Working Paper: NBER ID: w14027
Authors: Kathy Fogel; Randall Morck; Bernard Yeung
Abstract: Many countries appear to have excessively stable big business sectors, in that higher rates of big business turnover have been correlated with faster economy growth. Public policies that stabilize big business sectors are sometimes justified as supportive of social objectives. We find no consistent link between big business stability and public goods provision, egalitarianism, or labor empowerment. While absence of evidence is not evidence of absence, these findings suggest that other explanations, such as special interest politics or behavioral biases favoring the status quo also be considered.
Keywords: big business; stability; social welfare; economic growth; public goods
JEL Codes: D3; G3; I0; J0; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| higher rates of big business turnover (L25) | faster economic growth (O49) |
| big business stability (P12) | public goods provision (H41) |
| big business stability (P12) | egalitarianism (D63) |
| big business stability (P12) | labor empowerment (J89) |
| big business stability (P12) | lower infant and child mortality rates (J13) |
| per capita GDP (E20) | big business stability (P12) |
| big business stability (P12) | social outcomes (I14) |