All entrepreneurial productivity increases are not created equal

Arup Bose, Debashis Pal and David Sappington

Southern Economic Journal, 2016, vol. 82, issue 3, 952-974

Abstract: We examine the impact of productivity increases in a setting where wealth‐constrained entrepreneurs are privately informed about whether their project will succeed with high (pH) or low (pL) probability. Not surprisingly, many productivity increases (e.g., an increase in pH) generate gains for entrepreneurs and/or venture capitalists. However, some productivity increases (e.g., an increase in pL) can generate widespread losses. Furthermore, entrepreneurs with low‐productivity projects can benefit more from policies that increase the productivity of high‐quality projects than from policies that increase their own productivity. Therefore, the design of policy to enhance welfare in the entrepreneurial sector can entail important subtleties.

Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/soej.12032

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:wly:soecon:v:82:y:2016:i:3:p:952-974

Access Statistics for this article

More articles in Southern Economic Journal from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery (contentdelivery@wiley.com).