Working Paper: NBER ID: w10635
Authors: Randall Morck; Michael Percy; Gloria Tian; Bernard Yeung
Abstract: A panel of corporate ownership data, stretching back to 1902, shows that the Canadian corporate sector began the century with a predominance of large pyramidal corporate groups controlled by wealthy families or individuals. By mid-century, widely held firms predominated. But, from the 1970s on, pyramidal groups controlled by wealthy families and individuals resurge, restoring a situation similar to that a century earlier. Institutional factors underlying this resurgence are shown to have antecedents deep in the country's colonial past.
Keywords: Corporate Ownership; Canada; Family Firms; Institutional Factors
JEL Codes: G3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| weak institutions (O17) | early dominance of large pyramidal corporate groups in Canada (N22) |
| robust stock market + high taxes on inherited wealth + favorable institutional climate (P17) | rise of widely held firms (G34) |
| shift towards bank-based financial system + reduced estate taxes + increased political rent-seeking opportunities (F65) | resurgence of family-controlled pyramidal groups (L22) |
| institutional changes (O17) | decline of widely held firms (G34) |
| institutional changes (O17) | rise of family-controlled groups (L22) |