• Corpus ID: 15594245

Does Idiosyncratic Business Risk Matter?

  title={Does Idiosyncratic Business Risk Matter?},
  author={Claudio Michelacci and Fabiano Schivardi},
  journal={Entrepreneurship \& Management eJournal},
Financial market imperfections can prevent entrepreneurs from diversifying away the idiosyncratic risk of their business. As a result idiosyncratic risk discourages entrepreneurial activity and hinders growth, with the effects being stronger in economies with lower risk diversification opportunities. In accordance with this prediction we find that OECD countries with low levels of risk diversification opportunities (as measured by the relevance of family firms or of widely held companies… 

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