Uncertainty, entrepreneurship, and the organization of corruption

WANG, Yuan (2020). Uncertainty, entrepreneurship, and the organization of corruption. Small Business Economics.

[img] PDF
SHU_SBE_Y Wang.pdf - Accepted Version
Restricted to Repository staff only until 1 October 2021.
All rights reserved.

Download (688kB)
Official URL: https://link.springer.com/article/10.1007%2Fs11187...
Link to published version:: https://doi.org/10.1007/s11187-020-00402-3
Related URLs:

    Abstract

    This paper studies an occupational choice in which risk-neutral private agents have the option of either working in costless but low-yielding activity or undertaking a costly but potentially more rewarding venture, namely, entrepreneurship. Loans must be acquired from financial intermediaries and licences must be obtained from public officials for entrepreneurship. This paper has integrated two new ingredients into the traditional occupational choice framework: financial market imperfection due to asymmetric information between entrepreneurs and financial intermediaries; public-sector imperfection due to rent-seeking induced uncertainty on bribe demand. The paper shows how corruption has different effects depending on how it is practised. Under disorganised corruption, bribe payments are uncertain, and capital market imperfections surface; under organised corruption, these features are removed. This implies that organised corruption is likely to be the lesser of the two evils in terms of deterring entrepreneurial activity, even if bribe demands are higher in this case.

    Item Type: Article
    Uncontrolled Keywords: 14 Economics; 15 Commerce, Management, Tourism and Services; Business & Management
    Identification Number: https://doi.org/10.1007/s11187-020-00402-3
    SWORD Depositor: Symplectic Elements
    Depositing User: Symplectic Elements
    Date Deposited: 02 Oct 2020 12:09
    Last Modified: 02 Oct 2020 12:09
    URI: http://shura.shu.ac.uk/id/eprint/27338

    Actions (login required)

    View Item View Item

    Downloads

    Downloads per month over past year

    View more statistics