An Estimated Structural Model of Entrepreneurial Behavior

• 成果类型: Article
• 署名作者: Jones, John Bailey; Pratap, Sangeeta
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Richmond; City University of New York (CUNY) System; Hunter College (CUNY); City University of New York (CUNY) System
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20170370
• 发表日期: 2020
• 页码: 2859-2898
• 关键词: size distribution; Firm investment; risk-aversion; constraints; returns; WEALTH; misallocation; PRODUCTIVITY; frictions; DYNAMICS

摘要

Using a rich panel of owner-operated New York dairy farms, we provide new evidence on entrepreneurial behavior. We formulate a dynamic model of farms facing uninsured risks and financial constraints. Fanners derive nonpecuniary benefits from operating their businesses. We estimate the model via simulated minimum distance, matching both production and financial data. We find that financial factors and nonpecuniary benefits are of first-order importance. Collateral constraints and liquidity restrictions inhibit borrowing and the accumulation of capital, especially among high-productivity firms seeking to expand. The nonpecuniary benefits to farming are large and keep small, low-productivity farms in business. Although farmers are risk averse, eliminating uninsured production risk has only modest ejects on capital and output.