Resurrecting Dead Capital: The Sharing Economy, Entrepreneurship, and Job Creation

60 Pages Posted: 12 Feb 2018 Last revised: 20 Jul 2021

See all articles by Yifei Mao

Yifei Mao

Cornell University - SC Johnson College of Business - Finance Department

Xuan Tian

Tsinghua University - PBC School of Finance

Kailei Ye

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Date Written: July 16, 2021

Abstract

This paper examines how the sharing economy affects entrepreneurship. Using Airbnb’s penetration across counties as a proxy for the growth of the sharing economy and venture capital infusions interacted with local tourism as an instrument, we find that Airbnb spurs local firm creation. A plausible underlying channel is that Airbnb facilitates short-term rental, which relaxes the financial constraint of potential entrepreneurs. Increases in entrepreneurs’ risk tolerance, enhanced local demand, and increased collateral value caused by Airbnb penetration do not appear to explain our main findings. Our paper sheds new light on the real effects of the sharing economy.

Keywords: Airbnb, sharing economy, entrepreneurship, financial constraints, job creation

JEL Classification: L26, L85, L86, M13

Suggested Citation

Mao, Yifei and Tian, Xuan and Ye, Kailei, Resurrecting Dead Capital: The Sharing Economy, Entrepreneurship, and Job Creation (July 16, 2021). Kenan Institute of Private Enterprise Research Paper No. 19-13, PBCSF-NIFR Research Paper, Available at SSRN: https://ssrn.com/abstract=3111975 or http://dx.doi.org/10.2139/ssrn.3111975

Yifei Mao (Contact Author)

Cornell University - SC Johnson College of Business - Finance Department ( email )

Ithaca, NY 14850
United States

Xuan Tian

Tsinghua University - PBC School of Finance ( email )

No. 43, Chengfu Road
Haidian District
Beijing 100083
China
+86-10-62794103 (Phone)

HOME PAGE: http://xuantian.info/

Kailei Ye

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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