Corporate Governance, Competition, and Political Parties: Explaining Corporate Governance Change in Europe
The corporate governance systems of continental Europe have traditionally been quite different to those of the liberal market economies (e.g. the US and the UK). Company ownership has been dominated by incumbent blockholders, with a relatively minor role for minority shareholders and institutional investors. Business strategy has focused on the achievement of social stability - taking into account the interests of a broad group stakeholders - rather than the maximisation of shareholder value. However, since the mid-1990s, European corporations have adopted many of the characteristics of the Anglo-American shareholder model. Furthermore, such an increased shareholder-orientation has coincided with a significant role for the Left in European government. This presents a puzzle, as conventional wisdom does not usually conceive of the Left as an enthusiastic proponent of pro-shareholder capitalism. This book provides an analysis of this paradox by examining how economic factors have interacted with the policy preferences of political parties to cause a significant change in the European system of corporate governance. This book argues that the post-war support of the European Left for the prevailing blockholder-dominated corporate system depended on the willingness of blockholders to share economic rents with employees, both through higher wages and greater employment stability. However, during the 1990s, product markets became more competitive in many European countries. The sharing of rents between social actors became increasingly difficult to sustain. In such an environment, the Left relinquished its traditional social partnership with blockholders and embraced many aspects of the shareholder model. This explanation is supported through a panel data econometric analysis of 15 non-liberal market economies. Subsequent case study chapters examine the political economy of recent corporate governance change in Germany and Italy.
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2A Theory of Partisanship and Corporate Governance Change
A Critique of the Literature
4Measuring Change in Corporate Governance
6A Panel Data Analysis of Corporate Governance Change
7Robustness and Dynamic Modeling
Introduction to the Case Studies
From Blockholding to Hybrid Corporate Governance Regime
Everything Changes Everything Stays the Same
5The Measurement of Product Market Competition
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Corporate Governance, Competition, and Political Parties: Explaining ...
Roger M. Barker
Limited preview - 2010
Corporate Governance, Competition, and Political Parties:Explaining ...
Roger M. Barker
No preview available - 2010
agency costs analysis behavior blockholder model blockholders capital markets Chapter coalition codetermination companies company law Conditional effects conservative government core constituents corporate governance change corporate governance outcomes corporate governance reform Country and decade decade fixed effects Deeg Dependent variable Descriptive statistics Deutsche Bank economic rents empirical employees equity share estimated explanatory variables extreme bounds Financial firm-level corporate governance firms fixed effects Figure Furthermore German German corporate government on corporate hypothesis impact Industrial insider labor institutions interests international equity issuance investors Italian Italy labor market Left government legal origin market economies measure minority shareholders model of corporate NMR index nonliberal market economies OECD ownership concentration panel data Parmalat pension percent Political Economy political parties private universal banks product market competition regressions regulation regulatory relating relationship role sector shareholder model shareholder protection significant social actors stakeholders structure Table takeover value traded