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Boulevard of Broken Behaviors: Socio-Psychological Mechanisms of Entrepreneurship Policies

28 Pages Posted: 29 Aug 2014 Last revised: 2 Apr 2015

Michael Leatherbee

Pontifical Catholic University of Chile - Department of Industrial Engineering

Charles E. Eesley

Stanford University - Management Science & Engineering

Date Written: August 15, 2014

Abstract

By simultaneously standing on the entrepreneurship, institutions and social influences literatures, this paper explores the use of socio-psychological mechanisms to stimulate entrepreneurial ecosystems. While past research has studied the effects of institutions that use normative, cognitive, regulative and economic mechanisms, this paper assesses the causal relationship between an exogenous treatment that leverages social influences, and subsequent changes in entrepreneurial behaviors. We do this by conducting an in-depth examination of Start-Up Chile, a recent and unorthodox policy that forces a social interaction between domestic and foreign entrepreneurs. We provide evidence about the behavioral differences between two social groups from distinct geographical regions, as well as the assimilation of useful entrepreneurial behaviors as a consequence of the exogenously induced social interaction between these groups. Moreover, we find that entrepreneurial self-efficacy acts as an inverse amplifier in the assimilation of the studied behaviors. Our results shed light on an unexplored landscape in the design of entrepreneurship policies. By challenging current wisdom about the use of conventional mechanisms of influence, we uncover the effectiveness of socio-psychological mechanisms to cause change where the former may fail to do so.

Keywords: entrepreneurship, policies, institutions, social influence, regression discontinuity

Suggested Citation

Leatherbee, Michael and Eesley, Charles E., Boulevard of Broken Behaviors: Socio-Psychological Mechanisms of Entrepreneurship Policies (August 15, 2014). Available at SSRN: https://ssrn.com/abstract=2488712 or http://dx.doi.org/10.2139/ssrn.2488712

Michael Leatherbee (Contact Author)

Pontifical Catholic University of Chile - Department of Industrial Engineering ( email )

Av. Vicuna Mackenna 4860
Macul
Santiago
Chile

Charles Eesley

Stanford University - Management Science & Engineering ( email )

473 Via Ortega
Stanford, CA 94305-9025
United States

HOME PAGE: http://chuckeesley.com

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