Finance and Governance in Developing Economies

Randall Morck

Annual Review of Financial Economics, 2011, vol. 3, issue 1, 375-406

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.

Keywords: Big Push; business groups; family firms; network externalities; rent seeking; public choice (search for similar items in EconPapers)
JEL-codes: G3 O1 O25 P11 (search for similar items in EconPapers)
Date: 2011
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Working Paper: Finance and Governance in Developing Economies (2011)
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