Does imperfect competition foster capital accumulation in a developing economy?

Pascal Belan (), Philippe Michel and Bertrand Wigniolle

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: We analyze the relationship between imperfect competition and capital accumulation in a dual economy, with traditional and modern sectors and two types of agents (workers and capitalists). Workers allocate their time endowment between the two sectors. Capitalists accumulate wealth in the modern sector. The economy is open to capital flows, but capitalists face borrowing constraints. Non-competitive behavior of capitalists results in a rent which is extracted from the workers and lowers employment in the modern sector. In the long-run, if capitalists are unconstrained, imperfect competition is beneficial for capital accumulation and growth, while it is detrimental in the converse case. Moreover, not-binding borrowing constraints lead to higher employment and wages. This can motivate the introduction of a subsidy on bequests which allows the economy to reach the unconstrained regime, and is welfare-enhancing for workers.

Keywords: altruism; capital accumulation; imperfect competition; Concurrence imparfaite; accumulation du capital; altruisme (search for similar items in EconPapers)
Date: 2005-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00193985v1
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Published in 2005

Downloads: (external link)
https://shs.hal.science/halshs-00193985v1/document (application/pdf)

Related works:
Journal Article: Does imperfect competition foster capital accumulation in a developing economy? (2005)
Working Paper: Does imperfect competition foster capital accumulation in a developing economy ? (2005)
Working Paper: Does imperfect competition foster capital accumulation in a developing economy ? (2005)
Working Paper: Does imperfect competition foster capital accumulation in a developing economy? (2005)
Working Paper: Does imperfect competition foster capital accumulation in a developing economy ? (2005)
Working Paper: Does imperfect competition foster capital accumulation in a developing economy ? (2005)
Working Paper: Does imperfect competition foster capital accumulation in a developing economy (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00193985

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().