Journal ArticleDOI
An Estimated Model of Entrepreneurial Choice under Liquidity Constraints
David S. Evans,Boyan Jovanovic +1 more
TLDR
The authors show that the data point to liquidity constraints: capital is essential for starting a business, and liquidity constraints tend to exclude those with insufficient funds at their disposal, and a would-be entrepreneur must bear most of the risk inherent in his venture.Abstract:
Is the capital function distinct from the entrepreneurial function in modern economies? Or does a person have to be wealthy before he or she can start a business? Knight and Schumpeter held different views on the answer to this question. Our empirical findings side with Knight: Liquidity constraints bind, and a would-be entrepreneur must bear most of the risk inherent in his venture. The reasoning is roughly this: The data show that wealthier people are more inclined to become entrepreneurs. In principle, this could be so because the wealthy tend to make better entrepreneurs, but the data reject this explanation. Instead, the data point to liquidity constraints: capital is essential for starting a business, and liquidity constraints tend to exclude those with insufficient funds at their disposal.read more
Citations
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Journal ArticleDOI
New evidence on the relationship between risk attitudes and self-employment
TL;DR: In this paper, the impact of risk attitudes on the decision to become self-employed among individuals who grew up under the communist regime in Ukraine, which banned self-employment so that individuals could not observe what it was like to be employed.
Journal ArticleDOI
Entrepreneurship and Financial Frictions: A Macrodevelopment Perspective
Francisco J. Buera,Francisco J. Buera,Joseph P. Kaboski,Joseph P. Kaboski,Joseph P. Kaboski,Yongseok Shin,Yongseok Shin,Yongseok Shin +7 more
TL;DR: The authors review both the theoretical and empirical literature on entrepreneurship and financial frictions, with an emphasis on the heterogeneous and dynamic micro-level implications of financialfrictions for macro development.
Journal ArticleDOI
The experience of the founder and self-employment duration: a comparative advantage approach
TL;DR: In this paper, the authors investigated how the initial experience of a founder affects self-employment duration in a competing risks setting, using survey data that provided new perspectives on the role of the founder's experience.
Journal ArticleDOI
Managerial Tenure, Business Age, and Small Business Turnover
TL;DR: In this paper, the authors explored a Census Bureau survey of the small business sector, the 1982 Characteristics of Business Owners survey, which contains information on both small businesses and the managers running them.
Journal ArticleDOI
Entrepreneurial Progress: Climbing The Entrepreneurial Ladder in Europe and The US
TL;DR: Van der Zwan et al. as discussed by the authors investigated which countries have the highest potential to achieve entrepreneurial progress, defined as an entrepreneurial ladder with five successive steps: "never thought about starting a business", "thinking about it", "taking steps" and "running a young business".
References
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Book
The theory of economic development
TL;DR: Buku ini memberikan infmasi tentang aliran melingkar kehidupan ekonomi sebagaimana dikondisikan oleh keadaan tertentu, fenomena fundamental dari pembangunan EKonomi, kredit, laba wirausaha, bunga atas modal, and siklus bisnis as mentioned in this paper.
Posted ContentDOI
Credit Rationing in Markets with Imperfect Information.
Joseph E. Stiglitz,Andrew Weiss +1 more
TL;DR: In this paper, a model is developed to provide the first theoretical justification for true credit rationing in a loan market, where the amount of the loan and amount of collateral demanded affect the behavior and distribution of borrowers, and interest rates serve as screening devices for evaluating risk.
Book
Risk, Uncertainty and Profit
TL;DR: In Risk, Uncertainty and Profit, Frank Knight explored the riddle of profitability in a competitive market profit should not be possible under competitive conditions, as the entry of new entrepreneurs would drive prices down and nullify margins, however evidence abounds of competitive yet profitable markets as mentioned in this paper.
Journal ArticleDOI
The theory of economic development
Posted Content
Competition and Entrepreneurship
TL;DR: Kirzner as discussed by the authors argues that the assumption of perfect knowledge is unrealistic and argues that every market participant is a potential entrepreneur who can exploit a situation, which depends on a lack of perfect information among the market participants.