Resource title

Ownership, economic entrenchment and allocation of capital

Resource image

image for OpenScout resource :: Ownership, economic entrenchment and allocation of capital

Resource description

In an efficient economy, capital should be quickly (re)allocated from declining firms and sectors to more profitable investment opportunities. This process is affected by the concentration of corporate control, which in turn is affected by market institutions. We employ a panel of 12,000 firms across 44 countries to estimate the functional efficiency of capital markets. We adapt a measure for the efficiency of capital allocation using the accelerator principle. Our empirical results show weak property rights and highly concentrated ownership reduce the functional efficiency of capital markets. Findings support the economic entrenchment hypothesis but not the legal origins hypothesis.

Resource author

Johan E. Eklund, Sameeksha Desai

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25698

Resource license

Adapt according to the presented license agreement and reference the original author.