Echoes of Discord: The Effects of Global Conflicts and Disputes on Entrepreneurship

Astrid Marinoni
Georgia Institute of Technology, USA
 

Abstract:

Mixed-nationality founding teams bring together heterogeneous, hard-to-replicate bundles of human capital and country-specific ties through their cross-national networks, providing a distinctive foundation for building successful ventures. Yet these connections may be vulnerable to non-market shocks. This study examines whether geopolitical conflicts and disputes between the countries of origin of immigrant founders affect the formation of new ventures. Leveraging data on the founders of startups established in Great Britain and global information on conflicts and disputes, the author finds that such tensions reduce the likelihood that nationals of hostile countries cofound firms together. The evidence points more strongly to social mechanisms, and particularly the erosion of interpersonal relationships, than to diminished access to resources or the loss of entrepreneurial opportunities originating from the countries of origin. Startups of both low and high quality are affected, including in sectors that depend heavily on skilled human capital, such as high-tech and business services. The negative effect vanishes for nationality pairs that are heavily colocated across local areas and for founders with prior social exposure to individuals from the opposing nationality, indicating that interpersonal ties can buffer against geopolitical shocks. Conflicts do not affect the exit of existing firms, and the decline in mixed-nationality entrepreneurship is not offset by alternative team configurations such as solo ventures or those formed with co-nationals, natives, or individuals from third-party countries.

Astrid Marinoni is an Assistant Professor of Strategy and Innovation at the Scheller College of Business, Georgia Institute of Technology, USA. Her research focuses on regional entrepreneurship, entrepreneurial policy, and strategy. Specifically, she is interested in immigrant entrepreneurship, the influence of location on entrepreneurial entry and success, and the societal outcomes of entrepreneurship. She is a member of the editorial board for the Strategic Management Journal, Organization Science, and the Strategic Entrepreneurial Journal. She received her Ph.D. from the Rotman School of Management at the University of Toronto, an MS in Economics and Management of Innovation and Technology and a BA in Business Administration from Bocconi University.

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