Mary O'Sullivan

William H. Lazonick

English

Research Papers in Economics

122 For a detailed case study of a failed conglomerate acquisition, see Max Holland When the Machine Stopped: A Cautionarv Tale from Industrial America,

126 For accounts of this shift within major Wall Street firms, see Ken Auletta, Greed and Glow on Wall Street: The Fail of the House of Lehman, Warner Books,

13’ Merrill Lynch Advisory Services, Meraerstatm Review

15’ “Pay for Chiefs Jumps by 23%,” New York Times, March 3,1996, 07. “’ On the evolution of stock-based rewards in the compensation of U.S. corporate executives, see Lazonick, “Controlling the Market for Corporate Control,” 461-466 15’ Jensen,

17’ The most vigorous proponent of the stockholder control perspective in the United States has been

27 An important analysis of U.S. loss of competitive advantage in a number of major industries can be found in

5 United States Congress, Economic Reoort of the President

6* For the well-known example of General Motors in the 1980s see Paul lngrassia and

7he Conglomerate Mergers,”

88 se Ibid., 89 ” Early cases that established the principle of managerial discretion include St. John v.

A Studv of Corporation Securities, and Their Nature and Uses in Finance,

Absentee Ownership and the Business Enterprise in Recent Times: The Case of

Abstract of the United States

Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers,’

and Economic Efficiencv,

Antitrust in Jauan,

Bevond Mass Production: The Jaoanese Svstem and Its Transfer to the U.S.,

Bond Ratinqs as an Investment Guide: An Appraisal of Their Effectiveness, The Ronald Press,

Business Oroanization and the Mvth of the Market Economy,

Competitive Strateav: Techniaues for Anatyzina Industries and Competitors,

Controlling the Market for Corporate Control: The Historical Significance of Managerial Capitalism,” Industrial and Corporate Chanae,

Current Labor Policies of American Industry,’

Den of Thieves, Simon

Department of Commerce, Statistical Abstract, 1982-83: 406, and

Development of the Junk Bond Market and Its Role in Portfolio Management and Corporate Finance,”

Eclipse of the Public Corporation.” 81 156 See Graef Crystal, In Search of Excess: The Overcomoensation of American Executives,

Eclipse of the Public Corporation”; Meraerstat Review

Explaining the Economic Performance of Nations, 1820-1989,” in

Finance and Industrial Development: Evolution to Market Control,” Financial Histotv Review,

Financial Behavior of Jaoanese Corporations, Part II; see also Norio Tamaki, .Japanese Bankino: A Historv. 1859-1959,

for example John Lintner, “The Distribution of Incomes of Corporations among Dividends, Retained Earnings,

for example, Mark Roe, StronQ Manaaers. Weak Owners,

Ghilarducci, Labor’s Caoital: The Economics and Politics of Private Pensions,

Hiah Technoloav and International Comoetitiveness, Praeger,

In Deal to End Takeover Effort, Chrysler Selling Non-Auto Lines,

Industrial Research, 1900-1950,” in Bernard EIbaum z:d William Lazonick, eds., The Decline of the British Economy, Oxford University Pr iss, 1986; Alfred

Investment Bankina in America,

Investment Bankina in America, 256. See also Ron Chemow, The House of Morqan: An American Bankina Dvnastv and the Rise of Modem Finance,

Investment Bankina in America., 270. See also John Kenneth Galbraith, The Great Crash 1929,

l-low to Avoid These Layoffs?,

l4 “Firms Ponder How Best to Use Their Cash,” Wall

Lorsch, with Elizabeth Maclver. Pawns or Potentates: The Realitv of America’s Coroorate Boards,

Managing Our Way to Economic Decline,”

Meraer Movements in American Industrv.

Mindino America’s Business: The Decline and Rise of the American Economy, Vintage,

Money Keeps Pouring into Market Funds,”

New Deals: The Chrvsler Revival and the American Svstem, Penguin,

On the distinction between innovative and adaptive responses, see

On the United States and Britain, see Lazonick and O’Sullivan, “Finance and Industrial Development: Evolution to Market Control.” Fruin, Jaoanese Enterorise Svstem.

Ownership and Control: Rethinkina Corporate Governance for the Twentv-First Century,

Product Develooment Performance: Strateav. Omanization, and Manaaement in the World Auto Industry,

RCA and the Videodisc: The Business of Research,

Regulation-Defined Financial Markets: Fragmentation and Integration in Financial Services,”

Scale and Scooe: The Dvnamics of Industrial Caoitalism,

Securitv Speculation: Its Economic Effects,

State Bureau of Labor Statistics, Emplovment and Eaminas, U.S. Government Printing Office,

Stockholders’ Voting Rights and the Centralization of Voting Control,”

Stockholders’ Voting Rights and the Centralization of Voting Control.” lo2 See Hurst, The Leoitimacv of the Business Corporation. See also Ranald Michie, The London and New York Stock Exchanaes. 1850-1914, Allen & Unwin,

Strateav and Structure: Chapters in the Historv of the Industrial Enterprise,

The Competitive Performance of U.S. Industrial Enterprises since the Second World War,”

The Conalomerate Commotion, Viking, 1970: 100. 13’ Ibid.,

The Creative Response in Economic History,”

The Decline of US Consumer Electronics Manufacturing”, Richard Rosenbloom and Michael Cusumano, “Technological Pioneering and Competitive Advantage:

The Diffusion of Stock Ownership in the United States,”

The End of Corporate Loyalty?” Business Week,

The Financial Behavior of Jaoanese Corporations, Kodansha International,

The Financina of Larae Coroorations, 1920-39, National Bureau of Economic Research,

The Financing of Industry, 1970-1989: An International

The following is based on materials gathered and notes taken during a visit by the authors to GE Yokogawa Medical Systems in Tokyo on

The Future of the Automobile: The Reoort of MIT’s International Automobile Prooram,

The Growth of the ‘Junk’ Bond Market and Its Role in Financing Takeovers,”

The Jaoanese Automobile Industry,

The Jaoanese Enterprise Svstem: Comoetitive Strateaies and Coooerative Structures,

The Leaitimacv of the Business Corooration in the Law of the United States. 1780-l 970,

The New Place of the Stockholder, Harper & Brothers,

The New Venturers: Inside the Hioh-Stake World of Ventur? Capital,

The Rise of a Market for

The Teamwork Advantaae: An Inside Look at Japanese Product and Technoloav Develocment,

The Transformation of American Law, 1780-1860,

The U.S. National Innovation System,”

The US Machine Tool Industry and its Foreign Competitors,”

The Visible Hand: The Manaaerial Revolution in American Business,

TheUnseen Revolution: How Pension Fund Socialism Came to America,

Treatise on the Law of Corporations Havina a Caoital Stock, 7th edition,

Waaes, and National Income,

What Happened to the Theory of Economic Development?”

What’s Wrona with Wall Street,

When the Machine Stoooed. See, for example, Frank tichtenberg and Donald Siegel, “The Effects of Leveraged Buyouts on Productivity and Related Aspects of Firm Behavior,”

Who is Us?” Harvard Business Review, 68, January-February 1990; Robert 8. Reich, The Work of Nations: Preoarina Ourselves for Twentv-First Centurv Caoitalism,

Widest Gap in Incomes? Research Points to U.S.“,

Worker Displacement in a Period of Rapid Job Expansion, 1983-1987,” Monthlv Labor Review,

Workers in Industrial America,

Zaibatsu: The Rise and Fall of Familv Enterprise Groups in

"Corporate Governance and Corporate Employment: Is Prosperity Sustainable in the United States?"

http://www.levyinstitute.org/pubs/wp183.pdf

"Corporate Governance and Corporate Employment: Is Prosperity Sustainable in the United States?"

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Research Papers in Economics