Complexity Digest 2003.15 - 02
Predator Or Prey? Parasitic Enterprises In Economic Development, Euro. Econ. Rev.
Abstract: In many developing and transition economies Mafia-like activities are rampant. Extortion and other forms of predation lower profitability in private businesses and distort investment incentives. Incorporated in a model of industrialization, bimodal club convergence may result. Economies may get stuck in a Predators' Club characterized by a vicious cycle of poverty and predation. Societies with a low flow of new entrepreneurs are especially vulnerable to predation and never get out of this club. Poor societies with a high flow of new entrepreneurs, however, may grow out of the trap and join the rich Producers' Club.
- Source: Predator Or Prey? Parasitic Enterprises In Economic Development
[ http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V64-44HXD1S-1&_user=10&_handle=W-WA-A-A-AA-MsSAYWW-UUA-AUVEECAWZB-WYDEBAZYE-AA-U&_fmt=summary&_coverDate=04%2F30%2F2003&_rdoc=5&_orig=browse&_srch=%23toc%235804%232003%23999529997%23400044!&_cdi=5804&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=4a22fa626dfea7d2468acdf995af562e ], H. Mehlum, K. Moene - k.o.moeneecon.uio.no, r. torvik, DOI: 10.1016/S0014-2921(01)00194-5, Apr. 2003
- Contributed by Pritha Das - prithadas01yahoo.com