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
Wage earners, self-employment and gender in the informal sector in Turkey
Aysit Tansel,Aysit Tansel +1 more
TL;DR: In this article, the authors used the 1994 Turkish Household Expenditure Survey to examine how individuals are selected into the covered and uncovered wage earner and the self-employed categories, and the Oaxaca-Blinder decomposition of the labor sector and male-female wage differentials are carried out.
Journal ArticleDOI
A unified model of entrepreneurship dynamics
TL;DR: This paper developed an incomplete-markets q-theoretic model to study entrepreneurship dynamics and showed that the idiosyncratic risk premium is quantitatively significant, especially for low w. The option to accumulate wealth before entry is critical for entrepreneurship and the flexible exit option is important for risk management purposes.
Posted Content
Determinants of capital structure in Irish SMEs
TL;DR: In this paper, the authors present an empirical examination of firm characteristic determinants of the capital structure of a sample of 299 Irish small and medium sized firms (SMEs) and test the stability of parameter estimates across sectors.
Journal ArticleDOI
An empirical investigation of the financial growth lifecycle
TL;DR: In this paper, the authors examined the financing of small and medium sized enterprises (SMEs) through a financial growth lifecycle model and found that 92% of respondents disclosed detailed financing data.
Journal ArticleDOI
A structural econometric analysis of the informal sector heterogeneity
TL;DR: In this article, a model of entrepreneurial choice is proposed to address the heterogeneity in occupations and earnings observed within the informal sector, and the implications of the model with reduced form and nonparametric techniques, and use a structural econometric approach to identify occupational patterns and earnings using data from the Cameroon informal sector.
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.