Citation

Discussion Paper Details

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Title: Entrepreneurship and Regional Windfall Gains: Evidence from the Spanish Christmas Lottery

Author(s): Vicente Bermejo, Miguel Ferreira, Daniel Wolfenzon and Rafael Zambrana

Publication Date: April 2020

Keyword(s): Aggregate income, entrepreneurship, Financial Development, firm creation, Local demand, public policy and Self-employment

Programme Area(s): Financial Economics, Labour Economics and Public Economics

Abstract: The Spanish Christmas Lottery is the largest lottery worldwide. We exploit local windfall gains arising from lottery prizes to estimate the effect of income on entrepreneurship. We find higher firm creation and greater self-employment in winning provinces. Our estimates imply that 46 firms are created for every �?�1,000 increase in disposable income per capita. The effect occurs in both non-tradable and tradable industries, and is more pronounced in regions with poorer access to finance. Firms created in winning provinces are larger, create more value-added, and are more likely to survive. These results suggest that local income and financial development are important drivers of entrepreneurship.

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Bibliographic Reference

Bermejo, V, Ferreira, M, Wolfenzon, D and Zambrana, R. 2020. 'Entrepreneurship and Regional Windfall Gains: Evidence from the Spanish Christmas Lottery'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14638