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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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  • Pavel Sevcik, 2009. "Financial Frictions, Internal Capital Markets, and the Organization of Production," 2009 Meeting Papers 530, Society for Economic Dynamics.
    • Handle: RePEc:red:sed009:530
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    3. Cho, Duksang, 2019. "Pyramidal Business Groups and Asymmetric Financial Frictions," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 41(3), pages 1-38.
    4. Pavel Ševčík, 2017. "Do Multi-Plant Firms Reduce Misallocation? Evidence from Canadian Manufacturing," Journal of Industrial Economics, Wiley Blackwell, vol. 65(2), pages 275-308, June.
    5. Muhammad Ramzan & Mohammad Razib Hossain & Kashif Raza Abbasi & Tomiwa Sunday Adebayo & Rafael Alvarado, 2024. "Unveiling time-varying asymmetries in the stock market returns through energy prices, green innovation, and market risk factors: wavelet-based evidence from China," Economic Change and Restructuring, Springer, vol. 57(3), pages 1-36, June.

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    More about this item

    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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