Small business survival and inheritance: evidence from Germany

Schäfer, Dorothea and Talavera, Oleksandr (2009) Small business survival and inheritance: evidence from Germany. Small Business Economics, 32. pp. 95-109.

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This paper investigates whether small businesses face financial constraints that affect their survival. A model of moral hazard is developed in which financial constraints arise endogenously. The model predicts that higher private assets relax financial constraints and have a positive effect on the firm’s probability of survival. The empirical analysis confirms that the entrepreneur has a higher propensity to stay in business when she inherits capital. This effect is particularly strong for entrepreneurs who switch from self-employment into wage employment.

Item Type: Article
Uncontrolled Keywords: entrepreneurship,survival,financial constraints
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Gina Neff
Date Deposited: 16 Nov 2010 16:00
Last Modified: 16 Jan 2023 10:30
DOI: 10.1007/s11187-007-9069-7

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