Entrepreneur Selection, Rent-seeking and Economic Growth
Read
DownLoad |
| Title | Entrepreneur Selection, Rent-seeking and Economic Growth
|
| Author | Hu Yonggang and Shi Chong |
| Organization | Shanghai University of Finance and Economics |
| Email | yongghu@mail.shufe.edu.cn; chstone@126.com |
| Key Words | Distortion; Rent Seeking; Rule of Law; Economic Growth; Income Inequality |
| Abstract | This paper introduces distortion into a model combing entrepreneur selection and talent allocation, in which state-owned and private enterprises co-exist. Our studies show that government regulation and the rule of law affect economic growth through quantity and allocation effects. Reduction in government regulation speeds up growth but at same time enlarges income gap. Enforcement of rule of law and economic growth exhibit U type relationship instead of linear positive one. The model’s simulations reveal that a reduction of 0.1 unit in government regulation leads to 0.72 percentage point increase in China’s economic growth given return on rent-seeking. Enforcement of rule of law leads to a U type relationship regarding economic growth, the turning point is at about the level of 1.6 for return on rent-seeking. |
| Serial Number | WP991 |
| Time | 2015-12-15 |
|