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Structural change and the nature of innovative activity: Legal form and firm performance
Ivan Hernandez
School of Economics, National University of Colombia, Colombia
Paul Dewick
Manchester School of Management, UMIST, Manchester, United Kingdom
Abstract
This paper studies the evolution of legal forms and its effects on innovation and productivity within Colombia's manufacturing industry. The rise of a private legal structure is evidenced by the strategy of large and powerful conglomerates to increase their size and power by absorbing firms with a public setting.
The paper argues that this institutional innovation is sub-optimal since adopting a private limited liability framework excludes intrapreneurial forces from access to ownership. This was the world that the classic political economy and scholars like Schumpeter were concerned with: one in which the institutional change would favour the divorce between ownership and entrepreneurship.
Keywords
innovation, productivity, entrepreneurship, legal form
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