Access to finance is crucial for sustaining entrepreneurial activity. Elaborating on resource dependence theory, we argue that the adverse impact of a loan rejection by a crowdlending platform is more severe than that of a rejection by a traditional financial institution. The data indicate that a failed crowdlending loan attempt is associated with a 14.80% increase in the probability of transitioning out of self-employment. This effect is 1.62 times that of revolving lines of credit and 3.08 times that of non-revolving lines of credit. We highlight that these effects are amplified for marginal borrowers and credit- and income-constrained entrepreneurs. In addition, we show that successful crowdlending enhances self-employed individuals' future income and future access to traditional lines of credit. Implications for policy and practice are discussed.
机构:
Natl Univ Malaysia, Fac Econ & Management, Bangi 43600, Selangor, MalaysiaNatl Univ Malaysia, Fac Econ & Management, Bangi 43600, Selangor, Malaysia
Ayob, Abu H.
Shahiri, Hazrul Izuan
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Natl Univ Malaysia, Fac Econ & Management, Bangi 43600, Selangor, MalaysiaNatl Univ Malaysia, Fac Econ & Management, Bangi 43600, Selangor, Malaysia
Shahiri, Hazrul Izuan
Abd Hamid, Hamizah
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Natl Univ Malaysia, Fac Econ & Management, Bangi 43600, Selangor, MalaysiaNatl Univ Malaysia, Fac Econ & Management, Bangi 43600, Selangor, Malaysia
Abd Hamid, Hamizah
Mujani, Wan Kamal
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Natl Univ Malaysia, Fac Islamic Studies, Bangi, Selangor, MalaysiaNatl Univ Malaysia, Fac Econ & Management, Bangi 43600, Selangor, Malaysia
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