Entrepreneurship, Innovation, and Political Competition: How the Public Sector Helps the Sharing Economy Create Value
50 Pages Posted: 1 Mar 2017 Last revised: 1 Apr 2018
Date Written: March 21, 2018
With the recent growth of the sharing economy, regulators must frequently strike the right balance between private and public interests to maximize value creation. In this paper, we argue that political competition is a critical ingredient that explains whether cities accommodate or ban ridesharing platforms and that this relationship is moderated in more populous cities and in cities with higher unemployment rates. We empirically test our arguments using archival data covering ridesharing bans in various U.S. cities during the 2011-2015 period. We supplement these data with semi-structured interviews. We find broad support for our arguments while mitigating potential endogeneity concerns. Our study has important implications for the nonmarket strategy, entrepreneurship and innovation, and public-private partnership literatures. In addition, our findings inform policy debates on the sharing economy.
Keywords: Entrepreneurship, Nonmarket Strategy, Political Competition, Sharing Economy, Platform-Based Markets, Entry Response
JEL Classification: L5, M13, M2, H7, K2, L1, D6, C12, C21
Suggested Citation: Suggested Citation