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
A Darker Side to Decentralized Banks: Market Power and Credit Rationing in SME Lending
Rodrigo Canales,Ramana Nanda +1 more
TL;DR: In this paper, the authors use loan-level data to study how the organizational structure of banks impacts small business lending and find that decentralized banks give larger loans to small firms and those with "soft information".
Journal ArticleDOI
Homegrown Solutions: Fostering Cluster Formation
TL;DR: In this article, the authors consider the perspective of the small innovative firm and the question of what small technology-intensive firms want from state economic development programs and present a set of stylized facts and policy recommendations.
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Entrepreneurship at Country Level: Economic and Non-Economic Determinants
TL;DR: In this article, the authors investigated the rate of occupational entrepreneurship at country level, either measured by the number of business owners as a percentage of the labor force, or by some metric of the dynamics of entrepreneurship such as "nascent entrepreneurship" and business start-ups.
Journal ArticleDOI
Not for Lack of Trying: American Entrepreneurship in Black and White
Philipp Köllinger,Maria Minniti +1 more
TL;DR: This article found that black Americans tend to exhibit more optimistic perceptions of their business environment than other racial groups and are more likely than others to attempt starting a business, while whites are almost twice as likely as whites to try starting a new business.
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Entrepreneurship and the City
TL;DR: In this article, the authors present basic facts on two measures of entrepreneurship: the self-employment rate and the number of small firms and find that these measures are correlated with urban success, suggesting that more entrepreneurial cities are more successful.
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.