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Profits and Economic Development [PDF]

open access: possibleSSRN Electronic Journal, 2014
Are rents, or excess profits, good for development? Using industry-level manufacturing data, this paper demonstrates a negative effect of rents, measured by the mark-up ratio, on productivity growth. The negative effect is strongest in poor countries, suggesting that high profits stymie economic development rather than enable it.
Dan Schwab, Eric Werker
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