This theoretical study delves into the dynamics of housing submarkets with the framework of Marxian land rents. It examines the relationship between residential spaces and the reproduction of labour ...power in terms of commuting and the differentiated quality of reproduction by submarket. This study shows that the differentiation process of venturing to create distinct spaces for surplus profit and the emulation process of copycatting spaces of higher rents consequently form multiple housing submarkets, each characterised by different land rents of monopoly, intra‐differential rent (intra‐DR) and inter‐differential rent (inter‐DR). The coexistence of these multiple layers of land rents, in turn, becomes a driving force propelling dynamic capital movements that seek to exploit rent gaps between the layers. To illustrate these concepts, the study reviews the case of high‐rise mixed‐use residential developments in Seoul, highlighting the dual dynamic processes through which land rents are pursued.
We apply the dynamic Gordon growth model to the housing market in 23 US metropolitan areas, the four Census regions, and the nation from 1975 to 2007. The model allows the rent–price ratio at each ...date to be split into the expected present discounted values of rent growth, real interest rates, and a housing premium over real rates. We show that housing premia are variable and forecastable and account for a significant fraction of rent–price ratio volatility at the national and local levels, and that covariances among the three components damp fluctuations in rent–price ratios. Thus, explanations of house-price dynamics that focus only on interest rate movements and ignore these covariances can be misleading. These results are similar to those found for stocks and bonds.
We examine how the rent-seeking incentives of local government motivate private firms
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In this paper “private firms” refers to listed non state-owned-enterprises, the ultimate controlling ...shareholder of which is an individual.
listed in China to establish political connections, and whether such connections lead to more concentrated corporate control structures. Our results show that such firms are more likely to establish political connections in regions in which the local economy is less market-oriented or in which the government has more discretion in allocating economic resources. This is consistent with the notion that the presence of incentives for government officials to engage in rent seeking motivates private firms to look for alternative safeguards through political connections. We also find that the controlling owners of politically connected firms tend to concentrate their shareholdings and dominate the board of directors by occupying the position of either chairman or CEO, which supports the conjecture that a concentrated control structure facilitates rent seeking through political connections and allows the controlling owner to retain all of the benefits arising from connections with politicians.
Since signing the Amsterdam Treaty in 1997, the European Union (EU) has been working on increasing its renewable energy supply. However, the progress has been uneven across member states. A vibrant ...literature advances several explanations for this variation, but pays insufficient attention to a critical structural factor – varying levels of natural resource wealth across the EU – and provides an incomplete account by focusing on consumption indicators. Reconciling divergent views in the literature in a single framework, we hold that while overall natural resource abundance can be conducive to renewable energy production within a country, specific natural resources, such as petroleum, are likely to be harmful. These hypotheses find empirical support in a mixed-methods study that combines a fixed-effects statistical analysis of comprehensive panel data between 1997 and 2015 with a comparative qualitative case study of the Netherlands and Belgium. The findings suggest that to achieve the ambitious goals on renewable energy deployment, the EU needs additional policies that explicitly tackle pernicious effects of specific natural resources, including rent-capturing by politicians, rent-seeking by corporate vested interests, and lack of economic incentives to diversify.
•We examine the impact of natural resources on renewable energy production in the EU.•Combine EU panel data analysis with a case study of Belgium and the Netherlands.•Overall natural resources are conducive, petroleum harmful to renewable energy.•Policy factors are more salient than government ideology and governance quality.•EU needs extra regulatory interventions to tackle the effects of petroleum rents.
In the context of the implementation of the concept of sustainable development of individual countries of the post-Soviet space, the study of the problems of accounting for the results of rent ...relations becomes relevant given the solution of a number of strategic tasks facing businesses today. It is offered to solve the specified problem on the basis of definition in system of concepts of accounting of the economic nature of results of rent relations arising as a result of involvement in economic process of rent-forming factors. The purpose of the article is to formulate proposals for accounting for the results of rental relationships. The methodological basis of the research is the historical and logical method, which is used to study the evolution of rent and approaches to the disclosure of its economic content. The dialectical method and comparative analysis are used to identify significant differences in the definition of rent, formed at different stages and forms of economic relations. Methods of analysis, synthesis, induction, deduction, abstraction, idealization and generalization are used to identify the results of rent relations in the system of accounting concepts and formulate proposals for rent accounting and rent payments. Based on a critical assessment of a certain pluralism of researchers' opinions on the disclosure of the economic content of rent, it is established that: rent is a component of value added, but value added is not taken into account in the accounting system; rent is a component of income from operating activities carried out with the use or exploitation of limited natural resources; the complication of the preliminary valuation of rent makes it impossible to reflect it in income; the amount of rent depends on the demand for the product. Given the above, rent as income from the extraction / use of natural resources, as well as the use of other rent-forming factors, it is proposed to reflect on the off-balance sheet account “Rent” with the allocation of sub-accounts by type of economic rent. It is proposed to attribute rent payments to operating costs, as their inclusion in production costs contradicts the economic nature of such costs, unreasonably increases the cost and contradicts the principle of fair distribution of rent. The practical significance of the study is to increase the level of information disclosure for management decisions, in particular: determining the maximum allowable reduction in the selling price of finished products while maintaining an acceptable level of profitability to increase demand, expand market and, consequently, increase profits; directing all or part of the rent to the implementation of environmental measures, modernization of material and technical base, intensification of innovation.
Crises of seniors’ care in countries like the UK and Canada, further highlighted by the COVID-19 pandemic, have been connected to processes of privatization and financialization. In this paper I ...argue that rent theory is important for disaggregating mechanisms, including of accumulation by dispossession, the devaluation of labour, and assetization, that underpin the process of financialization in the sector. Work on rents often divides between critical approaches, especially to land rent, and mainstream institutionalist and public choice approaches to rent-seeking. Critical rent theory is evolving beyond this divide to understand a broader range of types of rent. Yet, despite attention to the increasing importance of economic rents and forms of rentierism, labour and social reproduction are often excluded from the analysis of how rent relations arise. This paper demonstrates the problems with these exclusions. The argument is illustrated through an analysis of the restructuring of eldercare in British Columbia, Canada, in the last two decades, and employs a feminist political economy approach to examine the social production of rent relations.
Entrepreneurs in emerging market economies operate in weak institutional contexts, which can imply different types of government. In some countries (e.g., Russia), the government is predatory, and ...the main risk faced by (successful) entrepreneurs relates to expropriation. In other countries (like China) this kind of risk is lower; nevertheless the government is intrusive, and the rules of the game remain fluid. The implication of the latter for entrepreneurs is that they are more likely to spend time and resources on influence (rent seeking) activities rather than on productive activities. We illustrate this type of government by focusing on the distribution of subsidies in China. We present a simple formal model that explores not only the direct effects of rent seeking for a company but also externalities under a situation of policy-generated uncertainty in the distribution of subsidies. We explore how these effects differ for the entrepreneurial sector (young, private and small companies) compared with other sectors. We posit that while the performance of private companies is more affected than the performance of state firms, the impact of government-induced uncertainty on young and small companies is actually less pronounced. Our empirical analysis, based on a unique large dataset of 2.4 million observations on Chinese companies, takes advantage of the regional and sectoral heterogeneity of China for empirical tests.
•We distinguish between predatory and intrusive non-transparent governments.•We exemplify non-transparent governments through uneven distribution of subsidies.•We use heterogeneity over Chinese sectors and counties to test effects on performance.•Where subsidies are distributed in an uneven way, performance suffers.•Private, large and old companies are most affected, young and small less so.
This paper sheds light on the relationship between oil rent and the allocation of talent, toward rent-seeking versus more productive activities, conditional on the quality of institutions. Using a ...sample of 69 developing countries, we demonstrate that oil resources orient university students toward specializations that provide better future access to rents when institutions are weak. The results are robust to various specifications, datasets on governance quality and estimation methods. Oil affects the demand for each profession through a technological effect, indicating complementarity between oil and engineering, manufacturing and construction; however, it also increases the ‘size of the cake’. Therefore, when institutions are weak, oil increases the incentive to opt for professions with better access to rents (law, business, and the social sciences), rather than careers in engineering, creating a deviation from the optimal allocation between the two types of specialization.
•Governance alters the impact of oil rent on specializations in tertiary education.•Oil rent orients talents toward productive activities in well-governed countries.•Oil rent orients talents toward rent-seeking activities in poorly governed countries.•The results are robust to different specifications, datasets, methods and endogeneity issues.
The Power of the Street Acemoglu, Daron; Hassan, Tarek A.; Tahoun, Ahmed
The Review of financial studies,
01/2018, Letnik:
31, Številka:
1
Journal Article
Recenzirano
Odprti dostop
Unprecedented street protests brought down Mubarak’s government and ushered in an era of competition between three rival political groups in Egypt. Using daily variation in the number of protesters, ...we document that more intense protests are associated with lower stock market valuations for firms connected to the group currently in power relative to non-connected firms, but have no impact on the relative valuations of firms connected to rival groups. These results suggest that street protests serve as a partial check on political rent-seeking. General discontent expressed on Twitter predicts protests but has no direct effect on valuations.
Optimal Taxation with Rent-Seeking ROTHSCHILD, CASEY; SCHEUER, FLORIAN
The Review of economic studies,
07/2016, Letnik:
83, Številka:
3 (296)
Journal Article
Recenzirano
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We develop a framework for optimal taxation when agents can earn their income both in traditional activities, where private and social products coincide, and in rent-seeking activities, where private ...returns exceed social returns either because they involve the capture of pre-existing rents or because they reduce the returns to traditional work. We characterize Pareto optimal income taxes that do not condition on how much of an individual's income is earned in each of the two activities. These optimal taxes feature an externality-corrective term, the magnitude of which depends both on the Pigouvian correction that would obtain if rent-seeking incomes could be perfectly targeted and on the relative impact of rent-seeking externalities on the private returns to traditional and to rent-seeking activities. If rent-seeking externalities primarily affect other rent-seekers, for example, the optimal correction lies strictly below the Pigouvian correction. A calibrated model indicates that the gap between the Pigouvian and optimal correction can be quantitatively important. Our results thus point to a hefty informational requirement for correcting rent-seeking externalities through the income tax code.
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