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Economic Rent (economic + rent)
Selected AbstractsON FINANCE AS A THEORY OF TFP, CROSS-INDUSTRY PRODUCTIVITY DIFFERENCES, AND ECONOMIC RENTS,INTERNATIONAL ECONOMIC REVIEW, Issue 2 2008Andrés Erosa We develop a theory of capital-market imperfections to study how the ability to enforce contracts affects resource allocation across entrepreneurs of different productivities, and across industries with different needs for external financing. The theory implies that countries with a poor ability to enforce contracts are characterized by the use of inefficient technologies, low aggregate TFP, large differences in labor productivity across industries, and large employment shares in industries with low productivity. These implications are supported by the empirical evidence. The theory also suggests that entrepreneurs have a vested interest in maintaining a status quo with low enforcement. [source] Not by Rent Alone: Analysing the Pro-Poor Functions of Small-Scale Fisheries in Developing CountriesDEVELOPMENT POLICY REVIEW, Issue 3 2010Christophe Béné The dominant view in academic and policy arenas is increasingly one in which the major contribution of capture fisheries to development should be derived from the capacity of society to maximise the economic rent of fishery resources. Drawing upon empirical experience from the South, this article highlights the potentially disastrous consequences that a universal implementation of the rent-maximisation model would have in developing countries, and argues that a more gradual approach would be preferable. The welfare function of small-scale fisheries, namely, their capacities to provide labour and cash income to resource-poor households, should be preserved until the appropriate macroeconomic conditions for rent-maximisation and redistribution are fulfilled. [source] The ,reversal of fortune' thesis and the compression of history: Perspectives from African and comparative economic history,JOURNAL OF INTERNATIONAL DEVELOPMENT, Issue 8 2008Gareth Austin Abstract Acemoglu, Johnson and Robinson have dramatically challenged the tendency of economists to confine their empirical search for the causes of economic growth to the recent past. They argue that the kind of institutions established by European colonialists, either protecting private property or extracting rents, resulted in the poorer parts of the pre-colonial world becoming some of the richest economies of today; while transforming some of the more prosperous parts of the non-European world of 1500 into the poorest economies today. This view has been further elaborated for Africa by Nunn, with reference to slave trading. Drawing on African and comparative economic historiography, the present paper endorses the importance of examining growth theories against long-term history: revealing relationships that recur because the situations are similar, as well as because of path dependence as such. But it also argues that the causal relationships involved are more differentiated than is recognised in AJR's formulations. By compressing different historical periods and paths, the ,reversal' thesis over-simplifies the causation. Relatively low labour productivity was a premise of the external slave trades; though the latter greatly reinforced the relative poverty of many Sub-Saharan economies. Again, it is important to distinguish settler and non-settler economies within colonial Africa itself. In the latter case it was in the interests of colonial regimes to support, rather than simply extract from, African economic enterprise. Finally, economic rent and economic growth have often been joint products, including in pre-colonial and colonial Africa; the kinds of institutions that favoured economic growth in certain historical contexts were not necessarily optimal for that purpose in others. AJR have done much to bring development economics and economic history together. The next step is a more flexible conceptual framework, and a more complex explanation. Copyright © 2008 John Wiley & Sons, Ltd. [source] The economics of transit oil and gas pipelines: a review of the fundamentalsOPEC ENERGY REVIEW, Issue 2 2009Ekpen J. Omonbude The growing relevance of transit oil and gas pipelines is reflected in the general anticipation of an increase in their construction in the future because of factors such as the increasing discoveries of reserves in remote and land-locked locations, the depletion of reserves close to established markets, and improvements in cost-effective technological methods of exploration and production in previously uneconomic reserves. Recent disputes between parties to transit pipeline agreements demonstrate, in addition to other problems, the relevance of a fundamental analysis of the workings of oil and gas pipelines in economics. The objective of this paper therefore is to provide a fundamental framework for understanding and analysing transit oil and gas pipelines. The paper finds that the concept of economic rent, natural monopoly and basic cost concepts clearly explain the rationale behind the imposition of a transit fee, although they do not sufficiently define how they are determined. [source] Testing and Implementing the Use of Multiple Bidding Rounds in Conservation Auctions: A Case Study ApplicationCANADIAN JOURNAL OF AGRICULTURAL ECONOMICS, Issue 3 2009John Rolfe Conservation auctions are typically framed as closed, discriminatory, single round, first-price auctions, and are based on the assumption that landholders will offer bids determined by their "independent private values." Where landholders are unfamiliar with conservation tender processes and the supply of environmental services, they may find it very difficult to construct bids in this way. Bid values may be influenced by other factors, such as concerns about "winner's curse," a desire to capture economic rent, and premiums for risk and uncertainty factors. Sealed, single round auctions may exacerbate information gaps and uncertainty factors because of the limited information flows compared to traditional market exchanges and open, ascending auctions. In this paper, the cost efficiencies of a multiple bidding round auction for landholder management actions are explored with the use of field experiments and a conservation auction. The case study application is improved grazing management in a rangeland area of Australia, where landholders are unfamiliar with supplying environmental services or conservation auctions. Results suggest that multiple round auctions may be associated with efficiency gains, particularly in initial rounds. Les enchères pour la conservation sont généralement des enchères au premier prix, à un tour, discriminatoires et par offre écrite. Elles reposent sur l'hypothèque que les offres des propriétaires fonciers refléteront leur ,valeur privée,. Lorsque les propriétaires fonciers ne sont pas familiers avec les processus d'enchères pour la conservation et la prestation de services environnementaux, ils peuvent éprouver de la difficultéà attribuer une valeur à leur offre. Cette valeur peut-être influencée par d'autres facteurs, tels que la crainte de la ,malédiction du vainqueur ,, le désir de réaliser une rente économique, les primes de risque et les facteurs d'incertitude. Les enchères scellées à un tour peuvent aggraver le manque d'information et les facteurs d'incertitude étant donné que les enchérisseurs disposent de peu d'information comparativement aux enchères ascendantes ouvertes traditionnelles. Dans le présent article, nous avons examiné, à l'aide d'expériences sur le terrain et d'enchères pour la conservation, l'efficacité-coût d'une enchère à tours multiples pour des mesures de gestion de la part de propriétaires fonciers. L'exercice visait à améliorer la gestion des pâturages d'un parcours naturel en Australie, où les propriétaires fonciers ne sont pas familiers avec la prestation de services environnementaux ni avec les enchères pour la conservation. Les résultats autorisent à penser que les enchères à tours multiples pourraient offrir des gains d'efficience, particulièrement durant les premiers tours. [source] Competition and Market Structure of National Association of Securities Dealers Automated QuotationsINTERNATIONAL REVIEW OF FINANCE, Issue 3-4 2007YOUNGSOO KIM ABSTRACT In this paper, we study the relation among market structure, trading costs, and competition in National Association of Securities Dealers Automated Quotations (NASDAQ). In particular, we address the following questions: Do NASDAQ dealers exercise market power and extract economic rents in setting bid-ask spread? How persistent is the market power of dominant dealers? Our estimate of the rent is approximately ¢8.76, or 0.54% of stock price. The half-life of the persistence of this rent is approximately 20 months for the entire sample, while the half-life of younger stocks tend to be shorter than those of more mature stocks. Our result supports Schultz: NASDAQ dealers make markets only for stocks where they have competitive advantages in accessing order flow and in information. It might take a while before a market maker poses effective competition to existing dominant market makers. In the meantime, incumbent market makers are able to exercise market power and appear to earn abnormally large profits. [source] Laissez Fear: Assessing the Impact of Government Involvement in the Economy on Ethnic ViolenceINTERNATIONAL STUDIES QUARTERLY, Issue 2 2008David A. Steinberg Does government involvement in the economy promote ethnic peace, or does it contribute to ethnic violence? Two theories, grievances and opportunity, suggest that government involvement in the economy reduces ethnic violence. We present an alternative security-based logic that focuses on the role of economic rents in political competition. Our theory of insecurity predicts that free market economies reduce violent ethnic conflict by reducing fear and insecurity. We present statistical analyses, using data from the Minorities at Risk project and the Index of Economic Freedom, showing that government involvement in the economy increases ethnic rebellion. Our results suggest that the overall size of the public sector is less important than government interference with the market allocation mechanism. We conclude by discussing the policy implications of our findings. [source] Vertical integration and trade policy: The case of sugarAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 1 2002Charles B. Moss The degree of vertical integration in the U.S. sugar industry between raw-sugar processing and sugar refining cannot be explained using theories of vertical integration based only on transaction costs. We graphically decompose the economic rents accruing to each level participant in the marketing channel. Different strategies of several major sugar producing, processing, and refining entities with regard to sugar quota policy are explored. Firms that are integrated from sugar production through to sugar marketing are less impacted by freer trade than are those that concentrate solely on production. We contrast the sugarcane industry in Florida and Louisiana with sugar beet production and processing in the northern plains. The sugar industry in Florida, because of the high degree of vertical integration, is much more capable of dealing with expanded sugar imports than either sugarcane producers in Louisiana or sugar beet growers in the northern plains where integration is not as pronounced. [Econ-Lit citations: Q18, Q11] © 2002 Wiley Periodicals, Inc. [source] OUT OF THE GOODNESS OF THEIR HEARTS?JOURNAL OF URBAN AFFAIRS, Issue 1 2008REGULATORY AND REGIONAL IMPACTS ON BANK INVESTMENT IN HOUSING AND COMMUNITY DEVELOPMENT IN THE UNITED STATES ABSTRACT:,Banks are considered key actors in affordable housing and community development in the United States. Their involvement in such activities may be due partly to their dependence on economic rents generated from development. In the United States, however, banks are encouraged to support such activities by the federal 1977 Community Reinvestment Act (CRA). I examine how different factors explain the CRA-qualified investments by banks. Qualified investments are essentially nondebt financial resources provided as an equity investment or grant with a community development purpose. I find that the identity of the regulator (the United States has four banking regulators) has a major impact on the level of qualified investments. Other things equal, a difference in regulators can cause a bank's qualified investments to more than double. Besides suggesting that some regulators may be enforcing a major portion of CRA regulations more vigorously than others, this also suggests that the CRA plays a major role in bank investment in community development. This has policy implications not just in the United States but also in other countries that might consider replicating the CRA. [source] | |||||||||||||