Giannetti Simonov (2009) - Social Interactions And Entrepreneurial Activity

• This page is referenced in The NBER Entrepreneurship Research Boot Camp Page

Reference(s)

• Giannetti, Mariassunta, and Andrei Simonov (2009), "Social interactions and entrepreneurial activity", Journal of Economics and Management Strategy, 18, 665-709. pdf

Abstract

We show that individuals residing in highly entrepreneurial neighborhoods are more likely to become entrepreneurs and invest more into their own businesses, even though their entrepreneurial profits are lower and their alternative job opportunities more attractive. Our results suggest that peer effects create nonpecuniary benefits from entrepreneurial activity and play an important role in the decision to become an entrepreneur. Alternative explanations, such as entry costs, social learning, and informal credit markets, are not supported by the data.