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Rent-Seeking Activities, Misallocation, and Innovation in Argentina (Inglês)

What is the efficiency cost of rent-seeking activities in Argentina? This paper quantitatively shows that rent-seeking activities in the form of bribes have aggregate effects through two channels. First, they generate misallocation of resources across firms because they prevent resources from flowing to the most productive firms, reallocating resources instead to those that succeed at rent-seeking. Second, such activities affect the allocation of resources within firms because rent-seeking drives resources away from innovation. These two channels can help in understanding why Argentina has more misallocation across firms and less investment in research and development, compared with developed economies, explaining a sizable portion of Argentina's low productivity.

Detalhes

  • Autor

    Zaourak,Gabriel Roberto

  • Data do documento

    2020/06/23

  • TIpo de documento

    Documento de trabalho sobre pesquisa de políticas

  • No. do relatório

    WPS9293

  • Nº do volume

    1

  • Total Volume(s)

    1

  • País

    Argentina,

  • Região

    América Latina e Caribe,

  • Data de divulgação

    2020/06/23

  • Disclosure Status

    Disclosed

  • Nome do documento

    Rent-Seeking Activities, Misallocation, and Innovation in Argentina

  • Palavras-chave

    Business Environment and Enterprise Performance Survey; trade and investment; rent-seeking activity; constant elasticity of substitution; Cost of Doing Business; total amount of taxes; misallocation of resources; total factor productivity; firm size distribution; rent-seeking behavior; parameter value; data on corruption; general equilibrium model; perception of corruption; unit labor; unit of labor; investment in innovation; types of regulation; share of capital; level of employment; cost of rent; probability distribution function; investment in research; real interest rate; terms of sale; private capital stock; tax and regulation; stock of capital; effects of bribery; allocation of capital; impact on productivity; direct government involvement; final goods producers; share of income; output per worker; industrial organization literature; first order condition; cost of innovation; Research Support; impact of policy; long run equilibrium; average productivity; aggregate productivity; steady state; depreciation rate; development of literature; stochastic process; firm-level productivity; innovation activity; firm level; market clearing; entry cost; aggregate statistic; firm dynamic; dynamic effect; standard deviation; labor use; production function; intangible capital; Labor Market; competitive market; innovation effort; increase productivity; value function; informal payment; functional form; aggregate variable; aggregate output; firm productivity; productivity distribution; firm-level innovation; employment growth; indicator function; efficiency cost; productivity dynamic; rental rate; Political Economy; budget constraint; business growth; import quota; value added; bribe payment; productive activity; low intensity; political science; opinion survey; corrupt countries; index value; micro firms; annual sale; aggregate outcome; discount value; convenient feature; future productivity; cross-country comparison; firm-level analysis; bureaucratic procedure; economic research; public transaction; bureaucratic structure; government contract; public official; high bribe; export permit; alternative measure; investment resource; development policy; disaggregated level; open access; cost minimization; idiosyncratic shock; reallocating resource; financing constraint; feasibility constraint; illegal activities; intermediate product; productivity level; price index; negative relationship; Innovation Policies; linear model; summary statistic; capital tax; credit crunch; exogenous shock; individual indicator; lump sum; productivity index; intermediate input; competitive equilibrium; richer countries; cross-country differences; legal punishment; International Trade; time t; important policy; output loss; innovation policy; black market; model strategy; management outcome; exogenous probability; labor demand; average cost; discount factor; rent seeking; bureaucratic framework; quantitative analysis; aggregate efficiency; negative effect; reward structure; potential competition; bribe measure; production process; future research; positive impact; imperfect competition; increasing investment; average pay; individual benefits; minimum level; selective enforcement; market discount; in institution; targeted subsidy; recent years; entry condition; Exchange Rates; lump-sum transfer; capital ratio; innovation constant; dynamic environment; conditional expectation; implicit tax; static effect; average investment; best practice

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