The US stock market and the governance of innovative enterprise
AbstractDuring the 1980s and 1990s, the argument that “maximizing shareholder value” results in superior economic performance came to dominate the corporate governance debates. This shareholder-value perspective represents an attempt to construct a theory of corporate governance that is consistent with the neoclassical theory of the market economy. I outline the rationale for the shareholder-value perspective, and show that, rooted in agency theory, it lacks a theory of innovative enterprise. To go beyond agency theory and its shareholder-value perspective, I present a framework for analyzing the functions of the stock market in the business corporation and the influence of these functions on the innovation process. I then apply this framework to the experience of the US ICT industries over the past decade to consider empirically the influences of the five functions of the stock market—summarized as “creation,” “control,” “combination,” “compensation,” and “cash”—on innovative enterprise in US high-technology industries. In the conclusion, I draw out the implications of the changing functions of the stock market for the governance of innovative enterprise. Copyright 2007 , Oxford University Press.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Oxford University Press in its journal Industrial and Corporate Change.
Volume (Year): 16 (2007)
Issue (Month): 6 (December)
Contact details of provider:
Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
Fax: 01865 267 985
Web page: http://icc.oupjournals.org/
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Naomi R. Lamoreaux, 2014. "Revisiting American Exceptionalism: Democracy and the Regulation of Corporate Governance in Nineteenth-Century Pennsylvania," NBER Working Papers 20231, National Bureau of Economic Research, Inc.
- Sverre Herstad, 2011. "Paradigms, Regimes and the Shifting Notions of Institutional Best Practice," Journal of the Knowledge Economy, Springer, Springer, vol. 2(2), pages 173-191, June.
- William Lazonick, 2010. "Entrepreneurial Ventures and the Developmental State: Lessons from the Advanced Economies," Working Papers id:3167, eSocialSciences.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.