How do Cash Windfalls Affect Entrepreneurship? Evidence from the Spanish Christmas Lottery

Vicente Jose Bermejo Boixareu, Miguel Ferreira, Daniel Wolfenzon, Rafael Zambrana

Producció científica: Article en revista indexadaArticleAvaluat per experts

Resum

We show cash windfalls affect the real economy by spurring entrepreneurship. We identify these effects using the Spanish Christmas Lottery, which provides a unique setting as prizes are geographically concentrated and distributed among thousands of households. We find higher start-up entry, job creation, and self-employment in winning regions. Consistent with a financial constraints channel, results are strongest in sectors relying on external finance and regions with limited credit access. Newly created firms are larger, more profitable, and survive longer. For existing firms, however, growth and profitability do not respond to lottery awards, but wages increase due to tighter labor markets.
Idioma originalAnglès
RevistaJournal of Financial and Quantitative Analysis
Data online anticipada29 de maig 2024
DOIs
Estat de la publicacióPublicació electrònica prèvia a la impressió - 29 de maig 2024

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