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

See all articles by Yongwook Paik

Yongwook Paik

Olin Business School, Washington University in St. Louis

Sukhun Kang

London Business School

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business

Date Written: March 21, 2018

Abstract

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

Paik, Yongwook and Kang, Sukhun and Seamans, Robert, Entrepreneurship, Innovation, and Political Competition: How the Public Sector Helps the Sharing Economy Create Value (March 21, 2018). Available at SSRN: https://ssrn.com/abstract=2925077 or http://dx.doi.org/10.2139/ssrn.2925077

Yongwook Paik (Contact Author)

Olin Business School, Washington University in St. Louis ( email )

1 Brookings Drive
Campus Box 1156
St. Louis, MO Missouri 63130
United States

Sukhun Kang

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Robert Seamans

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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