INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
➤ Gửi thông báo lỗi ⚠️ Báo cáo tài liệu vi phạmNội dung chi tiết: INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
INSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEtreet New York, NY 10012 Tel: (212)998 0337 E-mail: kjnhn@stern.nyu.eduSimi Kedia Graduate School of Business Administration Harvard University Morgan 483 Boston, MA 02163 Tel: (617) 495-5057 E-mail: skedia@hhs.eduThis Draft: January 2003ABSTRACTTwo different financial systems with some opposing fea INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEtures have evolved in the advanced economies, namely the insider system and the outsider system. In this paper, we provide a theoretical framework wheINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
re the features of the optima) governance system are derived as a function of economy-wide parameters, such as the degree of development of markets anINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE a degree of relative development of markets below a threshold, internal governance systems dominate for all firms in the economy independent of productivity,2) When the development of markets in an economy is above that threshold, either system may emerge as optimal depending on the productivity of INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE the technology. There are marked differences in the residual agency costs under the two systems when the scale of investment is large. Il is shown thINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
at insider systems constitute the optimal governance system for technologies that are optimally implemented at a small scale while outsider systems doINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEsider systems based on technological growth.INSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEThe differences among the corporate governance systems of the advanced economies of the world have attracted a lot of attention from financial economists, legal scholars, and pol INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEicy makers1 *. Two different financial systems with some opposing features seem to have evolved in the advanced economies, namely the insider system aINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
nd the outsider system. There are distinctive differences among these systems with regard to ownership, control, and capital markets. Countries belongINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEe of crossholdings. Widely dispersed ownership, liquid stock markets, low level of inter-corporate crossholdings and an active market for corporate control are the main features of the outsider system (e.g., U.K. and U.S). The existence and persistence of these markedly different corporate governanc INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEe systems have been the subject of an active debate in the area.- With new and emerging economies searching for the right corporate governance, the deINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
bate on the relative efficiency of the different existing governance systems has attained enormous importance.It has been conventional to take existenINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEoptimal governance systems are derived as a function of economy wide parameters, such as the degree of development of markets and the quality of the institutions, and firm-specific parameters such as the productivity of its technology. The optimal systems that we obtain map1 The academic literature INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEin law. economics, finance, strategy, and management on corporate governance has become extensive. For recent surveys, see shleifer and Vishny <1997),INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
John and Senbet (1998), and Bradley, Shipani, Sundaram and Walsh (1999).: The ter ms used by researchers to highlight the differences among differentINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEpairs of terms include “arms-length control-oriented ,” Berglof (1997), “market-based-relationship-oriented" e.g., Kaplan (1994) and market-based bank-based, e.g., Edwards and Fischer (1994).1into the insider and outsider systems. Our analysis explains the optimal choice between these systems with a INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE view to studying their evolution and persistence.There is increasing empirical evidence on the differences in corporate governance among countries. IINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
n a series ol influential papers La Porta el al. (1997,1998,1999,2002) have argued that the extent of legal protection of outside investors from exproINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEion of outside shareholders is associated with lower concentration of ownership and control, more valuable stock markets, higher number of listed firms and higher valuation of listed firms relative to their assets.3 Studies have also documented a link between corporate valuation and corporate govern INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEance mechanisms other than investorprotection. Gorton and Schmid (2000) show that higher ownership by the large shareholders is associated with higherINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
valuation of assets in Germany. Gompers, Ishi and Metrick (2001) document that US firms in the top decile of a “governance index" constructed from prINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEnderstanding of the empirical differences in the patterns of corporate governance has advanced in recent years, the theoretical work in this area is nascent. A number ol studies attempt to explain theoretically why control is so concentrated with poor shareholder protection in a setting where alignm INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEent is the only viable mechanism of coiporate governance (Zingales (1995), La Porta Ct al. (1999), Bcbchuk (1999)). La Porta Ct al. (2002) make the caINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
se for higher concentration of cash flow ownership with piMir shareholder protection. Shleiier and Wolfenzon (2001) also study ownership concentrationINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEs er al. (2000,2002), La Pona er al. (1997,1998,1999,2002).* Other interesting evidence rhar relate differences in international corporate governance to growth, performance and capital allocation has been documented recently. See, e.g., the special issue on International Corporate Governance of the INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEJournal of Financial Economics, Vol. 59, Nos. 1-2, October-November 2000.2https://khothuvien.cori!protection. The effectiveness of investor protectionINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
is modeled as the likelihood that the entrepreneur is caught and fined for expropriating shareholders. In a model, which allows for insider ownershipINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEn of protection of shareholders available in a given country. In our model, we allow for takeovers as an additional mechanism of corporate governance whose effectiveness is linked to the degree of development of markets in an economy. Economies are characterized by two parameters, the quality of ins INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEtitutions available to enforce contracts and the degree of development of markets. In each economy, the optimal governance system and the scale of invINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
estment undertaken is endogenously determined. For a fixed scale of investment, John and Kedia (2000) study the design of an optimal governance systemINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE They allow for interaction among the mechanisms and show that in any optimal governance system: 1) monitored debt is accompanied by concentrated ownership, and 2) takeovers are accompanied by diffuse ownership. The optimal configurations that they derive correspond to the different corporate govern INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEance systems seen around the world.A major objective of this paper is to study the optimality of governance structures and their relation to the underINSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
lying technology and its growth. In this paper, we provide a theory of changes in governance structure of firms in an economy based on growth in the uINSTITUTIONS, MARKETS AND GROWTH: A THEORY OF COMPARATIVE CORPORATE GOVERNANCEKose John Stern School of Business New York University 44 West Fourth St INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEical growth in those economies. This growth-based theory of changes in governance systems is in contrast to other theories, which have been proposed in the literature, to explain the dynamics of governance systems around the world.3https://khothuvien.cori!We have a simple stylized model of an entrep INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCEreneur who has access to an investment opportunity set which can be implemented at different scales of investment. We set up a generic agency problem,INSTITUTIONS, MARKETS AND GROWTH A THEORY OF COMPARATIVE CORPORATE GOVERNANCE
which influences the manager’s investment decision. The entrepreneur’s objective is to set up an optimal governance structure and choose the optimalGọi ngay
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