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
Risk preference and employment contract type
TL;DR: The authors explored the possibility that a systematic relationship exists between employment within a particular type of contract and risk preference and found evidence that there is a relationship between employment contract type and preference, with self-employed workers being more or less likely to engage in the consumption of 'risky' or financial security products respectively.
Journal ArticleDOI
The Role of Job Satisfaction in Transitions into Self-Employment
Giuliano Guerra,Roberto Patuelli +1 more
TL;DR: In this paper, the authors propose an empirical representation of transitions to self-employment, which includes subjective evaluations of pecuniary and non-pecuniary satisfaction on the previous job.
Posted Content
Self-Employment Longitudinal Dynamics: A Review of the Literature
TL;DR: In this article, 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
Creating a Policy Environment for Entrepreneurs
Thomas A. Garrett,Howard J. Wall +1 more
TL;DR: The authors found that bankruptcy exemptions, corporate tax rates, and the level of the minimum wage all affect a state's rate of entrepreneurship, and that these policies reduced the overall level of entrepreneurship by 10.5 percent.
Journal ArticleDOI
The relationship between prior and subsequent new venture creation in the United States: A county level analysis
Erick P. C. Chang,James J. Chrisman,James J. Chrisman,Franz W. Kellermanns,Franz W. Kellermanns +4 more
TL;DR: Minniti et al. as mentioned in this paper applied a spin-glass model to study the association between prior and subsequent new venture creation in the U.S. and found that there is a non-linear relationship between prior new-vendorship creation and subsequent venture creation, with venturing activities increasing at an increasing rate.
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.