Finance and Governance in Developing Economies

Posted: 10 Jan 2012

See all articles by Randall Morck

Randall Morck

University of Alberta - Department of Finance and Statistical Analysis; National Bureau of Economic Research (NBER); European Corporate Governence Institute; Asian Bureau of Finance and Economic Research

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Date Written: December 2011

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.

Suggested Citation

Morck, Randall K., Finance and Governance in Developing Economies (December 2011). Annual Review of Financial Economics, Vol. 3, pp. 375-406, 2011. Available at SSRN: https://ssrn.com/abstract=1981829 or http://dx.doi.org/10.1146/annurev-financial-102710-144828

Randall K. Morck (Contact Author)

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