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Oligarchic land ownership, entrepreneurship, and economic development

Josef Falkinger and Volker Grossmann ()

Journal of Development Economics, 2013, vol. 101, issue C, 206-215

Abstract: This paper develops a theory in which oligarchic ownership of land or other natural resources may impede entrepreneurship in the manufacturing sector and may thereby retard structural change and economic development. We show that, due to oligopsony power of owners in the agricultural labor market, higher ownership concentration depresses entrepreneurial investments by landless, credit-constrained households, whose investment possibilities depend on the income earned in the primary sector. We discuss historical evidence from Latin America, India, Taiwan and South Korea which supports our theory.

Keywords: Credit constraints; Entrepreneurship; Oligopsony power; Land concentration; Structural change (search for similar items in EconPapers)
JEL-codes: O10 O13 O40 (search for similar items in EconPapers)
Date: 2013
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