Henry Hansmann and Reiner Kraakman
This dissertation appeared to me profoundly erroneous, in both its prescriptive and positive (Empirical) foundations: shareowner value is not a good principle of governance, nor is it establishing itself end-to-end the world. We shall premiere examine this dissertation from an empirical perspective. We shall limit our summary to the German and French cases, as they are characteristic of the Continental European model. The period studied is the 1990s, during which the rise of financial markets, supposedly at the origin of transformations in forms of governance, has been most prominent. In the first part of this review, I shall present the US, German and French models and accent their principal differences. In the second part of the paper, I shall quantify the way in which current transformations in the financial champaign are reshaping these elements and shall also focus our attention on movements after-school(prenominal) the financial sphere that may either reinforce or weaken the continental European model. It is on this basis that we shall be able to pass an overall judgment on the thesis of convergence. In a third part, we will offer a critical assessment of shareholder value from a normative point of view, through an analysis of the Enron-era financial scandals.
1. The empirical novelty of the models of corporate governance
The essential factor of distinction between the US model and the continental European model lies in the dispersal of share ownership, both from the quantitative (degree of concentration) and the qualitative (identity of shareholders) point of view. Roughly, the US model is characterized by wide dispersion of ownership and by liquid capital markets, dominated by investment monetary resource (mostly pension funds and mutual funds). The essential properties of the continental European model, on the contrary, are relatively narrow capital markets, the front end of large block holdings and...If you want to get a full(a) essay, order it on our website: Orderessay
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