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
Reforms and Entry: Some Evidence from the Indian Manufacturing Sector
TL;DR: In this paper, the authors examine the phenomenon of entry in the Indian context and find that during the 1980s industry-level factors largely explained variations in entry rates, but that, following the economic federalism brought about by the post-1991 reforms, variations in the 1990s were explained largely by state-level institutional and legacy factors.
BookDOI
Non-farm enterprises in rural Africa : new empirical evidence
TL;DR: This article found that access to credit and markets, household wealth, and the education and age of the household head are positively associated with the likelihood of operating an enterprise in rural Sub-Saharan Africa.
Posted Content
Entrepreneurship and Survival Dynamics of Immigrants to the U.S. and Their Descendants
TL;DR: This paper found that Mexican and other Hispanic immigrants tend to enter entrepreneurship from unemployment or inactivity and they are more likely to exit towards employment in the wage sector, suggesting that entrepreneurship represents for them an intermediate step from non-employment to paid employment.
Posted Content
Uncertainty and the Employment Dynamics of Small and Large Businesses
TL;DR: This article examined the impact of uncertainty on employment dynamics and found that the impact on large businesses is generally non-existent or weaker than that of relatively smaller and entrepreneurial businesses, and discussed implications for the framing of economic policy.
Posted Content
Temporary migration and self-employment: evidence from Tunisia
TL;DR: Based on statistics from the Central bank of Tunisia and on a survey describing Tunisian workers who have returned from migration, the authors showed that temporary migration has potentially important consequences for sending countries like Tunisia.
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.