Entrepreneurial financing, savings, and mobility

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Advances in the Study of Entrepreneurship, Innovation & Economic Growth

ISSN: 1048-4736
Series editor(s): Sherry Hoskinson and Donald Kuratko

Subject Area: Enterprise and Innovation

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Document Information:
Title:	Entrepreneurial financing, savings, and mobility
Author(s):	Vincezo Quadrini
Volume:	13 Editor(s): Gary D. Libecap ISBN: 978-0-76230-822-4 eISBN: 978-1-84950-123-1
Citation:	Vincezo Quadrini (2001), Entrepreneurial financing, savings, and mobility, in Gary D. Libecap (ed.) Entrepreneurial inputs and outcomes: New studies of entrepreneurship in the United States (Advances in the Study of Entrepreneurship, Innovation & Economic Growth, Volume 13), Emerald Group Publishing Limited, pp.71-94
DOI:	10.1016/S1048-4736(01)13005-5 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Article type:	Full length article
Abstract:	Due to conflicts of interest between the agent that controls the funds of the firm (the entrepreneur) and the agent that provides the funds (the investor), external financing is limited. The limited availability of external financing creates an incentive for entrepreneurs to increase the internal funds with higher savings. Using data from the Panel Study of Income Dynamics, this chapter shows that entrepreneurs have higher saving rates than workers and experience greater upward mobility. Given these results, policies promoting entrepreneurship — especially those providing financial resources to households located at the lower end of the distribution of wealth — are important for fostering socio-economic mobility.