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Fallacies, Collapses, Crises. Now What?

Author

Listed:
  • Lazarides, Themistokles
  • Drmmpetas, Evaggelos

Abstract

The current crisis has been seen as the result of a “few bad apples”. The paper argues that the crisis is systemic and based on fallacies and misconceptions in the design and function of the economic – corporate system. Organizational and economic theories are based on hypotheses that lead to faulted decisions on how the system should be regulated and designed. The paper proposes that a new theory is needed. Disjoint approaches of the current situation are not suitable. Law, Organization theory, Economics, Finance and Accounting need to converge in order to formulate a theory that encompasses all factors and it is holistic. Introduction of corporate governance systems that are as dynamic as the organizational, ownership, product and capital market are, are necessary in order to create a stable and effective corporate environment.

Suggested Citation

  • Lazarides, Themistokles & Drmmpetas, Evaggelos, 2009. "Fallacies, Collapses, Crises. Now What?," MPRA Paper 17921, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:17921
    as

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    File URL: https://mpra.ub.uni-muenchen.de/17921/1/MPRA_paper_17921.pdf
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    References listed on IDEAS

    as
    1. Klapper, Leora F. & Love, Inessa, 2004. "Corporate governance, investor protection, and performance in emerging markets," Journal of Corporate Finance, Elsevier, vol. 10(5), pages 703-728, November.
    2. Gerald Vinten, 2001. "Shareholder versus Stakeholder - is there a Governance Dilemma?," Corporate Governance: An International Review, Wiley Blackwell, vol. 9(1), pages 36-47, January.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    5. Hellwig, Martin, 1998. "On the economics and politics of corporate finance and corporate control," Papers 98-43, Sonderforschungsbreich 504.
    6. Claus Dierksmeier & Michael Pirson, 2009. "Oikonomia Versus Chrematistike: Learning from Aristotle About the Future Orientation of Business Management," Journal of Business Ethics, Springer, vol. 88(3), pages 417-430, September.
    7. Ming Dong & David Hirshleifer & Scott Richardson & Siew Hong Teoh, 2006. "Does Investor Misvaluation Drive the Takeover Market?," Journal of Finance, American Finance Association, vol. 61(2), pages 725-762, April.
    8. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    9. Melinda Muth & Lex Donaldson, 1998. "Stewardship Theory and Board Structure: a contingency approach," Corporate Governance: An International Review, Wiley Blackwell, vol. 6(1), pages 5-28, January.
    10. Fama, Eugene F, 1991. " Efficient Capital Markets: II," Journal of Finance, American Finance Association, vol. 46(5), pages 1575-1617, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Crisis; Fallacies; Corporate Collapses; Corporate Governance;

    JEL classification:

    • K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • F01 - International Economics - - General - - - Global Outlook
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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