quality And Quantity In The United States Across Time And Location
By Raymond J. Andrews, Catherine Fazio, Jorge Guzman, and Scott Stern
MIT Working Paper

This document introduces the Startup Cartography Project, a project by the MIT Innovation Initiative. Building on recent research (Guzman and Stern, 2015, 2016, 2017), the Startup Cartography Project uses business registration records and predictive analytics to estimate entrepreneurial quality for a substantial portion of registered firms in the US (about 80%) over 27 years, and maps the quality and quantity of firms across the U.S. up to the individual address level into interactive public maps and publicly available research datasets. This document provides a brief overview of our project, reviews the approach to measure entrepreneurial quality, specifics on how our dataset was developed, and reviews our publicly available datasets. The goal of this document is to provide a technical guide for both users of our U.S. data and maps, as well as to others intending to implement our approach in other economies. 

Citation: Andrews, Raymond J, Catherine Fazio, Jorge Guzman, and Scott Stern. 2017. “The Startup Cartography Project: A Map Of Entrepreneurial Quality And Quantity In The United States Across Time And Location” MIT Working Paper

Published Research Articles

Where is Silicon Valley? 
By Jorge Guzman and Scott Stern
Published in: Science 347(6222): 606–9.
Citation: Guzman, Jorge and Scott Stern. 2015. “Where Is Silicon Valley ?” Science 347(6222): 606–9.

Nowcasting and Placecasting Enterpreneurial Quality and Performance.
By Jorge Guzman and Scott Stern
Published in: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges. Chapter 2.

 A central challenge in the measurement of entrepreneurship is accounting for the wide variation in entrepreneurial quality across firms. This paper develops a new approach for estimating entrepreneurial quality by linking the probability of a growth outcome (e.g., achieving an IPO or a significant acquisition) as a function of start-up characteristics observable at or near the time of initial business registration (e.g., the firm name or filing for a trademark/patent). Our approach allows us to characterize entrepreneurial quality at an arbitrary level of geographic granularity (placecasting) and in advance of observing the ultimate growth outcomes associated with any cohort of start-ups (nowcasting). We implement this approach in Massachusetts from 1988-2014, yielding several key findings. First, consistent with Guzman and Stern (2015), we find that a small number of observable start-up characteristics allow us to distinguish the potential for a significant growth outcome: in an out-of-sample test, more than 75% of growth outcomes occur in the top 5% of our estimated quality distribution. Second, we propose two new economic statistics for the measurement of entrepreneurship: the Entrepreneurship Quality Index (EQI) and the Regional Entrepreneurship Cohort Potential Index (RECPI). We use these indices to offer a novel characterization of changes in entrepreneurial quality across space and time. For example, we are able to document changes in entrepreneurial quality leadership between the Route 128 corridor, Cambridge and Boston, as well as more granular assessments that allow us to distinguish variation in average entrepreneurial quality down to the level of individual addresses. Third, we find a high correlation between an index that depends only on information directly observable from business registration records (and so can be calculated on a real-time basis) with an index that allows for a two-year lag that allows the estimate of entrepreneurial quality to incorporate early milestones such as patent or trademark application or being featured in local newspapers. Finally, we find that the most significant “gap” between our index and the realized growth outcomes of a given cohort seem to be closely related to investment cycles: while the most successful cohort of Massachusetts start-ups was founded in 1995, the year 2000 cohort registered the highest estimated quality.

Citation: Guzman, Jorge, and Scott Stern. 2017. “Nowcasting and Place-casting Entrepreneurial Quality and Performance.” NBER/CRIW Measuring Entrepreneurial Businesses: Current Knowledge and Challenges conference. Eds. John Haltiwanger, Erik Hurst, Javier Miranda, and Antoinette Schoar.

Working Papers

The State of American Entrepreneurship: New Estimates of the Quantity and Quality of Entrepreneurship for 34 US States, 1988-2014
By Jorge Guzman and Scott Stern
NBER Working Paper No. 22095

Assessing the state of American entrepreneurship requires not simply measuring the quantity but also the initial quality of new ventures. We use comprehensive business registries and predictive analytics to build estimates of entrepreneurial quantity and quality from 1988-2014 for 34 states.  In contrast to prior work highlighting a secular pattern of declining business dynamism, a quality-adjusted index of entrepreneurship follows a cyclical pattern, exhibiting a sharp rise during the dot-com boom and after the Great Recession.   Conditioning on the level of initial entrepreneurial quality, the probability of growth in the form of an IPO or significant acquisition has declined sharply since the mid-1990s.  Entrepreneurial quality is highly concentrated geographically, particularly in well-known start-up hubs such as Silicon Valley, Boston and Austin.  These estimates can be used to offer new insight into the interplay between entrepreneurship and economic growth.  First, consistent with a theory of investment cycles, we find a positive relationship between GDP growth and the subsequent quality-adjusted quantity of entrepreneurship; in contrast, there is no relationship between GDP growth and quantity (without quality adjustment).   We separately take advantage of the regional variation in the data to evaluate the relationship between the initial quantity and quality-adjusted quantity of entrepreneurship and subsequent 10-year economic growth; while there is no impact of quantity on growth, there is a strong positive association between quality-adjusted quantity and subsequent economic performance.  Our results offer a novel perspective on the distribution and dynamic evolution of entrepreneurship in the United States, and the relationship between entrepreneurship and economic performance.

Citation: Guzman, Jorge, and Scott Stern. 2016. “The State of American Entrepreneurship: New Estimates of The Quantity and Quality of Entrepreneurship for 34 US States, 1988-2014.” Working Paper (Prior Version: NBER Working Paper #22095)

Venture Capital Selection and Startup Growth
By Christian Catalini, Jorge Guzman, and Scott Stern

The process through which society matches capital to high potential ideas and translates them into scalable businesses is fundamental to economic growth. At the same time, most of what we know about firms’ path to growth is based on venture capital data, which cannot explain between 30% and 70% of all IPOs at any point in time. We test for the presence of alternative paths to growth by leveraging comprehensive business registration records for more than 85% of the US economy, and use a predictive analytics approach to estimate the growth potential at birth of every firm in our sample. This allows us to evaluate selection into and (estimate bounds on) the impact of venture capital on startup performance. We establish several key findings. First, the observables associated with growth within the non-VC-funded sample are similar to those associated both with selection into VC and with growth within the VC-funded sample. Second, venture capital selection is drawn from the extreme right tail of the observable, entrepreneurial quality distribution – more than 70% of all venture capital investments are drawn from the top 5% of such distribution. Consistent with our predictive analytics approach capturing a true proxy for a firm’s latent potential, the association between our estimates and VC selection is stronger when capital is scarce, both outside of entrepreneurial hubs as well as over economic cycles. Third, our comparison of firms’ paths to growth delivers a number of novel insights: While VC-backed firms are more than 518 times more likely to achieve an equity growth outcome in the raw data, matching on observable, entrepreneurial quality reduces the performance advantage of the venture-backed group to less than 6 times, and lower performance premiums (2.4 times) are observed for firms of high, starting quality. Taken together, our findings support the presence of alternative paths to growth, but a single profile for high potential firms, irrespective of funding source: Firms that achieve equity growth but do not receive venture capital have similar observable characteristics and growth potential at birth to those that do receive venture capital.

Draft coming soon. 

Gender Gap in Entrepreneurship

By Jorge Guzman and Aleksandra (Olenka) Kacperczyk

Using data on all businesses registered in the state of California and Massachusetts between 1995 and 2011, we examine gender inequality in entrepreneurship. We propose and empirically show that female entrepreneurs are more likely than male entrepreneurs to pursue lower-quality ventures. We also find that female entrepreneurs are less likely than male entrepreneurs to obtain VC funding, even for comparable levels of entrepreneurial quality. Our findings further indicate that the gender disadvantage in entrepreneurship decreases dramatically with increases with entrepreneurial quality. Consistent with the notion of statistical discrimination, we also show that gender disadvantage is amplified for amateur evaluators, more likely to rely on stereotypes when assessing new-venture potential. More generally, the study emphasizes the need to take the distribution of entrepreneurial quality into consideration when examining the mechanisms behind gender gap in entrepreneurship.

Citation: Guzman, Jorge and Aleksandra Kacperczyk. 2017. “Gender Gap in Entrepreneurship”. Working Paper.

Go West Young Firm: The Value of Entrepreneurial Migration for Startups and their Founders

By Jorge Guzman

Location is important for firm performance. A new firm choosing a location must trade off the agglomeration benefits of a destination with the loss of local embeddedness from leaving home. I study this tradeoff for a large sample of growth-oriented startups born between 1988 and 2014. I estimate changes in the performance of migrants after migration using both a machine learning approach that accounts for the entrepreneurial quality of firms before moving, and panel data regressions that control for firm and age fixed-effects. The results show migrants improve their performance across a range of outcomes, especially those that move to Silicon Valley. The likelihood of selling the company increases by 4X after migration to Silicon Valley (from 1.4% to 7.1%), and migrants also have higher patenting, commercialization, venture capital financing, and sales. In spite of the important benefits of migration, many potential migrants do not move; a subsample analysis suggests this is due to high personal costs from leaving home that make migration personally unprofitable.

Citation: Guzman, Jorge. 2018. "Go West Young Firm:  The Value of Entrepreneurial Migration for Startups and Their Founders". Workign Paper

Policy Reports

A New View of the Skew: Quantitative Estimates of the Quality and Quantity of Entrepreneurship.
By Fazio, Catherine, Jorge Guzman, Fiona Murray, and Scott Stern.
MIT Innovation Initiative. Policy Brief Series.
Citation: Fazio, Catherine, Jorge Guzman, Fiona Murray, and Scott Stern. “A New View of the Skew: Quantitative Estimates of the Quality and Quantity of Entrepreneurship.” MIT Innovation Initiative. Policy Brief Series.


The State of American Entrepreneurship: A Report for the European Central Bank
By Catherine Fazio, Jorge Guzman, and Scott Stern.
MIT Innovation Initiative. Policy Brief WorkingPapers.
Citation: Fazio, Catherine, Jorge Guzman, and Scott Stern. “The State of American Entrepreneurship: A Report for the European Central Bank” MIT Innovation Initiative. Policy Brief Working  Papers.