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Social capital access and entrepreneurship

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  • Bauernschuster, Stefan
  • Falck, Oliver
  • Heblich, Stephan

Abstract

We investigate the effect of social capital access on entrepreneurship. Social capital helps entrepreneurs to overcome resource constraints. This is especially important in small communities where we often see a lack of market-oriented institutions such as venture capital firms. Entrepreneurs gain access to social capital via club memberships. Combining differences in the number of individual club memberships with differences in the importance of social capital across communities, we identify a causal small community mark-up effect of individual club memberships on entrepreneurship. Assuming that unobserved heterogeneity that might influence both the individual’s selection into clubs and the occupational choice to be an entrepreneur is independent of community size, we find that the effect of club membership on the propensity to be an entrepreneur is 2.6 percentage points larger in small communities than in large communities. Robustness tests support the validity of our identifying assumption and results.

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Bibliographic Info

Paper provided by University of Munich, Department of Economics in its series Munich Reprints in Economics with number 20137.

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Date of creation: 2010
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Publication status: Published in Journal of Economic Behavior and Organization 3 76(2010): pp. 821-833
Handle: RePEc:lmu:muenar:20137

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References

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Cited by:
  1. Neira, Isabel & Portela, Marta & Cancelo, Maite Cancelo & Calvo, Nuria, 2013. "Social and human capital as determining factors of entrepreneurship in the Spanish Regions," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 26, pages 115-139.
  2. Bernard Dussuc & Sébastien Geindre, 2012. "Capital social, théorie des réseaux sociaux et recherche en PME : une revue de la littérature," Post-Print halshs-00747912, HAL.
  3. Alexander Tatarko, 2013. "Is individual social capital linked to the implementation of entrepreneurial intentions?," HSE Working papers WP BRP 25/SOC/2013, National Research University Higher School of Economics.
  4. Fabio Sabatini & Francesco Sarracino, 2013. "Will Facebook save or destroy social capital? An empirical investigation into the effect of online interactions on trust and networks," Department of Economics University of Siena 692, Department of Economics, University of Siena.
  5. Elke Lüdemann, 2011. "Schooling and the Formation of Cognitive and Non-cognitive Outcomes," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, number 39, July.
  6. Sabatini, Fabio & Sarracino, Francesco, 2014. "E-participation: social capital and the Internet," MPRA Paper 55722, University Library of Munich, Germany.
  7. Stephan Heblich & Viktor Slavtchev, 2014. "Parent universities and the location of academic startups," Small Business Economics, Springer, vol. 42(1), pages 1-15, January.
  8. Kim, Byung-Yeon & Kang, Youngho, 2014. "Social capital and entrepreneurial activity: A pseudo-panel approach," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 47-60.

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