Heterogeneous Entrepreneurs, Creation and Destruction: A Simple Model

Oscar Landerretche M.

Working Papers from University of Chile, Department of Economics

Abstract: We construct an economy with heterogeneous entrepreneurs in productivity, wealth and also size, with contracting originating from a hidden action problem. This economy generates dual margins with high productivity firms owned by poor entrepreneurs being incentive constrained and low productivity firms owned by richer entrepreneurs being participation constrained. We show that the incentive constrained margin composed of poorer but productive entrepreneurs will be more sensitive to shocks in this economy, more benefited by institutional improvements to contracting, financial opening, financial development and the provision of technical support by the government.

Keywords: Productivity; entrepreneurs. (search for similar items in EconPapers)
Pages: 38 pages
Date: 2007-06
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.econ.uchile.cl/uploads/publicacion/3462 ... 86f-2ca129274d82.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:udc:wpaper:wp243

Access Statistics for this paper

More papers in Working Papers from University of Chile, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Mohit Karnani ().