Entrepreneurship in Post-Conflict Transition

52 Pages Posted: 1 Jan 2011

See all articles by Asli Demirgüç-Kunt

Asli Demirgüç-Kunt

World Bank

Leora F. Klapper

World Bank; World Bank - Development Research Group (DECRG)

Georgios A. Panos

University of Glasgow - Adam Smith Business School

Date Written: September 14, 2010


We examine new self-employment entry and its viability in Bosnia and Herzegovina, using a rich household survey for the years 2001-2004. We find that wealthier households are more likely to engage in viable self-employment and create employment suggesting an important role for financing constraints. Specifically, although having an existing bank relationship is not significantly related to the entry decision, it is positively related to the survival for new entrepreneurs and their employment creation. We also find a non-linear relationship between remittances and entry in that individuals not receiving remittances are more likely to enter self-employment; but, if they do receive them, the likelihood of starting a business increases in the fraction of wealth received from domestic remittances. Finally, people working in the informal sector are more likely to become viable entrepreneurs, particularly those provided with loans from micro-credit organizations. These findings support the perception of the informal sector as an incubator for formal self-employment in the early years of transition.

Keywords: Self-employment, entrepreneurship, financial constraints, informal sector

JEL Classification: J23, M13, O16, O17

Suggested Citation

Demirgüç-Kunt, Asli and Klapper, Leora F. and Panos, Georgios A., Entrepreneurship in Post-Conflict Transition (September 14, 2010). Economics of Transition, Vol. 19, Issue 1, pp. 27-78, 2010, Available at SSRN: https://ssrn.com/abstract=1732952 or http://dx.doi.org/10.1111/j.1468-0351.2010.00398.x

Asli Demirgüç-Kunt (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Leora F. Klapper

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-473-8738 (Phone)

HOME PAGE: http://econ.worldbank.org/staff/lklapper

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
Washington, DC 20433
United States

Georgios A. Panos

University of Glasgow - Adam Smith Business School ( email )

Gilbert Scott Building
University Avenue
Glasgow, Scotland G128QQ
United Kingdom

HOME PAGE: http://https://sites.google.com/site/georgiosapanos/

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