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Applied Economics Letters Volume 27, 2020 - Issue 21
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Research Article

When risk-aversion promotes enterprise formation

George Abuchi Agwua Centre for the Analysis of Trade and Economic Transitions, Université De Pau et Des Pays De L’Adour, France;b Department of Economics and Development studies, Alex Ekwueme Federal University Ndufu-Alike, NigeriaCorrespondence[email protected]
ORCID Iconhttps://orcid.org/0000-0003-3022-5879
ORCID Icon
Pages 1726-1729 | Published online: 21 Jan 2020
 
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ABSTRACT

In this article, risk-aversion promotes rural enterprises formation contrasting with the theoretical motivations of new entrepreneurs. Rather than risk seeking, rural entrepreneurs are risk-averse, and instead of opportunities, the operators seek livelihood insurance. This finding indicates the value of insurance penetration in the rural areas.

JEL CLASSIFICATION:

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 Households with RNFEs older than 5 years are deleted.

2 CSR imposes similarity in all control variables.

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