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

@inproceedings{Andersen2012AbilityOF,
  title={Ability or Finances as Constraints on Entrepreneurship ? Evidence from Survival Rates in a Natural Experiment},
  author={Steffen Andersen and Kasper Meisner Nielsen},
  year={2012}
}
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… CONTINUE READING