Small Business Economics

, Volume 39, Issue 2, pp 473–493

Part-time entrepreneurship and financial constraints: evidence from the Panel Study of Entrepreneurial Dynamics



To date, entrepreneurship literature overlooks part-time entrepreneurs, i.e., those who devote time to entrepreneurial ventures and wage employment at the same time. In contrast, recent evidence from the Global Entrepreneurship Monitor, a large cross-national study on the level of entrepreneurial activity, establishes that 80% of nascent entrepreneurs also hold regular wage jobs. This paper offers a model of entrepreneurial entry under financial constraints where individuals choose between wage employment, part-time, and full-time entrepreneurship. Those who become nascent entrepreneurs must further decide how much capital to invest and what proportion of time to spend in business. I test this model using data from the Panel Study of Entrepreneurial Dynamics, which covers start-ups and nascent entrepreneurs. My findings show that part-time entrepreneurs are not affected by financial constraints. The analysis suggests that industry barriers, risk aversion, and learning by doing might be other factors worth investigating.


Entrepreneurial entry Part-time entrepreneurship Full-time entrepreneurship Wage employment Nascent entrepreneurs Financial constraints 

JEL Classifications

C21 J22 J23 J24 M13 

Copyright information

© Springer Science+Business Media, LLC. 2010

Authors and Affiliations

  1. 1.Department of Economics and FinanceState University of New York, College at PlattsburghPlattsburghUSA

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