Rent-seeking activities, misallocation, and innovation in Argentina
Date
2020-03
Authors
Zaourak, Gabriel Roberto
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Fattal Jaef, Roberto
Journal Title
Journal ISSN
Volume Title
Publisher
Universidad de San Andrés. Departamento de Economía
Abstract
What is the efficiency cost of rent-seeking activities in Argentina? In this paper, I quantitatively show
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 ones, reallocating them instead to those that succeed at rent-seeking. Second, such
activities affect the allocation of resources within firms, because they drive resources away from
innovation activities. These two channels can help explain why Argentina has both more misallocation
across firms and less investment in research and development than developed economies explaining a
sizable portion of the Argentinian low productivity.
Description
Fil: Zaourak, Gabriel Roberto. Universidad de San Andrés. Departamento de Economía; Argentina.