Premium Essay

Governance

In: Business and Management

Submitted By mlc215
Words 279
Pages 2
Political explanations of corporate gov. :
Roe
- explain how different countries achieve social peace.
-The Continental(大陸) European social democracies achieve peace by favouring employees instead of investors.
-Layoff(停工) will be difficult even they work efficiently the unemployment benefit is highmanager less likely focus on the max. SH value.& less takeover activities(since takeover cause layoff)
-democracy seek on the social equality with the cost of economic efficiencyconcentrated ownership Pagano&Volpin
-Argue that the trade off between strong investors protection and strong employees protection depend on the electoral system
-Rentiers(R): a person whose money comes from investments and who therefore does not have to work(食利人)
-Manager run the business on behalf of the R and R get the revenue from his investments. both managers and employees are both prefer weak investors rights weak investor rights(WIR)mangers to extract the private benefits from firms
-weak investor right provide a better job security(less unemployment).
- They will obtain the votes by focusing on the employees right rather than investor protection

Liberal market economy(LME)
-highly developed + flexible mkt
-highly mktable + liquid assets(short payback period+generate quick cash flow)
-minimum training of employees as the training effort will be poached(竊取) by them once they fully trained
-innovation: blue skies
-highly competitive mkt+ innovation
-e.g UK USA Australia

Coordinated market economy(CME)
-illiquid + inflexible
-focus on more specific+ less mktable assets
-Firms provide industry-specific training and powerful employees association ensure that not free rider problem on the training effort
-provide incentives to invest the long term to gain highly firm-specific skills
-incremental innovation e.g. highly valued added manufacturing...

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