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Globalization and entrepreneurial entry and exit: Evidence from U.S. households

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  • Aslan, Hadiye
  • Kumar, Praveen

Abstract

Using a database on U.S. individuals and households, we examine whether rise in globalization and trade integration of product markets have contributed to the observed decline in US entrepreneurship in trade-exposed sectors. US trade policy that lowered tariffs on China dampens entrepreneurial dynamism through lower entry (especially by incorporated entrepreneurs) and higher exit in exposed sectors but increases entry by highly educated individuals in skill-intensive nontradable industries. The results are robust to secular trends, labor market specialization, local collateral and credit shocks, and long-run bank distress. They are also robust to aggregation at local, state, and national industry levels.

Suggested Citation

  • Aslan, Hadiye & Kumar, Praveen, 2021. "Globalization and entrepreneurial entry and exit: Evidence from U.S. households," Journal of Monetary Economics, Elsevier, vol. 120(C), pages 83-100.
    • Handle: RePEc:eee:moneco:v:120:y:2021:i:c:p:83-100
    DOI: 10.1016/j.jmoneco.2021.05.001
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    Cited by:

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    2. HAYAKAWA Kazunobu & ITO Tadashi & URATA Shujiro, 2022. "Impacts of Increased Chinese Imports on Japan’s Labor Market: Firm and Regional Aspects," Discussion papers 22037, Research Institute of Economy, Trade and Industry (RIETI).
    3. Cui, Chuantao & Li, Leona Shao-Zhi, 2023. "Trade policy uncertainty and new firm entry: Evidence from China," Journal of Development Economics, Elsevier, vol. 163(C).
    4. Silva, Pedro Mendonça & Moutinho, Victor Ferreira & Moreira, António Carrizo, 2022. "Do social and economic factors affect the technical efficiency in entrepreneurship activities? Evidence from European countries using a two-stage DEA model," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    5. Liang Xu & Zhigao Liu, 2022. "The Evolution of the Spatial Patterns of Startup Firms in the Tibet Autonomous Region, China in the 21st Century," Sustainability, MDPI, vol. 14(15), pages 1-18, August.

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    More about this item

    Keywords

    Entrepreneurship; Globalization; Import competition; Tradable and nontradable industries; Human capital;
    All these keywords.

    JEL classification:

    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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