Seminarios académicos y conferencias
Human Capital Entrepreneurship and Employment
23 Junio 2015 - 17 hrs.
Sala 209, Facultad de Ciencias Económicas y Administrativas UC
This paper puts forth a rationale for entrepreneurship by employees of old firms, which is one of the most common sources of new firms in many industries. Entrepreneurship trades-off the agency cost of moral hazard under entrepreneurship against the loses from the lack of coordination and market adaptation due to communication frictions within firms. Workers of old firms choose entrepreneurship when fixed set-up costs are small, the productivity from effort under entrepreneurship is large, the uncertainty about market conditions is large, coordination costs within firms are large, communication frictions within firms are large and adaptation to market conditions is more important. Modelling entrepreneurship as an endogenous outside option for workers of old firms has important consequences on firms’ incentives to provide workers with human capital and rationalizes the entrepreneurship puzzle