Research and Publications - Department of Management

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Browsing Research and Publications - Department of Management by Author "Borgholthaus, Cameron J."

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    Venture creation in the aftermath of COVID-19: The impact of US governor party affiliation and discretion
    (Springer, 2023) Borgholthaus, Cameron J.; White, Joshua, V; Markin, Erik; Gupta, Vishal K.; Southern Illinois University Edwardsville; University of Dayton; Saint Petersburg State University; Mississippi State University; University of Alabama Tuscaloosa
    In the USA, governors became central figures in the fight against the novel coronavirus. In many cases, state leaders were forced to choose between preserving life and protecting economic livelihood. While prior research has underscored the important role that US governors played in implementing healthcare policies at the onset of the COVID-19 pandemic, we know little about how characteristics of state leaders impacted self-employment. In this paper, we draw from upper echelons theory to examine how governor party and discretion impacted venture creation in the food and restaurant industry. Interestingly, we find no significant relationship between governor party and venture creation. However, we find that when the governor and legislature were unified in their political party - irrespective of party line - there were a higher number of new food and restaurant ventures created. We also found this effect to be strengthened when small business unemployment levels were higher. We explore the implications of these results for how unity of command may be beneficial during times of crisis. Plain English Summary During the initial outbreak of the COVID-19 pandemic in the USA, governors played a critical role in creating policy that either helped to preserve life or protect economic livelihood. Our research examines how two particularly important characteristics of governors and the political environment - party affiliation and discretion - impacted new venture creation within the food and restaurant industry, which is an important indicator of economic recovery. Using a publicly available, hand-collected dataset inclusive of all 50 states, we find that the political party of the governor has no effect on venture creation. However, we demonstrate that when the governorship and state legislature were aligned and led by members with the same party affiliation, the state experienced a greater number of new venture creation in the food and restaurant industry than when leaders of these two branches of government were not aligned. We further found that the effect of governor discretion was stronger when small business unemployment levels were higher. Our findings have implications for practice by suggesting that a unity of command government structure can be advantageous for economic outcomes during crises.