Working Paper: NBER ID: w21107
Authors: Francisco J. Buera; Joseph P. Kaboski; Yongseok Shin
Abstract: We review both the theoretical and empirical literature on entrepreneurship and financial frictions, with an emphasis on the heterogeneous and dynamic micro-level implications of financial frictions for macro development.
Keywords: Entrepreneurship; Financial Frictions; Macro Development
JEL Codes: L26; O1; O11; O15; O16; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Financial frictions (G19) | Entry of entrepreneurs (L26) |
| Small relaxations of financial constraints (G59) | Entry among low-productivity entrepreneurs (L26) |
| Financial frictions (G19) | Growth dynamics of firms (D25) |
| Higher saving rates among entrepreneurs (D14) | Escape from financial constraints (G59) |
| Financial frictions (G19) | Individual poverty traps (I32) |
| Financial frictions (G19) | No aggregate poverty traps (I32) |
| Relaxed financial constraints (G19) | Expansion of more productive entrepreneurs (O49) |