Liquidity Constraints, Spillovers, and Entrepreneurship: Evidence from a Cash Transfer Program

Small Business Economics, forthcoming, 2019. 10.1007/s11187-019-00178-1

53 Pages Posted: 30 Jul 2013 Last revised: 25 Jun 2019

See all articles by Rafael P. Ribas

Rafael P. Ribas

Boise State University - College of Business & Economics

Date Written: April 30, 2019

Abstract

This paper exploits a welfare programme in Brazil to investigate the role of financial constraints, in opposition to general equilibrium mechanisms, in explaining entrepreneurship. A method for decomposing its impact into direct and indirect effects is presented. Instead of requiring two-level randomization, this method only assumes cluster-level independence of treatment. Results indicate that the number of formal entrepreneurs increased, but only due to the indirect component. Further tests suggest that the indirect effect is associated with an increase in private transfers between households. Thus entrepreneurship tends to respond more to the interaction between households than to financial constraints.

Keywords: Entrepreneurship, Financial Constraint, Eligibility Constraint, Cash Transfer, Indirect Treatment Effect, Private Transfers

JEL Classification: C21, H31, I38, J24, L26, O17

Suggested Citation

Ribas, Rafael Perez, Liquidity Constraints, Spillovers, and Entrepreneurship: Evidence from a Cash Transfer Program (April 30, 2019). Small Business Economics, forthcoming, 2019. 10.1007/s11187-019-00178-1, Available at SSRN: https://ssrn.com/abstract=2302802 or http://dx.doi.org/10.2139/ssrn.2302802

Rafael Perez Ribas (Contact Author)

Boise State University - College of Business & Economics ( email )

United States

HOME PAGE: http://https://www.boisestate.edu/cobe-economics/rafael-ribas-ph-d/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
160
Abstract Views
1,621
Rank
334,612
PlumX Metrics