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Oligarchic land ownership, entrepreneurship, and economic development

  • Falkinger, Josef
  • Grossmann, Volker

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.

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Article provided by Elsevier in its journal Journal of Development Economics.

Volume (Year): 101 (2013)
Issue (Month): C ()
Pages: 206-215

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Handle: RePEc:eee:deveco:v:101:y:2013:i:c:p:206-215
Contact details of provider: Web page: http://www.elsevier.com/locate/devec

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