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Publications
  • January 2022
  • Article
  • Journal of Financial Economics

Who Creates New Firms When Local Opportunities Arise?

By: Shai Benjamin Bernstein, Emanuele Colonnelli, Davide Malacrino and Timothy McQuade
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Abstract

We examine the characteristics of the individuals who become entrepreneurs when local opportunities arise. We identify local demand shocks by linking fluctuations in global commodity prices to municipality level agricultural endowments in Brazil. We find that the firm creation response is almost entirely driven by young and skilled individuals. Their response is larger in municipalities with better access to finance and more skilled human capital, and is driven entirely by the formal market. These results highlight how the composition of the local population can have a significant impact on the entrepreneurial responsiveness of the economy.

Keywords

Firms; Entrepreneurs; Demand Shocks; Entrepreneurship; Personal Characteristics; Demographics; Opportunities; Brazil

Citation

Bernstein, Shai Benjamin, Emanuele Colonnelli, Davide Malacrino, and Timothy McQuade. "Who Creates New Firms When Local Opportunities Arise?" Journal of Financial Economics 143, no. 1 (January 2022): 107–130.
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About The Author

Shai Benjamin Bernstein

Entrepreneurial Management
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More from the Authors

    • 2023
    • Faculty Research

    Life After Death: A Field Experiment with Small Businesses on Information Frictions, Stigma, and Bankruptcy

    By: Shai Benjamin Bernstein, Emanuele Colonnelli, Mitchell Hoffman and Benjamin Iverson
    • December 7, 2022
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    Why Decentralized Crypto Platforms Are Weathering the Crash

    By: Shai Bernstein and Scott Duke Kominers
    • December 2022 (Revised December 2022)
    • Faculty Research

    Ribbit Capital and the Gauntlet Investment Opportunity

    By: Shai Bernstein and Allison M. Ciechanover
More from the Authors
  • Life After Death: A Field Experiment with Small Businesses on Information Frictions, Stigma, and Bankruptcy By: Shai Benjamin Bernstein, Emanuele Colonnelli, Mitchell Hoffman and Benjamin Iverson
  • Why Decentralized Crypto Platforms Are Weathering the Crash By: Shai Bernstein and Scott Duke Kominers
  • Ribbit Capital and the Gauntlet Investment Opportunity By: Shai Bernstein and Allison M. Ciechanover
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