Entrepreneurial Saving Practices and Reinvestment

Theory and Evidence

T.H.L. Beck, H. Pamuk, R.B. Uras

Research output: Working paperDiscussion paperOther research output

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Abstract

We use a novel enterprise survey from Tanzania to gauge the relationship between saving instruments and entrepreneurial reinvestment. While most informal savings practices do not imply a lower likelihood of entrepreneurial reinvestment when compared with formal savings practices, we find a significantly negative effect of saving within the household on the likelihood of reinvesting entrepreneurial profits. Our results are robust to an extensive list of robustness checks, including controlling for reverse causation and omitted variable biases. Our work contributes to the recent debate on the implications of different saving instruments in developing countries and expands the entrepreneurial financing constraints literature by focusing on internal rather than external fundings constraints.
Original languageEnglish
Place of PublicationTilburg
PublisherEBC
Number of pages49
Volume2014-008
Publication statusPublished - 25 Aug 2014

Publication series

NameEBC Discussion Paper
Volume2014-008

Fingerprint

Savings
Developing countries
Tanzania
Causation
Financing constraints
Household
Funding
Profit
Omitted variable bias
Robustness

Keywords

  • entrepreneurial finance
  • savings
  • reinvestment
  • financial inclusion

Cite this

Beck, T. H. L., Pamuk, H., & Uras, R. B. (2014). Entrepreneurial Saving Practices and Reinvestment: Theory and Evidence. (EBC Discussion Paper; Vol. 2014-008). Tilburg: EBC.
Beck, T.H.L. ; Pamuk, H. ; Uras, R.B. / Entrepreneurial Saving Practices and Reinvestment : Theory and Evidence. Tilburg : EBC, 2014. (EBC Discussion Paper).
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Beck, THL, Pamuk, H & Uras, RB 2014 'Entrepreneurial Saving Practices and Reinvestment: Theory and Evidence' EBC Discussion Paper, vol. 2014-008, EBC, Tilburg.

Entrepreneurial Saving Practices and Reinvestment : Theory and Evidence. / Beck, T.H.L.; Pamuk, H.; Uras, R.B.

Tilburg : EBC, 2014. (EBC Discussion Paper; Vol. 2014-008).

Research output: Working paperDiscussion paperOther research output

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AU - Uras, R.B.

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N2 - We use a novel enterprise survey from Tanzania to gauge the relationship between saving instruments and entrepreneurial reinvestment. While most informal savings practices do not imply a lower likelihood of entrepreneurial reinvestment when compared with formal savings practices, we find a significantly negative effect of saving within the household on the likelihood of reinvesting entrepreneurial profits. Our results are robust to an extensive list of robustness checks, including controlling for reverse causation and omitted variable biases. Our work contributes to the recent debate on the implications of different saving instruments in developing countries and expands the entrepreneurial financing constraints literature by focusing on internal rather than external fundings constraints.

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KW - savings

KW - reinvestment

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Beck THL, Pamuk H, Uras RB. Entrepreneurial Saving Practices and Reinvestment: Theory and Evidence. Tilburg: EBC. 2014 Aug 25. (EBC Discussion Paper).