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Entrepreneurial finance, credit cards, and race

  • Chatterji, Aaron K.
  • Seamans, Robert C.
Registered author(s):

    This paper examines the impact of financial deregulation on entrepreneurship. We assess the impact of credit card deregulation on transitions into self-employment using state-level removal of credit card interest rate ceilings following the US Supreme Court's 1978 Marquette decision as a quasi-natural experiment. We find that credit card deregulation increases the probability of entrepreneurial entry, with a particularly strong effect for black entrepreneurs. We demonstrate that these effects are magnified in states with a history of racial discrimination and link the results to discrimination-based barriers to entry.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0304405X12000682
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    Article provided by Elsevier in its journal Journal of Financial Economics.

    Volume (Year): 106 (2012)
    Issue (Month): 1 ()
    Pages: 182-195

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    Handle: RePEc:eee:jfinec:v:106:y:2012:i:1:p:182-195
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505576

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