Advanced Search
MyIDEAS: Login

The Wealth Effect on New Business Startups in a Developing Economy

Contents:

Author Info

  • ALICE MESNARD
  • MARTIN RAVALLION

Abstract

The paper tests for nonlinearities in the wealth effect on self-employment, as can arise from startup costs or liquidity constraints. Using both nonparametric and parametric methods, we show that the relationship between the probability of a return migrant to Tunisia starting up a business and the stock of his savings repatriated at return is concave for almost the entire range of our data, though we find weak evidence of a convex relationship at very low wealth levels. Our results suggest that the aggregate self-employment rate is an increasing function of aggregate wealth, but a decreasing function of wealth inequality. Copyright (c) The London School of Economics and Political Science 2006.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0335.2006.00515.x
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 73 (2006)
Issue (Month): 291 (08)
Pages: 367-392

as in new window
Handle: RePEc:bla:econom:v:73:y:2006:i:291:p:367-392

Contact details of provider:
Postal: Houghton Street, London WC2A 2AE
Phone: +44 (020) 7405 7686
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0013-0427
More information through EDIRC

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0013-0427

Related research

Keywords:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Robinson, Peter M, 1988. "Root- N-Consistent Semiparametric Regression," Econometrica, Econometric Society, vol. 56(4), pages 931-54, July.
  2. Bates, Timothy, 1990. "Entrepreneur Human Capital Inputs and Small Business Longevity," The Review of Economics and Statistics, MIT Press, vol. 72(4), pages 551-59, November.
  3. Rivers, Douglas & Vuong, Quang H., 1988. "Limited information estimators and exogeneity tests for simultaneous probit models," Journal of Econometrics, Elsevier, vol. 39(3), pages 347-366, November.
  4. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," NBER Working Papers 4526, National Bureau of Economic Research, Inc.
  5. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-48, August.
  6. Lindh, Thomas & Ohlsson, Henry, 1996. "Self-Employment and Windfall Gains: Evidence from the Swedish Lottery," Economic Journal, Royal Economic Society, vol. 106(439), pages 1515-26, November.
  7. Van Praag, C Mirjam & Van Ophem, Hans, 1995. "Determinants of Willingness and Opportunity to Start as an Entrepreneur," Kyklos, Wiley Blackwell, vol. 48(4), pages 513-40.
  8. Kanbur, S M, 1979. "Impatience, Information and Risk Taking in a General Equilibrium Model of Occupational Choice," Review of Economic Studies, Wiley Blackwell, vol. 46(4), pages 707-18, October.
  9. Bhattacharya, Utpal & Ravikumar, B, 2001. "Capital Markets and the Evolution of Family Businesses," The Journal of Business, University of Chicago Press, vol. 74(2), pages 187-219, April.
  10. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-98, April.
  11. Levy, Brian, 1993. "Obstacles to Developing Indigenous Small and Medium Enterprises: An Empirical Assessment," World Bank Economic Review, World Bank Group, vol. 7(1), pages 65-83, January.
  12. Lindh, Thomas & Ohlsson, Henry, 1998. "Self-Employment and Wealth Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 25-42, March.
  13. Adonis Yatchew, 1998. "Nonparametric Regression Techniques in Economics," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 669-721, June.
  14. Dustmann, Christian & Kirchkamp, Oliver, 2001. "The Optimal Migration Duration and Activity Choice after Re-migration," IZA Discussion Papers 266, Institute for the Study of Labor (IZA).
  15. Magnac, Thierry & Robin, Jean-Marc, 1996. "Occupational choice and liquidity constraints," Ricerche Economiche, Elsevier, vol. 50(2), pages 105-133, June.
  16. Yatchew, A., 1997. "An elementary estimator of the partial linear model," Economics Letters, Elsevier, vol. 57(2), pages 135-143, December.
  17. Ilahi, Nadeem, 1999. "Return Migration and Occupational Change," Review of Development Economics, Wiley Blackwell, vol. 3(2), pages 170-86, June.
  18. Thomas Dunn & Douglas Holtz-Eakin, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment:Evidence from Intergenerational Links," NBER Working Papers 5622, National Bureau of Economic Research, Inc.
  19. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-27, August.
  20. Matzkin, Rosa L, 1992. "Nonparametric and Distribution-Free Estimation of the Binary Threshold Crossing and the Binary Choice Models," Econometrica, Econometric Society, vol. 60(2), pages 239-70, March.
  21. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
  22. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-35, June.
  23. Alice Mesnard, 2004. "Temporary migration and capital market imperfections," Oxford Economic Papers, Oxford University Press, vol. 56(2), pages 242-262, April.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Jackline Wahba & Yves Zenou, 2009. "Out of Sight, Out of Mind: Migration, Entrepreneurship and Social Capital," CReAM Discussion Paper Series 0930, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
  2. Gries, Thomas & Naude, Wim, 2010. "Entrepreneurship, Structural Change and a Global Economic Crisis," Working Paper Series wp2010-57, World Institute for Development Economic Research (UNU-WIDER).
  3. Catia Batista & Pedro Vicente, 2009. "Do Migrants Improve Governance at Home? Evidence from a Voting Experiment," The Institute for International Integration Studies Discussion Paper Series iiisdp313, IIIS.
  4. Almeida, Rita & Galasso, Emanuela, 2007. "Jump-starting self-employment ? Evidence among welfare participants in Argentina," Policy Research Working Paper Series 4270, The World Bank.
  5. Elisabetta Lodigiani, 2009. "Diaspora Externalities as a Cornerstone of the New Brain Drain Literature," Development Working Papers 277, Centro Studi Luca d\'Agliano, University of Milano.
  6. Catia Batista & Aitor Lacuesta & Pedro Vicente, 2009. "Micro evidence of the brain gain hypothesis: The case of Cape Verde," Banco de Espa�a Working Papers 0902, Banco de Espa�a.
  7. Catia Batista & Pedro C. Vicente, 2007. "Brain Drain or Brain Gain?Micro Evidence from an African Success Story," Economics Series Working Papers 343, University of Oxford, Department of Economics.
  8. Martin Ravallion, 2012. "Fighting Poverty One Experiment at a Time: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty : Review Essay," Journal of Economic Literature, American Economic Association, vol. 50(1), pages 103-14, March.
  9. Martin Ravallion, 2012. "Why Don't We See Poverty Convergence?," American Economic Review, American Economic Association, vol. 102(1), pages 504-23, February.
  10. Almeida, Rita K. & Galasso, Emanuela, 2010. "Jump-starting Self-employment? Evidence for Welfare Participants in Argentina," World Development, Elsevier, vol. 38(5), pages 742-755, May.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:econom:v:73:y:2006:i:291:p:367-392. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.