Aldo Musacchio and Sergio G. Lazzarini
In this book we describe the transformation of state capitalism from a model in which governments owned and ran corporations and broadly controlled the allocation of financial resources into two new varieties of state capitalism: Leviathan as a majority and as a minority investor. In this book we study the implications of such transformation using detailed data from Brazil between 1976 and 2009. In the Leviathan as a majority investor governments have started to list state-owned enterprises, have selected professional managers to run them, and have given them more financial autonomy. We argue that the transformation from owner and manager to majority shareholder has reduced many agency problems commonly faced by SOEs, but has not reduced the temptation governments face to intervene in the operation of large strategic enterprises. In the Leviathan as a minority shareholder mode, governments have small equity ownership in corporations and in general do not intervene in management. We find evidence that such equity investments allow firms to alleviate capital constraints and increase capital expenditures. Yet we also find instances in which governments use their minority positions to intervene in the management of firms, especially in natural resource industries.
Keywords: State capitalism;
corporate governance theory;
Business and Government Relations;
Governing and Advisory Boards;
Musacchio, Aldo, and Sergio G. Lazzarini. Reinventing State Capitalism: Leviathan in Business, Brazil and Beyond. Cambridge: Harvard University Press, forthcoming.
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| HBS Case Collection
(Revised November 2013)
Qatar: Energy For Development
Aldo Musacchio, Colin Donovan, Samir Mikati, Rami Sarafa and Abdulla AlMisnad
Keywords: frontier markets;
sovereign wealth funds;
| HBS Case Collection
(Revised July 2013)
Pakistan: Is Foreign Aid Helping or Hindering Development?
Aldo Musacchio, Ada Chu, Shahnawaz Nawabi, Jonathan Schlefer and Emil Staykov
Keywords: Development Economics;
Developing Countries and Economies;
Foreign Direct Investment;
| Business History
Does the Law and Finance Hypothesis Pass the Test of History?
Aldo Musacchio and John D. Turner
Business and Shareholder Relations;
Financial Services Industry;
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