Sampsa Samila and Olav Sorenson We find that public research funding and venture capital have a complementary relationship in fostering innovation and the creation of new firms. Based on a panel of metropolitan areas in the United States from 1993 to 2002, we find that the positive relationships between government research grants and the rates [...]

Sampsa Samila and Olav Sorenson Using a panel of U.S. metropolitan areas from 1993 to 2002, we find that an increase in the local supply of venture capital (VC) positively affects (i) the number of firm starts, (ii) employment, and (iii) aggregate income. Our results remain robust to a wide variety of specifications, including ones [...]

Sampsa Samila and Olav Sorenson We find that the enforcement of non-compete clauses significantly impedes entrepreneurship and regional growth. Based on a panel of metropolitan areas in the United States from 1993 to 2002, our results indicate that, relative to regions in states that enforce non-compete covenants, an increase in the local supply of venture [...]

Olav Sorenson and Toby E. Stuart Most existing theories of relationship formation imply that actors form highly cohesive ties that aggregate into homogenous clusters, but actual networks also include many “distant” ties between parties that vary on one or more social dimensions. To explain the formation of distant ties, we propose a theory of relationship [...]

Toby E. Stuart and Olav Sorenson One of the most commonly observed features of the organization of markets is that similar business enterprises cluster in physical space. In this paper, we develop an explanation for firm co-location in high-technology industries that draws upon a relational account of new venture creation. We argue that industries cluster [...]

Olav Sorenson and Toby E. Stuart Sociological investigations of economic exchange reveal how institutions and social structures shape transaction patterns among economic actors. This article explores how interfirm networks in the U.S. venture capital (VC) market affect spatial patterns of exchange. Evidence suggests that information about potential investment opportunities generally circulates within geographic and industry [...]