Reducing poverty through the shared economy: creating inclusive entrepreneurship around institutional voids in China

Poverty reduction has increasingly become a core subject for researchers across the social sciences from economics to finance, management, and entrepreneurship. This study goes beyond existing management and entrepreneurship literature that has devoted significant efforts to exploring market-based ways for economic development, but has neglected poor people in rural areas excluded from participating in and accessing markets. In this study, the sharing economy is proposed as an effective way to resolve and reduce the poverty problem. We show how to overcome institutional voids by facilitating two fundamental mechanisms (i.e., building new markets, cultivating new participants) that bring together entrepreneurship, local peasants, and governments in building inclusive markets. We reveal omitted elements, such as geographic and temporal differences in market development across regions and times, as the key source of institutional voids in emerging markets. The analyses are conducted using data from multiple sources ranging from participant observation, retrieval of archival documents, and in-depth interviews covering 335 counties of 16,500 villages involved with Taobao in 2007–2017 in China. The findings shed insight on the studies on institutional voids, entrepreneurship, and the sharing economy.