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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Do Entry Regulations Deter Entrepreneurship and Job Creation? Evidence from Recent Reforms in Portugal
TL;DR: In this paper, the authors employ data from Portugal, a country which implemented one of the most dramatic and thorough policies of entry deregulation in the industrialized world, and find that the short term consequences of the reform were just as one would predict with a standard economic model of entrepreneurship: the reform resulted in increased firm formation and employment, but mostly among "marginal firms" that would have been most readily deterred by existing heavy entry regulations.
Journal ArticleDOI
Public Policy Toward Entrepreneurship
TL;DR: This article reviewed standard efficiency and equity criteria for such tax-subsidies, and found that they provide little support for such policies and highlighted a central empirical void requiring further research: the "optimal" business failure rate.
Journal ArticleDOI
University Departments and Self–Employment Intentions of Business Students: A Cross–Level Analysis:
TL;DR: In this paper, the authors examined how characteristics of university departments impact students' self-employment intentions and found that four organizational-level factors (entrepreneurship education, entrepreneurship support programs, industry ties, and research orientation) increase such intentions.
Journal ArticleDOI
Comparative Advantage in Self-Employment and Paid Work
TL;DR: In this article, a study of self-employment/paid-work choice, based on a representative sample of white Canadian men, was conducted and the main findings were as follows: relative potential earnings is the main choice determinant; potential earnings differences between groups is primarily due to unobserved factors: market values of observed characteristics are similar between groups and relative potential earning, based only on observed characteristics, are not an explainer of choice; and paid workers have higher potential earnings in both sectors, with a greater advantage in paid work.
Journal ArticleDOI
Are You Experienced or Are You Talented?: When Does Innate Talent versus Experience Explain Entrepreneurial Performance?
TL;DR: In this article, the authors explore whether entrepreneurial performance is due to innate talent or the accumulation of entrepreneurial experience, using a novel data set with multiple observations of founding attempts per individual, and generate a unique measure of entrepreneurial talent.
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.