Rent-Seeking Behavior as a Determinant of Various Forms of Destructive Entrepreneurship
8 Pages Posted: 21 Jun 2018
Date Written: June 6, 2018
Taking into account the fact that in general entrepreneurship is perceived as a factor that leads to the growth and development of the economy, the examination of entrepreneurship that impacts negatively country’s welfare appears to be a very significant problem. The objective of the project was to analyse the phenomenon of destructive entrepreneurship in business units through the prism of systemic transformation. In this research an attempt will be made to concentrate on destructive entrepreneurship in business units. To prove the rightness of my personal statement, it is worth noting that in 1990 W. Baumol divided entrepreneurship into productive, unproductive and destructive. Worth noticing is the fact that the source of economic decisions of destructive entrepreneurs is rent-seeking behavior. I found it important to discuss this approach and answer the question what mainly determines destructive entrepreneurship. As it was mentioned before, the rentseeking behavior has the uncanny impact on economy since that determinants decide about the unfair resource allocation. The background of this discussion is the fact that destructive entrepreneurship is the approach of social question and economic problem. Business ethics deals with the activities of enterprises since the standards according to which business operates determine the economic welfare of society. Taking into account the fact that in general entrepreneurship is perceived as a push factor that leads to the growth and development of the economy, the examination of entrepreneurship that impacts negatively country’s welfare appears to be a very significant problem. The results of the tests have a significant contribution to the understanding of the phenomenon in terms of modern economy since predominantly the so called rules of the game (formal rules) direct entrepreneurs towards destructive entrepreneurship.
Keywords: destructive entrepreneurship, institutional economics, socio-economic development, business ethics, net social benefits, deviant behavior
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