Funding Self-Employment - The Role of Consumer Credit

Christoph Kneiding () and Alexander Kritikos
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Christoph Kneiding: GfA, Berlin

Working Papers from Gesellschaft für Arbeitsmarktaktivierung (GfA)

Abstract: In this paper we investigate whether self-employed households use consumer loans to finance their business activities. In particular, it is shown that self-employed households use personal overdrafts significantly more often than employee households do. This difference remains when controlling for financial and non-financial household variables: a discrete change from wage employment to self-employment results in an average rise in overdraft usage of 14.1%. These findings are corroborated when analyzing the correlation between consumer loan take-ups and consumption of self-employed households. Intermingling of personal and business resources is more likely when the household is credit constrained; when the household head is younger; and when financial assets within the household are lower.

Keywords: Small Business Finance; Consumer Credit; Financial Intermingling (search for similar items in EconPapers)
Pages: 22 pages
Date: 2007
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Funding self-employment -- the role of consumer credit (2013)
Working Paper: Funding Self-Employment: The Role of Consumer Credit (2011)
Working Paper: Funding Self-Employment: The Role of Consumer Credit (2011)
Working Paper: Funding Self-Employment – The Role of Consumer Credit (2008)
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