Social push and the direction of innovation

Elias Einiö, Josh Feng and Xavier Laurent Jaravel

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Innovators are intrinsically-motivated individuals who use ideas to create new goods and services. This raises the possibility that their social backgrounds may affect the direction of their innovative activity. Consistent with this "social push" channel, we document that innovators create products that are more likely to be purchased by customers similar to them along observable dimensions including gender, age, and socioeconomic status, both across and within detailed industries. Next, we provide causal evidence that social experience affects the direction of a person's innovative activity. Specifically, being exposed to peers from a lower-income group increases an entrepreneur's propensity to create necessity products, without affecting her rates of entrepreneurship and entrepreneurial income. We incorporate this channel into a general equilibrium model to assess its implications for cost-of-living inequality and long-run growth when there is unequal access to the innovation system.

Keywords: innovators social background; social push (search for similar items in EconPapers)
JEL-codes: O31 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2022-07-13
New Economics Papers: this item is included in nep-ent, nep-sbm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:117951

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