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Entrepreneurial Decisions and Liquidity Constraints

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  • Douglas Holtz-Eakin
  • David Joulfaian
  • Harvey S. Rosen

Abstract

Using a matched sample of federal estate and personal income tax returns, we examine how the receipt of an inheritance affects an individual's decision to become an entrepreneur and the amount of capital employed in the new enterprise. These findings are consistent with the presence of liquidity constraints.

Suggested Citation

  • Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
    • Handle: RePEc:rje:randje:v:25:y:1994:i:summer:p:334-347
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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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