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Financial Frictions, Internal Capital Markets, and the Organization of Production

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  • Pavel Sevcik

    (Universite de Montreal)

Abstract

Diversified business groups and conglomerate firms account for a large fraction of corporate assets and business activity in many emerging and developed countries. This paper examines whether a model in which business groups partially substitute for imperfect credit market is able to quantitatively explain key stylized facts on the way production is organized, on cross-firm productivity differences, and on cross-country differences in the degree of conglomeration.

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Paper provided by Society for Economic Dynamics in its series 2009 Meeting Papers with number 530.

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Date of creation: 2009
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Handle: RePEc:red:sed009:530
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Find related papers by JEL classification:
  • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
  • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
  • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
  • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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