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
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ReportDOI
Where does regulation hurt? Evidence from new businesses across countries
TL;DR: In this paper, the authors use two micro data sets that collect harmonized data across countries to investigate the effects of regulation on new businesses and find that women are overall less likely to start new businesses, in more regulated countries women are pulled into entrepreneurship not to pursue a business opportunity but because they could not find better work.
Journal ArticleDOI
Bidding against the odds? The impact evaluation of grants for young micro and small firms during the recession
TL;DR: In this article, the impact of small business development grants on young small firm survival, turnover growth, labor growth, and access to external finances was examined in the context of a long recession in Croatia (2009 to 2014).
Journal ArticleDOI
The Location of Markets, Perceived Entrepreneurial Risk, and Start-up Capital of Micro Rural Firms
TL;DR: In this article, it is argued that when founders of SMEs perceive the probability of a successful and lucrative venture to be greater, they are more likely to provide a greater proportion of the start-up capital.
Journal ArticleDOI
Persistent heterogeneous returns and top end wealth inequality
Dan Cao,Wenlan Luo +1 more
TL;DR: In this article, a tractable general equilibrium model where households face persistent idiosyncratic returns was proposed to study the US wealth distribution, which admits a Pareto tail and characterize how the tail index depends on salient equilibrium variables including capital-output ratio, labor share, interest rate, and growth rate.
Posted Content
The Characteristics of Business Owners (CBO) Database
TL;DR: The Characteristics of Business Owners (CBO) survey was first conducted by the United States Census Bureau and the Minority Business Development Agency (MBEDA) in 1986 as mentioned in this paper.
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.