The Location of Markets, Perceived Entrepreneurial Risk, and Start-up Capital of Micro Rural Firms

Content Provider	Semantic Scholar
Author	Psaltopoulos, Demetrios Stathopoulou, Sophia Skuras, Dimitris
Copyright Year	2005
Abstract	It is argued that when founders of SMEs perceive the probability of a successful and lucrative venture to be greater, they are more likely to provide a greater proportion of the start-up capital. This paper provides an empirical examination of two concurrent hypotheses. Firstly, that the size of the debt or equity is affected by factors influencing perceived entrepreneurial risk. Secondly, that the location of the market for the firm’s output is a major factor reducing perceived entrepreneurial risk and increasing equity of the start-up capital. A statistical analysis based on the simultaneous tobit model is used. Results show that significant factors influencing risk perception include the size of the new business and the sector of economic activity, as well as entrepreneurial experience and the location of the markets for the firm’s output. The results highlight implications for the design and implementation of rural development policies and especially for the instruments supporting rural business creation.
Starting Page	147
Ending Page	158
Page Count	12
File Format	PDF HTM / HTML
DOI	10.1007/s11187-003-6456-6
Volume Number	25
Alternate Webpage(s)	https://page-one.springer.com/pdf/preview/10.1007/s11187-003-6456-6
Alternate Webpage(s)	https://doi.org/10.1007/s11187-003-6456-6
Language	English
Access Restriction	Open
Content Type	Text
Resource Type	Article