Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201991 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7765
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Are entrepreneurs liquidity constraint? Using quasi-random housing wealth variation resulting from communist era decisions, we argue yes, as we find that wealthier East Germans are more likely to become self-employed after reunification. In the literature, no such strong relationship was found using regional house price changes the US and UK. In these economies, our results suggest, the effects of liquidity constraints are masked by anticipatory savings of the would be self-employed, which was impossible for the East Germans in our sample due to communism.
Subjects: 
self-employment
financial constraints
wealthy households
starting capital
JEL: 
J23
L26
G32
Document Type: 
Working Paper
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