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
Overseas Work Experience, Savings and Entrepreneurship Amongst Return Migrants to LDCs
Barry McCormick,Jackline Wahba +1 more
TL;DR: This paper studied the linkages between overseas employment, savings and entrepreneurial activity on return and found evidence supporting the hypotheses that both overseas savings and the duration of stay overseas increase the probability of becoming an entrepreneur amongst literate returnees to Egypt.
Journal ArticleDOI
Is lack of funds the main obstacle to growth? ebrd's experience with small- and medium-sized businesses in central and eastern europe
TL;DR: The European Bank for Reconstruction and Development (EBRD) as mentioned in this paper investigates the obstacles faced by small and medium-sized enterprises (SMEs) in the context of its increasing lending and investment activity in central and eastern Europe (CEE).
Journal ArticleDOI
Entrepreneurs' human capital and the start-up size of new technology-based firms
TL;DR: In this paper, the authors investigated the determinants of the start-up size of new technology-based firms, focusing on the characteristics of founders, notably their human capital, and found that the specific component of human capital associated with industry-specific professional knowledge and managerial and entrepreneurial experiences had a greater positive impact on the initial firm size than the generic component, proxied by education and general (i.e., non-industry-specific) working experience.
Journal ArticleDOI
Smart and Illicit: Who Becomes an Entrepreneur and Do They Earn More?
Ross Levine,Yona Rubinstein +1 more
TL;DR: The authors disaggregate the self-employed into incorporated and unincorporated to distinguish between "entrepreneurs" and other business owners, and show that the incorporated selfemployed and their businesses engage in activities that demand comparatively strong non-routine cognitive abilities, while the un-incorporated and their firms perform tasks demanding relatively strong manual skills.
Journal ArticleDOI
Why So Many Local Entrepreneurs
Claudio Michelacci,Olmo Silva +1 more
TL;DR: This paper found that the fraction of entrepreneurs who work in the region where they were born is significantly higher than the corresponding fraction for dependent workers in more developed regions and positively related to the degree of local financial development.
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.