 Entrepreneurship: skills and financingSmall Business Economics, 2018, vol. 50, issue 4, No 12, 886 pages Abstract: Abstract This article analyzes an occupational choice model with risk-averse agents who are heterogeneous in terms of skills and wealth in a setting with financial frictions. We show that high- and middle-wealth individuals endowed with a balanced portfolio of skills upgrade their skills so that the resulting portfolio of skills is more balanced and choose entrepreneurship. In contrast, middle-wealth individuals endowed with an unbalanced portfolio of skills and low-wealth individuals specialize in the skill in which they have an absolute advantage and choose paid employment. Deeper financial development, a more balanced portfolio of skills, lower entrepreneurial risk, and a higher liquidation value for projects result in more entrepreneurship and higher welfare, while wealth redistributions and financial subsidies to entrepreneurs have an ambiguous effect on welfare. Keywords: Entrepreneurship; Paid employment; Multiple skills; Financial development; Wealth; Risk (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:50:y:2018:i:4:d:10.1007_s11187-017-9915-1 Ordering information: This journal article can be ordered from DOI: 10.1007/s11187-017-9915-1 Access Statistics for this article Small Business Economics is currently edited by Zoltan J. Acs and David B. Audretsch More articles in Small Business Economics from Springer |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.