TY - JOUR
T1 - Entrepreneurship and network externalities
AU - Minniti, Maria
N1 - Funding Information:
Financial support from the A. Blank Center for Entrepreneurship and the W.F. Glavin Center for Global Management is gratefully acknowledged. The author is grateful to Josh Lerner and all participants to the Workshop “The Entrepreneurial Process: Research Perspectives” at Harvard University for helpful comments. All errors are mine.
PY - 2005/5
Y1 - 2005/5
N2 - Studies on agglomeration show that economic characteristics explain only a portion of variance in entrepreneurship rates across regions. To complement these studies, I argue that entrepreneurship tends to concentrate geographically, in part, because of the social environment. I suggest that, when making decisions, individuals follow social cues and are influenced by what others have chosen, especially when facing ambiguous situations. Such influence may be described as a non-pecuniary network externality. Using a non-linear path-dependent stochastic process, I build a model of entrepreneurial dynamics showing why communities with initially similar economic characteristics may end up with different levels of entrepreneurial activity.
AB - Studies on agglomeration show that economic characteristics explain only a portion of variance in entrepreneurship rates across regions. To complement these studies, I argue that entrepreneurship tends to concentrate geographically, in part, because of the social environment. I suggest that, when making decisions, individuals follow social cues and are influenced by what others have chosen, especially when facing ambiguous situations. Such influence may be described as a non-pecuniary network externality. Using a non-linear path-dependent stochastic process, I build a model of entrepreneurial dynamics showing why communities with initially similar economic characteristics may end up with different levels of entrepreneurial activity.
KW - Entrepreneurship
KW - Network externalities
KW - Path dependency
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U2 - 10.1016/j.jebo.2004.10.002
DO - 10.1016/j.jebo.2004.10.002
M3 - Article
AN - SCOPUS:17144417258
SN - 0167-2681
VL - 57
SP - 1
EP - 27
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
IS - 1
ER -