Sharing Economy and Entrepreneurship

Abstract

Our paper shows that Airbnb—a sharing economy pioneer—has led to the creation of new, local businesses, which have higher survival rates and better performance both at the creation and in the long-run. Airbnb appears to spur new business creations by increasing passive income for landlords and by boosting tourists spending in the local region, leading to higher local income and the creation of more jobs. Our empirical strategy exploits the staggered arrival of Airbnb across counties, an instrumental variable approach for Airbnb penetration, and a case study using the short-term rental restriction in New York.

Keywords: Airbnb, sharing economy, entrepreneurship, local demand, rental income, job creation

JEL Classification: L26, L85, L86, M13