However others have question the degree to which financing constraints are barriers to entrepreneurship particularly in advanc economies where firms have adequate access to capital. In this paper the authors consider a unique mortgage reform in to crit through the unlocking of housing collateral for personal loans had an impact on entrepreneurship. Findings show that the reform affect the ability to draw on debt back by home equity.
However despite the positive and statistically
Significant effect of relaxing crit constraints on entrepreneurship the magnitudes are small. Furthermore an important reason for the small magnitude was that the marginal business found by those who benefit from the reform was of lower quality Pakistan Phone Number List where the new entrants fail within two years of entry. Overall the results paint a more nuanc picture of the extent to which financing constraints are important in settings with well develop crit markets and the role that home equity can play in alleviating these. Key concepts include Findings address the longstanding question of the importance of crit constraints for entrepreneurship.
Housing collateral shifts the bank
Adjudication decision from a specific project to the critworthiness of the borrower. On the one hand good entrepreneurial projects may be able to be start or sustain. On the other hand though optimistic entrepreneurs may start lower quality businesses Sweden Phone Number because they do not face the same discipline from the bank. Author Abstract We study how a mortgage reform that exogenously increas access to crit had an impact on entrepreneurship using individual level micro data from Denmark.
