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Corporate Governance and the Innovative Economy: Policy Implications

Corporate governance is concerned with the institutions that influence the ways in which business corporations allocate resources and returns. Our approach to the analysis of corporate governance and its policy implications focuses on its relation to the innovation process and the innovative economy. We identify four different types of corporate governance institutions – executive, supervisory, consultative, and regulatory -- based on different relations with the locus of decision-making power over the allocation of corporate resources and returns. The prime foci for corporate governance policy are two: First, the reform of corporate governance institutions so that they provide better support to the innovation process. Second, the reform of corporate governance processes so that, within the framework of the governance institutions, they encourage corporate strategies that entail allocations of resources and returns to broader and deeper skill bases that can engage in organisational learning.

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Paper provided by The STEP Group, Studies in technology, innovation and economic policy in its series STEP Report series with number 199803.

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Handle: RePEc:stp:stepre:1998r03
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