Identifying and Boosting 'Gazelles' : Evidence from Business Accelerators

Why is high-growth entrepreneurship scarce in developing countries? Does this scarcity reflect optimal allocations, or constraints? We explore these questions using as laboratory an accelerator in Colombia that selects participants using scores from randomly assigned judges and offers them training, customized advice, and visibility, but no cash. Exploiting exogenous differences in judges’ scoring generosity, we show that alleviating constraints to firm capabilities increases average high-growth by unlocking innovative-entrepreneurs’ potential, rather than by transforming low-quality ideas. Results demonstrate that some high-potential entrepreneurs in developing economies face firm capabilities constraints, and that accelerators can help identify these entrepreneurs and boost their growth