Date of Award
Doctor of Philosophy (PhD)
This dissertation lays out new evidence on the relationship between inheritances and entrepreneurship and the dynamics of business formation. While the existing literature is split on whether liquidity constraints pose a real threat to the formation of new businesses, this study contributes to the debate by addressing the endogeneity problem between inherited wealth and entrepreneurship. The main results lend support to the liquidity constraint theory, indicating that receiving an inheritance boosts the likelihood of owning a business by about 3% for the average individual, which translates to a 21% increase in the probability of entrepreneurship over the baseline. Chapter 1 presents a dynamic model of intergenerational transmission of wealth and occupational choice in which bequests act as a means of startup financing for nascent entrepreneurs. Chapter 2 introduces the empirical relevance of inheritances in the decision to start a business using data from the Panel Study of Income Dynamics (PSID), discusses the challenges faced by the existing literature, and elucidates the contributions the current study brings to the field in its empirical strategy. Chapter 3 illustrates the results of the empirical analysis and provides a discussion and conclusion.
Chair and Committee
Costas Azariadis, Yannis Ioannides
Gaetano Antinolfi, Ana Babus, Bruce Petersen,
Ivanova, Martina, "Essays on Inheritances and Entrepreneurship" (2023). Arts & Sciences Electronic Theses and Dissertations. 2862.
Available for download on Saturday, April 19, 2025