Estimating the benefits and costs of forming business partnerships

• 成果类型: Article
• 署名作者: Lee, Jungho
• 署名单位: Singapore Management University
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12324
• 发表日期: 2020
• 页码: 531-562
• 关键词: Moral hazard; entrepreneurial choice; EFFICIENCY; KNOWLEDGE; merger; FIRMS; transmission; incentives; reputation; fertility

摘要

I estimate a matching model of business-partnership formation to quantify the relative importance of productivity gains, financing gains, and the coordination failure of effort provision (moral hazard) among partners. Productivity gains account for 61% of the gain from the observed partnerships. For partners in the first quartile of the wealth distribution, however, financing accounts for 93% of the gain. The cost of moral hazard corresponds to 42% of the entire gain from partnerships. A loan policy specifically targeting partnerships is less effective in improving welfare than a conventional loan policy that provides loans to individual entrepreneurs.