Submission Date

7-17-2025

Document Type

Paper

Department

Business & Economics

Faculty Mentor

Scott King

Comments

Presented during the 27th Annual Summer Fellows Symposium, July 18, 2025 at Ursinus College.

This research was supported by the Gladstone Whitman Fund.

Project Description

The COVID-19 pandemic had an unprecedented impact on the US economy. Severe restrictions were placed on nearly every state, culminating with the declaration of a national emergency in March 2020. The intent of these restrictions was to safeguard public health, while unintentionally imposing operational burdens on businesses. This paper explores how heterogeneity in state level policy responses influenced entrepreneurial activity. Using the synthetic control method and data on mandated workplace closures, we estimate the impact of these actions on business applications per capita in the state of South Carolina, which was late to impose these measures. We find that if South Carolina had implemented more stringent workplace restrictions at the start of the pandemic, business applications would have fallen by 9.5%, translating to approximately 8,669 fewer filings in 2021 alone, and remained persistently lower over our period of analysis.

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