Who creates new firms when local opportunities arise?

Shai Bernstein, Emanuele Colonnelli, Davide Malacrino and Tim McQuade

Journal of Financial Economics, 2022, vol. 143, issue 1, 107-130

Abstract: We examine the characteristics of the individuals who become entrepreneurs when local opportunities arise. We identify local demand shocks by linking fluctuations in global commodity prices to municipality-level agricultural endowments in Brazil. We find that the firm creation response is mostly driven by young and skilled individuals. The characteristics of these responsive entrepreneurs are significantly different from those of average entrepreneurs in the economy. By structurally estimating a novel two-sector model of a local economy, we highlight how the demographic composition of the local population can significantly affect the entrepreneurial responsiveness of the economy.

Keywords: Firms; Entrepreneurs; Brazil; Demand shocks (search for similar items in EconPapers)
JEL-codes: D21 D22 E22 L10 L22 Q02 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: Who Creates New Firms When Local Opportunities Arise? (2018)
Working Paper: Who Creates New Firms When Local Opportunities Arise? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:143:y:2022:i:1:p:107-130

DOI: 10.1016/j.jfineco.2021.05.045

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