Venture creation and COVID-19: Evidence from French regions during and after lockdowns

Nicolae Stef and Jean-Loup Soula

Revue de l'Entrepreneuriat, 2022, vol. 21, issue 4, 23-60

Abstract: The literature on crises states that unexpected events such as financial recessions or natural disasters can affect the creation of ventures through an external enabler effect. This study contributes to the literature on the relationship between entrepreneurship and crises by investigating the role played by the COVID-19 pandemic in fostering entrepreneurship opportunities and delaying business creation decisions. By relying on the daily data of French regions covering the first two lockdowns enforced in 2020, we found evidence that entrepreneurship opportunities emerged from the pandemic mainly in the sectors of industry, trade, restaurants, and hotels. Furthermore, the enforcement of the first lockdown amplified the level of uncertainty, thus increasing the option value of business formation delay in most French activity sectors, except for transport activities. As a result, prospective entrepreneurs embraced a precautionary behavior during the first lockdown. Fortunately, the recovery of the loss in new firm formation occurred in all sectors after the lifting of the first quarantine. JEL Classification M13 H12

Keywords: COVID-19; venture creation; lockdown; postlockdown; entrepreneurship; external enabler (search for similar items in EconPapers)
JEL-codes: H12 (search for similar items in EconPapers)
Date: 2022
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