Can you gig it? An empirical examination of the gig-economy and entrepreneurship

We examine how the entry of gig-economy platforms influences local entrepreneurial activity. On one hand, such platforms may reduce entrepreneurial activity by offering a stable employment for the un- and under-employed. On the other hand, such platforms may enable entrepreneurship by offering work flexibility that allows the entrepreneur to re- deploy resources strategically in order to pursue her nascent venture. To resolve this tension we exploit a set of natural experiments, the entry of the ride-sharing platform Uber X and the on-demand delivery platform Postmates. We examine the effect of each on crowdfunding campaign launches at Kickstarter, the world’s largest reward-based crowdfunding platform. Results indicate a significant negative effect on crowdfunding campaign launches, and thus local entrepreneurship, after platform entry. Strikingly, the effect appears to accrue primarily to un-funded and under-funded projects, suggesting that gig-economy platforms predominantly reduce necessity- based entrepreneurship by offering viable employment for the un- and under- employed. Finally, our results point to an associated increase in overall employment, suggesting the existence of significant economic spillovers that result from the influx of excess capital created by the platform.

Burtch, G., Carnahan, S. and Greenwood, B. (2016), 'Can you gig it? An empirical examination of the gig-economy and entrepreneurship,' Academy of Management Proceedings 2016(1).

Metadata

  • Uber, Kickstarter
  • transport, finance
  • On-location platform-determined routine work
  • United States
  • 2016
  • Research publication
  • challenges, employability and career progression
  • English
  • Academy of Management Global Proceedings (Publisher)
  • Quantitative research
  • Subscription
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