Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/45068
Authors: 
Bianchi, Milo
Year of Publication: 
2009
Series/Report no.: 
Research paper / UNU-WIDER 2009.20
Abstract: 
In this paper, we formalize the view that economic development requires high rates of productive entrepreneurship, and this requires an efficient matching between entrepreneurial talent and production technologies. We first explore the role of financial development in promoting such efficient allocation of talent, which results in higher production, job creation and social mobility. We then show how different levels of financial development may endogenously arise in a setting in which financial constraints depend on individual incentives to misbehave, these incentives depend on how many jobs are available, and this in turn depends on the level of financial development. Such complementarity between labour market and financial market development may generate highly divergent development paths even for countries with very similar initial conditions.
Subjects: 
credit constraints
allocation of entrepreneurial talent
productive and unproductive entrepreneurs
economic development
JEL: 
J24
L26
O16
ISBN: 
978-92-9230-189-7
Document Type: 
Working Paper

Files in This Item:
File
Size
204.04 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.