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
Housing prices and entrepreneurship in China
Lixing Li,Xiaoyu Wu +1 more
TL;DR: Wang et al. as discussed by the authors found that high house price in general discourages entrepreneurial activities for urban adults. But they also highlighted the negative consequences of surging housing price on entrepreneurship in developing countries.
Posted Content
What is a Patent Worth? Evidence from the U.S. Patent “Lottery”
TL;DR: In this paper, the authors provide evidence on the value of patents to startups by leveraging the quasi-random assignment of applications to examiners with different propensities to grant patents, and find that startups that win the patent lottery by drawing lenient examiners have, on average, 55% higher employment growth and 80% higher sales growth five years later.
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The Quality of the Legal System, Firm Ownership, and Firm Size
TL;DR: Laeven and Woodruff as mentioned in this paper examined the extent to which the distribution of firm size is related to the quality of the legal system using data from Mexico and found that Mexican states with more effective legal systems have larger firms.
Effects of childcare activities on the duration of self-employment
TL;DR: In this paper, the effect of time spent with children on the probability of success in self-employment has been studied, with a focus on the effects of the time spent caring for children.
Journal ArticleDOI
Serial Entrepreneurship: Learning by Doing?
TL;DR: In this paper, the authors used data on all establishments started between 1990 and 2011 to sell retail goods and services in Texas and found that 256% of businesses are operated by serial entrepreneurs, and that prior business experience increases the longevity of the next business opened.
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.