This paper develops a model of small business failure and sale that is motivated by recent evidence concerning how the failure and sale of small businesses vary with the age of the business and the tenure of the manager. This evidence motivates two key features of the model: a match between the...

The authors formalize a view of entrepreneurship in the spirit of Theordore W. Schultz. In this view, entrepreneurs are those individuals who respond to the opportunities for creating new products (and the like) that arise because of technological progress, for example. The theory has...

Despite the widespread belief that entrepreneurship is a key factor in economic development, there have been few attempts to develop formal models to analyze the phenomenon. This paper presents a model in which endogenous entrepreneurial activity is a key determinant of economic growth. The...