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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Posted Content
Entrepreneurship in Economic Development
TL;DR: The role of entrepreneurship in economic development has been surveyed in this paper, with the purpose of distilling the outlines for a more general theory of entrepreneurship, and identifying avenues for further research.
Journal ArticleDOI
Entrepreneurial origins: a longitudinal inquiry
TL;DR: The National Longitudinal Surveys of Youth (NLSY) as discussed by the authors found that roughly one out of four young workers pursue self-employment, and the quest for a better mousetrap continues in full force.
Journal ArticleDOI
Entrepreneurship, Economic Conditions, and the Great Recession
TL;DR: In this paper, a detailed analysis of the determinants of entrepreneurship at the individual level was conducted to shed light on the effect of recessions on business formation, showing that the positive influences of slack labor markets outweigh the negative influences resulting in higher levels of business creation.
Journal ArticleDOI
Who works for startups? The relation between firm age, employee age, and growth.
Paige Ouimet,Rebecca Zarutskie +1 more
TL;DR: In this paper, the authors argue that the skills, risk tolerance, and joint dynamics of young workers contribute to their disproportionate share of employment in young firms and that an increase in the supply of younger workers is positively related to new firm creation in high-tech industries.
Journal ArticleDOI
Uncertainty avoidance and the rate of business ownership across 21 OECD countries, 1976–2004
TL;DR: In this paper, the influence of cultural attitudes towards uncertainty on the rate of business ownership across 21 OECD countries was investigated, and an occupational choice model was introduced to underpin their reasoning at the macro-level.
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.