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
More filters
Center for research on economic development and policy reform
TL;DR: In this paper, the importance of courts and relationships in enforcing contracts has been investigated in post-communist countries and it has been shown that belief in the effectiveness of courts has a significant positive effect on the level of trust shown in new relationships between firms and their customers.
Journal ArticleDOI
Who becomes an entrepreneur? A 30-years-review of individual-level research
Sascha G. Walter,Simon Heinrichs +1 more
TL;DR: In this article, the authors categorize repeatedly analyzed determinants into six perspectives (trait, cognitive, affective, intentions, learning, and economic), review empirical findings for each determinant and each perspective, investigate trends in the field, and propose avenues for future research.
Posted Content
Self-Employment Longitudinal Dynamics: A Review of the Literature
TL;DR: In this paper, a number of hypotheses from both the economic and social-psychological literatures are examined vis the effects on self-employment dynamics of financial, human, and social capital, intergenerational effects, and labour market hardships.
Journal ArticleDOI
Bridging Strategic Human Capital and Employee Entrepreneurship Research: A Labor Market Frictions Approach
TL;DR: In this paper, the authors examine the impact of various labor market frictions on employee mobility to competitor firms and employee transitions to entrepreneurship and find that some factors that prevent employees from leaving their employers to join competitor companies may also keep those individuals from leaving to start new companies.
Journal ArticleDOI
Hermeneutic phenomenology and international entrepreneurship research
TL;DR: In this paper, the authors argue that a dichotomy between objective and subjective meaning is manifestly inadequate for the study of opportunity recognition and exploitation and by implication for many other problems of international entrepreneurship research.
References
More filters
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.