Creative Destruction

Or should I have titled this post "Against National Champions"?  Here is Kathy Fogel, Randall Morck, and Bernard Yeung:

What is good for big business need not generally advance a country’s
overall economy. Big business turnover correlates with rising income,
productivity, and (in high income countries) faster capital
accumulation; consistent with Schumpeter’s (1912) creative destruction
and recent formalizations like Aghion and Howitt (1992). Turnover
appears to “cause” growth; and disappearing behemoths, more than rising
stars, drive our results. Stronger findings suggest more intense
creative destruction in countries with higher incomes, as well as those
with smaller governments, Common Law courts, smaller banking systems,
stronger shareholder rights, and more open economies. Only the last
matters more in lower income countries.

Here is the paper.


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