This week aims to answer the following questions:
- What are the broad financing constraints faced by entrepreneurs?
- Why do we care whether potential entrepreneurs are financially constrained?
- What role does personal wealth play in supporting entrepreneurial entry?
Required and suggested readings
We will cover two papers and the institutional details required to understand them. Read these two papers and skim the articles on the week 2 reading list.
Paper 1: Cagetti, Marco, and Mariacristina De Nardi. “Entrepreneurship, frictions, and wealth.” Journal of Political Economy 114.5 (2006): 835-870.
Paper 2: Hombert, J., Schoar, A., Sraer, D., & Thesmar, D. (2020). Can unemployment insurance spur entrepreneurial activity? Evidence from France. The Journal of Finance, 75(3), 1247-1285.