Rugged Entrepreneurs: The Geographic and Cultural Contours of New Business Formation

30 Pages Posted: 18 Feb 2021

See all articles by John Manuel Barrios

John Manuel Barrios

Washington University in St. Louis - Olin Business School; National Bureau of Economic Research

Yael V. Hochberg

National Bureau of Economic Research (NBER); Rice University - Jesse H. Jones Graduate School of Business

Daniele Macciocchi

University of Miami Herbert Business School

Multiple version iconThere are 2 versions of this paper

Date Written: December 15, 2020

Abstract

How do geographic and historical-cultural factors shape new business formation? Using novel data on new business registrations, we document that 75% of the variation in new business formation is explained by time-invariant county-level factors and examine the extent to which such variation is driven by historical, cultural, and geographic factors. Current-day new business formation is positively related to historical attributes that presage individualist culture: frontier experience and historical birthplace diversity, as well as the county’s topographical features. The relation holds when we exploit plausibly exogenous variation in frontier experience driven by shocks to the settlement process that arise from historical immigration flows. Our study points to the fundamental role of geographic and historical-cultural features, especially rugged individualism, in explaining contemporary new business formation in the U.S.

Keywords: Entrepreneurship, New Business Formation, Culture, Individualism, American Frontier, Persistence, Geography, Diversity

JEL Classification: L26, N3, N9, O1, O43

Suggested Citation

Barrios, John Manuel and Hochberg, Yael V. and Macciocchi, Daniele, Rugged Entrepreneurs: The Geographic and Cultural Contours of New Business Formation (December 15, 2020). University of Miami Business School Research Paper No. 3784934, Available at SSRN: https://ssrn.com/abstract=3784934 or http://dx.doi.org/10.2139/ssrn.3784934

John Manuel Barrios

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

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

National Bureau of Economic Research ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yael V. Hochberg

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Rice University - Jesse H. Jones Graduate School of Business ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States

Daniele Macciocchi (Contact Author)

University of Miami Herbert Business School ( email )

P.O. Box 248126
Florida
Coral Gables, FL 33124
United States

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