Impediments to the Schumpeterian Process in the Replacement of Large Firms

Mara Faccio and John J. McConnell

Journal of Finance, 2025, vol. 80, issue 6, 3359-3399

Abstract: We use newly assembled data overall encompassing up to 75 countries and starting circa 1910, to study impediments to the Schumpeterian process of creative destruction as it “proceeds by competitively destroying old businesses.” Political connections appear to represent an obstacle to the destructive part of the Schumpeterian process in the replacement of large firms. When accompanied by regulations that restrict entry, political connections can play a role in allowing large firms to remain large. When connected to Fogel, Morck, and Yeung (2008, Journal of Financial Economics 89, 83–108), the results imply that political connections, combined with barriers to entry, can retard economic development.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jofi.13481

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:80:y:2025:i:6:p:3359-3399

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().