We examine how the entry of gig-economy platforms influences local entrepreneurial activity. On one hand, such platforms may reduce entrepreneurial activity by offering stable employment for the un-and under-employed. On the other hand, such platforms may enable entrepreneurial activity 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 into local areas. We examine the effect of each on crowdfunding campaign launches at Kickstarter, the world's largest reward-based crowdfunding platform. Results indicate a negative and significant effect on crowdfunding campaign launches, and thus local entrepreneurial activity, after entry of Uber X or Postmates. Strikingly, the effect appears to accrue primarily to un-funded and under-funded projects, suggesting that gig-economy platforms predominantly reduce lower quality entrepreneurial activity by offering viable employment for the un-and under-employed.
REF examine the effect of the entry of sharing economy platforms on entrepreneurial activity proxied the volume of crowdfunding campaigns, and find that lower quality campaigns are disproportionately negatively affected.
Can You Gig it? An Empirical Examination of the Gig-Economy and Entrepreneurial Activity
Management Science
Management Science
Economics Computer Science