EconPapers    
Economics at your fingertips  
 

Infrastructure investments and entrepreneurial dynamism in the U.S

Daniel L. Bennett

Journal of Business Venturing, 2019, vol. 34, issue 5, -

Abstract: Investments in physical infrastructure induce environmental changes that serve both an enabling and disabling function, potentially acting to simultaneously stimulate new business establishment and provoke exit by some incumbent establishments. The opening of a new establishment results in the creation of jobs that did not previously exist. Similarly, the closing of an establishment results in the permanent loss of jobs. I develop a theoretical model that depicts this external enabler/disabler process and test the model's predictions empirically tested using annual state-level data spanning the period 1993–2015. The results from dynamic panel system GMM estimation suggest that public and private infrastructure investments exert opposite effects on dynamism. Whereas private infrastructure investment is positively and significantly associated with the creation of businesses and jobs, public infrastructure investments are associated with the destruction of businesses and jobs. These results point to private infrastructure investment serving primarily an entrepreneurial enabler role and public infrastructure investment an entrepreneurial disabler role.

Keywords: Entry; Exit; External Enabler/Disabler; Infrastructure investments; Institutions; Regional entrepreneurship (search for similar items in EconPapers)
JEL-codes: H54 L26 M13 O18 O43 R53 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0883902618300089
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:34:y:2019:i:5:7

DOI: 10.1016/j.jbusvent.2018.10.005

Access Statistics for this article

Journal of Business Venturing is currently edited by S. Venkataraman

More articles in Journal of Business Venturing from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-08-06
Handle: RePEc:eee:jbvent:v:34:y:2019:i:5:7