Reference : The determinants of bootstrap financing in crises: evidence from entrepreneurial vent...
Scientific journals : Article
Business & economic sciences : Strategy & innovation
Entrepreneurship and Innovation / Audit
http://hdl.handle.net/10993/50178
The determinants of bootstrap financing in crises: evidence from entrepreneurial ventures in the COVID-19 pandemic
English
Block, Jörn []
Fisch, Christian mailto []
Hirschmann, Mirko []
2022
Small Business Economics
Springer
58
2
867-885
Yes
0921-898X
1573-0913
New-York
NY
[en] Entrepreneurship ; bootstraph finance ; COVID-19 ; crises ; coronavirus
[en] Bootstrap financing refers to measures that entrepreneurial ventures undertake to preserve liquidity (e.g., reducing expenses, collecting receivables, delaying payments, preselling). Prior research shows that bootstrap financing is an important enabler for the growth of resource-constrained early-stage ventures. However, little is known about the use of bootstrap financing in crises, during which the preservation of liquidity is particularly salient. We investigate the determinants of bootstrap financing in the 2020 COVID-19 crisis using a sample of 17,046 German entrepreneurial ventures. We formulate hypotheses about the determinants of bootstrap financing from a necessity, human capital, and opportunity cost perspective. Among others, our results show that the severity of the crisis for the venture, the level of private consumption, and self-employment experience are positively associated with an increased use of bootstrap financing measures. Our study contributes to the literature on bootstrap financing and illuminates how entrepreneurial ventures maintain liquidity in crises.
http://hdl.handle.net/10993/50178
10.1007/s11187-020-00445-6

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