The influence of risk aversion on the decision to become self-employed is a much discussedtopic in the entrepreneurial literature. Conventional wisdom asserts that the role model of anentrepreneur requires to make risky decisions in uncertain environments and hence thatmore risk-averse...

An industry is modeled in which entrepreneurs, who are heterogeneous in ability, may produce formally or informally. It is shown how the formal-informal mix depends on the distribution of ability, product demand and various parameter values...

Although business ownership has implications for income inequality, wealth accumulation and job creation, surprisingly little research explores why Mexican-Americans are less likely to start businesses and why the businesses that they start are less successful on average than non-Latino whites...

Theory predicts that mandated employment protections may reduce productivity by distortingproduction choices. Firms facing (non-Coasean) worker dismissal costs will curtail hiringbelow efficient levels and retain unproductive workers, both of which should affectproductivity. These theoretical...

We study entrepreneurs’ start-up financing from banks and local financiers. An informalnetwork, whose membership cannot be observed by outsiders, conveys the good signals itgets about the hidden types of network entrepreneurs to local financiers, which are thenreflected in different loan...

This paper analyses the impact of a change in Australia’s immigration policy, introduced inthe mid-1990s, on migrants’ probability of becoming entrepreneurs. The policy changeconsists of stricter entry requirements and restrictions to welfare entitlements. The resultsindicate that those who...