IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

The Agency Cost of Internal Collusion and Schumpeterian Growth

  • Martimort, David
  • Verdier, Thierry

This paper analyses the link between the internal organization of the firm andthe growth process. We present a Schumpeterian growth model in whichmonopoly firms face agency costs due to collusion between managers insidethe organization. These costs affect incentives to invest and the rate ofinnovation in the economy. When collusion is self-enforcing, higher growth andmore creative destruction shortens in turn the time horizon of colludingagents in the organization and makes internal collusion more difficult tosustain. We analyse this two-way mechanism between growth and agencyproblems and show how the transaction costs of side-contracting within thefirm and the growth rate of the economy are simultaneously derived. Copyright The Review of Economic Studies Limited, 2004.

(This abstract was borrowed from another version of this item.)

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:
File Function: Full text
Download Restriction: no

Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 170.

in new window

Date of creation: 2003
Date of revision:
Publication status: Published in The Review of Economic Studies, vol.�71, n°4, décembre 2004, p.�1119-1141.
Handle: RePEc:ide:wpaper:638
Contact details of provider: Postal: Manufacture des Tabacs, Aile Jean-Jacques Laffont, 21 Allée de Brienne, 31000 TOULOUSE
Phone: +33 (0)5 61 12 85 89
Fax: + 33 (0)5 61 12 86 37
Web page:

More information through EDIRC

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. Patrick Francois & Joanne Roberts, 2000. "Contracting Productivity Growth," Working Papers jorob-99-02, University of Toronto, Department of Economics.
Full references (including those not matched with items on IDEAS)

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

When requesting a correction, please mention this item's handle: RePEc:ide:wpaper:638. 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: ()

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.