Workplace Flexibility and Entrepreneurship

38 Pages Posted: 13 Mar 2018

See all articles by Sumit Agarwal

Sumit Agarwal

National University of Singapore

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate

Changcheng Song

Singapore Management University

Jian Zhang

The University of Hong Kong - Faculty of Business and Economics

Date Written: March 8, 2018

Abstract

Working at home benefits workers with low fixed costs and the ability to engage in joint market and household production. We evaluate a large-scale reform in Singapore that allows the possibility of business creation at one’s residential property and study whether the option of home-based entrepreneurship spurs entrepreneurial activities. Difference-in-difference estimate shows that the reform leads to a significantly higher level of business creation. The effect is more pronounced for low-income individuals, implying that financial constraint is a barrier for firm creation. Additional new firms in response to the reform have a higher survival rate, choose industries with higher productivity and lower risk. The reform also encourages entrepreneurs to become serial entrepreneurs, and they open a larger business with similar survival rate for their second firm. These results show that the home office scheme effectively spurs entrepreneurial activities and attract more entry into self-employment without significantly lowering the average quality of the pool. We also exploit the regional variation in the residential land density to assess the impact on aggregate economic outcomes. Regions more exposed to the reform experience higher rate of price growth.

Keywords: Entrepreneurship, Home-Base Work, Experimentation

JEL Classification: M13, L26

Suggested Citation

Agarwal, Sumit and Sing, Tien Foo and Song, Changcheng and Zhang, Jian, Workplace Flexibility and Entrepreneurship (March 8, 2018). Georgetown McDonough School of Business Research Paper No. 3136792. Available at SSRN: https://ssrn.com/abstract=3136792 or http://dx.doi.org/10.2139/ssrn.3136792

Sumit Agarwal

National University of Singapore ( email )

15 Kent Ridge Drive
Singapore, 117592
Singapore
8118 9025 (Phone)

HOME PAGE: http://www.ushakrisna.com

Tien Foo Sing

National University of Singapore (NUS) - Department of Real Estate ( email )

4 Architecture Drive
Singapore 117566
Singapore

Changcheng Song (Contact Author)

Singapore Management University ( email )

50 Stamford Road
Singapore
Singapore
+6568289610 (Phone)

Jian Zhang

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

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