Profit Sharing With Heterogeneous Entrepreneurial Prowess

Renato Fragelli Cardoso

Brazilian Review of Econometrics, 1995, vol. 15, issue 2

Abstract: This paper analyses the impact of the compulsory adoption of profit sharing on the incentives that individuals face to set up their own business. It presents a model of capital accumulation in which individuals are equally skilled to be workers but differ in their abilities to manage a firm. It is shown that the mandatory imposition of profit sharing can inhibit entrepreneurial initiatives, reducing the number of firms in operation, the aggregate output and the economy's long run capital stock. It is also shown an example where, despite its deleterious consequences. mandatory profit sharing could be introduced in a democratic society if this choice were put to vote.

Date: 1995
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://periodicos.fgv.br/bre/article/view/2886 (text/html)

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:sbe:breart:v:15:y:1995:i:2:a:2886

Access Statistics for this article

Brazilian Review of Econometrics is currently edited by Daniel Monte

More articles in Brazilian Review of Econometrics from Sociedade Brasileira de Econometria - SBE Contact information at EDIRC.
Bibliographic data for series maintained by Núcleo de Computação da FGV EPGE ().