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In search of an alternative to shareholder value maximization

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Author Info

  • Gaël Giraud

    (ESCP-EAP - ESCP-EAP - Ecole Supérieure de Commerce de Paris)

  • Cécile Renouard

    (PhD Programm - ESSEC Business School)

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    Abstract

    This 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 prioritar- ian goal for private rms. This opens the door for a widening of a company's goal. We argue that it should include the con- cern of all the stakeholders of a company, and cannot be ade-quately addressed uniquely by Pigouvian taxes or by property rights. Coming to terms with this broad understanding of a com-pany's goal should imply the internalization of the stakeholders' concern within the legal structure of the rm | as in the case of the scic in France or the cic in the UK.

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    Bibliographic Info

    Paper provided by HAL in its series Post-Print with number hal-00609153.

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    Date of creation: 08 Jul 2011
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    Handle: RePEc:hal:journl:hal-00609153

    Note: View the original document on HAL open archive server: http://hal-essec.archives-ouvertes.fr/hal-00609153/en/
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    Related research

    Keywords: Corporate social responsibility ; shareholder value ; stakeholder value ; incomplete markets; limited liability ; property rights ; collateral ; cooperative;

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