Infrastructure investments and entrepreneurial dynamism in the U.S.

By Daniel L. Bennett. Journal of Business Venturing, 2019

132 citations recorded by the source corpus.

Abstract Investments in physical infrastructure induce environmental changes that serve both an enabling and disabling function, potentially acting to simultaneously stimulate new business establishment and provoke exit by some incumbent establishments. The opening of a new establishment results in the creation of jobs that did not previously exist. Similarly, the closing of an establishment results in the permanent loss of jobs. I develop a theoretical model that depicts this external enabler/disabler process and test the model's predictions empirically tested using annual state-level data spanning the period 1993–2015. The results from dynamic panel system GMM estimation suggest that public and private infrastructure investments exert opposite effects on dynamism. Whereas private infrastructure investment is positively and significantly associated with the creation of businesses and jobs, public infrastructure investments are associated with the destruction of businesses and jobs. These results point to private infrastructure investment serving primarily an entrepreneurial enabler role and public infrastructure investment an entrepreneurial disabler role.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/77b68e4c5f2bfd76965a62b8c76fb80ec48b97ff

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In Economics and Econometrics

Citations in the corpus

Does entrepreneurial activity matter for economic growth in developing countries? The role of the institutional environment (2019, background): “Moreover, infrastructure facilitates connectivity and recognition of entrepreneurial opportunities (Audretsch et al. 2015; Bennett 2019).”