1 Introduction
2 Related literature
2.1 Prior research on bootstrap financing
2.2 Bootstrap financing and economic crises
3 Hypotheses: determinants of bootstrap financing in crises
3.1 Necessity perspective
3.2 Human capital perspective
3.3 Opportunity cost perspective
4 Context, data, and methods
4.1 Context: the COVID-19 crisis in Germany
4.2 Sample and survey
Variable | Definition |
---|---|
Dependent variable | |
Financial bootstrapping | Count variable that measures the number of bootstrapping measures used by the respondent. Responses include: (a) sending payment reminders, (b) paying invoices later, (c) reducing tax advances, (d) reducing health insurance contribution, (e) reducing commercial rent, (f) reducing private rent |
Independent variables | |
Revenue dummies | Set of dummy variables that capture the revenue change of the respondent’s business. Dummies include (a) stable/increased revenue or revenue decrease by (b) 100%, (c) 76 to 99%, (d) 51 to 75%, (e) 26 to 50%, and (f) 1 to 25% (serves as the reference category in the regression analysis) |
Solvency dummies | Set of dummy variables that capture the solvency of the respondent’s business. Dummies include (a) insolvent, (b) solvent for 1 to 6 months, (c) solvent for 7 to 12 months, and (d) more than 12 months (serves as the reference category in the regression analysis) |
Self-employment experience | Ordinal variable that captures the respondents self-employment experience in years (1 = 1–4, 2 = 5–10, 3 = 11–20, 4 = 21–30, 5 > 30) |
Academic education | Dummy variable equal to one if the respondent received an academic education at university, zero otherwise |
Full-time SE | Dummy variable that captures whether the respondent is working full-time (= 1) or part-time (= 0) |
Solo SE | Dummy variable that captures whether the respondent is working solo (= 1) or with employees (= 0) |
Age | Set of dummy variables that captures the age of the respondent. Dummies include (a) < 30 years, (b) 30–39 years, (c) 40–49 years, (d) 50–59, (e) > 59 years |
Control variables | |
Female | Dummy variable that captures whether the self-employed is female (= 1) or not (= 0) |
Risk attitude | Ordinal variable that captures the individual’s risk attitude in entrepreneurial decision-making (1 = very low, 5 = very high) |
Household size | Number of persons living in the respondent’s household (including the respondent), scaled from 1 to > 5 |
High digitalization | Dummy variable equal to one if the respondent describes the level of digitalization of his business as high or very high, zero otherwise |
Mostly works from home | Dummy variable equal to one if the respondent mostly works from home, zero otherwise |
Wealth | Ordinal variable that captures the respondent’s private wealth, that can be liquidated in the short term, in € (1 = 0; 2 = 30,000; 3 = 60,000; 4 = 90,000; 5 = 120,000; 6 = 150,000; 7 = 180,000; 8 = 210,000; 9 = 500,000; 10 = > 500,000) |
Costs of living | Ordinal variable that captures the respondent’s private cost of living, in € per month (1 = 0–500, 2 = 501–1000, 3 = 1001-1500, 4 = 1501–2000, 5 = 2001–2500, 6 = 2501–3000, 7 = 3001–3500, 8 = 3501–4000, 9 = 4001–4500, 10 = 4501–5000, 11 = 5001–10,000, 12 = > 10,000) |
Limited liability company | Dummy variable equal to one if the business is a limited liability company (i.e., UG, GmbH), zero otherwise |
Government support | Dummy variable equal to one if the respondent received any governmental support during the Coronavirus crisis, zero otherwise |
Region dummies | Set of 16 dummy variables that capture the location of the respondent’s business. The dummies refer to the 16 federal states of Germany |
Industry dummies | Set of 15 dummy variables that capture the main industry of the respondent’s business. Dummies (a) IT, (b) engineering, (c) business services, (d) training, (e) proof-reading, (f) journalism, (g) culture, (h) event, (i) health and wellness, (j) tourism, (k) retail, (l) online retail, (m) finance and real-estate, (n) hospitality, and (o) others |
Response week dummies | Set of five dummy variables that capture the week in which the respondent concluded the survey. Dummies refer to (a) calendar week 15 (06.04.–12.04.), (b) week 16 (13.04.–19.04.), (c) week 17 (20.04.–26.04.), (d) week 18 (27.04.–03.05.), (e) week 19 (04.05.–10.05.) |
4.3 Variables
4.3.1 Dependent variable
4.3.2 Independent variables
4.3.3 Control variables
5 Results
5.1 Descriptive statistics and univariate analyses
Column | (1) | (2) | (3) | (4) | (5) | (6) | (7) |
---|---|---|---|---|---|---|---|
Sample | Full sample | Subsamples: bootstrapping measures used | |||||
No | Yes | t/z test | |||||
N (observations) | 17,056 | 4693 | 12,353 | 17,046 | |||
Variables | Mean | SD | Min | Max | Mean | Mean | Sig. |
Dependent variable | |||||||
Financial bootstrapping | 1.408 | 1.218 | 0 | 6 | – | – | – |
Independent variables | |||||||
Revenue stable/increase | 0.002 | 0.042 | 0 | 1 | 0.004 | 0.001 | |
Revenue decrease: 100% | 0.393 | 0.488 | 0 | 1 | 0.400 | 0.391 | |
Revenue decrease: 76–99% | 0.245 | 0.430 | 0 | 1 | 0.200 | 0.262 | *** |
Revenue decrease: 51–75% | 0.168 | 0.374 | 0 | 1 | 0.161 | 0.170 | |
Revenue decrease: 26–50% | 0.125 | 0.330 | 0 | 1 | 0.133 | 0.121 | |
Revenue decrease: 1–25% (ref.) | 0.053 | 0.224 | 0 | 1 | 0.074 | 0.045 | |
Solvency: insolvent | 0.112 | 0.315 | 0 | 1 | 0.105 | 0.114 | |
Solvency: 1–6 months | 0.665 | 0.472 | 0 | 1 | 0.591 | 0.693 | *** |
Solvency: 7–12 months | 0.131 | 0.338 | 0 | 1 | 0.149 | 0.125 | |
Solvency: > 12 months (ref.) | 0.092 | 0.290 | 0 | 1 | 0.154 | 0.069 | *** |
Self-employment experience | 2.662 | 1.142 | 1 | 5 | 2.572 | 2.695 | *** |
Academic education | 0.605 | 0.489 | 0 | 1 | 0.613 | 0.602 | |
Full-time SE | 0.892 | 0.310 | 0 | 1 | 0.799 | 0.927 | *** |
Solo SE | 0.864 | 0.343 | 0 | 1 | 0.911 | 0.846 | *** |
Age: 30–39 | 0.180 | 0.384 | 0 | 1 | 0.167 | 0.184 | |
Age: 40–49 | 0.277 | 0.447 | 0 | 1 | 0.248 | 0.287 | * |
Age: 50–59 | 0.369 | 0.483 | 0 | 1 | 0.369 | 0.369 | |
Age: > 60 | 0.138 | 0.345 | 0 | 1 | 0.167 | 0.127 | * |
Age: < 30 (ref.) | 0.037 | 0.189 | 0 | 1 | 0.048 | 0.033 | |
Control variables | |||||||
Female | 0.525 | 0.499 | 0 | 1 | 0.571 | 0.507 | *** |
Risk attitude | 3.048 | 0.967 | 1 | 5 | 2.966 | 3.079 | *** |
Household size | 2.195 | 1.124 | 1 | 5 | 2.149 | 2.213 | *** |
High digitalization | 0.169 | 0.375 | 0 | 1 | 0.162 | 0.172 | |
Mostly works from home | 0.479 | 0.500 | 0 | 1 | 0.481 | 0.478 | |
Wealth | 2.104 | 1.466 | 1 | 10 | 2.257 | 2.045 | *** |
Costs of living | 4.151 | 1.986 | 1 | 13 | 3.636 | 4.347 | *** |
Limited liability company | 0.041 | 0.198 | 0 | 1 | 0.030 | 0.045 | |
Government support | 0.644 | 0.479 | 0 | 1 | 0.518 | 0.691 | *** |
Variables | (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | (12) | (13) | (14) | (15) | (16) | (17) | (18) | (19) | (20) | (21) | (22) | (23) | (24) | (25) | VIF |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(1) Financial bootstrapping | 1.15 | |||||||||||||||||||||||||
(2) Revenue stable/increase | − 0.03 | 1.03 | ||||||||||||||||||||||||
(3) Revenue decrease: 100% | 0.01 | − 0.03 | 4.68 | |||||||||||||||||||||||
(4) Revenue decrease: 76–99% | 0.07 | − 0.02 | − 0.46 | 3.78 | ||||||||||||||||||||||
(5) Revenue decrease: 51–75% | 0.01 | − 0.02 | − 0.36 | − 0.26 | 3.03 | |||||||||||||||||||||
(6) Revenue decrease: 26–50% | − 0.05 | − 0.02 | − 0.30 | − 0.21 | − 0.17 | 2.54 | ||||||||||||||||||||
(7) Solvency: insolvent | 0.07 | − 0.01 | 0.14 | − 0.03 | − 0.06 | − 0.06 | 2.66 | |||||||||||||||||||
(8) Solvency: 1–6 months | 0.09 | 0.00 | −0.03 | 0.02 | 0.04 | 0.00 | −0.50 | 3.67 | ||||||||||||||||||
(9) Solvency: 7–12 months | − 0.07 | 0.01 | − 0.04 | 0.00 | 0.00 | 0.04 | − 0.14 | − 0.55 | 2.28 | |||||||||||||||||
(10) Self-employment experience | 0.04 | − 0.03 | − 0.02 | 0.02 | 0.00 | 0.00 | − 0.06 | 0.02 | 0.02 | 1.54 | ||||||||||||||||
(11) Academic education | − 0.04 | − 0.01 | − 0.13 | 0.02 | 0.06 | 0.06 | − 0.10 | − 0.05 | 0.08 | − 0.04 | 1.25 | |||||||||||||||
(12) Full-time SE | 0.18 | − 0.02 | − 0.04 | 0.06 | 0.01 | 0.00 | − 0.03 | 0.07 | 0.01 | 0.12 | 0.00 | 1.15 | ||||||||||||||
(13) Solo SE | − 0.13 | 0.00 | 0.05 | 0.00 | − 0.02 | − 0.04 | 0.03 | − 0.06 | 0.01 | − 0.06 | 0.13 | − 0.10 | 1.41 | |||||||||||||
(14) Age: 30–39 | 0.00 | 0.01 | 0.01 | − 0.01 | 0.00 | 0.00 | 0.03 | 0.00 | − 0.02 | − 0.33 | 0.03 | − 0.01 | 0.04 | 4.98 | ||||||||||||
(15) Age: 40–49 | 0.05 | − 0.01 | − 0.01 | 0.00 | 0.01 | 0.01 | 0.00 | 0.01 | 0.00 | − 0.09 | 0.01 | 0.04 | − 0.02 | − 0.29 | 6.81 | |||||||||||
(16) Age: 50–59 | 0.00 | 0.00 | − 0.01 | 0.01 | 0.00 | 0.00 | − 0.03 | 0.01 | 0.01 | 0.22 | − 0.04 | 0.05 | − 0.02 | − 0.36 | − 0.47 | 8.20 | ||||||||||
(17) Age: > 60 | − 0.06 | − 0.01 | 0.01 | − 0.01 | − 0.01 | 0.00 | − 0.01 | − 0.02 | 0.01 | 0.29 | 0.02 | − 0.06 | − 0.02 | − 0.19 | − 0.25 | − 0.31 | 5.01 | |||||||||
(18) Female | − 0.07 | 0.01 | − 0.01 | − 0.01 | 0.02 | 0.01 | 0.05 | − 0.01 | − 0.01 | − 0.12 | 0.12 | − 0.07 | 0.07 | 0.01 | 0.02 | 0.01 | − 0.05 | 1.27 | ||||||||
(19) Risk attitude | 0.07 | − 0.01 | 0.01 | 0.01 | 0.00 | − 0.02 | 0.01 | 0.03 | − 0.02 | 0.02 | 0.00 | 0.07 | − 0.08 | − 0.04 | − 0.01 | 0.02 | 0.04 | − 0.17 | 1.07 | |||||||
(20) Household size | 0.02 | 0.01 | − 0.05 | 0.01 | 0.02 | 0.03 | − 0.03 | 0.01 | 0.00 | − 0.02 | 0.00 | − 0.01 | − 0.12 | − 0.02 | 0.17 | − 0.02 | − 0.13 | − 0.08 | 0.00 | 1.13 | ||||||
(21) High digitalization | 0.01 | 0.02 | − 0.10 | − 0.02 | 0.06 | 0.05 | − 0.03 | − 0.01 | 0.00 | − 0.01 | 0.07 | 0.05 | 0.04 | 0.03 | 0.03 | − 0.04 | − 0.02 | − 0.07 | 0.02 | 0.01 | 1.16 | |||||
(22) Mostly works from home | − 0.03 | 0.02 | − 0.14 | 0.03 | 0.06 | 0.06 | − 0.05 | − 0.03 | 0.03 | − 0.05 | 0.19 | 0.01 | 0.21 | 0.03 | 0.00 | − 0.01 | − 0.02 | 0.03 | 0.01 | − 0.04 | 0.20 | 1.22 | ||||
(23) Wealth | − 0.10 | 0.01 | − 0.06 | 0.02 | 0.02 | 0.01 | − 0.22 | − 0.24 | 0.18 | 0.07 | 0.14 | 0.05 | − 0.03 | − 0.05 | − 0.01 | 0.04 | 0.05 | − 0.09 | 0.00 | 0.05 | 0.06 | 0.08 | 1.48 | |||
(24) Costs of living | 0.17 | 0.00 | − 0.07 | 0.02 | 0.03 | 0.03 | − 0.09 | 0.03 | 0.04 | 0.08 | 0.05 | 0.17 | − 0.27 | − 0.09 | 0.04 | 0.09 | − 0.01 | − 0.15 | 0.11 | 0.21 | 0.05 | − 0.01 | 0.21 | 1.39 | ||
(25) Limited liability company | 0.07 | 0.00 | 0.00 | 0.00 | − 0.01 | 0.00 | − 0.03 | 0.00 | 0.01 | 0.00 | − 0.02 | 0.04 | − 0.32 | − 0.03 | 0.01 | 0.00 | 0.01 | − 0.11 | 0.08 | 0.06 | 0.04 | − 0.07 | 0.06 | 0.16 | 1.15 | |
(26) Government support | 0.19 | − 0.04 | 0.08 | 0.09 | 0.00 | − 0.09 | 0.06 | 0.13 | − 0.07 | 0.06 | − 0.10 | 0.22 | − 0.17 | − 0.01 | 0.01 | 0.01 | − 0.02 | − 0.06 | 0.09 | − 0.01 | − 0.06 | − 0.09 | − 0.14 | 0.06 | 0.05 | 1.25 |
5.2 Multivariate analyses
Column | (1) | (2) | (3) | (4) | |||||
---|---|---|---|---|---|---|---|---|---|
Statistic | Coeff. | (SE) | Coeff. | (SE) | Coeff. | (SE) | Coeff. | (SE) | |
Control variables | |||||||||
Female | −0.055 | (0.014)*** | − 0.044 | (0.015)** | − 0.053 | (0.014)*** | − 0.057 | (0.015)*** | |
Risk attitude | 0.025 | (0.007)*** | 0.030 | (0.007)*** | 0.027 | (0.007)*** | 0.022 | (0.007)** | |
Household size | − 0.011 | (0.006) | − 0.011 | (0.006) | − 0.017 | (0.006)** | − 0.015 | (0.006)* | |
High digitalization | 0.033 | (0.018) | 0.033 | (0.018) | 0.017 | (0.018) | 0.020 | (0.018) | |
Mostly works from home | 0.002 | (0.014) | 0.004 | (0.014) | 0.009 | (0.014) | 0.017 | (0.014) | |
Wealth | − 0.037 | (0.006)*** | − 0.079 | (0.005)*** | − 0.081 | (0.005)*** | − 0.044 | (0.006)*** | |
Costs of living | 0.065 | (0.003)*** | 0.066 | (0.003)*** | 0.055 | (0.004)*** | 0.052 | (0.004)*** | |
Limited liability company | 0.085 | (0.030)** | 0.069 | (0.030)* | 0.015 | (0.031) | 0.032 | (0.031) | |
Government support | 0.243 | (0.015)*** | 0.302 | (0.015)*** | 0.243 | (0.015)*** | 0.182 | (0.016)*** | |
Independent variables | |||||||||
Revenue stable/increase | H1a | − 0.424 | (0.232) | − 0.369 | (0.232) | ||||
Revenue decrease: 100% | H1a | 0.222 | (0.033)*** | 0.250 | (0.033)*** | ||||
Revenue decrease: 76–99% | H1a | 0.315 | (0.033)*** | 0.323 | (0.033)*** | ||||
Revenue decrease: 51–75% | H1a | 0.271 | (0.034)*** | 0.279 | (0.034)*** | ||||
Revenue decrease: 26–50% | H1a | 0.179 | (0.036)*** | 0.179 | (0.036)*** | ||||
Revenue decrease: 1–25% (ref.) | H1a | – | – | ||||||
Solvency: insolvent | H1b | 0.509 | (0.037)*** | 0.481 | (0.037)*** | ||||
Solvency: 1–6 months | H1b | 0.380 | (0.032)*** | 0.338 | (0.032)*** | ||||
Solvency: 7–12 months | H1b | 0.218 | (0.035)*** | 0.182 | (0.035)*** | ||||
Solvency: > 12 months (ref.) | H1b | – | – | ||||||
Self-employment experience | H2a | 0.023 | (0.006)*** | 0.039 | (0.007)*** | ||||
Academic education | H2b | 0.004 | (0.015) | 0.024 | (0.015) | ||||
Full-time SE | H3a | 0.468 | (0.028)*** | 0.437 | (0.028)*** | ||||
Solo SE | H3b | − 0.115 | (0.020)*** | − 0.123 | (0.021)*** | ||||
Age: 30–39 | H3c | 0.070 | (0.039) | 0.055 | (0.040) | ||||
Age: 40–49 | H3c | 0.093 | (0.039)* | 0.054 | (0.040) | ||||
Age: 50–59 | H3c | 0.024 | (0.038) | − 0.034 | (0.040) | ||||
Age: > 60 | H3c | − 0.057 | (0.041) | − 0.133 | (0.044)** | ||||
Age: < 30 (ref.) | H3c | – | – | – | – | ||||
Region dummies (15) | Yes | Yes | Yes | Yes | |||||
Industry dummies (14) | Yes | Yes | Yes | Yes | |||||
Response week dummies (4) | Yes | Yes | Yes | Yes | |||||
Observations | 17,046 | 17,046 | 17,046 | 17,046 | |||||
Chi2 | 2081.619 | 1722.636 | 2127.848 | 2507.913 | |||||
Pseudo-R2 | 0.040 | 0.033 | 0.041 | 0.048 |
5.3 Further analysis
Column | (1) | (2) | (3) | (4) | (5) | (6) | |||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dependent variable | Sending payment reminders (dummy) | Paying invoices later (dummy) | Reducing tax advances (dummy) | Reducing health insurance contr. (dummy) | Reducing commercial rent (dummy) | Reducing private rent (dummy) | |||||||
Statistics | Coeff. | (SE) | Coeff. | (SE) | Coeff. | (SE) | Coeff. | (SE) | Coeff. | (SE) | Coeff. | (SE) | |
Independent variables | |||||||||||||
Revenue stable/increase | H1a | − 0.123 | (0.431) | − 0.690 | (0.751) | − 0.490 | (0.483) | − 0.899 | (0.744) | 0.045 | (1.040) | 0.000 | (.) |
Revenue decrease: 100% | H1a | − 0.617 | (0.079)*** | 0.035 | (0.103) | 0.748 | (0.077)*** | 0.946 | (0.088)*** | 0.525 | (0.161)** | 0.648 | (0.167)*** |
Revenue decrease: 76–99% | H1a | 0.076 | (0.078) | 0.296 | (0.104)** | 0.755 | (0.078)*** | 0.800 | (0.089)*** | 0.572 | (0.163)*** | 0.452 | (0.170)** |
Revenue decrease: 51–75% | H1a | 0.121 | (0.080) | 0.319 | (0.106)** | 0.552 | (0.080)*** | 0.662 | (0.092)*** | 0.419 | (0.168)* | 0.466 | (0.174)** |
Revenue decrease: 26–50% | H1a | 0.210 | (0.082)* | 0.132 | (0.112) | 0.405 | (0.083)*** | 0.307 | (0.097)** | 0.284 | (0.175) | 0.078 | (0.187) |
Revenue decrease: 1–25% (ref.) | H1a | – | – | – | – | – | – | – | – | – | – | – | – |
Solvency: insolvent | H1b | 0.109 | (0.100) | 1.649 | (0.146)*** | 0.237 | (0.088)** | 0.579 | (0.094)*** | 1.150 | (0.186)*** | 1.671 | (0.204)*** |
Solvency: 1–6 months | H1b | 0.323 | (0.076)*** | 1.025 | (0.134)*** | 0.451 | (0.070)*** | 0.373 | (0.077)*** | 0.791 | (0.169)*** | 0.826 | (0.191)*** |
Solvency: 7–12 months | H1b | 0.330 | (0.082)*** | 0.365 | (0.148)* | 0.211 | (0.076)** | 0.203 | (0.085)* | 0.493 | (0.182)** | 0.139 | (0.216) |
Solvency: > 12 months (ref.) | H1b | – | – | – | – | – | – | – | – | – | – | – | – |
Self-employment experience | H2a | 0.075 | (0.020)*** | 0.016 | (0.023) | 0.177 | (0.018)*** | 0.020 | (0.019) | − 0.027 | (0.029) | 0.008 | (0.031) |
Academic education | H2b | 0.239 | (0.043)*** | 0.013 | (0.048) | 0.038 | (0.038) | 0.040 | (0.039) | − 0.135 | (0.060)* | − 0.140 | (0.064)* |
Full-time SE | H3a | 0.388 | (0.070)*** | 0.006 | (0.077) | 0.758 | (0.063)*** | 1.520 | (0.084)*** | − 0.104 | (0.102) | 0.038 | (0.104) |
Solo SE | H3b | − 0.169 | (0.061)** | − 0.314 | (0.066)*** | − 0.346 | (0.058)*** | 0.005 | (0.059) | − 0.528 | (0.075)*** | 0.214 | (0.100)* |
Age: 30–39 | H3c | − 0.093 | (0.102) | − 0.254 | (0.119)* | 0.362 | (0.103)*** | 0.224 | (0.104)* | 0.475 | (0.189)* | − 0.222 | (0.143) |
Age: 40–49 | H3c | − 0.264 | (0.103)* | − 0.088 | (0.118) | 0.457 | (0.103)*** | 0.165 | (0.104) | 0.677 | (0.187)*** | − 0.368 | (0.146)* |
Age: 50–59 | H3c | − 0.536 | (0.106)*** | − 0.197 | (0.121) | 0.314 | (0.105)** | 0.113 | (0.106) | 0.528 | (0.190)** | − 0.480 | (0.150)** |
Age: > 60 | H3c | − 0.811 | (0.119)*** | − 0.207 | (0.133) | 0.138 | (0.114) | − 0.101 | (0.117) | 0.513 | (0.202)* | − 0.615 | (0.171)*** |
Age: < 30 (ref.) | H3c | – | – | – | – | – | – | – | – | – | – | – | – |
Control variables | Yes | Yes | Yes | Yes | Yes | Yes | |||||||
Region dummies (15) | Yes | Yes | Yes | Yes | Yes | Yes | |||||||
Industry dummies (14) | Yes | Yes | Yes | Yes | Yes | Yes | |||||||
Response week dummies (4) | Yes | Yes | Yes | Yes | Yes | Yes | |||||||
Observations | 17,046 | 17,046 | 17,046 | 17,046 | 17,046 | 17,016 | |||||||
Chi2 | 1226.526 | 1266.687 | 2699.394 | 1395.863 | 1602.801 | 677.644 | |||||||
Pseudo-R2 | 0.063 | 0.082 | 0.114 | 0.065 | 0.145 | 0.071 |