Risk, Migration and Networks: A Cross-National Comparison (Unpublished Manuscript)
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This paper examines how different types of social networks constrain and enable the growth of entrepreneurial ventures. In addition, we examine whether the impact of ties varies across institutional contexts. We propose (and test empirically) a link between cultural attitudes towards risk-taking and migration from rural to urban contexts. Migration appears to reduce the stigma of failure and increase risk-taking behavior as well as the creation of more innovative and larger new firms. We use the stricter labor market regulations in China to identify the causal impact of migrating and shifting social networks. We also use the fact that the data come from 2,996 respondents who were admitted from various locations in China to Tsinghua University in Beijing and then were assigned or chose to migrate back to rural areas or to urban areas before founding firms. We compare the impact of different types of social ties with comparable data from 2,067 MIT alumni with comparable educational backgrounds, starting firms over a similar time period and in similar industries. The results indicate a significantly stronger role for entrepreneur-government ties in the less developed institutional environment.
RPRT
Eesley, Charles E.
2009
Stanford University
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