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
Supporting self-employment and small-scale entrepreneurship: potential programs to improve livelihoods for vulnerable workers
TL;DR: The authors provides a review of the profiles of the subsistence entrepreneurs and their constraints, and the landscape of current entrepreneurship programs and the evidence on impacts, and discusses the potential role of public policies for the livelihoods of subsistence entrepreneurs.
Journal ArticleDOI
Small Business, Innovation, and Tax Policy: A Review
William G. Gale,Samuel Brown +1 more
TL;DR: The authors discusses interactions between the federal tax code, small business, and the economy and concludes that policies that aim to stimulate young and innovative firms are likely to prove different than policies that subsidize small businesses.
ReportDOI
The Impact of Consumer Credit Access on Employment, Earnings and Entrepreneurship
TL;DR: In this article, the authors investigated the effect of consumer credit access on employment prospects, earnings, and entrepreneurship by merging individual employment records from the Census Bureau with individual TransUnion credit reports, and exploiting the discrete increase in individual credit following exogenous bankruptcy flag removal.
Journal ArticleDOI
Personal Bankruptcy and the Level of Entrepreneurial Activity
TL;DR: In this paper, the authors show that higher bankruptcy exemption levels benefit potential entrepreneurs by providing partial wealth insurance, and they test this prediction and find evidence that the probability of owning a business is about 28% higher if potential entrepreneurs live in states with unlimited exemptions rather than low exemptions.
Journal ArticleDOI
Small firm start-up by composers in the recording industry
TL;DR: In this article, the authors examined new record company formation by music composers and found that composers who start-up their own company usually do so because of push rather than pull factors and hence usually represent artistic enterprise which has been rejected by incumbent firms.
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.