Corporate Governance and Emerging Markets: Lessons from the Field
38 Pages Posted: 5 Aug 2008
Date Written: July 29, 2008
Although it may be too early to pronounce on the relative effectiveness of various capital market-driven corporate governance initiatives, experiences in emerging markets over the last decade, especially Latin America, lead to some preliminary conclusions. These observations may have some predictive value in gauging the potential effectiveness of any particular initiative. "Voluntary" codes and procedural remedies drawn from Anglo-American law, for example, may not be the most effective means of channeling market forces to the improvement of corporate governance in continental European-style legal systems. These transplants may behave a little differently than expected; at worst, they may have somewhat perverse consequences, where an internationally recognized, but domestically ineffective, rule is introduced into a system. The Latin American cases studied are instructive in this regard, as governance mechanisms were introduced in multiple guises along a continuum of private and public rules, amplifying the prospects of effectiveness.
Keywords: corporate governance, capital markets, emerging markets
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