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Estudo

Profit sharing with heterogeneous entrepreneurial prowess

Cardoso, Renato Fragelli

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Resumo

This paper analyzes the impact of profit sharing on the incentives that individuals face to set up their own business. It presents a model of capital accumulation in which individuals are equally skilled to be workers but differ in their abilities to manage a firm Given an exogenous profit sharing parameter, an individual chooses whether to be an employer or an employee in order to maximize his net income. It is shown that profit sharing can inhibit entrepreneurial initiatives, reducing the number of firms in operation, the aggregate output and the economy's long run capital stock.

Ficha do documento

Tipo
Estudo
Ano
1995
Instituição
Escola de Pós-Graduação em Economia da FGV
Idioma
Inglês
Acesso
Não informado
Identificador
oai:repositorio.fgv.br:10438/490

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