Corporate finance in international perspective: legal and regulatory influences on financial system development
In the postwar period, systems of corporate finance and governance have emerged in the United States, Japan, and Germany that are dramatically different from one another. To date, there has been little focus on why. Stephen Prowse argues that differences in three aspects of the legal and regulatory environments in these countries are responsible. First, the severity of legal and regulatory restraints on financial institutions being "active" investors in firms. Second, the degree to which corporate securities markets are suppressed by regulation. Finally, the degree to which securities markets are "passively" suppressed by the absence of mandated disclosure requirements. ; Prowse compares the merits of each system and argues that the U.S. system may be more favorable to the growth of high-technology firms. He discusses the future evolution of each system. The German and Japanese regulatory environments are changing rapidly to increase the role of securities markets in corporate finance. The U.S. environment is also changing to give financial institutions more latitude to be active investors in firms. Over the long term, the regulatory environments of all three countries appear to be converging. The focal point of this convergence is an entirely new environment in which financial institutions are free to be active investors and corporate securities markets are unhindered by regulatory obstacles.
Volume (Year): (1996)
Issue (Month): Q III ()
|Contact details of provider:|| Web page: http://www.dallasfed.org/|
More information through EDIRC
|Order Information:|| Email: |
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.:
- Allen N. Berger & Anil K. Kashyap & Joseph M. Scalise, 1995.
"The Transformation of the U.S. Banking Industry: What a Long, Strange Trips It's Been,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 26(2), pages 55-218.
- Allen N. Berger & Anil K. Kashyap & Joseph Scalise, 1995. "The Transformation of the U.S. Banking Industry: What a Long, Strange Trip It's Been," Center for Financial Institutions Working Papers 96-06, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Mark S. Carey & Stephen D. Prowse & John Rea & Gregory F. Udell, 1993. "The economics of the private placement market," Staff Studies 166, Board of Governors of the Federal Reserve System (U.S.).
- Franklin Allen & Douglas Gale, 1995. "Universal banking, intertemporal risk smoothing, and European financial integration," Working Papers 95-6, Federal Reserve Bank of Philadelphia.
- Lichtenberg, Frank R. & Pushner, George M., 1994.
"Ownership structure and corporate performance in Japan,"
Japan and the World Economy,
Elsevier, vol. 6(3), pages 239-261, October.
- Frank R. Lichtenberg & George. M Pushner, 1992. "Ownership Structure and Corporate Performance in Japan," NBER Working Papers 4092, National Bureau of Economic Research, Inc.
- Leland, Hayne E & Pyle, David H, 1977.
"Informational Asymmetries, Financial Structure, and Financial Intermediation,"
Journal of Finance,
American Finance Association, vol. 32(2), pages 371-87, May.
- Hayne E. Leland and David H. Pyle., 1976. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Research Program in Finance Working Papers 41, University of California at Berkeley.
- Steven N. Kaplan, 1992. "Top Executive Rewards and Firm Performance: A Comparison of Japan and the U.S," NBER Working Papers 4065, National Bureau of Economic Research, Inc.
- Bhide, Amar, 1993. "The hidden costs of stock market liquidity," Journal of Financial Economics, Elsevier, vol. 34(1), pages 31-51, August.
- George W. Fenn & J. Nellie Liang & Stephen D. Prowse, 1995. "The economics of the private equity market," Staff Studies 168, Board of Governors of the Federal Reserve System (U.S.).
- Takeo Hoshi & Anil Kashyap & David Scharfstein, 1993. "The Choice Between Public and Private Debt: An Analysis of Post-Deregulation Corporate Financing in Japan," NBER Working Papers 4421, National Bureau of Economic Research, Inc.
- Diamond, Douglas W, 1991. "Monitoring and Reputation: The Choice between Bank Loans and Directly Placed Debt," Journal of Political Economy, University of Chicago Press, vol. 99(4), pages 689-721, August.
When requesting a correction, please mention this item's handle: RePEc:fip:fedder:y:1996:i:qiii:p:2-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Chapman)
If references are entirely missing, you can add them using this form.