Filtering by: Keyword Intertemporal firm choice Remove constraint Keyword: Intertemporal firm choice
|Creator:||Hopenhayn, Hugo Andres. and Vereshchagina, Galina.|
|Series:||Advances in dynamic economics|
Entrepreneurs bear substantial risk, but empirical evidence shows no sign of a positive premium. This paper develops a theory of endogenous entrepreneurial risk taking that explains why self-financed entrepreneurs may find it optimal to invest into risky projects offering no risk premium. The model has also a number of implications for firm dynamics supported by empirical evidence, such as a positive correlation between survival, size, and firm age.
|Keyword:||Risk taking, Intertemporal firm choice, Firm dynamics, Financing, Investment, Occupational choice, and Borrowing constraints|
|Subject (JEL):||G32 - Corporate finance and governance - Financing policy ; Financial risk and risk management ; Capital and ownership structure, L25 - Firm objectives, organization, and behavior - Firm performance : Size, diversification, and scope, L26 - Firm objectives, organization, and behavior - Entrepreneurship, and E21 - Macroeconomics : Consumption, saving, production, employment, and investment - Consumption ; Saving ; Wealth|