Failure is an Option

What is it about?

Relaxing the penalties of company and personal bankruptcy , motivates more capable entrepreneurs to start companies. This results in improved new firm growth. Overall, we demonstrate that institutional changes affect different people in different ways creating changes in entrepreneurial firms.

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Why is it important?

Relates work explores direct effects of institutional changes such as bankruptcy. We first show that the way institutional change affects different people in different ways, causes secondary and unanticipated effects. Also, we show how entrepreneurs pay attention to the potential ends of their firm when deciding to start a firm. Finally, we show that if policies are formed to promote entrepreneurship, they should focus on motivating capable entrepreneurs, not just more entrepreneurs

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