Entrepreneur Debt Aversion and Financing Decisions: Evidence from COVID-19 Support Programs

Item Type Monograph (Working Paper)
Abstract An entrepreneur's negative attitude towards debt - debt aversion - affects the financing decisions of the businesses they run. Controlling for a range of observable traits, firms run by highly debt-averse entrepreneurs are about nine percentage points less likely to use debt. The same entrepreneurs are also almost 25% less likely to take up government-guaranteed debt during the COVID-19 crisis. These firms show less interest in COVID-19 support policies if they perceive them to involve debt, based on experiments randomizing the framing and labeling of otherwise nearly identical, hypothetical COVID-19 support policies as debt or grants.
Authors Pursiainen, Vesa
Language English
Subjects finance
Date 2021
Official URL https://papers.ssrn.com/sol3/papers.cfm?abstract_i...
Depositing User Prof. PhD Vesa Pursiainen
Date Deposited 06 Dec 2021 14:12
Last Modified 01 Apr 2022 13:11
URI: https://www.alexandria.unisg.ch/publications/265097

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Pursiainen, Vesa: Entrepreneur Debt Aversion and Financing Decisions: Evidence from COVID-19 Support Programs. , 2021,

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https://www.alexandria.unisg.ch/id/eprint/265097
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