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
Ethnic Segregation, Tipping Behavior, and Native Residential Mobility
TL;DR: In this article, the tipping behavior in residential mobility of the native population in Sweden between 1990 and 2007 was studied using regression discontinuity methods, and they found that native population growth in a n...
Journal ArticleDOI
The Real Effects of Liquidity During the Financial Crisis: Evidence from Automobiles
TL;DR: In this paper, a new data set linking every car sold in the United States to the credit supplier involved in each transaction was used to show that the collapse of the asset-backed commercial paper market decimated the financing capacity of captive leasing companies in the automobile industry.
Posted Content
Nascent and Infant Entrepreneurs in Germany. Evidence from the Regional Entrepreneurship Monitor (REM)
TL;DR: In this paper, the patterns of variables influencing nascent and infant entrepreneurship are quite similar and broadly in line with our theoretical priors -both types of entrepreneurship are fostered by the width of experience and a role model in the family, and hindered by risk aversion.
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Survival chances of new businesses: Do regional conditions matter?
TL;DR: In this article, the effects of industry-, regional and firm-level characteristics on the post-entry performance of new businesses by means of an econometric survival time model were analyzed.
Journal ArticleDOI
Self-employment duration in urban and rural locations
Mika Haapanen,Hannu Tervo +1 more
TL;DR: In this article, the authors investigated the role of region-specific factors as compared with individual-specific and other factors on the duration of self-employment spells and found that rural areas have significantly lower exit rates in the first years of selfemployment than urban areas.
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.