Subsidizing startups under imperfect information

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dc.contributor.authorMelcangi, Davide
dc.contributor.authorTuren, Javier
dc.date.accessioned2025-01-20T17:26:24Z
dc.date.available2025-01-20T17:26:24Z
dc.date.issued2023
dc.description.abstractHow is firm creation affected by imperfect information? Our model of rational inattention generates inefficient entry and labor misallocation, because startups make error-prone decisions. Learning decisions of prospective entrepreneurs alter the effects of lump-sum transfers to startups: the total employment gain is amplified due to an unintended increase in inefficient entry, most entrants hire fewer workers, and misallocation goes up. The transfer changes the learning incentives and makes even productive startups lean towards more conservative hiring. We show that this novel information channel works against well-known mechanisms, and thus can help reconcile recent empirical evidence on startup policies.(c) 2023 Published by Elsevier B.V.
dc.fuente.origenWOS
dc.identifier.doi10.1016/j.jmoneco.2023.06.008
dc.identifier.eissn1873-1295
dc.identifier.issn0304-3932
dc.identifier.urihttps://doi.org/10.1016/j.jmoneco.2023.06.008
dc.identifier.urihttps://repositorio.uc.cl/handle/11534/91554
dc.identifier.wosidWOS:001094591400001
dc.language.isoen
dc.pagina.final109
dc.pagina.inicio93
dc.revistaJournal of monetary economics
dc.rightsacceso restringido
dc.subjectStartups
dc.subjectRational inattention
dc.subjectFirm subsidy
dc.subject.ods17 Partnerships for the Goals
dc.subject.ods08 Decent Work and Economic Growth
dc.subject.odspa17 Alianzas para lograr los objetivos
dc.subject.odspa08 Trabajo decente y crecimiento económico
dc.titleSubsidizing startups under imperfect information
dc.typeartículo
dc.volumen139
sipa.indexWOS
sipa.trazabilidadWOS;2025-01-12
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