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Title: Product Market Competition and Entrepreneurial Activity: Evidence from U.S. Households

Citation Type: Miscellaneous

Publication Year: 2018

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Abstract: Motivated by the accelerated decline in U.S. entrepreneurship in the past two decades, and using a unique panel dataset of U.S. households, we theoretically and empirically analyze the e§ects of increased product market competition through growth of low-cost imports on household entrepreneurial activity. We Önd strong empirical support (during 1993-2006) for the theoretical predictions that higher penetration of low-cost imports reduces entry by domestic entrepreneurs in the tradable sector, especially for less wealthy individuals, but has positive spillover e§ects on entrepreneurial activity in the non-tradable sector. The results are robust to the alternative hypotheses of latent shocks to U.S. industries and local regions; collateralization e§ects of the housing boom; and feedback e§ects between imports and business activity. Our analysis highlights the signiÖcant and diverse economy-wide e§ects of increased product market competition (in a given industry) on household entrepreneurial activity

Url: https://pdfs.semanticscholar.org/516e/f44be84db220e137d0a2cffbbb8a02e51597.pdf

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Authors: Aslan, Hadiye; Kumar, Praveen

Publisher: Georgia State University

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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