Working Paper: CEPR ID: DP2782
Authors: Raghuram Rajan; Luigi Zingales
Abstract: Major technological, regulatory, and institutional changes have made finance more widely available in recent years, amounting to a bona fide ?financial revolution?. In this article, we focus on the impact the financial revolution has had on the way firms are (or should be) organized and managed, and on the policy consequences.
Keywords: corporate governance; financial revolution; theory of the firm
JEL Codes: L20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Financial revolution (G19) | Accessibility of capital (O16) |
| Accessibility of capital (O16) | Uniqueness of alienable assets (H82) |
| Accessibility of capital (O16) | Reliance on non-alienable resources (Q32) |
| Traditional governance mechanisms (G38) | Effectiveness of governance (H11) |
| Shift in governance mechanisms (G38) | Pay-for-performance incentives (J33) |
| Shift in governance mechanisms (G38) | Debt as governance tools (H63) |
| Need for competitive edge (L21) | Internal governance structures (G38) |
| Financial revolution (G19) | Winner-takes-all dynamics (D79) |
| Financial revolution (G19) | Changes in governance structures (G38) |