People Financing Entrepreneurs within and outside the Family: Pandemic Decline and Resilience in Cultures around the World

Ahmed Tolba, Ayman Ismail and Thomas Schøtt
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Ahmed Tolba: Department of Marketing, School of Business, American University in Cairo, New Cairo 11835, Egypt
Ayman Ismail: Department of Marketing, School of Business, American University in Cairo, New Cairo 11835, Egypt
Thomas Schøtt: Department of Marketing, School of Business, American University in Cairo, New Cairo 11835, Egypt

JRFM, 2021, vol. 14, issue 12, 1-18

Abstract: People may finance entrepreneurs, often family members. Here, the question is: how has the COVID-19 pandemic affected people’s funding of family-related entrepreneurs and non-family-related entrepreneurs? The pandemic predictably reduced the funding of family-related entrepreneurs and especially the financing of non-family-related entrepreneurs. However, a culture supportive of family businesses may alleviate the declining funding of family-related entrepreneurs, predictably, while a secular–rational culture supportive of non-family businesses may alleviate the declining financing of non-family-related entrepreneurs. Similar to a field experiment, a globally representative survey was conducted before and after the disruption in 42 countries, interviewing 266,983 adults either before or after the disruption. The individual-level data are combined with national-level data on culture, amenable to hierarchical linear modeling. People’s financing of family-related entrepreneurs and especially of non-family-related entrepreneurs are found to have declined with the COVID-19 pandemic. However, culture provides resilience, in that the declining funding of family-related entrepreneurs was alleviated where the culture supports family businesses, and the declining funding of non-family-related entrepreneurs was alleviated in societies with a secular–rational culture. The findings contribute to contextualizing business angel financing temporally, as embedded in time before and after the COVID-19 pandemic disruption, and societally, as embedded in culture providing resilience.

Keywords: business angels; family-related entrepreneurs; non-family-related entrepreneurs; COVID-19; culture; family business culture; secular-rational culture; resilience (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2021
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