Date Added: May 2011
Small businesses that active in developing areas frequently report financial constraints as key obstacle. One of the reasons for this is the high risk environment in which these firms operate. Firms that have sufficient access to finance are often more productive. In this paper, the authors are interest in how both financial constraints and the way in which entrepreneurs cope with risk affect their business. They analyze the influence of financial constraints on firm performance based on an exclusive sample of entrepreneurs who have restricted access to micro credit.