Endogenous growth and adverse selection in entrepreneurship

Public expenditure, risk sharing and economic growth

“…Another strand of related literature explores the relationship between asymmetric information and growth. The effect of asymmetric information on economic growth is investigated in a human capital framework with regard to moral hazards in financial markets, the contracting environment in production, and adverse selection in innovation‐driven growth (Plehn‐Dujowich, 2009). Less attention is paid to how public policies, through their impact on information asymmetry, affect growth.…”

Explaining the performance of immigrant entrepreneurship in market economies: empirical evidence of technology signaling

“…And second, since Akerlof's (1970) seminal "lemons problem" idea, it has been established in many market settings that adverse selection reduces gains from trade when sellers possess private information about market opportunities that buyers can't credibly verify (Amit and Muller 1995;Hellmann and Stiglitz 2000;Myers and Majluf 1984;Plehn-Dujowich 2009). Hence, the presence of some untalented necessity entrepreneurs may also depress the market opportunities to immigrant entrepreneurship (Amit et al 1990;Bruder et al 2011;Ghatak et al 2007).…”

Credit Constraints and the Inverted‐U Relationship Between Competition and Innovation

“…Bryce Campodonico et al . () and Plehn‐Dujowich () develop Schumpeterian growth models with adverse selection in financing, but use them to study optimal tax policy and to quantify the reduction in the rate of growth stemming from the presence of financial frictions, respectively. Finally, Ates and Saffie () study a general equilibrium endogenous growth model in which financial intermediaries screen the quality of projects from a heterogeneous population of entrepreneurs.…”