Big business stability and economic growth: Is what's good for General Motors good for America?

A-Tier
Journal: Journal of Financial Economics
Year: 2008
Volume: 89
Issue: 1
Pages: 83-108

Authors (3)

Fogel, Kathy (not in RePEc) Morck, Randall (University of Alberta) Yeung, Bernard (not in RePEc)

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

What is good for a country may not be good for its big businesses, at least recently. More turnover in top businesses correlates with faster per capita gross domestic product, productivity, and capital growth; supporting Schumpeter's [1942. Capitalism, Socialism and Democracy, third ed., Harper & Bros., New York, NY] theory of "creative destruction"--innovative firms blooming as stagnant ones wither. These correlations are greater in more developed economies, supporting Aghion and Howitt's [1992. A model of growth through creative destruction. Econometrica 60, 323-351] thesis that creative destruction matters more to economies nearer the technological frontier. More big business turnover also correlates with smaller government, common law, less bank-dependence, stronger shareholder rights, and greater openness.

Technical Details

RePEc Handle
repec:eee:jfinec:v:89:y:2008:i:1:p:83-108
Journal Field
Finance
Author Count
3
Added to Database
2026-01-26