Financial Markets, Industry Dynamics and Growth

• 成果类型: Article
• 署名作者: Iacopetta, Maurizio; Minetti, Raoul; Peretto, Pietro F.
• 署名单位: Universite Cote d'Azur; SKEMA Business School; Michigan State University; Duke University
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12635
• 发表日期: 2019
• 页码: 2192-2215
• 关键词: research-and-development; corporate governance; cash flow; AGENCY; PROTECTION; OWNERSHIP; COSTS

摘要

This article introduces corporate governance frictions into a growth model with endogenous market structure. Managers engage in corporate resource diversion and empire building. Shareholders discipline managers with incentive compensation contracts. A reform that mitigates corporate governance frictions boosts firms' entry and, for a given market structure, has an ambiguous impact on incumbents' return to product improvement. However, as the market structure adjusts, becoming more diffuse, incumbents invest less in product improvement. Calibrating the model to U.S. data, we find that a reform of the kind recently enacted in several advanced economies can lead to a welfare loss.