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Financing Constraints, Home Equity and Selection into Entrepreneurship / Thais Lærkholm Jensen, Søren Leth-Petersen, Ramana Nanda.
- Format:
- Book
- Author/Creator:
- Lærkholm Jensen, Thais.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20583.
- NBER working paper series no. w20583
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- We exploit a mortgage reform that differentially unlocked home equity across the Danish population and study how this impacted selection into entrepreneurship. We find that increased entry was concentrated among entrepreneurs whose firms were founded in industries where they had no prior work experience. In addition, we find that marginal entrants benefiting from the reform had higher pre-entry earnings and that a significant share of entrants started longer-lasting firms. Our results are most consistent with the view that housing collateral enabled high ability individuals with less-well-established track records to overcome credit rationing and start new firms, rather than just leading to `frivolous entry' by those without prior industry experience.
- Notes:
- Print version record
- October 2014.
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