University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); University of Chicago - Polsky Center for Entrepreneurship; European Corporate Governance Institute (ECGI)
The New Palgrave Dictionary of Economics and the Law, 1998
This essay summarizes my own personal view of what corporate governance is about. I argue that it makes sense to discuss corporate governance only in an incomplete contract world. In this world, the notion of corporate governance is intrinsically related to the definition of the firm. In this respect, I review the shortcomings of the existing definitions of the firm and the possible applications of the idea that the firm is a "nexus of specific investments" introduced by Rajan and Zingales (1997 and 1998). I conclude discussing the limitations of the incomplete contracts approach to corporate governance.
Number of Pages in PDF File: 20
JEL Classification: G3Accepted Paper Series
Date posted: June 10, 1998
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