Revolutionary Sparks: Exploring the Resource Spillover Effect of Street Protests on Entrepreneurship.

This article investigates how street protests over noneconomic issues indirectly influence entrepreneurship in developing economies through a resource spillover effect mediated by local government responses. Using longitudinal city-level data from China (2008–2019), the study finds that local officials, motivated by political survival concerns, adopt politically pragmatic middle-ground economic policies—specifically, relaxing business loan restrictions and implementing regulatory reforms—that enhance resource access and reduce operating costs for new ventures. These policy responses partially mediate the positive relationship between street protests and the founding of new ventures, with the effect amplified when city mayors have stronger political position prospects, proxied by higher education levels. The findings highlight a state-centered mechanism distinct from the informational spillovers emphasized in advanced economies, illustrating how activism can unintentionally foster entrepreneurship through local political dynamics in developing contexts.