Advanced Search
MyIDEAS: Login to save this paper or follow this series

Corporate Stability and Economic Growth

Contents:

Author Info

  • Kathy S. He

    ()

  • Randall Morck

    ()

  • Bernard Yeung

    ()

Abstract

Greater instability in a country's list of top corporations is associated with faster economic growth. This faster growth is primarily due to faster growth in total factor productivity in industrialized countries, and faster capital accumulation in developing countries. These findings are consistent with the view that economic growth is more closely tied to the rise of new large firms than to the prosperity of established large firms. Although a stable list of leading corporations is highly correlated with government size, it is unrelated to other possible policy goals, such as (successful) income equalization and avoiding economic crises, it is related to other political factors. However, the list of top firms is more stable in countries with fewer rights for creditors in bankruptcy and with bank-based rather than stock market-based financial systems. These findings appear to oppugn arguments of the form “What’s good for General Motors is good for America”. We propose that political rent-seeking by large established firms underlies increased corporate stability.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp553.pdf
Download Restriction: no

Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 553.

as in new window
Length: 69 pages
Date of creation: 01 Apr 2003
Date of revision:
Handle: RePEc:wdi:papers:2003-553

Contact details of provider:
Postal: 724 E. University Ave, Wyly Hall 1st Flr, Ann Arbor MI 48109
Phone: 734 763-5020
Fax: 734 763 5850
Email:
Web page: http://www.wdi.umich.edu
More information through EDIRC

Related research

Keywords:

Other versions of this item:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Beck, Thorsten & Levine, Ross & Loayza, Norman, 1999. "Finance and the sources of growth," Policy Research Working Paper Series 2057, The World Bank.
  2. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 1999. "The Quality of Government," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 15(1), pages 222-79, April.
  3. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  4. King, Robert G & Levine, Ross, 1993. "Finance and Growth: Schumpeter Might Be Right," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(3), pages 717-37, August.
  5. Sachs, Jeffrey D & Warner, Andrew M, 1997. "Fundamental," American Economic Review, American Economic Association, American Economic Association, vol. 87(2), pages 184-88, May.
  6. La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert W., 1998. "Law and Finance," Scholarly Articles 3451310, Harvard University Department of Economics.
  7. Manuelli, Rodolfo E., 1994. "Capital fundamentalism, economic development, and economic growth: A comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 40(1), pages 293-300, June.
  8. Randall K. Morck & David A. Strangeland & Bernard Yeung, 1998. "Inherited Wealth, Corporate Control and Economic Growth," William Davidson Institute Working Papers Series, William Davidson Institute at the University of Michigan 209, William Davidson Institute at the University of Michigan.
  9. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers, Center for International Development at Harvard University 42, Center for International Development at Harvard University.
  10. King, Robert G. & Levine, Ross & DEC, 1994. "Capital fundamentalism, economic development, and economic growth," Policy Research Working Paper Series 1285, The World Bank.
  11. Levine, Ross & Renelt, David, 1991. "A sensitivity analysis of cross-country growth regressions," Policy Research Working Paper Series 609, The World Bank.
  12. RAFAEL LaPORTA & FLORENCIO LOPEZ-de-SILANES & ANDREI SHLEIFER & ROBERT W. VISHNY, . "Legal Determinants of External Finance,"," CRSP working papers, Center for Research in Security Prices, Graduate School of Business, University of Chicago 324, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
  13. Rafael Di Tella & Raymond Fisman, 2002. "Are Politicians Really Paid Like Bureaucrats?," NBER Working Papers 9165, National Bureau of Economic Research, Inc.
  14. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  15. Raghuram G. Rajan & Luigi Zingales, 2001. "The Great Reversals: The Politics of Financial Development in the 20th Century," CRSP working papers, Center for Research in Security Prices, Graduate School of Business, University of Chicago 526, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
  16. Tarun Khanna & Krishna Palepu, 2000. "Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups," Journal of Finance, American Finance Association, American Finance Association, vol. 55(2), pages 867-891, 04.
  17. Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
  18. Olson, Mancur, 1963. "Rapid Growth as a Destabilizing Force," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 23(04), pages 529-552, December.
  19. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 5(3-4), pages 287-320.
  20. Morck, Randall & Nakamura, Masao & Shivdasani, Anil, 2000. "Banks, Ownership Structure, and Firm Value in Japan," The Journal of Business, University of Chicago Press, University of Chicago Press, vol. 73(4), pages 539-67, October.
  21. Solow, Robert M, 1988. "Growth Theory and After," American Economic Review, American Economic Association, American Economic Association, vol. 78(3), pages 307-17, June.
  22. Levine, Ross, 2002. "Bank-Based or Market-Based Financial Systems: Which Is Better?," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 11(4), pages 398-428, October.
  23. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1993. "Why Is Rent-Seeking So Costly to Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 83(2), pages 409-14, May.
  24. La Porta, Rafael, et al, 1997. "Trust in Large Organizations," American Economic Review, American Economic Association, American Economic Association, vol. 87(2), pages 333-38, May.
  25. Randall Morck & Masao Nakamura, 1999. "Banks and Corporate Control in Japan," Journal of Finance, American Finance Association, American Finance Association, vol. 54(1), pages 319-339, 02.
  26. Gregory Mankiw, 1995. "The Growth of Nations," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1, 25th A), pages 275-326.
  27. Frankel, Jeffrey, 2001. "Assessing the Efficiency Gains from Further Liberalization," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp01-030, Harvard University, John F. Kennedy School of Government.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Christoph Walkner, 2004. "Issues in corporate governance," European Economy - Economic Papers, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission 200, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
  2. Kinda, Tidiane & Plane, Patrick & Veganzones-Varoudakis, Marie-Ange, 2009. "Firms'productive performance and the investment climate in developing economies : an application to MENA manufacturing," Policy Research Working Paper Series 4869, The World Bank.
  3. Tidiane Kinda & Patrick Plane & Marie-Ange Veganzones, 2011. "Firm-Level Productivity and Technical Efficiency in MENA Manufacturing Industry: The Role of the Investment Climate," Working Papers, HAL halshs-00556700, HAL.
  4. Peter Hogfeldt, 2005. "The History and Politics of Corporate Ownership in Sweden," NBER Chapters, National Bureau of Economic Research, Inc, in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 517-580 National Bureau of Economic Research, Inc.
  5. Hyunbae Chun & Jung-Wook Kim & Jason Lee & Randall Morck, 2004. "Patterns of Comovement: The Role of Information Technology in the U.S. Economy," NBER Working Papers 10937, National Bureau of Economic Research, Inc.
  6. Formby, John P. & Smith, W. James & Zheng, Buhong, 2004. "Mobility measurement, transition matrices and statistical inference," Journal of Econometrics, Elsevier, Elsevier, vol. 120(1), pages 181-205, May.
  7. Enrico Perotti & Ernst-Ludwig von Thadden, 2005. "The Political Economy of Corporate Control," Tinbergen Institute Discussion Papers, Tinbergen Institute 05-102/2, Tinbergen Institute.
  8. Escribano, Alvaro & Guasch, J. Luis, 2005. "Assessing the impact of the investment climate on productivity using firm-level data : methodology and the cases of Guatemala, Honduras, and Nicaragua," Policy Research Working Paper Series 3621, The World Bank.
  9. Morck, Randall & Yeung, Bernard, 2001. "Japanese Economic Success and the Curious Characteristics of Japanese Stock Prices," CEI Working Paper Series, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University 2001-19, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  10. Michael R. Darby & Lynne G. Zucker, 2006. "Innovation, Competition and Welfare-Enhancing Monopoly," NBER Working Papers 12094, National Bureau of Economic Research, Inc.
  11. Peter Hogfeldt, 2004. "The History and Politics of Corporate Ownership in Sweden," NBER Working Papers 10641, National Bureau of Economic Research, Inc.
  12. Alvaro Escribano & J. Luis Guasch & Manuel De Orte & Jorge Pena, 2008. "Investment climate assessment based on demean Olley and Pakes decompositions: methodology and application to Turkey's investment climate survey," Economics Working Papers we082012, Universidad Carlos III, Departamento de Economía.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wdi:papers:2003-553. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laurie Gendron).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.