Models with entrepreneurship can reproduce high wealth concentration in the top. The key assumption is borrowing constraint, that is, households are unable to borrow enough assets to start a business or to invest to the optimal amount in the business. More recent evidence, however, shows that...

This article uses an endogenous growth model to study how the improvements in financing for innovative start-ups brought by venture capital (VC) affect firm innovation and growth. Partial equilibrium results show how lending contracts change as financing efficiency improves, while general...

This study explores individual and country-level environmental drivers of informal "seed" investment. We examine four types of informal investors based on business ownership experience (or no such experience) and close family relationship with investee (or no such relationship): "classic love...

We show that the behavior of entrepreneurs facing incomplete financial markets and risky investment can explain why accelerations of productivity growth in developing countries tend to be associated with current account improvements. Under uninsurable investment risk, entrepreneurs have to...

This paper studies the joint dynamics of investor protection and economic development in a political economy model with capital accumulation and occupational choice. Less investor protection implies higher costs of external financing for entrepreneurs. This excludes poorer agents from...

Social capital plays a crucial role in the development processes of every country. Diyarbakýr, a metropolitan city in Turkey, and her hinterland had always been – and still is – one of the most developed centers of Anatolia and Middle East. But the city is experiencing a continual relapse...

Recent papers argue that the misallocation of resources can explain large cross-country TFP differences. This argument is underpinned by empirical evidence documenting substantial dispersion in the marginal products of resources, particularly capital, in developing countries. But why does...

In this research, we aim to develop a conceptual framework to assess the entrepreneurial properties of the Vietnamese reform, known as Doi Moi, even before the kickoff of Doi Moi policy itself. We argued that unlike many other scholars’ assertion, economic crisis and harsh realities were...

We use data on stock portfolios of Norwegian households to show that stock market wealth increases entrepreneurship by relaxing financial constraints. Our research design isolates idiosyncratic variation in household-level stock market returns. An increase in stock market wealth increases the...