Can Strong Creditors Inhibit Entrepreneurial Activity?

Autor:	Nuri Ersahin, Katherine Waldock, Rustom M. Irani
Rok vydání:	2020
Předmět:	Economics and Econometrics Market economy Creditor Accounting Burden of proof Business New entrants Churning Finance
Zdroj:	The Review of Financial Studies. 34:1661-1698
ISSN:	1465-7368 0893-9454
DOI:	10.1093/rfs/hhaa050
Popis:	We examine entrepreneurial activity following the staggered adoption of modern-day fraudulent transfer laws in the United States. These laws strengthen unsecured creditors’ rights and are particularly important for entrepreneurs whose personal assets commingle with the firm’s. Using administrative data from the U.S. Census Bureau, we document declines in startup entry—particularly among riskier entrants—and closures of existing firms after these laws pass. Firm financial data shows that entrepreneurs lower leverage by reducing demand for unsecured credit. Our results suggest that strong creditor protections can limit entrepreneurs’ appetite for risk, which may reduce churning along the extensive margin among the smallest firms in the economy.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::7e5e9672936cadfd2b19dc8a021699d0 https://doi.org/10.1093/rfs/hhaa050 Zobrazit plný text záznamu