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
Do Lower Taxes Stimulate Self-Employment?
TL;DR: In this article, the authors investigated the relation between taxation and the share of self-employed in two data sets and found that there is a strong negative correlation between the tax burden and self-employment in a panel of OECD countries.
Journal ArticleDOI
The Rise in Self-Employment Amongst U.K. Males
TL;DR: The authors used time-series data to identify the factors responsible for the rise in self-employment among UK males, focusing in particular on the period of rapid growth which was experienced during the 1980s.
Journal ArticleDOI
The Impact of the Business Environment on Young Firm Financing
TL;DR: This paper used a dataset of more than 70,000 firms in over 100 countries to systematically study the use of different financing sources for new and young firms, in comparison to mature firms.
Journal ArticleDOI
Recent Trends in Ethnic and Racial Business Ownership
TL;DR: This paper examined trends and the causes of the trends from 1979 to 1998 in business ownership among several ethnic/racial groups in the United States and found that the rapid growth rates were primarily due to expansions in the labor force for these groups.
Posted Content
Growth and entrepreneurship: an empirical assessment
TL;DR: In this article, the authors identify entrepreneurship as one such mechanism facilitating the spillover of knowledge facilitating economic growth, and they find that entrepreneurial activity not only serves as a conduit for R&D and human capital, but also promotes economic growth.
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.