Study Overview
This research examines how the prolonged regulatory uncertainty surrounding blockchain and digital assets relates to entrepreneurial activity. Exploiting variation in U.S. congressional voting patterns, close-call elections of crypto-friendly politicians, and spatial distribution of crypto PAC contributors, we analyze startup formation, failure rates, capital raising, and strategic pivots inferred from hiring data.
Study Results
We find that regulatory uncertainty significantly influences entrepreneurial outcomes, with increased legislative support associated with positive startup performance. Paradoxically, while the industry advocates for regulation, startups’ hiring patterns suggest reluctance to prioritize regulatory compliance. Overall, our study helps to quantify the magnitude of regulatory uncertainty’s impact on emerging technology and offer insights for policymakers seeking to balance oversight with innovation.
Intervention: Regulation
Research Partner: Emory University
Populations: Blockchain start-ups, Government regulators
IBSI Funding Acknowledgement: Lab for Inclusive FinTech (LIFT)