Does capitalism produce an entrepreneurial class?

Ruef, Martin; Reinecke, David

doi:10.1016/j.riob.2011.09.006

Cited by 5 publications

(4 citation statements)

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“…As a result, enumeration of businesses via property tax assessments may miss much of the entrepreneurial activity during early industrialization. An alternative definition focuses on occupations that were especially likely to lead to brick-and-mortar business proprietorship, including the artisanal trades, shopkeeping, high-end service trades, and independent professions (Ruef & Reinecke, 2011). The number of household heads with these entrepreneurial occupations are shown in Table 2.…”

Section: Measures Of Small Business Ownershipmentioning

confidence: 99%

The household as a source of labor for entrepreneurs: Evidence from New York City during industrialization

Ruef

2018

Strategic Entrepreneurship

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Research Summary This article conceptualizes households as a crucial pool of labor for small entrepreneurs. The household varied historically in its scope (depending on whether bonded workers were included) and work intensity (depending on the authority or coercion exercised by household heads). Drawing on data that enumerate over 100,000 households in New York City, I examine how the shift from institutions of unfree labor to wage labor affected business proprietorship between 1790 and 1850. Given the disproportionate importance of unfree household labor to small entrepreneurs, the contraction of this labor source may offer one general explanation for their decline. Managerial Summary How does household scope and composition affect the ability of an individual to run their own business? Historical archives can provide useful insights into this question. They track long‐term declines in family size and the emancipation of non‐family members—such as apprentices, indentured servants, and slaves—from the authority of household heads. Examining records from early New York City, this study shows that business ownership was strongly linked with the ownership of slaves and the presence of dependent males after the American Revolution. Large households and unfree laborers were especially important for entrepreneurship among individuals with limited wealth. For modern economies, the results suggest that policymakers consider potential tensions between small business ownership and the development of free and equitable labor markets.

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Section: Measures Of Small Business Ownershipmentioning

confidence: 99%

The household as a source of labor for entrepreneurs: Evidence from New York City during industrialization

Ruef

2018

Strategic Entrepreneurship

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“…Such explanations must explicitly recognize the complex interactions among various factors that may occur over time. Yet despite the increasing appeal of historically sensitive analysis, only a handful of studies of new-venture creation reflect this shift (e.g., Dobbin and Dowd, 1997;Stuart and Ding, 2006;Johnson, 2007;Ruef and Reinecke, 2011).…”

Section: Directions For Future Researchmentioning

confidence: 99%

“…In the same vein, declines in federal grants to universities weakened scientists' concerns about communalism and disinterestedness and increased their acceptance of property-rights claims on scientific discoveries (Etzkowitz, 1989); this normative shift made scientists more likely to participate in new biotechnology ventures (Stuart and Ding, 2006). To give a final example, capitalist development can either increase or decrease rates of entrepreneurship, depending on whether it occurs through endogenous development or is imposed by external fiat (Ruef and Reinecke, 2011). As these examples show, attention to history can solve puzzles about entrepreneurial dynamics by revealing how interactions among multiple factors open and close different paths to entrepreneurship.…”

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How Entrepreneurship Evolves

Haveman

Habinek

Goodman

2012

Administrative Science Quarterly

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We craft a historically sensitive model of entrepreneurship linking individual actors to the evolving social structures they must navigate to acquire resources and launch new ventures. Theories of entrepreneurship and industry evolution suggest two opposing hypotheses: as an industry develops, launching a new venture may become more difficult for all but industry insiders and the socially prominent because of competition from large incumbents, or it may become easier for all people because the legitimacy accorded to the industry simplifies the entrepreneurial task. To test these two conflicting claims, we study the American magazine industry from 1741 to 1860. We find that magazine publishing was originally restricted to publishing-industry insiders, professionals, and the highly educated, but most later founders came from outside publishing and more were of middling stature. Gains by entrepreneurs from the social periphery, however, were uneven: most were doctors and clergy without college degrees in small urban areas; magazines founded by industry insiders remained predominant in the industry centers. Our analysis demonstrates the importance of grounding studies of entrepreneurship in historical context. It also shows that entrepreneurship scholars must attend to temporal shifts within the focal industry and in society at large.In a pioneering analysis, Stinchcombe (1965) proposed that entrepreneurial dynamics are influenced by historical conditions. Large-scale changes such as urbanization, the creation of new policy regimes, and technological breakthroughs may change the resources available to entrepreneurs, altering organizational founding rates by transforming the entrepreneurial task itself. Yet much research on entrepreneurship remains ahistorical. It assumes that the factors that make people more or less likely to create new organizations do not

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“…Their use, in fact, has been quite limited. The D&B records from southern states for the postbellum period are used by sociologists (for example, Ruef and Patterson (2009b) and Ruef and Reinecke (2011)) to study patterns in business classification and formation. In economics, Kim (2003) links D&B records for two counties to the nineteenth century Census of Manufactures (CoM) to study exit rates and the growth of the partnership model.…”

Section: Introductionmentioning

confidence: 99%

Credit Relationships and Business Bankruptcy during the Great Depression

Hansen

Ziebarth

2017

American Economic Journal: Macroeconomics

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Credit relationships are sticky. Stickiness makes relationships beneficial to borrowers in times of their own distress but makes them potentially problematic when lenders themselves face hardship. To examine the role of credit relationships during a financial crisis, we exploit a natural experiment in Mississippi during the Great Depression that generated plausibly exogenous differences in financial distress for banks. Using new data drawn from the publications of the credit rating agency Dun & Bradstreet and from original bankruptcy filings, we show that financial distress increased business exit but did not increase the bankruptcy rate. Financial distress caused both banks and trade creditors to recalibrate their collections strategies, which is revealed by changes in the geographical distribution of the creditors of bankrupt businesses. (JEL G21, G24, G33, N12, N22, N82)

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Does capitalism produce an entrepreneurial class?

Cited by 5 publications

References 84 publications

The household as a source of labor for entrepreneurs: Evidence from New York City during industrialization

The household as a source of labor for entrepreneurs: Evidence from New York City during industrialization

How Entrepreneurship Evolves

Credit Relationships and Business Bankruptcy during the Great Depression

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