Ability or Finances as Constraints on Entrepreneurship? Evidence from Survival Rates in a Natural Experiment

Publikation: Working paperForskning

447 Downloads (Pure)


We use a natural experiment in Denmark to test the hypothesis that aspiring entrepreneurs face financial constraints because of low entrepreneurial quality. We identify 304 constrained entrepreneurs who start a business after receiving windfall wealth and examine the performance of these marginal entrepreneurs. We find that constrained entrepreneurs have significantly lower survival rates and lower profits when compared with a matched sample of unconstrained entrepreneurs. These results are consistent with the hypothesis that the marginal entrepreneur is of low quality.
UdgiverDepartment of Economics. Copenhagen Business School
Antal sider43
StatusUdgivet - 2012
NavnWorking Paper / Department of Economics. Copenhagen Business School