Corporate Stability and Economic Growth: Is What's Good for General Motors Good for America?
Institution(s): Hong Kong Institute of Economics and Business Strategy
Date: Nov 21, 2005 (Monday)
Time: 04:30 pm - 06:00 pm
Venue: Conference Room, Room 910, 9/F, KK Leung Building
**PLEASE NOTE THAT THE SEMINAR HAS BEEN POSTPONED UNTIL FURTHER NOTICE. WE APOLOGIZE FOR ANY INCONVENIENCES CAUSED**
What is good for a country's leading corporations is generally not good for the country's overall economy? Turnover in the list of a country's top ten corporations between 1975 and 1996 is associated with faster overall economic growth, faster productivity growth, and (in high income countries) faster capital accumulation? This is critically due to old leading firms declining or disappearing, as well as to new firms arising, and this turnover appears to cause economic growth? We interpret this as consistent with Schumpeter's (1912) theory of creative destruction, and its subsequent formalizations, such as Aghion and Howitt (1992), in which growth entails creative new firms destroying old stagnant ones? Our findings are much stronger in high than low income countries, suggesting that creative destruction plays a greater role in the growth of more developed economies. Creative destruction appears to be more intense where government is smaller, Common Law holds sway, banking systems are smaller, shareholder rights are better protected, and the economy is more open. Only the last is more important in low than high income countries.
Bernard Yeung is the Abraham Krasnoff Professor in Global Business, Professor in Economics, and Professor in Management at New York University Stern School of Business. He is also the Deputy Director, Global Business Institute, Stern, NYU and an honorary co-chair of the Strategy Department of the Beijing University Guanghua School of Management. He teaches multinational enterprise economics, economics of strategy, global business environment, and international finance at both the doctoral and MBA level.
Dr. Yeung joined NYU Stern in September 1999. His research covers topics in international corporate finance, foreign direct investment and multinational firms, the relationship between institutions, development, and firm strategy, family firms, and international trade/investment policies. His research articles have appeared in top rated journals in economics, Finance, and Management, including the Journal of Finance, Journal of Financial Economics, Journal of Accounting Research, Management Science, Journal of Economics Literature, Journal of Economic Perspectives, Economic Journal, Economic Inquiry, Review of Economics and Statistics, Strategic Management Journal, Journal of International Economics, and Journal of Business.
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