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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Self-employment and labor market transitions at older ages
TL;DR: In this article, an analysis of the HRS data indicates that the determinants of self-employment transitions among older workers reflect those of younger workers, and the importance of viewing "retirement" as a process.
Journal ArticleDOI
Entrepreneurial human capital and the long-run survival of firms in India
E. Wayne Nafziger,Dek Terrell +1 more
TL;DR: In this article, the characteristics of entrepreneurs that contribute to firms' survival in less-developed countries (LDCs) were analyzed and found that entrepreneurial human capital greatly influences firm survival.
Journal ArticleDOI
Age and High-Growth Entrepreneurship
TL;DR: The authors studied the ages of the founders of growth-oriented start-ups and found that successful entrepreneurs are middle-aged, not young, and the mean founder age for the 1 in 1,000 fastest growing new ventures is 45.0.
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Identifying Constraints to Financial Inclusion and Their Impact on GDP and Inequality: A Structural Framework for Policy
TL;DR: The authors developed a micro-founded general equilibrium model with heterogeneous agents to identify pertinent constraints to financial inclusion and evaluate quantitatively the policy impacts of relaxing each of these constraints separately, and in combination, on GDP and inequality.
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Unemployment Benefits, Risk Aversion, and Migration Incentives
TL;DR: In this article, the authors derived a framework which allows the study of the effect of unemployment benefits on the migration decision, which suggests increased migration incentives independent of taste and a positive selection of risk neutral individuals.
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.