The Impact of Debt and Equity on the Decision to be Self-employed – an Economics Perspective
Douglas, Evan J. & Shepherd, Dean (2003) The Impact of Debt and Equity on the Decision to be Self-employed – an Economics Perspective. In Academy of Management Meeting, August, Seattle.
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This paper substantially extends recent work on the decision to become a self-employed entrepreneur rather than to be an employee of an organization. To enter self-employment typically requires access to financial capital. This article investigates the costs and benefits of different sources of financial capital, and how these may militate for or against the decision to be self-employed. The basic model is extended to accommodate start-up costs, the additional risk associated with the liability of newness, extended time horizons, debt funding, and equity funding. The different implications of debt versus equity funding are explored in detail. We find that preference for one over the other depends not only on their relative costs to the entrepreneur but also on the entrepreneur’s attitudes toward work effort, risk, and autonomy.
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|Item Type:||Conference Paper|
|Additional Information:||Access to the author-version is currently restricted pending permission from the publisher. For more information, please refer to the publisher’s website (see hypertext link) or contact the author.|
|Keywords:||Douglas, E, entrepreneurship, self, employment, debt and equity capital|
|Subjects:||Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BANKING FINANCE AND INVESTMENT (150200) > Banking Finance and Investment not elsewhere classified (150299)|
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300)
Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > BUSINESS AND MANAGEMENT (150300) > Small Business Management (150314)
|Divisions:||Current > QUT Faculties and Divisions > QUT Business School|
|Copyright Owner:||Copyright 2003 Academy of Management|
|Deposited On:||23 Nov 2006|
|Last Modified:||11 Aug 2011 03:25|
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