Personal Wealth, Self-Employment, and Business Ownership

Review of Financial Studies, Forthcoming

61 Pages Posted: 2 Apr 2020 Last revised: 26 Feb 2021

See all articles by Aymeric Bellon

Aymeric Bellon

University of Pennsylvania - The Wharton School

J. Anthony Cookson

University of Colorado at Boulder - Leeds School of Business

Erik Gilje

University of Pennsylvania - The Wharton School

Rawley Heimer

Boston College - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: February 16, 2020

Abstract

We study the effect of personal wealth on entrepreneurial decisions using data on mineral payments from Texas shale drilling to individuals throughout the United States. Large cash windfalls increase business formation by 0.8 to 2.1 percentage points, but do not affect transitions to self-employment. By contrast, cash windfalls significantly extend self-employment spells, but do not affect the duration of business ownership. Our findings help reconcile contrasting findings in prior work: liquidity constraints have different effects on entrepreneurial activity that may depend on the entrepreneur’s motivations.

Keywords: self-employment; entrepreneurship; personal wealth; oil and gas; mineral rights

JEL Classification: L26, G51, G39

Suggested Citation

Bellon, Aymeric and Cookson, J. Anthony and Gilje, Erik and Heimer, Rawley, Personal Wealth, Self-Employment, and Business Ownership (February 16, 2020). Review of Financial Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3551576 or http://dx.doi.org/10.2139/ssrn.3551576

Aymeric Bellon

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

J. Anthony Cookson (Contact Author)

University of Colorado at Boulder - Leeds School of Business ( email )

Boulder, CO 80309-0419
United States

Erik Gilje

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Rawley Heimer

Boston College - Department of Finance ( email )

Carroll School of Management
140 Commonwealth Avenue
Chestnut Hill, MA 02467-3808
United States

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