Entrepreneurial finance, credit cards, and race

Aaron K. Chatterji and Robert Seamans

Journal of Financial Economics, 2012, vol. 106, issue 1, 182-195

Abstract: This paper examines the impact of financial deregulation on entrepreneurship. We assess the impact of credit card deregulation on transitions into self-employment using state-level removal of credit card interest rate ceilings following the US Supreme Court's 1978 Marquette decision as a quasi-natural experiment. We find that credit card deregulation increases the probability of entrepreneurial entry, with a particularly strong effect for black entrepreneurs. We demonstrate that these effects are magnified in states with a history of racial discrimination and link the results to discrimination-based barriers to entry.

Keywords: Financial constraints; Entrepreneurship; Barriers to entry; Race (search for similar items in EconPapers)
JEL-codes: J15 L26 M13 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (53)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:106:y:2012:i:1:p:182-195

DOI: 10.1016/j.jfineco.2012.04.007

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