Cognitive Financial Constraints and Firm Growth

Jun Du; Bach Nguyen

doi:10.1007/s11187-021-00503-7

Cognitive Financial Constraints and Firm Growth

Jun Du, Bach Nguyen^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

Abstract

This study distinguishes entrepreneurs’ cognitive financial constraints from financial supply constraints and assesses their relative importance to small business growth. Drawing from the literature on cognitive styles and institutional theory, we argue that small businesses’ financial constraints derive not only from financial market failures but also from the cognitive factors of entrepreneurs. Analysing a comprehensive dataset of more than 200,000 small businesses in Vietnam, we show that both financial supply and cognitive financial constraints impede firm growth. Given this significantly deleterious effect, the cognitive financial constraints originating from the demand side of firm financing deserve more attention.

Original language	English
Pages (from-to)	2109-2137
Number of pages	28
Journal	Small Business Economics
Volume	58
DOIs	https://doi.org/10.1007/s11187-021-00503-7
Publication status	Published - 15 Jun 2021

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cognitive financial constraints and firm growth
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Cite this

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title = "Cognitive Financial Constraints and Firm Growth",

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Cognitive Financial Constraints and Firm Growth

Abstract

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