(When) Can Entrepreneurship Improve Community Integration?

Previous research has focused on the antecedents of entrepreneurship within communities, but little is known about the consequences of entrepreneurship for the community. Focusing on crime incidence as a key dimension of community disintegration, we propose that regional boosts of entrepreneurial activity benefit communities. Using employer-employee matched data from Portugal between 2002 and 2010 and an exogenous increase in entrepreneurship following a deregulation reform, we find that promoting entrepreneurship reduces crime incidence within the focal communities. We further find that higher participation in the labor market by disadvantaged groups and access to better working conditions within established firms is the key mechanism responsible for this effect. This result is further amplified in communities with higher unemployment rates and greater income inequality, confirming our prediction that entrepreneurship serves as a vehicle to improve the standing of disadvantaged groups.

Zoom link: https://eur-nl.zoom.us/j/96806118823