Community and aftershock: New venture founding in the wake of deadly natural disasters

Arkangel M. Cordero

Journal of Business Venturing, 2023, vol. 38, issue 2

Abstract: The entrepreneurship literature has advanced our understanding of how natural disasters affect new venture founding in their wake. However, despite providing valuable insights, most existing studies focus on theoretical mechanisms that, explicitly or implicitly, invoke material losses or do not hone in on the theoretical effect of human losses caused by these events. This is an important omission because the social psychology literature suggests that individual reactions to human death are not only stronger than (i.e., higher in scale), but qualitatively different (i.e., infinitely stronger) from, those involving other types of losses. The present study addresses this oversight by drawing from the social psychology literature on the emotive and cognitive heuristics (e.g., the incidental emotion and availability biases) induced by human death and developing and testing a theory of how the death toll caused by natural disasters decreases new venture founding by inducing irresolvable uncertainty. Moreover, the study draws from research on how strong pre-disaster local participation in voluntary associations—by increasing the social, symbolic, cultural and material resources in a community—protects against such negative effects. Contributions to both the post-disaster venturing and the broader resiliency literatures are discussed.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:38:y:2023:i:2:s0883902623000022

DOI: 10.1016/j.jbusvent.2023.106288

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