IDEAS home Printed from https://ideas.repec.org/p/dsr/pastwp/05.html
   My bibliography  Save this paper

Credit rationing or entrepreneurial risk aversion? A comment

Author

Listed:
  • Marcos Vergara
  • Claudio A. Bonilla

    (School of Business and Economics, Universidad del Desarrollo)

Abstract

Cressy (2000) argues that the positive correlation between assets and the rate of business startups is due to DARA preferences. We show however that the required property is prudence,and prudence is consistent with DARA, IARA or CARA.

Suggested Citation

  • Marcos Vergara & Claudio A. Bonilla, 2012. "Credit rationing or entrepreneurial risk aversion? A comment," Past Working Papers 05, Universidad del Desarrollo, School of Business and Economics, revised May 2013.
    • Handle: RePEc:dsr:pastwp:05
    as

    Download full text from publisher

    File URL: http://repositorio.udd.cl/bitstream/handle/11447/57/pwp05.pdf?sequence=1
    File Function: First version, 2007
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kimball, Miles S, 1990. "Precautionary Saving in the Small and in the Large," Econometrica, Econometric Society, vol. 58(1), pages 53-73, January.
    2. Evans, David S & Jovanovic, Boyan, 1989. "An Estimated Model of Entrepreneurial Choice under Liquidity Constraints," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 808-827, August.
    3. Cressy, Robert, 2000. "Credit rationing or entrepreneurial risk aversion? An alternative explanation for the Evans and Jovanovic finding," Economics Letters, Elsevier, vol. 66(2), pages 235-240, February.
    4. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    5. Louis Eeckhoudt & Harris Schlesinger, 2006. "Putting Risk in Its Proper Place," American Economic Review, American Economic Association, vol. 96(1), pages 280-289, March.
    6. Menezes, C & Geiss, C & Tressler, J, 1980. "Increasing Downside Risk," American Economic Review, American Economic Association, vol. 70(5), pages 921-932, December.
    7. Dreze, Jacques H. & Modigliani, Franco, 1972. "Consumption decisions under uncertainty," Journal of Economic Theory, Elsevier, vol. 5(3), pages 308-335, December.
    8. Eeckhoudt, Louis & Gollier, Christian & Schneider, Thierry, 1995. "Risk-aversion, prudence and temperance: A unified approach," Economics Letters, Elsevier, vol. 48(3-4), pages 331-336, June.
    9. L. Eeckhoudt & C. Gollier & H. Schlesinger, 2005. "Economic and financial decisions under risk," Post-Print hal-00325882, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bonilla, Claudio A. & Tapia, Pablo & Ruiz, Jose Luis, 2024. "Are annuities an inferior or normal good? Evidence from a less-developed country," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 724-734.
    2. Claudio A. Bonilla & Pablo A. Gutiérrez Cubillos, 2021. "The effects of ambiguity on entrepreneurship," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 63-80, February.
    3. Kit Pong Wong, 2015. "Export And Hedging Decisions Under Correlated Revenue And Exchange Rate Risk," Bulletin of Economic Research, Wiley Blackwell, vol. 67(4), pages 371-381, October.
    4. Claudio A. Bonilla & Marcos Vergara, 2021. "Risk aversion, downside risk aversion, and the transition to entrepreneurship," Theory and Decision, Springer, vol. 91(1), pages 123-133, July.
    5. Wong, Kit Pong, 2023. "Risk aversion and entrepreneurship under uncertainty: Further results," Economics Letters, Elsevier, vol. 230(C).
    6. Claudio A. Bonilla & Marcos Vergara & Richard Watt, 2019. "New Results on Entrepreneurship and Risk," Working Papers in Economics 19/20, University of Canterbury, Department of Economics and Finance.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christian Gollier & James Hammitt & Nicolas Treich, 2013. "Risk and choice: A research saga," Journal of Risk and Uncertainty, Springer, vol. 47(2), pages 129-145, October.
    2. Claudio A. Bonilla & Pablo A. Gutiérrez Cubillos, 2021. "The effects of ambiguity on entrepreneurship," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(1), pages 63-80, February.
    3. Donatella Baiardi & Marco Magnani & Mario Menegatti, 2020. "The theory of precautionary saving: an overview of recent developments," Review of Economics of the Household, Springer, vol. 18(2), pages 513-542, June.
    4. Claudio A. Bonilla & Marcos Vergara, 2021. "Risk aversion, downside risk aversion, and the transition to entrepreneurship," Theory and Decision, Springer, vol. 91(1), pages 123-133, July.
    5. Ignacia Benitez & Claudio A. Bonilla & Marcos Vergara, 2024. "Hybrid entrepreneurship and risk," Small Business Economics, Springer, vol. 63(3), pages 1171-1196, October.
    6. repec:dau:papers:123456789/11094 is not listed on IDEAS
    7. Loubergé, Henri & Malevergne, Yannick & Rey, Béatrice, 2020. "New Results for additive and multiplicative risk apportionment," Journal of Mathematical Economics, Elsevier, vol. 90(C), pages 140-151.
    8. Michel Denuit & Louis Eeckhoudt & Béatrice Rey, 2010. "Some consequences of correlation aversion in decision science," Annals of Operations Research, Springer, vol. 176(1), pages 259-269, April.
    9. Danau, Daniel, 2020. "Prudence and preference for flexibility gain," European Journal of Operational Research, Elsevier, vol. 287(2), pages 776-785.
    10. Jouini, Elyès & Napp, Clotilde & Nocetti, Diego, 2013. "On multivariate prudence," Journal of Economic Theory, Elsevier, vol. 148(3), pages 1255-1267.
    11. Heinzel Christoph & Richard Peter, 2021. "Precautionary motives with multiple instruments," Working Papers SMART 21-09, INRAE UMR SMART.
    12. Eeckhoudt, Louis R. & Laeven, Roger J.A. & Schlesinger, Harris, 2020. "Risk apportionment: The dual story," Journal of Economic Theory, Elsevier, vol. 185(C).
    13. Claudio A. Bonilla & Marcos Vergara & Richard Watt, 2022. "Changes in risk and entrepreneurship," Risk Management, Palgrave Macmillan, vol. 24(4), pages 367-385, December.
    14. Thomas Mayrhofer & Hendrik Schmitz, 2020. "Prudence and prevention - Empirical evidence," Working Papers CIE 134, Paderborn University, CIE Center for International Economics.
    15. AJ A. Bostian & Christoph Heinzel, 2016. "Consumption Smoothing and Precautionary Saving under Recursive Preferences," FOODSECURE Working papers 44, LEI Wageningen UR.
    16. Claudio A. Bonilla & Marcos Vergara & Richard Watt, 2019. "New Results on Entrepreneurship and Risk," Working Papers in Economics 19/20, University of Canterbury, Department of Economics and Finance.
    17. Han (H.) Bleichrodt & Paul van Bruggen, 2018. "Reflection for higher order risk preferences," Tinbergen Institute Discussion Papers 18-079/I, Tinbergen Institute.
    18. Patrick Roger, 2011. "Mixed risk aversion and preference for risk disaggregation: a story of moments," Theory and Decision, Springer, vol. 70(1), pages 27-44, January.
    19. Baiardi, Donatella & De Donno, Marzia & Magnani, Marco & Menegatti, Mario, 2015. "New results on precautionary saving under two risks," Economics Letters, Elsevier, vol. 130(C), pages 17-20.
    20. Cary Deck & Harris Schlesinger, 2010. "Exploring Higher Order Risk Effects," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1403-1420.
    21. Christoph Heinzel & Richard Peter, 2021. "Precautionary motives with multiple instruments [Motifs de précaution en cas de multiples instruments]," Working Papers hal-03484875, HAL.

    More about this item

    Keywords

    Credit rationing; Risk aversion; Prudence; Entrepreneurship.;
    All these keywords.

    JEL classification:

    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • G3 - Financial Economics - - Corporate Finance and Governance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dsr:pastwp:05. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jean Sepulveda (email available below). General contact details of provider: https://edirc.repec.org/data/feuddcl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.