Entrepreneurship, Compensation, and the Corporation

Quarterly Journal of Austrian Economics, Vol. 14, No. 1, pp. 3-24, 2011

22 Pages Posted: 31 May 2011  

Henry G. Manne

George Mason University School of Law (Deceased)

Date Written: May 27, 2011

Abstract

This paper revisits the concept of entrepreneurship, which is frequently neglected in mainstream economics, and discusses the importance of defining and isolating this concept in the context of large, publicly held companies. Compensating for entrepreneurial services in such companies, ex ante or ex post, is problematic – almost by definition – despite the availability of devices such as stock and stock options. It is argued that insider trading can serve as a unique compensation device and encourage a culture of innovation.

Keywords: Entrepreneurship, Compensation, Corporation, Innovation, Insider Trading

JEL Classification: D82, D83, J33, K22, L26, M12, M52

Suggested Citation

Manne, Henry G., Entrepreneurship, Compensation, and the Corporation (May 27, 2011). Quarterly Journal of Austrian Economics, Vol. 14, No. 1, pp. 3-24, 2011. Available at SSRN: https://ssrn.com/abstract=1854661

Henry G. Manne (Contact Author)

George Mason University School of Law (Deceased) ( email )

3301 N. Fairfax Drive
Arlington, VA 22201
United States

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