The Riddle of the Great Pyramids
The Oxford Handbook of Business Groups, Asli M. Colpan, Takashi Hikino, and James R. Lincoln, eds., September 2010
Posted: 26 May 2013 Last revised: 4 Jun 2013
Date Written: September 10, 2009
Business groups inspire much confusion. To the Americans and British, capitalism forced brisk competition — maximizing efficiency. To everyone else, capitalism turned the economy over to a handful of old moneyed families. Neither side accorded the other much leeway: the Americans and Brits marveled at the conspiracy theories circulating in less enlightened parts of the world; the others marveled at the naivety of the Anglo-Saxons. Only recently has either side taken the other seriously. It turns out both are right, and capitalism is different in different countries. Remarkably, this stems largely — primarily, this article argues — from differences in corporate governance regarding pyramidal groups. Following most of the finance literature, this article defines a group as two or more listed firms under a common controlling shareholder. It says that the group is pyramidal if one listed group firm is a controlled subsidiary of another.
Keywords: business groups, capitalism, conspiracy theories, Anglo-Saxons, finance literature
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