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Do African resource rents promote rent-seeking at the expense of entrepreneurship?
- Source :
- Small Business Economics; Mar2022, Vol. 58 Issue 3, p1647-1660, 14p, 6 Charts
- Publication Year :
- 2022
-
Abstract
- This paper examines the relationship between natural resource rents and new business formation (a critical measure of entrepreneurship) using a panel dataset of 28 African countries covering the period 2002–2014. The paper finds robust evidence that nations with high resource rents (i.e., resource rents exceeding 30% of GDP) significantly exhibit less entrepreneurial activity. This result is consistent with the hypothesis that high resource rents significantly promote rent-seeking behavior at the expense of entrepreneurship. Policies that reward productive entrepreneurship and reduce incentives for rent-seeking behavior are therefore important for reversing this negative relationship in African countries with high natural resource-derived income. [ABSTRACT FROM AUTHOR]
- Subjects :
- RENT seeking
INCENTIVE (Psychology)
RENT
NATURAL resources
ENTREPRENEURSHIP
Subjects
Details
- Language :
- English
- ISSN :
- 0921898X
- Volume :
- 58
- Issue :
- 3
- Database :
- Complementary Index
- Journal :
- Small Business Economics
- Publication Type :
- Academic Journal
- Accession number :
- 155179723
- Full Text :
- https://doi.org/10.1007/s11187-021-00461-0