Luisa Gagliardi and Olav Sorenson
How do high-growth startups influence the neighborhoods in which they locate? Using data from the greater London area, we show a positive relationship between entrepreneurship and the subsequent growth of residential real estate prices in a neighborhood. These effects appear concentrated in places that had been cheaper prior to the entry of the entrepreneurs. The demographic composition of these communities also changes in a classic pattern of gentrification, with older, less educated residents being replaced by younger, more educated ones.