Can You Gig It? An Empirical Examination of the Gig Economy and Entrepreneurial Activity

Gordon Burtch, Seth Carnahan () and Brad N. Greenwood ()
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Seth Carnahan: Ross School of Business, University of Michigan, Ann Arbor, Michigan 48109
Brad N. Greenwood: Carlson School of Management, University of Minnesota, Minneapolis, Minnesota 55455

Management Science, 2018, vol. 64, issue 12, 5497-5520

Abstract: We examine how the entry of gig-economy platforms influences local entrepreneurial activity. On the one hand, such platforms may reduce entrepreneurial activity by offering stable employment for the unemployed and underemployed. On the other hand, such platforms may enable entrepreneurial activity by offering work flexibility that allows the entrepreneur to redeploy resources strategically in order to pursue the nascent venture. To resolve this tension, we examine the entry of the ridesharing platform Uber X into local areas. We use two measures of entrepreneurial activity: crowdfunding campaign launches at Kickstarter, the world’s largest reward-based crowdfunding platform, and levels of self-employment from the Current Population Survey. Results indicate a negative and significant relationship between platform entry and both measures of entrepreneurial activity. Importantly, the effect manifests primarily amongst unsuccessful Kickstarter campaigns and unincorporated entrepreneurial ventures, suggesting that gig-economy platforms predominantly reduce lower quality entrepreneurial activity, seemingly by offering viable employment for the unemployed and underemployed. These relationships are corroborated with a first-hand survey conducted with gig-economy service providers.

Keywords: gig economy; digital platforms; crowdfunding; entrepreneurship; difference in difference; necessity-based entrepreneurship (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (113)

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