Monopolies Life Cycle, Bureaucratization and Schumpeterian Growth
AbstractThis paper analyzes the links between the internal organization of firms and macroeconomic growth. We present a Schumpeterian growth model in which firms face dynamic agency costs. These agency costs are due to the formation of vertical collusions within the organization. To respond to the opportunity of internal collusion, firms go through a whole life cycle, getting more bureaucratized and less efficient over time. Weak creative destruction in the economy facilitates informal collusion inside firms and exacerbates bureaucratization. As bureaucratization affects the firms profitability and the return to innovation, stationary equilibrium growth depends in turn on the efficiency of collusive side-contracts within firms.
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Bibliographic InfoPaper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 1999-09.
Date of creation: 1999
Date of revision:
Other versions of this item:
- Martimort, D. & Verdier, T., 1999. "Monopolies Life Cycle, Bureaucratization and Schumpeterian Growth," Papers 1999-09, Laval - Laboratoire Econometrie.
- Martimort, David & Verdier, Thierry, 2001. "Monopolies Life Cycle, Bureaucratization, and Schumpeterian Growth," CEPR Discussion Papers 2700, C.E.P.R. Discussion Papers.
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
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- Knobel, A., 2009. "Vertical Integration and Economic Growth: An Empirical Study," Journal of the New Economic Association, New Economic Association, issue 3-4, pages 54-70.
- Acemoglu, Daron & Zilibotti, Fabrizio & Aghion, Philippe, 2003.
"Vertical Integration and Distance to Frontier,"
4481512, Harvard University Department of Economics.
- Acemoglu, Daron & Aghion, Philippe & Zilibotti, Fabrizio, 2002. "Vertical Integration and Distance to Frontier," CEPR Discussion Papers 3565, C.E.P.R. Discussion Papers.
- Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2002. "Vertical Integration and Distance to Frontier," NBER Working Papers 9191, National Bureau of Economic Research, Inc.
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