This paper develops a model that is capable of replicating these empirical findings. It extends Hopenhayn (1993) industry dynamics framework by introducing firm ownership status (private or public) and allowing private firms to go public at a cost. The key assumption is that privately held firms...

This paper studies the formation of teams in the economy in which entrepreneurs dier by how much they can contribute to the joint firm. First, it documents, using the Panel Study of Entrepreneurial Dynamics, that the individual contributions are positively correlated across owners, even after...

Empirical studies document differences in firms' response to the introduction of various labor market policies. In particular, large and mature firms tend to participate more actively in targeted employment subsidy programs (under which firms receive subsidies for hiring disadvantaged workers)....

This paper embeds a repeated partnership game with imperfect monitoring into a matching environment. We show that even though the underlying technology of production exhibits no complementarities with respect to types of the partners, the presence of imperfect monitoring leads to non-trivial...

may, on their own, generate monotone matching predictions in the absence of complementarities or anti-complementarities in production technology. We also derive sufficient conditions on the primitives of the model leading to the optimality of positive and negative matching of team members.

the consumers who start saving in order to increase consumption of the commitment good in the future become risk lovers. We also argue that such behavior is likely to arise due to the presence of borrowing constraints; therefore suggesting that in the economies with consumption commitments...