I have been always enchanted with Edward Glaeser’s writing, ranging from his best-selling book Triumph of the City (城市的胜利) to papers published in academic journals. Edward Glaeser, a pioneer in urban economics, reshapes how we perceive and understand cities.Luckily, I am taking a course given by one of Glaeser’s students and co-authors and I can tell how he has been influenced by Glaeser. In my first blog as a contributing blogger, I am happy to share with you Glaeser's recent paper,Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines, published in Review of Economics and Statistics. It is the entrepreneurship that nurtures urban growth, argue Urban economists. However, there are several factors that jointly affect a city’s level of initial entrepreneurship and its subsequent growth. Hence, we can hardly make causality inference without identifying the exogenous sources of variation in local entrepreneurship. This paper focuses on solving this problem with IV strategy. The kernel of this paper are sections 3 and 4 starting from page 18 where a city’s historical mineral and coal deposits are used as instruments for modern entrepreneurship. The previous OLS regressions used two metrics of entrepreneurship: the average establishment size of cities in 1982 and the share of employment in start-ups in 1982-1986. The larger establishment size is, the lower level of entrepreneurship is; the higher share of employment in start-ups is, the higher level of entrepreneurship is. The proxy for urban growth is employment growth from 1982 to 2002. The story told with IV sounds like an early version of natural resource curse: more access to coal results in lower level of entrepreneurship and so lower employment growth. For the instrument to be valid, two restrictions have to be satisfied. First, mineral and coal deposits should be correlated with level of entrepreneurship (measured with two metrics above). The empirical result shows that the first stage is solid and the mechanism is first discussed by Chinitz (White 1928). The major concern lies in the second restriction: mineral and coal deposits can only influence urban growth through entrepreneurship. Since mineral and coal deposits are likely associated with other variables that can impact economic growth, the exclusive restriction may be violated. Some observable variables can be controlled for while the unobservable remains uninvestigated. The correlation between mineral and coal deposits and employment growth may just reflect the decline of Rust Belt regions in US. Section 4 revolves around two approaches to this problem. The first approach is to focus on the United States’ growing regions (warmer regions). It is still found that historical mines dampened employment growth. They also include Bartik-style controls for robust check. The second approach is instrument variable quantile regression method, which allows us to seewhether the effects of entrepreneurship vary between rapidly and slowly growing cities. The basic idea of quantile regression is that cities at various points throughout the conditional city growth distribution would receive various weights during the IVQR. Beyond the introduction of the paper, I have something else to share: 1. There seems to be a subtle difference between a proxy andan instrument . In this paper, historical mineral and coal deposits is an instruments for modern entrepreneurship which is the bridge between mines and employment growth, while in another paper, it would be a proxy for an independent variable that directly explains urban growth. Is it fair to assert that whether it’s a proxy or an instrument depends on which story you are telling? 2. The methodology used in this paper can apply to China if data is available. The causality between entrepreneurship and urban growth may explain why Northeast China has been lagging behind in recent years and why the transition of heavy-industry center is painful. 第一篇很高兴能够介绍Glaeser的文章，他是我的heroooo! 文章已经贴在我和好朋友的文库Economic Oil on Canvas，论文的链接也在那儿，欢迎大家在下边评论呀！ https://bbs.pinggu.org/thread-3589316-1-1.html
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