Topic: Financial Constraints and Entrepreneurship: Evidence from Unemployment Insurance

Speaker: Miguel A. Ferreira,  BPI | Fundação “la Caixa” Chair Professor in Responsible Finance, Nova School of Business and Economics

Date: November 27, 2019 (Wednesday)

Time: 10:00am-11:30am

Location: 4-101, Building 4

Language: English

Abstract:

We study the effect of financial constraints on entrepreneurship using administrative data on a public program that allows Portuguese unemployed workers to collect the full amount of their unemployment benefits upfront in order to start a business. Exploiting age-based discontinuities in the amount of benefits, we find that an extra one thousand euros of funding increases entrepreneurship by 0.16 percentage points. The effect is stronger for incorporated entrepreneurs, especially for those in the top decile of the income distribution before unemployment. In addition, we find that the effect is more pronounced in the top quintile of the size distribution across all businesses and in the middle of the size, growth and profitability distributions among incorporated businesses. Our findings suggest that financial constraints hamper growth-oriented entrepreneurship.

About the speaker:

Miguel A. Ferreira holds the BPI | Fundação “la Caixa” Chair in Responsible Finance at Nova School of Business and Economics. He is the Dean of Faculty and Research at Nova School of Business and Economics. He is also a research associate of the European Corporate Governance Institute (ECGI) and a research fellow of the Centre for Economic Policy Research (CEPR). He has a PhD in Finance from the University of Wisconsin-Madison, a Master in Economics from Nova School of Business and Economics, and a Licenciatura in Business from ISCTE. His research interests include corporate finance and governance. His research has been published in academic journals including the Journal of Finance, Journal of Financial Economics, Review of Financial Studies and Management Science. He is associate editor for the Journal of Banking and Finance. He has been a recipient of several research grants and awards including a European Research Council (ERC) grant. He teaches corporate finance in the undergraduate program. He also has an extensive experience of teaching in executive education programs, consulting, and expert witness.