Tag
market_reallocation
2 findings
Finance & microfinanceFinancial Barriers to Talented Entrepreneurial EntryFinancing obstacles prevent talented entrepreneurs with low capital from establishing competing enterprises, which, combined with delegation limits on large firms, severely restricts market reallocation from inefficient to efficient managers.Observational StudyEconomics (general)Market Reallocation Barriers and Bad Management PersistenceIndian textile firms faced a 35% import tariff on cotton fabric, strict credit access limits, and severe managerial span-of-control constraints where firm size was driven by the supply of adult male family members (R-squared impact of 10.1%). These distortions allowed poorly managed firms (baseline management score mean of 2.60 out of 5) to survive over 20 years without exiting.RCT