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Finance and Governance in Developing Economies

  • Randall Morck

    ()

    (Alberta School of Business, University of Alberta, Edmonton, Canada T6E 2T9, and National Bureau of Economic Research)

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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File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-financial-102710-144828
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Article provided by Annual Reviews in its journal Annual Review of Financial Economics.

Volume (Year): 3 (2011)
Issue (Month): 1 (December)
Pages: 375-406

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Handle: RePEc:anr:refeco:v:3:y:2011:p:375-406
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  1. Raghuram Rajan & Henri Servaes & Luigi Zingales, 1998. "The Cost of Diversity: The Diversification Discount and Inefficient Investment," NBER Working Papers 6368, National Bureau of Economic Research, Inc.
  2. Randall Morck & Daniel Wolfenzon & Bernard Yeung, 2004. "Corporate Governance, Economic Entrenchment and Growth," NBER Working Papers 10692, National Bureau of Economic Research, Inc.
  3. Robert Cull & Stephen Haber & Masami Imai, 2011. "Related lending and banking development," Journal of International Business Studies, Palgrave Macmillan, vol. 42(3), pages 406-426, April.
  4. Randall Morck & Michael Percy & Gloria Tian & Bernard Yeung, 2005. "The Rise and Fall of the Widely Held Firm: A History of Corporate Ownership in Canada," NBER Chapters, in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 65-148 National Bureau of Economic Research, Inc.
  5. Acemoglu, Daron & Zilibotti, Fabrizio & Aghion, Philippe, 2003. "Vertical Integration and Distance to Frontier," Scholarly Articles 4481512, Harvard University Department of Economics.
  6. Randall Morck & M. Deniz Yavuz & Bernard Yeung, 2009. "Banking System Control, Capital Allocation, and Economy Performance," NBER Working Papers 15575, National Bureau of Economic Research, Inc.
  7. Daron Acemoglu & Philippe Aghion & Claire Lelarge & John Van Reenen & Fabrizio Zilibotti, 2006. "Technology, Information and the Decentralization of the Firm," CEP Discussion Papers dp0722, Centre for Economic Performance, LSE.
  8. Beason, R. & Weinstein, D.E., 1993. "Growth, Economies of Scale, and Targeting in Japan (1955- 1990)," Harvard Institute of Economic Research Working Papers 1644, Harvard - Institute of Economic Research.
  9. Randall Morck & Andrel Shleifer & Robert W. Vishny, 1988. "Alternative Mechanisms for Corporate Control," University of Chicago - George G. Stigler Center for Study of Economy and State 52, Chicago - Center for Study of Economy and State.
  10. Da Rin, Marco & Hellmann, Thomas, 2002. "Banks as Catalysts for Industrialization," Journal of Financial Intermediation, Elsevier, vol. 11(4), pages 366-397, October.
  11. Marco Becht & Fabrizio Barca, 2001. "The control of corporate Europe," ULB Institutional Repository 2013/13302, ULB -- Universite Libre de Bruxelles.
  12. Booth, L. & Asli Demirgu-Kunt, V.A. & Maksimovic, V., 1999. "Capital Structure in Developing Countries," Rotman School of Management - Finance 00-001, Rotman School of Management, University of Toronto.
  13. Artyom Durnev & Randall Morck & Bernard Yeung & Paul Zarowin, 2003. "Does Greater Firm-Specific Return Variation Mean More or Less Informed Stock Pricing?," Journal of Accounting Research, Wiley Blackwell, vol. 41(5), pages 797-836, December.
  14. Becsi, Zsolt & Wang, Ping & Wynne, Mark A., 1999. "Costly intermediation, the big push and the big crash," Journal of Development Economics, Elsevier, vol. 59(2), pages 275-293, August.
  15. Peter Skott & Jaime Ros, 1997. "The "Big Push" in an Open Economy with Nontradable Inputs," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 20(1), pages 149-162, October.
  16. Vikas Mehrotra & Randall Morck & Jungwook Shim & Yupana Wiwattanakantang, 2010. "Must Love Kill the Family Firm?," NBER Working Papers 16340, National Bureau of Economic Research, Inc.
  17. repec:rne:rneart:v:4:y:2005:i:1:p:4-18 is not listed on IDEAS
  18. Berkowitz, Daniel & Li, Wei, 2000. "Tax rights in transition economies: a tragedy of the commons?," Journal of Public Economics, Elsevier, vol. 76(3), pages 369-397, June.
  19. Randall K. Morck & David A. Strangeland & Bernard Yeung, 1998. "Inherited Wealth, Corporate Control and Economic Growth," William Davidson Institute Working Papers Series 209, William Davidson Institute at the University of Michigan.
  20. Raghuram G. Rajan & Luigi Zingales, 1996. "Financial Dependence and Growth," NBER Working Papers 5758, National Bureau of Economic Research, Inc.
  21. Randall Morck & Masao Nakamura, 2007. "Business Groups and the Big Push: Meiji Japan's Mass Privatization and Subsequent Growth," NBER Working Papers 13171, National Bureau of Economic Research, Inc.
  22. de Fontenay, Catherine C., 2004. "The dual role of market power in the Big Push: from evidence to theory," Journal of Development Economics, Elsevier, vol. 75(1), pages 221-238, October.
  23. Gopalan, Radhakrishnan & Nanda, Vikram & Seru, Amit, 2007. "Affiliated firms and financial support: Evidence from Indian business groups," Journal of Financial Economics, Elsevier, vol. 86(3), pages 759-795, December.
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  25. Hyunbae Chun & Jung-Wook Kim & Randall Morck & Bernard Yeung, 2007. "Creative Destruction and Firm-Specific Performance Heterogeneity," NBER Working Papers 13011, National Bureau of Economic Research, Inc.
  26. Susan Perkins & Randall Morck & Bernard Yeung, 2008. "Innocents Abroad: The Hazards of International Joint Ventures with Pyramidal Group Firms," NBER Working Papers 13914, National Bureau of Economic Research, Inc.
  27. Larry H. P. Lang & Mara Faccio & Leslie Young, 2001. "Dividends and Expropriation," American Economic Review, American Economic Association, vol. 91(1), pages 54-78, March.
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  29. Raghuram Rajan & Arvind Subramanian, 2007. "Does Aid Affect Governance?," American Economic Review, American Economic Association, vol. 97(2), pages 322-327, May.
  30. Weinstein, David E & Yafeh, Yishay, 1995. "Japan's Corporate Groups: Collusion or Competitive? An Empirical Investigation of Keiretsu Behavior," Journal of Industrial Economics, Wiley Blackwell, vol. 43(4), pages 359-76, December.
  31. Marianne Bertrand & Simon Johnson & Krislert Samphantharak & Antoinette Schoar, 2008. "Mixing Family With Business: A Study of Thai Business Groups and the Families Behind Them," NBER Working Papers 13738, National Bureau of Economic Research, Inc.
  32. Bianco, Magda & Nicodano, Giovanna, 2006. "Pyramidal groups and debt," European Economic Review, Elsevier, vol. 50(4), pages 937-961, May.
  33. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
  34. Randall Morck & Bernard Yeung, 2003. "Family Control and the Rent-Seeking Society," William Davidson Institute Working Papers Series 585, William Davidson Institute at the University of Michigan.
  35. Randall Morck & Bernard Yeung, 2005. "Dividend Taxation and Corporate Governance," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 163-180, Summer.
  36. Maurer, Noel & Sharma, Tridib, 2001. "Enforcing Property Rights Through Reputation: Mexico'S Early Industrialization, 1878 1913," The Journal of Economic History, Cambridge University Press, vol. 61(04), pages 950-973, December.
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  38. repec:aea:jeclit:v:43:y:2005:i:3:p:655-720 is not listed on IDEAS
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