The Impact of Entrepreneurship on Community Integration: Evidence from a Quasi-Natural Experiment

Vera Rocha, Olenka Kacperczyk

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

Previous research has focused on the antecedents of entrepreneurship within communities, but little is known about the consequences of entrepreneurship for the community. Focusing on within-community integration, as indicated by violation of community norms through misconduct, we propose that regional boosts of entrepreneurial activity benefit communities. Using employer–employee matched data from Portugal between 2002 and 2010 and an exogenous increase in entrepreneurship, we find support for our claims. Following the enactment of entry deregulation policies which increased entrepreneurship, the incidence of norm violation through misconduct declined within the focal community. We further find that higher participation in the labor market and improved workforce conditions of disadvantaged groups is the key mechanism responsible for this effect. Workers from such groups are more likely to find employment and experience improvement in working conditions when entrepreneurship rates increase. The beneficial effect of entrepreneurship on misconduct was further amplified in communities with greater rates of unemployment and greater income inequality, confirming our prediction that entrepreneurship can serve as a vehicle to improve the standing of low-income communities.
Original languageEnglish
Publication date2019
Number of pages38
Publication statusPublished - 2019
EventDRUID19 Conference - Copenhagen Business School, Frederiksberg, Denmark
Duration: 19 Jun 201921 Jun 2019
Conference number: 41
https://conference.druid.dk/Druid/?confId=59

Conference

ConferenceDRUID19 Conference
Number41
LocationCopenhagen Business School
CountryDenmark
CityFrederiksberg
Period19/06/201921/06/2019
Internet address

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