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Social Interactions and Entrepreneurial Activity

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  • Mariassunta Giannetti
  • Andrei Simonov

Abstract

"We show that individuals residing in highly entrepreneurial neighborhoods are more likely to become entrepreneurs and invest more into their own businesses, even though their entrepreneurial profits are lower and their alternative job opportunities more attractive. Our results suggest that peer effects create nonpecuniary benefits from entrepreneurial activity and play an important role in the decision to become an entrepreneur. Alternative explanations, such as entry costs, social learning, and informal credit markets, are not supported by the data." Copyright (c) 2009 Wiley Periodicals, Inc..

Suggested Citation

  • Mariassunta Giannetti & Andrei Simonov, 2009. "Social Interactions and Entrepreneurial Activity," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(3), pages 665-709, September.
  • Handle: RePEc:bla:jemstr:v:18:y:2009:i:3:p:665-709
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