Institutions, political voting behaviour and start-ups: evidence from 651 electoral constituencies

Abstract Research on politics and entrepreneurship is still quite rare but is amassing rapidly. Recent evidence suggests that places with a high concentration of left-wing votes have lower rates of new firm formation and less positive public attitudes toward entrepreneurship. Plus, received wisdom suggests right of centre political beliefs are more conducive towards entrepreneurship than their left-wing counterparts. In order to test this contention using institutional theory, we use start-up data for 651 electoral constituencies in the UK. The core data is derived from the UK’s largest single entrepreneurship programme, the Start-Up Loan scheme which has supported 103,442 start-ups between 2012 and 2023. Contrary to expectations, we find that left of centre political constituencies have on average the highest business start-up rates and right-wing constituencies the lowest. In general, start-ups in right of centre constituencies feature more in knowledge intensive business services and are better resourced than their counterparts in left of centre constituencies where entrepreneurs disproportionately transition from unemployment. The quantity-quality nexus surrounding voting behaviour and entrepreneurship raises an interesting set of research questions for further research to explore further.