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http://dspace.mediu.edu.my:8181/xmlui/handle/10419/18529| Title: | Small-Scale Business Survival and Inheritance: Evidence from Germany |
| Keywords: | G30 J20 L10 ddc:330 Entrepreneurship survival financial constraints |
| Issue Date: | 16-Oct-2013 |
| Publisher: | Deutsches Institut für Wirtschaftsforschung (DIW) Berlin |
| Description: | In this paper we investigate whether small-scale businesses face financial constraints that affect their survival. We develop a model of moral hazard in which financial constraints arise endogenously. The model predicts that higher private assets relax financial constraints and have a positive effect on the firm's probability of survival. We test this proposition using German Socio-Economic Panel (GSOEP) data, which cover the period 1984{2004. The release from financial constraints is measured by inheritance. The empirical analysis confirms that the entrepreneur has a higher propensity to stay in business when she inherits capital. This effect is particularly strong for entrepreneurs that switch from self-employment into wage employment. These results are consistent with hypothesis that financial frictions have a perceptible impact on bankruptcy among small business firms. |
| URI: | http://koha.mediu.edu.my:8181/xmlui/handle/10419/18529 |
| Other Identifiers: | http://hdl.handle.net/10419/18529 ppn:519891546 |
| Appears in Collections: | EconStor |
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