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Family Control and the Rent–Seeking Society

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  • Randall Morck
  • Bernard Yeung

Abstract

A high level of trust within a small elite, like a low level of trust in society at large, may be a serious impediment to economic development. This is because such concentrated high trust among the elite promotes political rent seeking, known to retard growth. We propose that entrusting the governance of a country's great corporations to a few wealthy families promotes this undesirable distribution of trust. Preliminary empirical evidence and arguments grounded in game theory support this view.

Suggested Citation

  • Randall Morck & Bernard Yeung, 2004. "Family Control and the Rent–Seeking Society," Entrepreneurship Theory and Practice, , vol. 28(4), pages 391-409, July.
    • Handle: RePEc:sae:entthe:v:28:y:2004:i:4:p:391-409
    DOI: 10.1111/j.1540-6520.2004.00053.x
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    9. Hanqing “Chevy” Fang & Kulraj Singh & Taewoo Kim & Laura Marler & James J. Chrisman, 2022. "Family business research in Asia: review and future directions," Asia Pacific Journal of Management, Springer, vol. 39(4), pages 1215-1256, December.
    10. Arena, Matteo P. & Dewally, Michaël & Jain, Bharat A. & Shao, Yingying, 2022. "Family firms' cross-border mergers and acquisitions," International Review of Financial Analysis, Elsevier, vol. 82(C).
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    20. Won-Yong Oh & Hojae Ree & Young Kyun Chang & Igor Postuła, 2023. "Trees in the Forest: How Do Family Owners Make CSR Decisions in Business Groups?," Journal of Business Ethics, Springer, vol. 187(4), pages 759-780, November.
    21. Isabelle Le Breton-Miller & Danny Miller, 2018. "Beyond the Firm: Business Families as Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 42(4), pages 527-536, July.

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