Venture creation in the aftermath of COVID-19: The impact of US governor party affiliation and discretion

dc.contributor.authorBorgholthaus, Cameron J.
dc.contributor.authorWhite, Joshua, V
dc.contributor.authorMarkin, Erik
dc.contributor.authorGupta, Vishal K.
dc.contributor.otherSouthern Illinois University Edwardsville
dc.contributor.otherUniversity of Dayton
dc.contributor.otherSaint Petersburg State University
dc.contributor.otherMississippi State University
dc.contributor.otherUniversity of Alabama Tuscaloosa
dc.date.accessioned2023-09-28T19:38:33Z
dc.date.available2023-09-28T19:38:33Z
dc.date.issued2023
dc.description.abstractIn 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.en_US
dc.format.mediumelectronic
dc.format.mimetypeapplication/pdf
dc.identifier.citationBorgholthaus, C. J., White, J. V., Markin, E., & Gupta, V. K. (2022). Venture creation in the aftermath of COVID-19: The impact of US governor party affiliation and discretion. In Small Business Economics (Vol. 61, Issue 2, pp. 655–674). Springer Science and Business Media LLC. https://doi.org/10.1007/s11187-022-00705-7
dc.identifier.doi10.1007/s11187-022-00705-7
dc.identifier.orcidhttps://orcid.org/0000-0001-9307-3177
dc.identifier.orcidhttps://orcid.org/0000-0001-8914-9677
dc.identifier.urihttps://ir.ua.edu/handle/123456789/11657
dc.languageEnglish
dc.language.isoen_US
dc.publisherSpringer
dc.subjectSmall businesses
dc.subjectEntrepreneurs
dc.subjectCOVID-19 pandemic
dc.subjectUpper echelons theory
dc.subjectGovernors
dc.subjectUPPER ECHELONS
dc.subjectINSTRUMENTAL VARIABLES
dc.subjectDECISION-MAKING
dc.subjectCEO DUALITY
dc.subjectMANAGERIAL
dc.subjectIDEOLOGY
dc.subjectENTREPRENEURSHIP
dc.subjectCONSERVATIVES
dc.subjectENDOGENEITY
dc.subjectEXPERIENCE
dc.subjectBusiness
dc.subjectEconomics
dc.subjectManagement
dc.titleVenture creation in the aftermath of COVID-19: The impact of US governor party affiliation and discretionen_US
dc.typeArticle
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