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Business Groups in Canada: Their Rise and Fall, and Rise and Fall Again

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  • Randall Morck
  • Gloria Y. Tian

Abstract

Family-controlled pyramidal business groups were important in Canada early in the 20th century, amid rapid catch-up industrialization, but largely gave way to widely held free-standing firms by mid- century. In the 1970s and early 1980s – an era of high inflation, financial reversal, unprecedented state intervention, and explicit emulation of continental European institutions – pyramidal groups abruptly regained prominence. The largest of these were politically well-connected and highly leveraged. The two largest collapsed in the early 1990s in a recession characterized by very high real interest rates. The smaller groups that survived were more vertically integrated and less diversified at the time. Widely held freestanding firms and Anglo-Saxon concepts of the role of the state soon regained predominance.

Suggested Citation

  • Randall Morck & Gloria Y. Tian, 2015. "Business Groups in Canada: Their Rise and Fall, and Rise and Fall Again," NBER Working Papers 21707, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21707
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    References listed on IDEAS

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    1. Cumming, Douglas J. & MacIntosh, Jeffrey G., 2006. "Crowding out private equity: Canadian evidence," Journal of Business Venturing, Elsevier, vol. 21(5), pages 569-609, September.
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    7. Kryzanowski, Lawrence & Roberts, Gordon S, 1993. "Canadian Banking Solvency, 1922-1940," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(3), pages 361-376, August.
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    More about this item

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-

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