Entrepreneurial Spawning from Remote Work
Working Paper 33774
DOI 10.3386/w33774
Issue Date
Using a novel firm-level remote work measure created from big data on Internet activity, we show that firms with higher remote work during the pandemic are more likely to see their employees becoming entrepreneurs. This effect holds both unconditionally and relative to other types of job turnovers. We establish causality using instrumental variables and a panel event study. The marginally created businesses are higher quality than the average new firm. The effect is not driven by employee selection, preference change, or forced turnover. Rather, remote work increases spawning by providing the time and downside protection needed for entrepreneurial experimentation.
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Copy CitationAlan Kwan, Ben Matthies, Richard R. Townsend, and Ting Xu, "Entrepreneurial Spawning from Remote Work," NBER Working Paper 33774 (2025), https://doi.org/10.3386/w33774.
Non-Technical Summaries
- The widespread transition to remote work during the COVID-19 pandemic fundamentally altered workplace arrangements. Full work-from-home...