William Lazonick and Tea Petrin

Author Archive | William Lazonick and Tea Petrin


The Value-Extracting CEO: How Executive Stock-Based Pay Undermines Investment in Productive Capabilities

The business corporation is the central economic institution in a modern economy. A company’s senior executives, with the advice and support of the board of directors, are responsible for the allocation of corporate resources to investments in productive capabilities. Senior executives also advise the board on the extent to which, given the need to invest […]

Continue Reading

US Pharma’s Business Model: Why It Is Broken, and How It Can Be Fixed

Price gouging in the US pharmaceutical drug industry goes back more than three decades. In 1985 US Representative Henry Waxman, chair of the House Subcommittee on Health and the Environment, accused the pharmaceutical industry of “gouging the American public” with “outrageous” price increases, driven by “greed on a massive scale.” Despite many Congressional inquiries since […]

Continue Reading

Innovation, competition and financialization in the communications technology industry: 1996-2016

The objective of this paper is to document the relative position of different firms in the communications technology industry to take advantage of new opportunities and the potential influence of financialization on their innovative strategy and performance. To do so, we compare the performance of the leading sixteen firms in the industry over the past […]

Continue Reading

European Ruling Highlights Apple’s Corrupted Business Model

There is much for U.S. authorities to learn from the European example of forcing corporations to pay their fair share of taxes, but more far-reaching oversight of executives’ allocation of resources is also required The European Commission’s decision to serve Apple with a 13 billion euro tax bill represents a step forward in compelling multinational […]

Continue Reading

Innovative Enterprise or Sweatshop Economics? In Search of Foundations of Economic Analysis

In Capitalism, Socialism, and Democracy, Joseph Schumpeter asserts: “perfect competition is not only impossible but inferior, and has no title to being set up as a model of ideal efficiency.” For neoclassical economists, the large corporation is a “market imperfection” that, compared with “perfect competition,” should result in higher product prices and lower industry output. […]

Continue Reading