Business Groups in Canada: Their Rise and Fall, and Rise and Fall Again

Business Groups in Canada: Their Rise and Fall, and Rise and Fall Again

Randall Morck, Gloria Tian

Series number :

Serial Number: 
455/2015

Date posted :

October 01 2015

Last revised :

October 28 2015
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Keywords

  • PYRAMIDAL BUSINESS GROUPS • 
  • financial history • 
  • CORPORATE OWNERSHIP AND CONTROL
Family-controlled pyramidal business groups were important in Canada early in the 20th century, amid rapid catch-up industrialization, but largely gave way to widely held freestanding firms by mid-century. In the 1970s and early 1980s ? an era of high inflation, financial reversal, unprecedented state intervention, and explicit emulation of continental European institutions ?
pyramidal groups abruptly regained prominence. The largest of these were politically well-connected and highly leveraged. The two largest collapsed in the early 1990s in a recession characterized by very high real interest rates. The smaller groups that survived were more vertically integrated and less diversified at the time. Widely held freestanding firms and Anglo-Saxon concepts of the role of the state soon regained predominance.

Authors

Real name: 
Gloria Tian