The allocation of entrepreneurial efforts in a rent-seeking society: Evidence from China
•There are four types of entrepreneurial efforts in a rent-seeking society.•Entrepreneurs pursue rent-seeking and reject rent-extraction against politicians.•Ordinary entrepreneurs would desire better institutional environment.•Entrepreneurs prefer political connections if institutional improvement...
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Published in | Journal of Comparative Economics Vol. 44; no. 2; pp. 353 - 371 |
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Main Authors | , , |
Format | Journal Article |
Language | English |
Published |
San Diego
Elsevier Inc
01.05.2016
Elsevier BV |
Subjects | |
Online Access | Get full text |
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Summary: | •There are four types of entrepreneurial efforts in a rent-seeking society.•Entrepreneurs pursue rent-seeking and reject rent-extraction against politicians.•Ordinary entrepreneurs would desire better institutional environment.•Entrepreneurs prefer political connections if institutional improvement is unavailable.•China is trapped in a rent-seeking society.
This paper considers four types of entrepreneurial efforts: productive activities, aggressive rent seeking, defense against rent extraction, and leisure. It examines how entrepreneurs allocate efforts when facing dual-dealing relationships with politicians in a rent-seeking society: entrepreneurs not only pursue additional benefits through rent seeking, but also try to avoid extortions by politicians. Using unique city-level and firm-level data across China, we demonstrate that Chinese entrepreneurs survive in a twisted world: ordinary entrepreneurs would desire better institutional environment, but if institutional improvement is not available, they would prefer political connections which are often preoccupied by special interest groups and/or large-sized firms. |
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Bibliography: | ObjectType-Article-1 SourceType-Scholarly Journals-1 ObjectType-Feature-2 content type line 23 |
ISSN: | 0147-5967 1095-7227 |
DOI: | 10.1016/j.jce.2015.02.004 |