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Finance and Governance in Developing Economies

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  • Randall Morck

Abstract

Classic Big Push industrialization envisions state planners coordinating economic activity to internalize a range of externalities that otherwise lock in a low-income equilibrium, but runs afoul of well-known government failure problems. Successful Big Push coordination may occur instead when a large business group, acting in its controlling shareholder’s self-interest, coordinates the establishment and expansion of businesses in diverse sectors. Where business groups play this role, many basic axioms of Anglo-American corporate governance, including the advocacy of shareholder value maximization and contestable corporate control, must be qualified.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16870.

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Date of creation: Mar 2011
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Publication status: published as Randall Morck, 2011. "Finance and Governance in Developing Economies," Annual Review of Financial Economics, Annual Reviews, vol. 3(1), pages 375-406, December.
Handle: RePEc:nbr:nberwo:16870

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Cited by:
  1. Chakraborty, Indrani, 2013. "Does capital structure depend on group affiliation? An analysis of Indian firms," Journal of Policy Modeling, Elsevier, Elsevier, vol. 35(1), pages 110-120.

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