In search of an alternative to shareholder value maximization
AbstractThis paper argues that mainstream economic the- ory, far from providing an indisputable plea in favor of shareholder value-maximization, o ers striking arguments showing quite the opposite : pro t-maximization cannot be a legitimate prioritarian goal for private rms. This opens the door for a widening of a company's goal. We argue that it should include the concern of all the stakeholders of a company, and cannot be adequately addressed uniquely by Pigouvian taxes or by property rights. Coming to terms with this broad understanding of a company's goal should imply the internalization of the stakeholders' concern within the legal structure of the firm as in the case of the scic in France or the cic in the UK.
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 InfoPaper provided by ESSEC Research Center, ESSEC Business School in its series ESSEC Working Papers with number WP1108.
Length: 29 pages
Date of creation: 08 Jul 2011
Date of revision:
Corporate social responsibility; shareholder value; stakeholder value; incomplete markets; limited liability; property rights; collateral; cooperative;
Find related papers by JEL classification:
- A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- K11 - Law and Economics - - Basic Areas of Law - - - Property Law
- L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
- L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-27 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Atsushi Kajii & Antonio Villanacci & Alessandro Citanna, 1998. "Constrained suboptimality in incomplete markets: a general approach and two applications," Economic Theory, Springer, vol. 11(3), pages 495-521.
- Momi, Takeshi, 2001. "Non-existence of equilibrium in an incomplete stock market economy," Journal of Mathematical Economics, Elsevier, vol. 35(1), pages 41-70, February.
- GIRAUD, Gaël, 2000.
"An algebraic index theorem for non-smooth economies,"
CORE Discussion Papers
2000016, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Gaël Giraud, 2001. "An Algebraic Index Theorem for Non-smooth Economies," Post-Print hal-00460314, HAL.
- Cornet, Bernard, 1988. "General equilibrium theory and increasing returns : Presentation," Journal of Mathematical Economics, Elsevier, vol. 17(2-3), pages 103-118, April.
- Boyd, John III & Conley, John P., 1997. "Fundamental Nonconvexities in Arrovian Markets and a Coasian Solution to the Problem of Externalities," Journal of Economic Theory, Elsevier, vol. 72(2), pages 388-407, February.
- Dierker, Egbert, 1987. "Increasing returns, efficiency, and the distribution of wealth," European Economic Review, Elsevier, vol. 31(1-2), pages 475-482.
- Bruni, Luigino & Sugden, Robert, 2008. "Fraternity: Why The Market Need Not Be A Morally Free Zone," Economics and Philosophy, Cambridge University Press, vol. 24(01), pages 35-64, March.
- John Geanakoplos & Michael Magill & Martine Quinzii & J. Dreze, 1988.
"Generic Inefficiency of Stock Market Equilibrium When Markets Are Incomplete,"
Cowles Foundation Discussion Papers
863, Cowles Foundation for Research in Economics, Yale University.
- Geanakoplos, J. & Magill, M. & Quinzii, M. & Dreze, J., 1990. "Generic inefficiency of stock market equilibrium when markets are incomplete," Journal of Mathematical Economics, Elsevier, vol. 19(1-2), pages 113-151.
- Geanakoplos, J. & Magill, M. & Quinzii, M. & Dreze, J., . "Generic inefficiency of stock market equilibrium when markets are incomplete," CORE Discussion Papers RP -916, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Britz, Volker & Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2010.
"Non-cooperative support for the asymmetric Nash bargaining solution,"
Journal of Economic Theory,
Elsevier, vol. 145(5), pages 1951-1967, September.
- Britz, Volker & Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2008. "Non-cooperative Support for the Asymmetric Nash Bargaining solution," Research Memorandum 018, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Salchow, Hans-Jurgen, 2006. "An essay on the state of economic science," Journal of Mathematical Economics, Elsevier, vol. 42(6), pages 653-660, September.
- Balasko, Yves & Cass, David, 1989. "The Structure of Financial Equilibrium with Exogenous Yields: The Case of Incomplete Markets," Econometrica, Econometric Society, vol. 57(1), pages 135-62, January.
- Bonnisseau, J.-M. & Cornet, B., 1987. "Existence of marginal cost pricing equilibrium in an economy with several nonconvex firms," CORE Discussion Papers 1987023, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- John Geanakoplos & H. M. Polemarchakis, 2008. "Pareto Improving Taxes," Cowles Foundation Discussion Papers 1662, Cowles Foundation for Research in Economics, Yale University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sophie Magnanou).
If references are entirely missing, you can add them using this form.