Research | Daehyun (Dan) Kim

Manuscripts Under Review

current

How Digital Peer-to-Peer Marketplaces Affect Local Entrepreneurial Activities: Evidence from the Staggered Entry of Craigslist

Daehyun Kim, Yongwook Paik, and Namil Kim*

Conditionally Accepted, Strategic Entrepreneurship Journal
Abstract SSRN

The emergence of prominent digital platforms impacts the way we organize economic activities, including how one starts a new business. In this paper, we examine how a prominent digital platform might affect entrepreneurial activities. We argue that popular digital platforms that serve as a peer-to-peer digital marketplace such as Craigslist can lower barriers to entrepreneurship by reducing resource acquisition costs and customer acquisition costs when starting new businesses, resulting in increased entrepreneurial activities. Exploiting the staggered entry of Craigslist into various U.S. markets with a difference-in-differences econometrics approach, we find causal evidence that the entry of Craigslist increased local entrepreneurial activity, especially in low-income regions and for business-to-consumer businesses. Our study highlights the unintentional spillover effect of a digital platform in empowering potential entrepreneurs.
Anti-Labor Environments and Employee Entrepreneurship: Evidence from Right-To-Work Laws

Daehyun Kim, Namil Kim*, and Haemin Dennis Park

2^nd Revise and Resubmit, Strategic Entrepreneurship Journal
Abstract

We explore how changes in labor union and related labor environments affect employees’ likelihood of starting a new business. Using Michigan’s and Indiana’s adoption of right-to-work (RTW) laws as a natural experiment, we demonstrate that the likelihood of employees becoming self-employed increased by 54.6% as compared to that in states without RTW laws following the passage of the law. However, this tendency is more pronounced for less-educated and blue-collar workers. Moreover, newly created-firms are mostly small businesses with limited scalability. These findings offer novel insights on the relationship between anti-labor environments and employee entrepreneurship.
Unpacking the Entrepreneurial Process after Failure: The Role of Attribution and Behavioral Responses in Technology-Based Startups

Daehyun Kim, Haejun Jung, Aaron Chatterji, Wonjoon Kim*, and Sunghyun Cho

1^st Revise and Resubmit, Strategic Entrepreneurship Journal
Abstract

This paper investigates the relationship between the attribution of the cause of prior entrepreneurial failure and subsequent entrepreneurial processes, with a focus on technology-based startups. Drawing on social psychology literature on attribution theory and research on learning from failure, the study finds that failed entrepreneurs with prior financing experience are more likely to attribute internal factors as the causes of their business failure, reducing their likelihood of re-entering entrepreneurial activities after a failure. Furthermore, the study shows that serial entrepreneurs who attribute their previous failure to internal factors are more likely to change their business model or technology in subsequent startups. Lastly, the research reveals that entrepreneurs who change their business model or technology after a previous startup failure have a higher probability of receiving private investment than startups founded by entrepreneurs who do not make these changes. Overall, the research provides a comprehensive understanding of the behavioral processes of failed entrepreneurs and contributes to the literature on entrepreneurship.
How Does Publicly Available Knowledge Affect Interfirm Hiring?

Shu Deng, Haemin Dennis Park*, and Daehyun Kim

Under Review
Abstract SSRN

Increased availability of public knowledge may diminish the necessity of hiring inventors for codified knowledge, but it may heighten the demand for inventors with tacit knowledge to utilize public knowledge. By using the enactment of the American Inventor’s Protection Act (AIPA) as a shock that increased publicly available knowledge through mandated patent disclosure, we find that firms with greater exposure to AIPA hire fewer inventors who possess less complex knowledge while hiring more inventors who possess highly complex knowledge. Further analyses reveal that both the substitution and complementation effects are less pronounced for firms with highly novel technological portfolios, whereas they are more pronounced for firms with greater technological capability.
When Automation Hits Jobs: Entrepreneurship as an Alternative Career Path

Daehyun Kim, Taekyun Kim*, Wonjoon Kim, and Hyejin Youn

Under Review
Abstract

The paper explores the association between workers in occupations at risk of automation and their inclination towards entrepreneurship, particularly in its unincorporated form, as a reaction to changes in the labor market driven by robotics and AI. Through analysis of data from the Current Population Survey (CPS) and the Automation Probability Index (API), it uncovers a significant link between heightened automation risks and the propensity to start smaller, less innovative entrepreneurial endeavors. The study further sheds light on gender differences in these trends, noting a lesser propensity for female workers to turn to entrepreneurship when faced with the prospect of automation. Moreover, the role of the COVID-19 pandemic in intensifying this movement towards entrepreneurship is recognized, coinciding with a surge in automation technology adoption during this period. This research enhances understanding of the impact of automation on career choices, underlining the need for policy initiatives to assist individuals transitioning from conventional employment to entrepreneurship in an economy increasingly influenced by automation.

Manuscripts Under Development

Correct authoring will be determined later

current

The Emergence of P2P Platform and Entrepreneurial Experimentation: A Quasi-Experimental Study of Craigslist

Daehyun Kim
Abstract

This paper investigates how the expansion of Craigslist into U.S. metropolitan areas has affected the propensity of potential entrepreneurs to test their business ideas. By providing cost‐free access to local markets and facilitating side-job activities among employees, Craigslist has created a low‐risk environment for entrepreneurial experimentation. Our empirical analysis, based on a staggered difference‐in‐differences approach, finds that Craigslist’s entry significantly increased entrepreneurial experimentation, particularly among employees engaging in side-jobs. Moreover, the effect is especially pronounced among younger and highly educated individuals, while little evidence is found for significant heterogeneity by gender or income. These findings underscore the role of digital peer-to-peer (P2P) marketplaces in providing a ground that allows entrepreneurs to test their business ideas more easily and quickly, lowering barriers to entry and fostering entrepreneurship in the digital era.
Employee Welfare and Startup Growth: Evidence from Paid Family Leave Policy and Venture Capital Funding

Daehyun Kim, Yongwook Paik*, and Shu Deng
Abstract SSRN

This study investigates the impact of Paid Family Leave (PFL) policies on Venture Capital (VC) investments in startups. Leveraging New Jersey and Rhode Island’s PFL policies as a quasi-experimental setting, we find that PFL implementation is associated with a significant 18.9% decline in VC investments. This negative effect is particularly pronounced in startups with higher proportions of female employees. While PFL policies are intended to improve workplace conditions, our analysis shows no impact on hiring rates but reveals an increase in exit rates among female employees, particularly female inventors. Additionally, we find that PFL policies are linked to a decline in startup innovation. These findings contribute to the entrepreneurship literature by illustrating that while PFL policies aim to enhance workplace environments, they may impose operational costs on startups, diminishing their appeal to venture capitalists.
Technological Uniqueness and Venture Capital Funding

Daehyun Kim, Haemin Dennis Park*, and Shu Deng
Abstract

We explore how technological uniqueness affects a new venture’s ability to raise venture capital (VC) funding. Although some level of technological uniqueness is expected for new ventures entering a market or technological domain, excessive uniqueness can make a venture appear risky and less attractive to investors. We thus expect an inverted U-shaped relationship between technological uniqueness and first-round VC funding amount. However, as the investment community becomes more familiar with a venture’s unique technologies, the optimal uniqueness point shifts to the right for the second funding round. This effect is particularly strong for those ventures that received first round of funding from highly reputable VC firms.
Empowering to Scale Global: Evidence from the German Accelerator Program

David Heller, Daehyun Kim, and Dietmar Harhoff
Abstract

This paper examines the effects of accelerators on startup networks and performance. To study this, we leverage a unique setting, the German Accelerator (GA), a government-funded program to foster the international scaling of startups by organizing customized three-month learning journeys to leading innovation hubs, primarily in the US. The analyses build on application information (including accepted, withdrawn, and rejected startups), augmented with detailed startup-level information from Crunchbase and LinkedIn. Startups that participated in the program subsequently raise more funding, especially from non-European investors relative to startups that withdrew despite being accepted for the program and startups that got rejected, controlling for industry-, year-, and program fixed effects and founder characteristics. Further, GA-supported startups start hiring more workers from non-German countries, particularly outside of Europe. Heterogeneous treatment effects reveal that startups whose founders have limited experience working abroad benefit most from the GA program, consistent with a substitution effect of the GA program for founder experience. Overall, the analyses reveal crucial new insights into the workings of accelerator programs and their effects on startup performance.
Generative AI and New Firm Creation: Evidence From Current Population Survey

Daehyun Kim
Abstract

This paper investigates the impact of generative artificial intelligence on workers’ decisions to found businesses in the United States. Although there has been considerable speculation that generative AI can lower barriers to innovation, encourage self-employment, and stimulate new venture formation, systematic empirical evidence on this question remains limited. To address this gap, we merge occupation-level exposure measures to generative AI (as developed by Felten et al., 2023) with individual-level data from the Current Population Survey. We then implement a continuous difference-in-differences design to compare changes in self-employment outcomes among workers who are differentially exposed to generative AI technologies before and after ChatGPT’s public release. Our results indicate that individuals employed in occupations more exposed to generative AI exhibit a reduction in transitions to incorporated self-employment in the period following ChatGPT’s release, in contrast to workers in occupations with lower exposure. The effect on unincorporated self-employment is statistically indistinguishable from zero, and we find no significant change in unemployment rates. While generative AI holds promise for facilitating the search for new ideas and boosting productivity, these findings suggest that technology-induced entrepreneurship may not manifest uniformly in the short run, possibly due to uncertainty, reallocation frictions, or the possibility that workers choose to leverage these tools in existing paid employment roles rather than in newly formed businesses.
Director Job Security and Entrepreneurship: Evidence from Majority Voting Legislation

Daehyun Kim
Abstract

We examine whether weakening directors’ job security, induced by the staggered adoption of majority voting (MV) legislation in U.S. states, drives entrepreneurship among employees in science, technology, engineering, and mathematics (STEM) occupations. Using a difference-in-differences framework, we find that STEM employees are about 42% more likely to form incorporated self-employment following MV enactment. By contrast, there is no significant change in unincorporated self-employment or unemployment. The evidence suggests that when directors face a heightened threat of dismissal and shorten the innovation horizon, STEM workers—who value complex, long-term projects—tend to exit to pursue their own businesses. The findings offer new insights into the interplay between corporate governance and the career choices of key technical personnel.

Published and Forthcoming Articles

2024

Are researchers more likely to succeed when they start a technology-based startup?

Jeoungbong Han, Daehyun Kim*, Wonjoon Kim, and Cho Sunghyun

Applied Economics Letters, 2024
Abstract Journal

This study investigates the relationship between a founder’s occupational background and the survival rate of technology-based startups, focusing on founders with prior research positions. Utilizing a unique tech-based startup database, the study discovers that startups founded by researchers exhibit a lower survival rate compared to those led by founders with other backgrounds. Nevertheless, prior entrepreneurial experience positively moderates the relationship between a founder’s research experience and startup survival rate, indicating that practical business knowledge can offset the inherent lack of business expertise in a researcher’s background. Moreover, the study reveals that startups established by researchers from large companies have an even lower survival rate, as specialization within large organizations may impede the acquisition of essential management skills. These findings emphasize the importance of developing a diverse skill set for startup success.

2018

The effect of patent protection on firms’ market value: the case of the renewable energy sector

Daehyun Kim, Namil Kim, and Wonjoon Kim*

Renewable and Sustainable Energy Reviews, 2018
Abstract Journal

In the renewable energy industry, technology development requires a large initial investment by firms and takes a long time. Thus, protecting patents in this industry has become an increasingly important issue in maintaining a company’s value. In this study, we examine how patent protection affects firms’ market value by analyzing the listed companies in South Korea in the renewable energy sector over a 35-year period (from 1980 to 2014). We find that simple patent counts are not a strong measure for explaining a firm’s financial success in this industry, whereas indices that represent a firm’s ability to protect patents (backward citation and patent family) positively and significantly affect the firm’s market value. This study suggests that patent protection is an important factor for companies in improving their economic value in the renewable energy sector.