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

31 Pages Posted: 29 Mar 2021 Last revised: 28 Feb 2022

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: March 2021

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.

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Suggested Citation

Barrios, John Manuel and Hochberg, Yael V. and Macciocchi, Daniele, Rugged Entrepreneurs: The Geographic and Cultural Contours of New Business Formation (March 2021). NBER Working Paper No. w28606, Available at SSRN: https://ssrn.com/abstract=3814593

John Manuel Barrios (Contact Author)

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

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National Bureau of Economic Research ( email )

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Yael V. Hochberg

National Bureau of Economic Research (NBER) ( email )

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

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Daniele Macciocchi

University of Miami Herbert Business School ( email )

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

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