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Predation, Protection, and Productivity: A Firm-Level Perspective

Timothy Besley () and Hannes Mueller

American Economic Journal: Macroeconomics, 2018, vol. 10, issue 2, 184-221

Abstract: This paper studies the consequences of predation when firms deploy guard labor as a means of protecting themselves. We build a simple model and combine it with data for 144 countries from the World Bank enterprise surveys, which ask about firm-level experiences with predation and spending on protection. We use the model to estimate the output loss caused by the misallocation of labor across firms and from production to protection. The loss due to protection effort is substantial and patterns of state protection at the micro level can have a profound impact on aggregate output losses. Various extensions are discussed.

JEL-codes: D22 D24 J24 K40 L84 O17 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/mac.20160120
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Working Paper: Predation, protection, and productivity: a firm-level perspective (2018) Downloads
Working Paper: Predation, Protection and Productivity: A Firm-Level Perspective (2016) Downloads
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Handle: RePEc:aea:aejmac:v:10:y:2018:i:2:p:184-221