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Extreme Events, Entrepreneurial Start-Ups, and Innovation: Theoretical Conjectures

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  • Thomas Gries

    (University of Paderborn)

  • Wim Naudé

    (University College Cork
    RWTH Aachen University)

Abstract

In light of the COVID-19 pandemic, we scrutinize what has been established in the literature on whether entrepreneurship can cause and resolve extreme events, the immediate and long-run impacts of extreme events on entrepreneurship, and whether extreme events can positively impact (some) entrepreneurship and innovation. Based on this, we utilize a partial equilibrium model to provide several conjectures on the impact of COVID-19 on entrepreneurship, and to derive policy recommendations for recovery. We illustrate that while entrepreneurship recovery will benefit from measures such as direct subsidies for start-ups, firms’ revenue losses, and loan liabilities, it will also benefit from aggregate demand-side support and income redistribution measures, as well as from measures that facilitate the innovation-response to the Keynesian supply-shock caused by the pandemic, such as access to online retail and well-functioning global transportation and logistics.

Suggested Citation

  • Thomas Gries & Wim Naudé, 2021. "Extreme Events, Entrepreneurial Start-Ups, and Innovation: Theoretical Conjectures," Economics of Disasters and Climate Change, Springer, vol. 5(3), pages 329-353, October.
    • Handle: RePEc:spr:ediscc:v:5:y:2021:i:3:d:10.1007_s41885-021-00089-0
    DOI: 10.1007/s41885-021-00089-0
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    Cited by:

    1. Beniamino Callegari & Christophe Feder, 2022. "A Literature Review of Pandemics and Development: the Long-Term Perspective," Economics of Disasters and Climate Change, Springer, vol. 6(1), pages 183-212, March.
    2. Naudé, Wim & Nagler, Paula, 2021. "The Rise and Fall of German Innovation," IZA Discussion Papers 14154, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Entrepreneurship; Innovation; COVID-19; Extreme events; Development;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L53 - Industrial Organization - - Regulation and Industrial Policy - - - Enterprise Policy
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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