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Finance and Governance in Developing Economies

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  • Randall Morck

Abstract

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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  • Randall Morck, 2011. "Finance and Governance in Developing Economies," NBER Working Papers 16870, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:16870
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    More about this item

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • P11 - Economic Systems - - Capitalist Systems - - - Planning, Coordination, and Reform

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