Comment by solyin
18 hours ago
Is there? GE, back in the days, did everything, and looking at Samsung as a percentage of South Korea's economy, would say, absent any government regulation like anti-trust, there really isn't. Berkshire Hathaway is one such conglomerate in the US today.
>absent any government regulation like anti-trust, there really isn't.
Yes, there is. Read Coase's seminal paper, The Nature of the Firm. Companies function by replacing market mechanisms with bureaucratic administration. That finds its end when internal coordination or misallocation of resources incurs more cost than it saves in transaction costs.
Conglomerates therefore have a ceiling in size, and it's the reason why unwinding them generally increases market value for the sum of its individual companies (in finance parlance: "conglomerate discount"). It's also why the Soviet Union didn't run very well, and very large conglomerates are usually the consequence of political/economic arrangements.