This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Sectoral Differentiation, Allocation of Talent, and Financial Development

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Esteban Jaimovich

Additional information is available for the following registered author(s):

Abstract

I present a theory of development in which heterogeneously talented entrepreneurs require credit to start new projects and open new sectors. As the variety of sectors expands during development, the allocation of entrepreneurial talent improves. A key result of the paper is to show that, in addition to increasing the average productivity of the matches between agents and sectors, this process also mitigates informational frictions affecting the functioning of financial markets. Furthermore, the positive impact of sectoral variety on the efficiency of financial markets gives rise to a novel feedback between financial development and R&D effort, which may lead to different types of dynamics. A successful economy typically exhibits a progressive increase in the variety of sectors, which in turn helps to alleviate frictions in the financial markets. However, a poverty trap may also arise. This situation is characterised by a rudimentary productive structure with poor matching of skills to activities, and where the operation of financial markets is severely affected by talent mismatching.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.carloalberto.org/files/no.59.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 59.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 42 pages
Date of creation: 2007
Date of revision: 2009
Handle: RePEc:cca:wpaper:59

Contact details of provider:
Postal: Via Real Collegio, 30, 10024 Moncalieri (To)
Phone: +390116705000
Fax: +390116476847
Email:
Web page: http://www.carloalberto.org/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Giovanni Bert).

Related research
Keywords: Adverse Selection; Informational Frictions; Talent Allocation; Sectoral Diversification; Financial Development.;

Other versions of this item:

Find related papers by JEL classification:
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information
O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Maristella Botticini & Zvi Eckstein, 2006. "From Farmers to Merchants, Voluntary Conversion and Diaspora: A Human Capital Interpretation of Jewish History," Carlo Alberto Notebooks 2, Collegio Carlo Alberto. [Downloadable!]
    Other versions:
  2. Daniela Del Boca & Daniela Vuri, 2006. "The Mismatch between Employment and Child Care in Italy: the Impact of Rationing," CHILD Working Papers wp08_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
    Other versions:
  3. Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini & Marco Taboga, 2004. "Portfolio Selection with Monotone Mean-Variance Preferences," ICER Working Papers - Applied Mathematics Series 27-2004, ICER - International Centre for Economic Research, revised Dec 2004. [Downloadable!]
    Other versions:
  4. Massimiliano Amarante & Fabio Maccheroni & Massimo Marinacci & Luigi Montrucchio, 2006. "Cores of Non-Atomic Market Games," Carlo Alberto Notebooks 13, Collegio Carlo Alberto. [Downloadable!]
    Other versions:
  5. Daniela Del Boca & Robert M. Sauer, 2006. "Life Cycle Employment and Fertility Across Institutional Environments," IZA Discussion Papers 2285, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  6. Peter Klibanoff & Massimo Marinacci & Sujoy Mukerji, 2006. "Recursive Smooth Ambiguity Preferences," Carlo Alberto Notebooks 17, Collegio Carlo Alberto, revised 2008. [Downloadable!]
  7. Giovanni Mastrobuoni & Wioletta Dziuda, 2005. "The Euro Changeover and its Effects on Price Transparency and Inflation," Carlo Alberto Notebooks 26, Collegio Carlo Alberto, revised 2006. [Downloadable!]
    Other versions:
Full references

Statistics
Access and download statistics

Did you know? You too can volunteer for RePEc, for example by providing information about publications in your institution.

This page was last updated on 2009-11-2.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.