Working Paper: CEPR ID: DP14263
Authors: Bishnupriya Gupta; Dilip Mookherjee; Kaivan Munshi; Mario Sanclemente
Abstract: We provide evidence of the role of community networks in emergence of Indian entrepreneurship in early stages of cotton and jute textile industries in the late 19th and early 20th century respectively, overcoming lack of market institutions and government support. From business registers, we construct a yearly panel dataset of entrepreneurs in these two industries. We fi nd no evidence that entry was related to prior upstream trading experience or price shocks. Firm directors exhibited a high degree of clustering of entrepreneurs by community. Entry flows were consistent with a model of network-based dynamics.
Keywords: Industrialization; Social Networks
JEL Codes: N10; L26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| community networks (D85) | emergence of entrepreneurs (L26) |
| community clustering (C38) | trust and cooperation in firm management (L14) |
| presence of incumbents from the same community (D79) | likelihood of new entrants (L26) |
| additional active entrepreneur from a community in 1866 (N81) | increase in entrepreneurs from the same community by 0.57 in 1880 (N91) |
| additional active entrepreneur from a community in 1866 (N81) | increase in entrepreneurs from the same community by 2.95 in 1890 (N81) |
| community presence (R23) | productivity-enhancing help among entrepreneurs (O49) |
| prior upstream trading experience (G19) | entry patterns (Y20) |
| price shocks (E30) | entry patterns (Y20) |