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Politics-Business Interaction Paths

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Listed:
  • Marianna Belloc
  • Ugo Pagano

Abstract

Most pre-crisis explanations of the various corporate governance systems have considered the separation between ownership and control to be an advantage of the Anglo-American economies. They have also attributed the failure of other countries to achieve these efficient arrangements to their different legal and/or electoral systems. In this paper we compare this view with the co-evolution approach based on the hypothesis that politics and corporate governance influence each other, generating complex interactions of financial and labour market institutions. Countries cluster along different complementary politics-business interaction paths and there is no reason to expect, or to device policies for, their convergence to a single model of corporate governance. We argue that this hypothesis provides a more convincing explanation of the past histories of major capitalist economies and can suggest some useful possible scenarios of their future institutional development. Bayesian model comparison suggests that the co-evolution approach turns out at least as influential as the competing theories in explaining shareholder and worker protection determination.

Suggested Citation

  • Marianna Belloc & Ugo Pagano, 2009. "Politics-Business Interaction Paths," CESifo Working Paper Series 2883, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_2883
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    References listed on IDEAS

    as
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Massimiliano Vatiero, 2017. "On The (Political) Origin Of ‘Corporate Governance’ Species," Journal of Economic Surveys, Wiley Blackwell, vol. 31(2), pages 393-409, April.
    2. repec:bla:kyklos:v:70:y:2017:i:2:p:330-343 is not listed on IDEAS
    3. Massimiliano Vatiero, 2017. "Learning from the Swiss Corporate Governance Exception," Kyklos, Wiley Blackwell, vol. 70(2), pages 330-343, May.

    More about this item

    Keywords

    employment protection; corporate governance; ownership concentration; Bayesian model estimation; Bayesian model comparison;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • P10 - Economic Systems - - Capitalist Systems - - - General

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