Entrepreneurs, Risk Aversion, and Dynamic Firms
Bibliographic Data
| ID | 10180306 |
|---|---|
| Authors | Neus Herranz (University of Illinois System), Stefan Krasa (University of Illinois System), Anne P Villamil (0000-0002-3867-5164, University of Iowa) |
| Year | 2015 |
| Volume | 123 |
| Issue | 5 |
| Pages | 1133-1176 |
| Publication date | 2015-10-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Journal of Political Economy (JOURNAL) |
| Journal identifiers | ISSN: 0022-3808 • E-ISSN: 1537-534X |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/682678 |
| OpenAlex | W167199293 |
| Language | EN |
| Citations received | 9 |
| References cited | 18 |
How do entrepreneurs vary firm size, capital structure, and default to manage risk? We show that more risk-averse entrepreneurs run smaller, more highly leveraged firms and default less, because running a smaller firm with higher debt reduces personal funds at risk in the firm. Optimal default depends on ex ante debt, consumption forgone from firm liquidation, and owner capacity to inject funds. We show that entrepreneurs sacrifice current consumption in the hope of future success that never materializes for the bottom 25 percent, but entrepreneurship is a path toward great wealth and high consumption for the top quartile
Business · Capital (architecture · Capital structure · Consumption (sociology · Credit risk · Debt · Default Risk · Economics · Entrepreneurship · Ex-ante · Expected utility hypothesis · Financial economics · Macroeconomics · Microeconomics · Monetary economics · Risk aversion (psychology · Corporate Finance and Governance · Corporate Insolvency and Governance · Finance · Private Equity and Venture Capital
Innovative Entrepreneurs and Their Negotiation Behaviours in Launching New Products
From Unemployment to Self-Employment
Starting a Non-Farm Enterprise to Escape Energy Poverty
Procurements with Bidder Asymmetry in Cost and Risk-Aversion
L’Entrepreneuriat des femmes
On why women-owned businesses take more time to secure microloans
Payment instruments, finance and development
Turning entrepreneurs into intrapreneurs
Identification of loan effects on personal finance
Optimal contracts and competitive markets with costly state verification
Distinguishing Limited Liability from Moral Hazard in a Model of Entrepreneurship
A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion
Entrepreneurship, Frictions, and Wealth
Essai Sur la Nature du Commerce en General
Default Risk and Income Fluctuations in Emerging Economies
| Unique citing works | 9 |
|---|---|
| Citations per year | 0.9 |
| Citation span | 2016 - 2026 (11) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 9 |