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
The institutions of economic freedom and entrepreneurship: evidence from panel data
TL;DR: In this paper, the authors investigated the relationship between the institutional setting, in terms of economic freedom, and entrepreneurship, measured by self-employment, in a panel data setting covering 23 OECD countries for the period 1972-2002.
Journal ArticleDOI
Remittances and Microenterprises in Mexico
TL;DR: In this paper, the effect of capital constraints on investment levels of microenterprises in Mexico was examined using a survey of more than 6000 small firms located in 44 urban areas of Mexico.
Journal ArticleDOI
Entrepreneurship and its Determinants in a Cross-Country Setting
Andreas Freytag,Roy Thurik +1 more
TL;DR: The relative stability of differences in entrepreneurial activity across countries suggests that other than economic factors are at play as mentioned in this paper, and the results show that country specific (cultural) variables seem to explain the preference for entrepreneurship, but cannot explain actual entrepreneurship.
Journal ArticleDOI
Entrepreneurship in the EU: To Wish and not to be
TL;DR: This paper used survey data from the 15 EU Member States and the US to investigate two aspects of entrepreneurial capacity: latent and actual entrepreneurship, measured by the probability of a declared preference for self-employment over employment.
Journal ArticleDOI
Size matters: entrepreneurial entry and government
TL;DR: In this paper, the authors explore the country-specific institutional characteristics likely to influence an individual's decision to become an entrepreneur and find that entrepreneurial entry is inversely related to the size of the government, and more weakly to the extent of corruption.
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.