Liberalizing home-based business
Publication Type
Journal Article
Publication Date
7-2023
Abstract
Working at home benefits entrepreneurs by lowering fixed costs and allowing them to engage in joint market and household production. We evaluate a large-scale reform in Singapore, the Home Office Scheme, that allowed business creation at one's residential property and study whether home-based entrepreneurship spurs entrepreneurial activities. The difference-in-differences estimate shows that the reform led to a significantly higher level of business creation and that the firms newly created in response to the reform had a higher survival rate. The effect is more pronounced for low-income female individuals and industries with high startup capital, implying that financial constraints and nonpecuniary benefits likely drive the effect. The reform also encourages entrepreneurs to become serial entrepreneurs, and they open a larger business with a similar survival rate for their second firm. Overall, our findings suggest that the program effectively attracted more entry into self-employment without significantly lowering the average quality of the pool.
Keywords
Entrepreneurship, Home-Base Work, Experimentation
Discipline
Entrepreneurial and Small Business Operations
Publication
Management Science
ISSN
0025-1909
Identifier
10.2139/ssrn.3136792
Publisher
Institute for Operations Research and Management Sciences
Citation
AGARWAL, Sumit; SING, Tien Foo; SONG, Changcheng; and ZHANG, Jian.
Liberalizing home-based business. (2023). Management Science.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7463
Additional URL
https://doi.org/10.2139/ssrn.3136792