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Financial Frictions, Internal Capital Markets, and the Organization of Production

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  • Pavel Sevcik

    (Universite de Montreal)

Abstract

Diversified business groups and conglomerate firms account for a large fraction of corporate assets and business activity in many emerging and developed countries. This paper examines whether a model in which business groups partially substitute for imperfect credit market is able to quantitatively explain key stylized facts on the way production is organized, on cross-firm productivity differences, and on cross-country differences in the degree of conglomeration.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2009 Meeting Papers with number 530.

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Date of creation: 2009
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Handle: RePEc:red:sed009:530

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