Big Business Stability and Economic Growth: Is What's Good for General Motors Good for America?

53 Pages Posted: 3 Aug 2006 Last revised: 30 Jan 2013

See all articles by Kathy Fogel

Kathy Fogel

Suffolk University - Department of Finance

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

Bernard Yin Yeung

National University of Singapore - Business School

Multiple version iconThere are 3 versions of this paper

Date Written: July 2006

Abstract

What is good for big business need not generally advance a country%u2019s overall economy. Big business turnover correlates with rising income, productivity, and (in high income countries) faster capital accumulation; consistent with Schumpeter%u2019s (1912) creative destruction and recent formalizations like Aghion and Howitt (1992). Turnover appears to %u201Ccause%u201D growth; and disappearing behemoths, more than rising stars, drive our results. Stronger findings suggest more intense creative destruction in countries with higher incomes, as well as those with smaller governments, Common Law courts, smaller banking systems, stronger shareholder rights, and more open economies. Only the last matters more in lower income countries.

Suggested Citation

Fogel, Kathy and Morck, Randall K. and Yeung, Bernard Yin, Big Business Stability and Economic Growth: Is What's Good for General Motors Good for America? (July 2006). NBER Working Paper No. w12394. Available at SSRN: https://ssrn.com/abstract=921560

Kathy Fogel

Suffolk University - Department of Finance ( email )

8 Ashburton Place-Beacon Hill
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Randall K. Morck (Contact Author)

University of Alberta - Department of Finance and Statistical Analysis ( email )

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National Bureau of Economic Research (NBER)

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European Corporate Governence Institute ( email )

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Asian Bureau of Finance and Economic Research ( email )

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Bernard Yin Yeung

National University of Singapore - Business School ( email )

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BIZ 1 Level 6
Singapore, 119245
Singapore
65 6516 3075 (Phone)
65 6779 1365 (Fax)

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