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In search of an alternative to shareholder value maximization

  • Gaël Giraud

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

  • Cécile Renouard

    (PhD Program - Essec Business School)

Registered author(s):

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

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    Date of creation: 08 Jul 2011
    Date of revision:
    Publication status: Published in ESSEC Working paper. Document de Recherche ESSEC / Centre de recherche de l'ESSEC ISSN : 1291-961.. 2011, pp.31
    Handle: RePEc:hal:journl:hal-00609153
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    8. John Geanakoplos & Andreu Mas-Colell, 1985. "Real Indeterminacy with Financial Assets," Cowles Foundation Discussion Papers 770R, Cowles Foundation for Research in Economics, Yale University, revised Oct 1985.
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