Risk taking by entrepreneurs Public Deposited

Creator Series Date Created
  • 2003-02
Abstract
  • 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.

Subject (JEL) Keyword Date Modified
  • 04/10/2018
Corporate Author
  • Federal Reserve Bank of Minneapolis. Research Department.
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