Date of Award

2021

Document Type

Thesis

Degree Name

M.A.

Department

Economics

First Advisor

Markus Schneider

Keywords

Bessembinder, Corporate performance, Creative destruction, History of economic thought, Monopolistic competition, Schumpeter

Abstract

Historical studies of U.S. capital markets show a dramatic skew in the distribution of corporate wealth. This thesis investigates the evolution of economic thought related to realistic models of competition, seeking to find the most suitable theory of competition to explain this skew in U.S. corporate wealth creation. The incorporation of realistic elements into the static theories of competition leads to theoretical difficulties in the early 20th century. Another line of thought developed non-equilibrium dynamic models of competition, culminating in Schumpeter. In Schumpeter, firms seek to manage the uncertainty f rom rapid change induced by innovation and increasing returns by following regulative business strategies to reduce the uncertainty of investment. Failure to manage the uncertainty of investment results in “creative destruction,” allowing firms with superior strategies to reap disproporation rewards, resulting in a skewed distribution of corporate wealth, until the environment changes to undermine the previously successful strategy.

Publication Statement

Copyright is held by the author. User is responsible for all copyright compliance.

Provenance

Received from ProQuest

Rights holder

Marc H. Pentacoff

File size

88 pgs

File format

application/pdf

Language

en

Discipline

Economic theory, Economic history, Economics

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