Working Paper: CEPR ID: DP10997
Authors: Grard Roland
Abstract: We document that individuals who grew up in areas with high density of firms are more likely, as adults, to become entrepreneurs, controlling for the density of firms in their current location. Conditional on becoming entrepreneurs, the same individuals are also more likely to be successful entrepreneurs, as measured by business income or firm productivity. Strikingly, firm density at entrepreneur?s young age is more important than current firm density for business performance. These results are not driven by better access to external finance or intergenerational occupation choices. They are instead consistent with entrepreneurial capabilities being at least partly learnable through social contacts. In keeping with this interpretation, we find that entrepreneurs who at the age of 18 lived in areas with a higher firm density tend to adopt better managerial practices (enhancing productivity) later in life.
Keywords: European data
JEL Codes: A13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| electoral corruption (K16) | control over voting behavior of agricultural workers (J43) |
| control over voting behavior of agricultural workers (J43) | incentivizes land ownership (Q15) |
| incentivizes land ownership (Q15) | increases land concentration (Q15) |
| electoral corruption (K16) | inefficient land concentration (Q15) |
| introduction of the secret ballot in 1958 (K16) | disruption of control mechanism (E61) |
| disruption of control mechanism (E61) | decrease in land concentration (Q15) |
| disruption of control mechanism (E61) | shift in voting behavior from right-wing to left-leaning (D72) |