Inheritance taxes may induce heirs to discontinue family firms. Because firm dissolution incurs transaction costs, a preferential tax treatment of transferred family businesses seems to be desirable from a macroeconomic viewpoint. The support of dynastic succession, however, entails also a cost...

This paper develops a model of costly firm creation in an economy with weak institutions, costly business environment as well as skill gaps where one of the equilibrium outcomes is a low-productivity trap. The paper tests the implications of the model using a cross-sectional dataset including...

We present a theoretical and empirical analysis of the links between the gender of an entrepreneur, access to finance, occupational choice, and business performance. Our theoretical model predicts that, when lenders discriminate against women entrepreneurs, the average entrepreneurial skill of...

Why do entrepreneurship rates differ so markedly by gender? Using data from a large, representative German household panel, we investigate to what extent personality traits, human capital, and the employment history influence the start-up decision and can explain the gender gap in...

We incorporate the concept of social identity into a stylized model of occupational choice and analyze whether an individual’s identity affects his or her decision to become an entrepreneur. We argue that an entrepreneurial identity results from an individual’s socialization. This could be...

There is wide consensus that entrepreneurial talent is the ability to discover and exploit market opportunities by taking the relevant risky decisions. Discovery and exploitation are separate but interlinked features of entrepreneurship requiring, in different proportions, the exploitation of...

We examine the spatio-temporal dynamics of self-employment in India using geoadditive models and pseudo panel techniques. We test the claim of Iyigun and Owen (1999) that individuals invest in professional human capital and not in entrepreneurial human capital as an economy develops. The results...

This paper shows that labor market institutions are important for the formation of new enterprises. The effects of labor market institutions on entrepreneurship, wage determination, and firm size are analysed analytically and illustrated numerically. The main result is that an increase in union...

The paper introduces a model of enterprise formation in a unionized economy with labor protection and wage bargaining. Enterprise formation is subject to future market risk and is shaped by labor market institutions in the post-entry stage. The predictions of the model are tested in...