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Do Liquidity Constraints Matter For New Entrepreneurs?
Using data from the Surveys of Consumer Finances, the author constructs a proxy for wealth based on the household’s home equity wealth at the time of the entrepreneurial decision. The results provide further evidence that the relationship between wealth and entering
entrepreneurship is only significant for high-wealth households and that liquidity constraints do not appear to bind for the majority of new entrepreneurs.
Link
http://www.federalreserve.gov/pubs/feds/2004/200442/200442pap.pdf