Publication Type

Working Paper

Publication Date

4-2017

Abstract

I estimate a matching model of partnerships among startup owners to quantify therelative importance of productivity gain, financing gain, and moral hazard to businesspartnership formation. The productivity gain accounts for 85% of the gain from theobserved partnerships. For partners in the first quintile of the wealth distribution, however, financing accounts for 85% of the gain. The moral hazard cost corresponds to 39%of the entire gain from partnerships. A government-guaranteed loan program specificallytargeting partnership firms does not increase the number of partnership firms, and isineffective in improving match quality among partners.

Keywords

Partnership, productivity, financial constraints, moral hazard, entrepreneurship, matching

Discipline

Econometrics | Entrepreneurial and Small Business Operations | Finance

Research Areas

Econometrics

First Page

1

Last Page

76

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

http://jungholee.weebly.com/uploads/3/8/6/4/38644437/partnershiprevised2017apr.pdf

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