After a long  silence I finally found my way back here again – I have been finishing my dissertation on “Entrepreneurial Exit” which will be defenced in May at the Stockholm School of Economics. The dissertation is published by The Economic Research Institute and can be bought in softcover there or downloaded ( for free as a pdf. file.

Ironically enough, the topic of my dissertation has attracted many questions from people in the recent months, given the sad state of the economy. A main finding in my research is that there is a rather weak, or more correctly speaking a non-linear relationship between economic profitability and entrepreneurial exit, with exit frequently occuring both among well-performning and poorly performing firms.

A practical conclusion of this is that while much effort and resources are spent by policy makers trying to the attractiveness of entrepreneurship as a career choice – for example by lowering the tax rate for new firms – there is comparatively little policy attention directed at the exit side of entrepreneurship.  One wonder why economic policy focus so little on stimulating the rapid exit of unprofitable firms and lowering the risk of (uneccessary) exit of profitable businesses due to (temporary) financial turmoil?

In the Swedish banking crisis during the early 1990s, many small businesses – even highly profitable ones – were forced to exit because of the sudden rigidity of credit terms which put a stranglehold on their liquidity. It is important for authorities not to let this happen again in times of financial turmoil.

Avoiding the olympic torch to get home from work?

 Tomorrow I am as usual going to the State of California office in downtown San Fransisco to continue teaching court officials how to use statistics to catch criminals (well, we actually more often discuss how to evaluate court procedures and rehabilitation programs – but that does not sound as cool). It actually is a very cool and interesting group of researchers there.

Despite the coolness I am feeling somewhat nervous, my wife is in Europe on a job interview and I just HAVE to get back to Palo Alto in time, two different babysitters are lined up – one to tend to my daughter and another one to pick my son up from schools. The kids are usually very cool on these occassions. But last time I taught in SF we had to evacuate the building since there was a ‘anniversary anti-War march’ about to surround. What if this happens again?

I am of course talking about the controversies surrounding the Olympic Torch that you might have seen in new coverage across the globe. San Fransisco is the only North American town to host the Torch and the city’s combination of a pro-Tibetan activitism and one of the largest Chinese communities in North America, we are bound to see a lot of people taking to their pens, megaphones, and to the streets.

The Chronicle has been covering this issue for quite some time with a remarkably in-depth (starting with the cultural bases of Tibetan and Han Chinese culture and the historical development between the regions) and balanced coverage of the issue.  Did you know that by far the largest Tibetan diaspora on the North American continent lives in Toronto (3,300) while only 1,100 first- or second-generation  refugess from Tibet lives in Northern California?

Nevertheless, I just have to get home in time tomorrow not to risk the wrath of the babysitter(s). Despite my pathos for the Tibetan cause, I rather read the kids bed time stories than get bogged down in a demonstration…

Being Metternich

I have recently been reading the brilliant book “Vienna 1814: How the Conquerors of Napoleon Made Love, War and Peace at the Congress of Vienna” by David King. A wonderful account of the actual days and nights during which 19th century Europe was created, the book gives a chance to get an insight into the actual thoughts, discussions and dealings by historical giants such as Klemens von Metternich. King writes engaged, lively and colorful and manage to weave together an intricate web where the lives and actions of political delegates seem to logically connect to Vienna contemporaries such as Ludwig van Beethoven in a grand narrative that is fascinatingly complex yet great fun and comprehensible for the average history nerd.

For anyone interested in diplomacy, history, or international politics this book is a must: it provides in-depth and intriguing insights into the actual stories and life worlds of what was to define the emerging field of diplomacy. Metternich’s importance can be gauged by the fact that he is still a controversial figure who for long, especially by the liberal democrats of late 19th and early 20th century - was depicted as a reactionary oppressor. For others he is seen as a forebearer of modern diplomacy – especially in regards to him leveraging Montesquieu’s balance of powers to an international framework. Apparently, Henry Kissinger (also a controversial figure these days) wrote his Harvard PhD on Metternich.