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Leviathan in Business: Varieties of State Capitalism and their Implications for Economic Performance

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  • Additional Information
    • Publication Date:
      2012
    • Collection:
      HBS Scholarly Articles
    • Abstract:
      In this paper we document the extent and reach of state capitalism around the world and explore its economic implications. We focus on governmental provision of capital to corporations – either equity or debt – as a defining feature of state capitalism. We present a stylized distinction between two broad, general varieties of state capitalism: one through majority control of publicly traded companies (e.g. state-controlled SOEs) and a hybrid form that relies on minority investments in companies by development banks, pension funds, sovereign wealth funds, and the government itself. We label these two alternative modes Leviathan as a majority investor and Leviathan as a minority investor, respectively. Next we differentiate between these two modes by describing their key fundamental traits and the conditions that should make each mode more conducive to development and superior economic performance.
    • Relation:
      Harvard Business School Working Paper Series
    • Accession Number:
      edshld.1.9056789