Friends for richer or poorer: Economic connectedness, regional social capital, and county entrepreneurial activity

In this study we propose that economic connectedness (friendship among individuals with different socioeconomic statuses) is associated with higher entrepreneurial activity, and regional social capital in the form of network cohesiveness related to clustering coefficient (support ratio) weakens (strengthens) this relationship. Using a sample of U.S. counties and controlling for focal-county lagged effects and conditions in the neighboring counties, we find support for the hypothesized effects. The proposed factors are not influenced by historic measures of county-level collectivism, gender inequality, or religiosity. Natural amenities in the focal county strengthen the association between economic connectedness and entrepreneurial activity.